Investors are part of the problem, but by no means the only part. Anything that reduces investor speculation on housing and returns units to the rental or purchase markets is ok by me.
It may sit for a month or 6 waiting for a buyer.
Now, multiply this by all the turnover in the housing market, and there will be many "empty" homes at any one time.
In the car dealer business, cars usually sit for a month on the dealer's lot before they sell. Car dealers hate that, because they borrow money to put the inventory on the lot, and pay interest on that money.
It's the same for house sellers. Leaving a house vacant cost thousands of dollars a month. Sellers aren't letting it sit vacant for fun. When I've sold a house, I was painfully aware of the vacancy costs, and always tried to price it to get it sold ASAP.
Interestingly realtors houses stay on the market longer and sell for more than their customer’s houses …
That was true in my neighbourhood as well, up until a few month ago. Now I know two or three people around me that have moved and have been trying to sell their houses for months and aren't even getting low ball bids.
But even if you manage to sell your house within 24 hours of putting it on the market without having to do any work on it, there can still be a few months lag between you actually moving out and the new owner moving in.
Gotta love that oh-so-efficient market.
This is a complex issue no doubt, but it is the height of nativity to think we can use existing underutilized housing stock to solve or even help the existing homeless crisis. We have frequently tried it with poor results and poor outcomes. It is very very very hard to meaningfully address the existing homeless epidemic, which is intimately tied up with the opioid, general drug, and mental health epidemics, none of which we have any reasonable answers for.
This argument is a variant of letting the perfect be the enemy of the good. You can improve the lot of many long before you need to solve all addictions.
Can't just shove them in a house and all good, but its a fundamental part of treatment along with social programs. Without stability it's tough to change much in someone's life.
Agree just because a property is vacant it doesn’t make that property suitable for anyone. Does it need ground maintenance. Does it need furniture. Is it in a very high cost of living area. Is it near where homeless people and their associated support groups and family are. Etc
You'd do better to stick to facts, like most homeless people are recently homeless and locals, and homeless rates correlate well with housing availability/prices.
Spending a decade without a housing structure and self medicating away the depression that comes with it is precisely how you end up like that.
I really wish there was an exponential property tax based on the number of properties that someone or some entity owns. I don’t think it would actually be feasible to implement, but I wish something like it existed.
Owning one property? Reasonable/cheap property tax. Own two properties? Pretty expensive property taxes. Own three properties? Eye watering property taxes. Own more than three? Truly insane property taxes.
Especially for vacant properties
It's because while the statistic may be correct, it is a misrepresentation, as a lot of those "empty" homes are awaiting a buyer.
Which means as a society we've chosen to value the liquidity of the housing market (something that I think is really good!) over the basic dignity and needs of human beings (something that I think is even more important!).
That's a societal choice. In a society that absolutely has enough wealth to shelter and feed every person, the fact that we've chosen not to is simply a disgrace. That people die in the cold in America is a moral failing. If we were a poor nation, and couldn't afford otherwise that would be one thing. But we aren't, and it's simply a choice that we make to let people die in the cold.
I made a proposal above (though, you’ll also not that I said I thought my proposal was unlikely to be workable in practice).
But, if you review what I wrote, you’ll note I never proposed anything close to what you asked about.
My actual proposal would be this: we should invest heavily in a housing first approach to homelessness at both the federal and state level. We should invest in this as a priority, as if it will save lives because it will.
Along with that, we should invest in mental health and addiction treatment programs as a supplement.
We should tax the fuck out of the rich to do so in a revenue neutral way.
That's what California does, and the homeless problem in CA just gets worse.
Is capital gains taxed at the same rate as income?
Then we aren’t taxing the fuck out of the rich.
Does the Federal government and the State of California provide stable housing to every homeless person in the state?
Well, then, what’s why the problem is getting worse.
Actually tax the rich, and actually provide housing first. Until then, we haven’t tried my proposal.
https://www.caltax.org/caltax-resources/california-tax-facts...
https://taxfoundation.org/publications/federal-tax-rates-and...
BTW, the government has built housing for the poor many times. They're called "The Projects". Usually they wound up being demolished after a few years.
https://en.wikipedia.org/wiki/Subsidized_housing_in_the_Unit...
Reagan, in his deal to reduce the top marginal tax rates, also eliminated a vast swath of tax shelters and tax deductions.
More generally, the government consumed much less of the GDP in the 50s than it does today.
It's feasible (in some contexts), and has been implemented in Wales in recent years [0] (though not exponential, there's nothing stopping it from progressing that way).
There used to be reduced taxes on second homes, recently changed to 100%, and now changing to max 300% (set by councils).
They've also closed a number of loopholes to stop owners passing these homes off as dysfunctional businesses (listed to let without taking any lettings).
