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Comment by WastingMyTime89 | Hacker News Reader

Heavily taxing houses that stay empty and limiting short duration rental could be quite effective.

The issue is somewhat the same in Paris. It’s very hard to afford living there because non local use properties as an investment and prefer them staying empty than risking them degraded and people who want to rent make more money on Airbnb.

It’s fine if you want the city to become Disneyland but very depressing otherwise.

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Are those really making a dent? What percentage of Lisbons apartments stay empty? What percentage is used for short duration rental?

I would think only a small one-digit percentage?

There are tons (like, really many) of empty, closed rotting buildings in Lisbon. My assumption is the owners are waiting for prices to increase or simply demanding unreasonably inflated prices until they find a buyer. I'd like to know the reasons for it. Anyway, whole blocks are empty. Heck, there is a large empty building directly next to the German embassy (and, ironically, part of the German embassy is also abandoned and empty even though it belongs to it).

There is also a substantial number of new luxury apartment buildings in my area with apartments that appear to be empty. Whether they are owned yet or to be sold is hard to determine but you can see when nobody lives there.

Exactly. There should be a tax on vacancy. We've made the 1) mistake of turning a very special need like shelter into a commodity or security vehicle, and 2) this commodity the owner can "hold-out" on in that makes it violate the principles of economics that we all supposedly agreed upon from above that the market is the most fair and best solution for people.

We already tax vacant property up to 12 times the regular tax when located in high demand areas[1] which includes all of Lisbon municipality. It's definitely had some effect as you see a lot less vacant property, but it unfortunately doesn't fix everything.

[1]: https://dre.pt/dre/detalhe/decreto-lei/67-2019-122349221

Hard to understand why anyone thinks gentrification or foreign buyers/renters are the problem if this is the case. Put people in the houses you already have, and build some more if needed, and you will likely find the price drops. But perhaps the people with decision-making power are hoping the price continues to rise.

Even more building were rotting before Portugal liberalized the market, because nobody would or could pay for renovations.

The truth is that real estate is merely a reflection of wealth. Some of that wealth is earned by hard work that others are not willing to put in while other wealth is just inherited and some people work hard and smart and still stay relatively poor.

Therefore we shouldn‘t judge so easily based on what someone has and go back to asking how it came about.

I have an apartment that sits empty, I'd love to rent it, I even have a license to rent it for holiday rental but it took 2 years and an half for the proper permits to be filled for me to renovate the apartment, once that went through, covid happened and it was not possible to find anyone to do the work, eventually the constructors I hired started doing the work but stopped in the middle claiming they can't find employees...

So I now have an apartment that's been empty and useless for 5 years, it did triple in value in the meantime but it's such a huge waste

You can hear a version of this story from apartment owners in many European cities, meanwhile the newspapers attribute out-of-control housing costs to a laundry list of more sensational causes...

Why not sell it?

Because I really like the location and view, I really wanted to renovate it, rent it for part of the year to tourists and stay in it for part of the year.

Cute, walkable cities are the original Disneyland - there's no changing that and in fact it will become more pronounced.

taxing empty - yes

limiting short duration - no, just tax it more. Limits are too easy to hack.

This issue of speculation on empty properties would be, if not solved, then at least immensely alleviated with a Georgist LVT (Land Value Tax), a tax on properties equal to the rent for the undeveloped piece of land.

It's easy to implement, the market exists to price that amount, and provides a direct incentive to either put the property to productive use or get rid of it.

Building physical houses to sit empty as a financial instrument has to be one of the peaks of capitalist insanity.

> Building physical houses to sit empty as a financial instrument has to be one of the peaks of capitalist insanity.

I quite agree, and I am therefore very suspicious that this is actually happening in significant volume! I have never seen convincing evidence that this happens, and it, at least superficially, makes no sense as a money-making scheme (Worried about degradation? That just means you should get insurance.) In general, it doesn't make financial sense to keep capital idle, and claims of such should be taken with a grain of salt, especially if the messaging is politically charged as "rich foreigners are screwing the common man over to make money".

I agree that an LVT would be the solution if this were actually a problem. And that an LVT solves many other problems unrelated to evil foreign billionaires.

Indeed. I'm most familiar with the US market so can't speak for European countries which may be different, but here's a graph of estimated vacant units held off-market against total housing units in the US:

https://fred.stlouisfed.org/graph/?g=TiNw

Is this a high or a low number? On the one hand, <5% of units vacant sounds small. On the other hand, this is about 12x as many as there are estimated homeless in the US.

https://www.usich.gov/tools-for-action/2020-point-in-time-co...

4% vacancy is what you get if people live in a house for two years before moving, and it takes a month before a new family moves in. Sounds pretty normal, and with no obvious way of using this idle time to help the homeless.

> Heavily taxing houses

Two wrongs don't make a right.

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