Where is the social justice in letting investors outbid people who want to own their own bit of shelter?
(Existing homeowners might appreciate the gains to property values from investor bidding up, but I'd say the needs of another person to also become a homeowner trumps the needs of an existing homeowner to make greater profit on the investment aspect.)
Now there would be no middle-ground. Either you own 1 (one) building under four units, in one of which you live. If you want to move, you must find another individual who would take your place. They'd also have to give up their single building and move into yours, for which they must find another individual... Either that, or you're a multi-millionaire investor owning condominiums and living in a private mansion, banned from ever owning small-unit-count buildings.
I'd say, this would lead to the owner of the building on paper still owning a unit there, but putting their least socially protected tenants in it. Tell them that either they have an arrangement where they are not legally renting, but they still pay you money – and if law enforcement asks then tell that you're landlord's friends who are staying over long-term. Or they can go live in a cardboard box.
If you want to have families own their detached homes, make it so that their self-declared primary residence is taxed very little. You can own as many houses as you wish – but the more you own, the higher the tax rate on all the extra ones which are considered “small”. Then families can have a house or two, or maybe even three – whatever you consider a “reasonable” amount. Then businesses can own as many 50-unit condominiums and office complexes as they want, without any diminishing returns. However, it could be economically impractical to own more than, say, two “small” homes – if you have to pay yearly homeownership tax on each “small” home that is not your primary residence, of 20% of the property value for each one that you own. You own five – you pay 100% of value of each of them every year. You own one extra house – you sponsor a new house for a new family once every five years.
But that would require some political will to screw over the rich people. And those are the people who are building the houses in the first place, so you'd also need to ensure that families can build a home for themselves if the businesses are not willing to build property they can't profit off by renting it out instead of selling.
For example in Australia there is CGT on an investment property apportioned to the time it acted as such (as apposed to principle place of residence).
CGT is fairly lame in Australia with both a 50% discount and perhaps you need not pay it for 1000 years if you keep passing the property down through family.
Land tax and vacant property tax would help motivate thought!
Renting is not a great long-term strategy but can certainly helpful when you're poor, or don't want to shell out $100K to buy a box truck for the weekend.
The busybodies I observe definitely and loudly put their own needs first, but they predict the opposite effect of rental units from you - lower property values. Therefore, they would probably welcome outlawing investment properties, just as you desire.
This dislike of renters seems mixed up with class or race consciousness. I think it's pretty widespread.
I don't think it's possible to avoid the fact that people who can purchase a home are generally more privileged than renters, and so being against investment properties is not a simple matter of social justice.
You don't have to stop them completely, they should just be deprioritized while there's a housing shortage.
You can't fix a stuff shortage by throwing money at it, no matter what economists tell you. The housing shortage is the real-world equivalent of stock buybacks - in theory the increased stock price boosts investment and thus innovation, but in practice we get Boeing and Intel. Same with housing. The higher prices should in theory draw more suppliers in, but in practice the only supply that grows is the supply of NIMBYS wanting to "preserve home values" to profit from the intolerable status quo.
From those NIMBYs’ points of view, as frustrating as I find them, they probably feel like they scrimped and sacrificed to get their little piece, so now they’re desperate to not let anyone mess it up, because they want to be able to get out the massive amount they put in. I’m guessing it’s more often loss aversion than trying to profit by cornering the market.
Economics will ultimately do this for you. As the economy deteriorates, the rate of return on rental properties will plunge, forcing sales by over-leveraged "investors."
I guess we’ll just have to see what happens.
So if I decide to build a new apartment building and cant sell all the units, you’ll do is me from renting them out in the mean time?
Sounds like building new buildings isn’t worth doing now.
Anyways, OP proposed “I think I'd love for where I live to outlaw ownership of small-unit-count buildings by someone who doesn't live in the building.”