Paying Top Dollar for Condos, and Leaving Them Empty

Re:Paying Top Dollar for Condos, and Leaving Them Empty by stickfigure on Monday February 11, 2013 @10:06PM (#5204996)

Forget looking at this from a moral perspective and try the utilitarian approach. It is not socially desirable to have underutilized real estate in a place as crowded as NYC. Put it this way: Renting out an empty space is effectively the equivalent of building a new space!

I normally disapprove of using tax policy to modify behavior, but in this case it makes sense. Property tax is like the "rent" citizens pay to the government for using land. If the rent is too low, people overconsume the scarce resource.

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Re:Paying Top Dollar for Condos, and Leaving Them Empty by darkarmani on Tuesday February 12, 2013 @12:19AM (#5205319)

Doesn't property tax raise the rent for everyone?

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Re:Paying Top Dollar for Condos, and Leaving Them Empty by stickfigure on Tuesday February 12, 2013 @12:30AM (#5205351)

Possibly. But so does underused real estate, by reducing supply. And housing is a fairly inelastic good, so even a 5-10% increase in supply could have a significant impact.

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Re:Paying Top Dollar for Condos, and Leaving Them Empty by wisty on Tuesday February 12, 2013 @09:08AM (#5206798)

Not necessarily. Rent is decided by supply, and demand. Property taxes may encourage smaller homes, which increases supply (as you can build more of them); and demand won't change at all (since people will still spend 1/3rd of their income on rent, or more if they live in NY).

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Re:Paying Top Dollar for Condos, and Leaving Them Empty by malandrew on Tuesday February 12, 2013 @01:37AM (#5205528)

They can just focus on really high tax rates for homes that aren't primary residences.

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