I don't know how regulators can look at this number of vacancies and conclude that yes, the taxation on property with vaccancies is as high as it should be.
Real Estate will stop being a free money machine when the government stops artificially restricting housing supply with single-use, single-family zoning.
A land value tax that ignores the value of improvements on the land would make a dent. Freeloaders who buy a lot just to sell it later would see their gains evaporate. So land holders would seek to actually improve their land.
Currently another big driver of land value is zoning. But it isn't the only one. And until society starts degrading hard, the other drivers aren't going to slow down either. maybe with an exception for suburbia where the roads will need replacement even though the area doesn't raise enough tax revenue to pay for the replacement roads.
People's idea of what is appropriate housing have changed.
The investor class is simply insatiable and you can't just satisfy the demand because it's always growing beyond all reason.
You need to curb investors interest in real estate.
So basically ban buying residential real estate on credit. That's a start.
It would have interesting sideffects. One of them would showing clearly to the masses how unaffordable houses actually already are. Unfortunately rents would go up in the short term from increased demand from people who'd otherwise get a loan. So the rich people would keep buying them raising the prices till the new equilibrium is reached.
Eventually rents would settle at how much people who rent can pay without starving and house prices would settle at whatever's the price of whatever asset that yields similar returns.
I don't think it would be at 10% of today's prices
The power is simply way too skewed in favor of gigantic companies with coffers that are infinitely deep when you compare them to any individual looking for housing. They can buy dozens of building at a time and completely eek out individuals looking for a home for themselves and their families, and what can anyone do about it?
Imo corporations should be legally barred from owning residential property of any kind, and there should be limits to what an individual can own for themselves as well, be it at the neighbourhood/district/city/state/country level. The overwhelmingly large majority of people need no more than a single home, the only people this kind of rule would affect negatively are the ones that aren't struggling in the first place.
Are you aware that the government is the entity preventing housing from being built in many cities?
I don't think zoning should be abolished or anything but clearly the regulations the US has now, at least, are incorrect and restrict supply far too much.
[1] https://www.faegredrinker.com/en/insights/publications/2024/...
You know if they did things by the books the rent will increase? (probably by 20-30%)
At least in regards to the US, no one can really know that. The Chinese government technically doesn't own anything in the US anymore. The alarm is being raised because supposedly private Chinese enterprise includes ownership of significant American food production (e.g. largest pork manufacturer), farm land, homes near military facilities, etc. Those are strategically sound holdings for national defense in both countries. Suburbs are built on farm land, etc. It's very difficult to decouple real estate from national defense, really.
That said, "Chinese people" don't own all that much in the US overall when compared with other countries. China is being singled out because they have been caught spying repeatedly. They stood and burned their embassy and refused to allow firefighters in. There is military posturing. They are invading American airspace over the US mainland. All these combined paint such purchases in a suspicious light at the very least.
There's enough evidence to know that the Chinese government is funding at least some of the purchases. It could be most of these purchases. No one can know for sure, not even the individual buyers themselves. Only the Chinese government knows.
I think the same applies in Europe?
In many cases the ownership has been traced to government funding. The suspicion is that these are just the tip of the iceberg.
So, at least in the eyes of the US Congress, based on some damning evidence, China is doing something to the US.
That said, "black money" is also a problem. But I suspect that's the case in China as well. There's no way to eliminate all corruption, even in China.
On the contrary, the skyrocketing homelessness rates around the country are showing that demand for housing is more elastic than people thought.
this price fixing is partially about units not even for rent which is a different problem you don't want. (but you want some units not for rent while they remodel)
Unless you're talking about a tax on vacant properties.
This is a solid in-depth explanation, if you're interested: https://www.gameofrent.com/content/can-lvt-be-passed-on-to-t...
If it becomes impossible to rent properties profitably, then eventually there would just be fewer rentals available.
This is true ...
> If it becomes impossible to rent properties profitably, then eventually there would just be fewer rentals available.
But this is a leap that doesn't apply to the Georgist scheme. A key feature of the scheme is that taxes on buildings (possibly among other taxes) are removed in favor of the land value tax. It's true that if the tax on some piece of land increases sufficiently, it will eventually become impossible to profitably charge rents on existing buildings on that land--but improving existing buildings or building some superior building (for example, a new building with more units than a pre-existing building) allows landlords to continue profiting.
If the current landlords don't want to improve buildings there, they can sell the land to someone who will. And it's clear that someone will, because if there's enough demand for the land that the land value tax makes it unprofitable to sit on it without improving it, someone is going to want to do something more with it.
The reason we don't already have a Georgist-style economy is quite obvious, of course: the homo sapiens landlordicus is a very soft, squishy, vulnerable subspecies. If they had incentives to improve their properties and thereby possibly even work as hard as the rest of the human species, they might well go extinct. And no one wants that.
But here's the rub: if you remove those restrictions, you don't need to change the taxes. Even with current taxes, people will build more housing units, if they're allowed to and they can make money from it.
That's the point. They'd be forced to sell instead of hoarding increasing supply of houses on the market tremendously.
You wouldn't rent. You'd just buy.
I lived in floor 30 of a “luxury” skyscraper in Seattle built after ~2015. We had an algorithm for pricing according to the landlord and the class action letter we received. Amazing water views and city views. Clearly desirable housing in a city flush with rich people and a massive housing shortage. I was the only occupant on the floor and the only tenant at the time ever to live in that unit. They tried to raise my rent like $1000/m when lease was up. We paid it since we had just gotten a raise. Next lease renewal was about $1000 again and we moved out because $2k extra was just too far above comparable units nearby. They literally offered us a Starbucks gift card to stay. We could see the other vacant units listed on the buildings website and they were always priced way above comparable units in neighboring buildings.
Oh and to directly answer your question, I’m guessing the building was never more than half full. The mail room was never full, and the parking garage had about 20/100 spots in use.
https://fred.stlouisfed.org/series/RHVRUSQ156N
https://fred.stlouisfed.org/series/EVACANTUSQ176N (estimated absolute number)
https://fred.stlouisfed.org/series/EOFFMARUSQ176N (held off the market)
The data you showed says there were 7 million units held off-market. My building had only a few hundred tops.
I wonder if there is more to the story though. I think that the building would be less desirable if it was full. Skyscrapers already have long lines for elevators, and common spaces get a lot of wear and tear from so many people in small areas. I wonder if they keep it below capacity while they can charge a “newness premium”, and once that fades they add extra units to the market to increase revenue.
and just natural turnover - people moving, outgrowing their home (or on the other end when someone leaves the home, or pass away) - leads to a vacancy of millions of homes. people usually harp about this a lot, and I also think it would be good to get people into homes, even if temporary, faster. but the effective solution is land value tax, and high density. everything else is just bad and worse trade-offs (like rent control and various machinations with 'affordable' units, and so on).
regarding highrises, I noticed that they mostly look the worst when they are new. everyone is moving in, elevators are full of scratches. there's a lot of ongoing construction (inevitably there will be someone from a hundred tenants, who wants to change something). and then eventually it settles into some steady state. ... so this forced cycling or whatever this management company did is just 120% WTF to me.