There's a large disparity in wealth over a relatively short physical distance, resulting in a large number of homes in "idyllic" but poor areas being bought as second homes and spending the majority of the year empty.
They've also moved to a land transaction tax that makes the second home purchase more expensive [1].
I'm not saying they are pulling the ladder up, and good to see these initiatives being put in place, but they don't necessarily solve the issue with existing vacant second houses which most likely have benefited from the lax taxation over the years combined with increasing property values.
As a renter, I’m not a fan of this. The worst landlords I’ve had have been local and the best has been a corporation based in another city.
The problem of vacant apartments is that as long as there’s a shortage of housing in places people want, housing that has been built will increase in value. If we reduce the artificial constraints on building more housing, it will also remove the incentive to leave housing vacant.
This happened in Switzerland, where towns with more vacancies were assigned a higher number of refugees. In order to avoid this the towns demolished the empty buildings.
I don't think anyone is recommending we reimplement failed efforts, line for line.
That's what the georgism advocate.
The problem of property as investment is not so new as a problem.
For my part, I am against the over ever evolving taxation schemes such as setting property tax sky high to deter speculators but not homeowners, without addressing the root cause of the current crisis.
First, homeowners are still incentivized to support housing supply restriction. Second, improvement on said properties are disincentivized. Which is why you want to tax land, but not property.
This is a systematic problem, not going to be solved by merely targeting a small part of the landowning population.
I could just leave a PC on mining some random coin to ensure there was always a bit of power going on. Likewise leave a tap slowly going. Cheaper than any tax most likely.
Second homes and vacation homes should be unaffordable. They are a luxury.
As for the comment about kings and lords, I suppose you're not familiar with the story of Robinhood...
Taxes that are too high transition the outcome from wealth redistribution to punishment.
I’m British, I think our society is better than the US due to things like social services, the NHS, etc. What is being discussed here is way outside the realm of British (and definitely American) way of taxation and public/social services.
You have to look at the intention of the tax - as per this discussion - is not about wealth distribution but about enforcing a policy by trying to free up existing homes for the homeless.
In the advocates ideal position there would almost never be any money collected from this tax because it would make a second home or holiday home unaffordable. If people truly want the homeless to all be homed then why not use tax money to build more homes in better locations for those that need them? In the US, UK, and most other countries there is massive amounts of available real estate (could be via building up or building out). The issue here is more than finding a house. Who is going to pay the power, water, rates, insurance, furnishings, transport costs etc (those Martha Vineyard homes are not a great location for homeless trying to work).
Should I be able to get a free home if I refuse to pay rent? What if I can work, but refuse to, should I get a free home? Instead of taking my home, why not build them their own new home.
I have two houses: one in England, one in France. I live in one during the year and one in The summer. Neither one is an investment. They’re both our home. Combined, they would sell for less than a cheap house in Southern California.
Why do you want me to pay extra property tax because my home is split in two?
It sounds like hold this view that anybody who owns anything is necessarily evil. But most of us are just people living their lives as best we can.
This is like asking why I want to make sure everyone gets a slice of cake before you go for a second slice.
I absolutely have nothing against you having two properties, but while homeless people exist in these societies, I absolutely think it should be expensive for you to do so. If we get to a place where homelessness doesn't exist, then I'd absolutely want you to be able to own a second property at no financial penalty.
> It sounds like hold this view that anybody who owns anything is necessarily evil.
I never said any such thing. I described adding taxes to a behavior that I think leads to a bad social outcome.
There are lots of things that I think we should tax as a means of changing behavior without saying someone who engages in those behaviors is evil.
Frankly, I don't know why you'd have this perception from my comment, but it's certainly not accurate. I own things! I don't think it's evil. There are lots of activities that I personally do that I think should be taxed at a higher rate.
I own a home, and think my property taxes should be higher. I own a business, and think my business taxes should be higher. Just because I advocate for higher taxes on things I personally do, doesn't lead me to believe I'm evil.
There is no shortage of houses here in farmland France or up in rural north England[1], which explains why houses are cheap enough that you can buy two of them. That’s the housing market working like it’s supposed to. Why does it need punishing or incentivising?
[1] there are towns within a few miles with hundreds of boarded up row houses that you could get for a few thousand pounds if you like. Our village in France is surrounded by fields as far as you can see in two directions. If you want to come live here, you can (and people often do) buy a small piece of that land and build a house.
More per house. There's no natural law saying taxes need to be equal per house, or that they need to be commensurate with services consumed by those living in them. Taxes (and tax breaks) are also used to incentivize behavior, which is the answer to your original question of "why".
The solution isn’t to stick homeless people in every available space. It’s to build places for them to live.
In your case, if your hypothetical homeless person wants to live on my street, he can buy one of the three homes currently for sale there, for the same price mine would sell for. How about we at least wait to see if he buys one of those before you go kicking me out of mine?
