It really is high time there is some serious regulation around home ownership, especially as an investment vehicle.
I would even say this is an existential issue for our current civilizational model - the unaffordability of housing is contributing to demographic decline globally.
https://en.wikipedia.org/wiki/Progress_and_Poverty
Too bad most people forgot about this book. It was a bestseller and all the famous economists knew about it and praised it. Even Leo Tolstoy 3000 miles away.
Occupancy taxes would be a very good start--especially if applied aggressively to investment holders (resident owners aren't really the problem) who can't demonstrate that they live in a space.
It's a lot harder calculation to hold a space unoccupied in the hope of getting better rent if you're staring down a nice big bill for a place being unfilled. It would also cut down on the whole AirBnB idiocy if you don't automatically classify that as occupied.
Suddenly, you will have housing owners aggressively hunting for residents.
Some of the residential apartment units, for example, are playing pricing games with rental prices vs occupancy because they can blame it on "pricing software" right now.
An occupancy tax would neutralize those.
The current economic trickle-up system is starting to cause serious problems. Large sections of populations everywhere are increasingly shut out of the capitalist system because they do not have ANY access to capital.
But they fixed housing. A decade or so after they were built and things became somewhat stable around them.
The problem with tax, and any kind of economic system is very simple. Capitalism and communism, and the more creative options like mercantilism or militarism, we can argue about them for a long time, but fundamentally they divide up existing properties. Nothing more. We can use these systems to choose WHO is homeless, but they cannot lower the number of homeless.
Also many Western cities have very high numbers of homes that are vacant. Seems like a tax on that behaviour would be hard to argue about?
Post WW2 in the UK the gov't built a lot of social housing that was successful. Sure there were some failures too (eg tower blocks), but I believe those were built much later.
Although I guess there could be some number of properties where that becomes untenable as well.
The point of this progressively increasing tax would be to raise the landlord's costs to the point where the market actually cannot bear a rent increase--which would disincentivize using the property as an investment.
As an example, 30 year fixed rate mortgages are only a thing in the US because of govt guarantees.
- put up a ton of capital
- take housing price risk
- enter into a long term commitment
- deal with maintenance and repairs
- deal with selling my investment every time I move
And that includes me. I want to rent. I want the landlord to take care of all that crap for me. And I'm tired of all these people complaining about it.
A renter from a co-op, etc doesn't have to do anything for lower rent, more rights, options, etc, than another renter in the same city.
What I would say we're missing is condominiums in the city center. Lots of apartments, fewer places to own in the inventory of downtown housing.
I wonder if it has helped? We are also having similar rent vs wage issues here.
Higher taxes could lead to higher rents, but that stops working once the supply of people willing to pay said higher rent is exhausted. At some point landlords won't be able to rent out their place with a profit, at which point you have 2 options: Leave it empty (which should also be illegal, IMO) or sell it (to people who would otherwise have to rent).
It could be that there is a potential never-ending supply of rich people wanting to pay rent to live in a place with ever-increasing rent and the gentrification that comes with it, but it seems unlikely to me.
In the Netherlands there were recently a set of tax changes increasing taxes on house ownership, which caused companies to sell apartments en mass. Housing prices dipped for a little bit, rent (in the private market) went up, but more people own their own place now. This is the direction you want to go, I think.
After 1991 all of this has stoped.
I don't know where you are from, but when was the last time you guys built a new neighbourhood for 10, 20 thousand people to live in? Because i've been all over both always-capitalist and former-socialist countries (mostly europe), and most of them are old with just a few newer buildings, mostly replacing the demolished old ones. It really doesn't matter, slovenia (my home), or germany... you see a bunch of large apartment blocks built in the same style, for many many people to live in, and you just know it was built somewhere between 1960s and late 1980s, and not after.
but there is also https://en.wikipedia.org/wiki/Donau_City from the 90s (though it has only 20% residential use) and https://en.wikipedia.org/wiki/Alterlaa from the 70s
in general vienna has a long history of large public housing projects going back a century. https://en.wikipedia.org/wiki/Gemeindebau
it should be noted that until the 1990s the population of vienna has actually been slowly declining (from 2 million more than 100 years ago to 1.5-1.6 million) and most projects before then were more likely needed because a lot was damaged in the world wars. but in the last few decades vienna has seen unprecedented growth, now reaching almost 2 million inhabitants again. consequently in the last 20 years several new building projects have been initiated. the ones i linked are just a few examples. i keep finding out about more as i search.
And of course we will need an expensive and unaccountable bureaucracy to manage all the inevitable conflicts of interest. But it's a small price to pay to avoid the horror of building enough housing units to match population growth.
If you're stuck at a "pay way too much for rent" or "commute for 3 hours every day" choice, and if you don't take the too expensive apartment, there are 10 other people interested in it, it's a pretty shitty situation to be in... and here in Ljubljana Slovenia this is happening just now (college starting soon, students looking for apartments).
Leaving apartments empty is not worth it, since you still have to pay for monthly costs (power, water, heating, even if empty), and the only way to be worth it is, if the price of the apartment rises higher than the monthly costs.. and that is only true if (almost) no new apartments are being built. If we built enough new apartments the prices of used one would go down, making apartments a bad investments for speculators.
(Some holiday lets are entirely legit and necessary for some local economies, but the politics of that is very complicated and site-specific.)
Edit: why disagree?
> individuals wouldn't be able to build high density housing
Who exactly has (a) enough money to build an apartment block and (b) not enough to put it in a corporate wrapper? (Admittedly the wrapper problem is a serious issue for any kind of rationing!)
I’m not sure why that’s more popular in the US.
Not rented out a property for 3 months straight? Ok, pay 25% of the rent to the govt then.
Property prices will quickly find their market value (and we will know if the problem is genuinely a shortage of space then).
Best of both worlds: cooperative rental companies. Renters control everything collectively as a non-profit. They employ the custodian(s) and vote on what to invest any excess capital into. With this it means you're only paying as much as needed to maintain the buildings, your utilities, and saving up for larger renovations.
I've lived in multiple apartments organized like that, and frankly it beats every corporate/individual landlord I've been attached to.
The world has survived most of its existence without needing holiday lets.
Because it has hotels.
Hotels that do not take up residential properties and pay appropriate taxes, etc. and prevent overtourism whixh has become one of the biggest issues in most tourist places.
You can eliminate holiday let’s and the world will do just fine. Any legitimate loss will be minor.
The only problem is these pesky single digit millionaires thinking they can somehow come here to our neighborhood for a month. I paid good money to live here so I wouldn't have to be around those upjumped peasants, but now airbnb rentals are letting them in by the thousands and ruining it. If you can't pay $1000 a night for a hotel, you're not the sort that belongs here. We'll call it "overtourism" to make it seem like they're the problem and not our own insufferable snobbery.
> right to live in that unit rent-free until you die
This is very bad for labour mobility. It's a hukou system for retirees.
This is unfortunately a political requirement for passage. There are very, very few people 60+ who have lived in the same place for 20+ years who are willing to leave their houses, and most who do are dragged into nursing homes only because they are no longer physically capable of taking care of themselves.
The rent-to-own period can and should be quite long, like 30-40 years, similar to a mortgage. But the quality of "nobody can take my property away from me" is quite strongly felt, and not one that you can really take away from people. Any radical housing reform must respect that.