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Comment by alfromspace | Hacker News Reader

Imagine if instead of constantly building horrific low-income housing projects to (fruitlessly) retroactively "solve" the problem of middle and lower-class people being unable to afford housing in major metropolitan areas, we didn't poison the market in the first place by treating housing as foreign investment vehicles.

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Yeah. I am in favor of a high tax on absentee ownership of real estate. Deduct the property where you live and where you work. Everything else gets taxed heavily.

But then either you can afford to buy your home or you have to live on the street...

Absentee ownership is not equal to renting it out.

We should exempt rent-to-own contracts. If the contract vests ownership over a 20 year period or less, then it should count as owned by both sides for the purposes of this tax proposal. Bonus, we reduce the influence of banks.

It's pointless. One can have multiple temporary residences. The Swiss have already solved this. You pay the same amount of tax regardless if you keep the property empty, live in it or rent it. It's calculated as a percentage of average rent in that area which gets updated with market prices every 6 months or so. They also have low VAT and corp taxes.

But the Swiss make you pay an income tax on rent you would have made if you had rented it. Land value taxes are probably better than that.

Not really. One could graze cows on land, or run a casino.

The cycle works like this:

- we have people who live in subpar conditions

- let's build some cheap houses and rent them at discount to those in need

- actually not that cheap: why is that only rich people deserve to have a balcony?

- within a decade the houses turn into a ghetto

- oh, but there is a research which suggests if people actually owned the houses instead of just renting them, they would stop throwing garbage on the floors. So we sell these houses at discount.

- goto step 1

It doesn't always work like this. In the Netherlands you can find big parts of the cities built by housing corporations with people renting them for decades, yet very few of them you can define as ghettos

I don't know how you guys do it, but Netherlands keeps amazing me.

An absolutely fantastic country.

In New York, they were deliberately intended to become ghettos, or at best a place to sequester the city's poor.

http://www.hopesandfears.com/hopes/now/politics/216905-the-l...

https://www.nytimes.com/2012/12/04/nyregion/how-new-york-cit...

Sorry, I don't buy it.

First, there are buses going to Long Island beaches (Jones Beach, specifically).

Second, a place becomes a ghetto not because there's no nice park nearby. A district becomes a ghetto because people who live there deface the walls and throw garbage on the streets.

"Mayor John V. Lindsay, who took office in 1965, was determined to break this cycle, to put low-income projects in middle-class neighborhoods. He tried, memorably, in 1971 in Forest Hills, Queens, figuring that the community’s predominantly liberal Jewish population would not object to the arrival of three 24-story towers. He was wrong. The construction site was soon overrun with angry protesters."

I have to wonder, does anyone, yourself included, want projects in their neighborhood? And more importantly, is there evil dirt in 'bad' neighborhoods that makes housing projects become high-crime ghettos, and if we just build them in middle-class neighborhoods with good dirt instead, everyone's going to behave and make it a nice place to live?

I can tell you, living in an extremely liberal, formerly low-crime small city that in the past decade decided to "put low-income projects in middle-class neighborhoods" and even offered section 8 vouchers to random people from a big city hundreds of miles away to move in, it's been a catastrophe. Spreading crime and dysfunction around isn't really better than quarantining it.

I'm not an expert in this area, but I think the general line of thinking is that it's concentration of poverty that causes these kinds of problems in the first place. Now that the problems exist, spreading the poverty around as you point out won't make the problems go away.

I'm sure there has been research done on this, I will try to find some references.

Building houses can help prevent homelessness, but it can't treat the socioeconomic causes that makes folks homeless in the first place. You can't "just" build houses - you have to treat income disparity and the massive wealth gap at the same time.

Don't forget:

-Ah, the federal government pushed/incentivized us to give mortgages to people who have poor odds of paying them back

-Economy or housing market downturns a bit

-A bunch of people can't pay their mortgages

-Major recession

The key word in your comment is "we". "we" don't do that - the government does. And as you yourself indicate - they don't do so in the public interest, they do so in the investors' interest.

Also - they shouldn't be a _domestic_ investment vehicle either.

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