San Francisco has started building these again as startup incubators, but that's not the only target market
> if your hypothetical homeless person wants to live on my street, he can buy one of the three homes currently for sale there, for the same price mine would sell for.
Haha oh those silly homeless people, they should just buy houses, right?
Therefore each owner only owns one massive house that friends can use part of and spends most of the time at other friends massive houses.
> You can be charged an extra amount of Council Tax (a ‘premium’) if your home has been empty for 2 years or more.
> You can be charged up to 4 times your normal Council Tax bill if your home has been empty for 10 years or more.
I know it’s a crazy idea, so go easy on me.
Also, what makes you think the market is not working and new houses are not being built at the highest possible pace? Given the prices, that would be a sensible assumption, no?
The headline says "Investor home purchases drop 30%".
> Partly because buying up new houses protects the investment into the already owned.
That doesn't work. See the latest news on cryptocurrencies.
And no, investors won't buy up all the houses. Blackrock's massive home buying fund was <1% of the total value of the housing market.
> what makes you think the market is not working and new houses are not being built at the highest possible pace
There’s a lot of political pressure by existing homeowners not to green light additional housing in their neighborhoods, because it would bring the price of the homes they already own down. There are a number of high-density projects in NYC and SF that have been blocked by these efforts.
https://www.businessinsider.com/abandoned-houses-detroit-201...
https://anytimeestimate.com/research/most-vacant-cities-2022....
Edit: even in supply constrained cities like Seattle, there are ~10 vacant units for ever homeless person.
100% true and while I appreciate your perspicacity, this will not resolve the issue.
Seattle has a vacancy rate of 3.6% according to your cited source. Cities need a supply of vacant homes, lest we all become New York (vacancy rate 1.4%): https://www.bloomberg.com/news/features/2022-02-18/looking-t...
As I mentioned elsewhere in this thread, the only way out of this is to build more homes.
Yeah...
P.S. Not sure why one would pick San Francisco for seasonal use?!
P.S. 2 Let's see how the empty home tax works out https://www.jdsupra.com/legalnews/voters-approve-san-francis...
You figure the houses vacant because they’re sold/rented and waiting for move in, those under renovation, those where people have died and waiting to settle estate, etc and it’s 80-90% of that figure.
It’s really dishonest.
> Someone did an analysis and the true number of vacant homes someone can move into is like 10% of that figure.
If that 10% figure from the analysis of San Fransisco applies to the entire country (and I recognize it may not), then the 550k homeless would be compared to 1.6M homes, or still ~3x the number of houses we would need to house every homeless person in the country. That 3x gives us a fair amount of wiggle-room, for the analysis not being replicable across the country.
My main point is not that we should seize an arbitrary number of houses and house homeless people in them, but rather that homelessness is both a choice that we've made as a society and as government policy.
We absolutely have the wealth that we could choose not to have homelessness in the country. And it's a stain on our society that we choose to have homelessness.
But regardless, do you think the only reason why people are homeless is because they can't afford a home? They did a survey in SF and 60%+ were homeless due to mental health and/or drug and alcohol issues.
Building more houses won't fix that.
Housing First approaches have found much better outcomes for mental health treatment, and addiction treatment.
It’s so hard to address mental health issues with a population that’s homeless. Simple things like weekly visits with a therapist become much much more difficult. Keeping medication safe and secure is much more feasible when someone has stable housing.
You’re absolutely right that housing people won’t necessarily fix all their problems. But it makes those other problems much easier to address, and leads to better outcomes [1].
And it can drive down other costs (like healthcare costs specifically) to the point that it’s cheaper [2].
[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2916946/
[2] https://www.bluecrossmafoundation.org/publication/preventive...
There was much outrage, until the IRS said that the reason was that 50% of corporations lost money. Corporations are taxed on profits, not losses.
It is much more complex problem. Homeless people need more help than just giving them flat or even a room.
Yes they made choices in life that led them to not be able to hold a job and pay for housing - but to say it was "bad choices" one need context of their lives to judge that and in addition it might be the case that choice was made for them and they could not do much about it.
There were (I think still are in many places) projects where municipality in Europe would create social housing and putting let's say "not that lucky people" in one place does not help but creates its own problems. Where just providing flats was not enough because later no one had time do social work or money to pay social workers.
I can say as a kid I was living in such a project, all of the "normal-city" people would refer to us as "special place" or "street of magic". Many people made their lives better or at least make it stable there. Some managed to burn down their flats creating problems for their neighbors. Then there was loads of shady stuff going on.
I don't see a problem with these real estate developers that are building and managing large apartments complexes themselves. Seems like they're doing a lot to add supply at the lower end. Even if they do maintain a certain vacancy rate.