Property and real estate have a different utility, in that it provides one of the most foundational needs a person requires. It's not the same as a chinese investment firm buying up various asset classes, non-native investors buying up real estate that could provide shelter to native citizens is a problem.
Aside from xenophobia, why?
But when there are constrained resources it generally makes sense to look after the locals first, before providing for non-locals.
It’s only a problem because we aren’t building enough new housing to meet the demand. You are blaming a symptom instead of the disease.
> are paying property taxes
Call me prejudiced, but I went from renter to home-owner in the last half-decade and I don't see the rentier class as really contributing in excess like you do.
I live in a Midwestern city where many of the rentals are owned by one singular corporation, and there are several such corporations, and I don't know what all the properties are like. I have a myopic view because I've only ever rented one house in this city, and only ever owned one house.
So I'll give you my one anecdote, because it's all I got. Tl;dr: we're paying those taxes, even though we should be saving a boatload because of our primary residence exception, we're still paying more taxes than a comparably priced house that we used to rent. It's a much nicer house, but by the numbers I do not get the sense that property renters are paying more taxes like "they're supposed to be." (But if I became a rentier and bought a second home to improve, rent out, and maintain, then I would pay those boku taxes; sure!)
We paid almost $200k for our house, a steal because we bought it in 2020. It has appreciated by almost 20% in two years. (We're not selling, so that doesn't help us any.)
We rented a house before we bought this house. They don't maintain the property, they did re-rent it; I'm not sure if it's empty today, but they definitely kept the house full for the past three or so years mostly since we left.
It's in poor condition because they count on renters to maintain it, and the renters rarely have any interest in maintaining their rented property. So it looks like garbage and the assessed value is not likely to increase, based on there being no improvements.
But the property is valued somehow at $275k in spite of nothing having changed. The house I lived in when I was renting, has been listed for sale for the last month at almost 4x its tax-assessed value. That house was assessed at less than $40,000 when we moved in, the tax assessment is up to $75k, listed for $269k – they do not get any primary residence exemption, but their assessed value is less than half mine so they pay 14% less than I do in taxes. Do you think it will sell?
The rental house is paying less in taxes, but that house has been listed at 20% more than our new house is worth. It probably will sell for more than we paid, based on the potential for rental income; it has a marginally better location and 30% less sqft than our house, so there's no basis for that price. But I bet you that it will sell, for at least 80% of the asking price, and that assessment won't be updated for years "because that's how long it takes."
It isn't worth what they're paying/asking, unless they jack up the price and re-rent it again! (They will...) And they will never pay property taxes on a sale price or on a lease price, property taxes are based on an assessment value. An inflated sale price with no improvements does nothing for assessed value, nothing for tax revenue, it's wholly based on the rental price bubble that can stay inflated and keep going as long as we're a college town, (as long as college prices keep going up!)
I have one anecdote and to me it shows the bad pretty clearly. I'm not sure how clearly I explained what I perceive is wrong, but what I'm saying is they are really taking money out of our collective pockets and it's not going towards taxes.
I should probably just put the clown makeup on, I am not going to convince you of anything; if you're starting with the belief that sophisticated investors from outside of the community buying up houses and renting them back out to people in the community aren't creating a net loss while they generate a return on their investment, then you haven't interrogated the situation honestly.
Their (outside investors) return is axiomatically the net loss to the community.
If we (residents) weren't paying it out to these investors, then we'd still have that money here in the community, going into savings of people that live in the community, or getting spent in the community. You think they're going to pay taxes, and well, as I see it we just aren't set up to operate like that! Not at all. The law notionally taxes non-primary rentals or non-residences at a higher rate than residences, but for reasons I can't fully convey and don't truly understand, it typically, seemingly, doesn't work out like that.
> Their (outside investors) return is axiomatically the net loss to the community.
This is false, it is not a zero-sum game. Just because an investor makes a return doesn’t mean that somebody else loses. The same as investing in the stock market isn’t a zero-sum game. You shouldn’t have such a myopic view of how the world works.
I appreciate your frank response, and I'd be willing to read if you find the time to tell me what else I should understand! (If we got our tax policy in order... no, that's not where you were going is it!)