this post was submitted on 13 May 2024
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Housing Bubble 2: Return of the Ugly

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A community for discussing and documenting the second great housing bubble.

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Solve the housing crisis with this one weird trick (lemmy.world)
submitted 6 months ago by SeattleRain to c/housing_bubble_2
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[–] Furbag 16 points 6 months ago

Tax empty properties owned by corporations.

Ban foreign investors from buying up properties.

Increase taxes on non-primary, non-secondary properties dramatically (so if you own a home and a vacation house, you're fine, but you'll pay way more in taxes if you own more than that).

Release federal funds earmarked for subsidizing the mass construction of low and middle income properties that must be sold at below market rate in order to qualify for the subsidy.

Re-evaluate zoning laws nationwide to make it easier for residential housing to be built into areas that it currently makes sense but is forbidden due to draconian zoning laws propped up by NIMBYs.

Sorry if any of the above hurt your bottom line in the end, but it's more important to ensure that everyone has a place to live than it is to protect the "ownership as a means of passively generating wealth" model we are currently living under. The line cannot go up forever.

[–] az04 12 points 6 months ago (1 children)

Don't tax anything remotely to do with building and owning property. Tax the fuck out of owning empty property

[–] jj4211 7 points 6 months ago (1 children)

Doesn't address some issue of how every time a house goes up for sale in my neighborhood, it's immediately sold to some company, usually hundreds of miles away. Property isn't empty, but there's no chance of an average person to manage to own a house, and rental rates are largely at the discretion of a handful of companies.

[–] az04 4 points 6 months ago (1 children)

If property keeps getting built faster and faster it's just a matter of time until the bubble pops. Taxing empty property will accelerate that popping or at least deflate it.

There's no need for competition in the rental market because there isn't enough housing. The problem is multifaceted, people should look not only to taxes but also liberalizing zoning laws.

[–] franklin 3 points 6 months ago* (last edited 6 months ago)

Agreed, zoning laws and by extension car dependant infrastructure are a huge source of costs both to the individual and society.

Starting at the unnecessary additional land that it mandates, to promoting a one size fits all solution for every individual, to the additional roads and parking that becomes an enormous burden on the taxpayer to subsidize.

Incentivize not just more construction but more dense and varied construction the does not require the additional expense of private automotive transport.

[–] _lilith 7 points 6 months ago

And outlaw Air bnb, why build an apartment when you can just build condos and make the place into an overpriced pseudo hotel with no cleaning service

[–] Fluffy_Ruffs 5 points 6 months ago (1 children)

Wouldn't that just drive rents up? Landlords would instantly pass the cost onto renters.

[–] SeattleRain 0 points 6 months ago (1 children)

Not every tenant in every market can raise rents unless landlords collude which is supposed to be illegal.

[–] Jimmyeatsausage 6 points 6 months ago (1 children)

You wouldn't really need collusion to figure out what your new tax liability was and raise rent by that much. Just like how the cost of an EV goes up by the exact amount of any new tax rebates you'd qualify for by buying one.

[–] SeattleRain -1 points 6 months ago (1 children)

You need collusion to make sure all the landlords raise rents by the tax increase. Not every landlord is undercapitalized and lose money over a tax increase so they could not raise rents and steal rents from other landlords.

[–] Jimmyeatsausage 2 points 6 months ago (2 children)

You still don't need collusion...it's got nothing to do with undercapitalization. The IRS would publish a new rule, the underwriter would increase the escrow payment to cover the new tax liability (meaning the amount the property owner pays the bank monthly would increase) and the owner would increase the rent by that same amount. You would only need collusion if you wanted to raise the rates higher than the tax increase. If you wanted to, for example, increase rents by 2x the tax increase, then collusion could be helpful...but its still super risky. It only takes 1 landlord to not be OK with it to expose the whole thing.

[–] SeattleRain 0 points 6 months ago

You do need collusion to keep the more profitable landlords from just taking the increased taxes out of their profit. Regardless landlords are proven to be colluding via RealPage so your point is moot.

[–] RizzRustbolt 4 points 6 months ago

*per unit

[–] chonglibloodsport 3 points 6 months ago

I don’t know about the US but Canada’s population has been skyrocketing at about 12-15% increase per decade. Yet we’re building houses at an unbelievably glacial rate. This is totally unsustainable.

Here’s the real problem: the household wealth of most Canadians is tied up in the real estate values of their homes. Governments are afraid to unleash a building spree because that bubble will burst and destroy the wealth of the middle class. Instead, the current government is deeply committed to growing the population and the economy through immigration. But this will only put more and more upward pressure on the housing market. The middle class gets richer, housing gets less and less affordable, and immigration resentment grows.

[–] HootinNHollerin 2 points 6 months ago* (last edited 6 months ago)

Why not crop off the reddit advertisement

[–] KlugeMaster -1 points 6 months ago

Get rid of California's capital gains tax on house sales so that properties can be sold instead of rented out.