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Comment by killtimeatwork | Hacker News Reader

The taxation would be on resales only, not initial sales by developers.

Also, if you increased the value of house (e.g. via renovation), the value increase would be tax-free upon resale, so that you can fully recoup the money you've put into the renovation.

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This is already true up to $250k. Look, I certainly don't think it's a good thing to build an economy on people or corporations flipping real estate. But active measures that would make it less attractive for people to buy a house, will drive that money elsewhere. As of 2020, 82.8 million residences in the US are owner-occupied. People have put their nest egg into a place to live, and that's good. It's a good thing that real estate is a safe place for people to put their savings to keep pace or outpace inflation. Imagine that money going into the stock market chasing gains. It would be a catastrophe. There is a true market for real estate driven by demand. A large number of houses in this country are owned by people who live in them, who are not speculators, but would only make the decision to own if it made financial sense.

It’s easy to treat taxation of primary and secondary residences different from rentals.

Houses in this country are being purchased by large investors at rates never seen before. It only started happening in the last decade. SFR wasn’t previously an institutional asset class. That has increased demand for housing that used to make sense to buy on a lower income and reduced supply. They literally will buy every house they can that fits their buy box. Suddenly that $150k starter home is a forever rental.

Frankly, I think tax policy may be the only way to fix it. That or prohibit ownership by large entities.

I'm totally with you on this. I think the sharing economy for housing is catastrophic. And I'm someone who rented most of my life - sometimes finding places on AirBnB and going long term on them - then bought a house, and I hope in a few years I will rent this house out (long term) and buy another. But I've watched areas around me turn into transient AirBnB wastelands, including the house next door. While other people can't afford rent, and the rents have gone up 30% in the last five years. Short term rentals are a blight. I don't blame people for taking the money - the family who owns the house next door put their house up on AirBnB, pays a company 10% to do housekeeping and fucks off to Thailand .. they come back once a year for a few days. I can't say they're wrong. But it's even worse if it's a faceless corporation buying up all the housing stock. Then we're all just living in a hotel.

I do think this should be addressed, either with tax policy or city ordinances against the practice, but I think the first step is to differentiate between short and long-term rentals. Long term renters have rights, for one thing. And they add to the neighborhood, they don't hollow it out. Every AirBnB is basically a dead property that takes away from the community and gives nothing back.

I agree except I’d say most people prefer neighbors that own and are invested over renters that may have historically stuck around for just as long as owners but now have to move every few years because corporate landlords up the rents 5% every year. That’s an entirely new phenomenon.

Corporate landlords have turn ratios near 40%. Small landlords are closer to 20%. The turnover is akin to Airbnb.

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