Can we finally focus on real estate reform now?
This latest housing crisis has made it abundantly clear that allowing wealthy individuals and corporations to own single family homes is destructive to society as a whole.
The priority should be owner occupied homes. People need housing security. If even the middle class with career jobs can’t afford a modest house in their peak working years, the system is broken.
We can attack this runaway housing inflation by doing the following:
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Ban companies (including hedge funds, etc) from owning condos and houses. Apartment complexes are still fair game, because society needs high occupancy buildings which require more capital to build and run.
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Limit individual ownership to 3 (as an example, number doesn’t matter) dwellings. This will curb the rampant “buy for short term rental, parlay into next purchase for short term rental” scheme. We still need rental properties, and small local landowners should be the priority.
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Heavy penalties for selling in under 2 (as an example) years. This will also curb the short term rentals due to added risk, as well as curbing the flippers relisting at 30%+ (and I’ve seen 100%) markups after 3 months.
Each of these wouldn’t be outright bans which would potentially too big of a disruption. But in phases, using increasing tax penalties as the stick.
We need to stop treating homes as a commodity. They are a basic essential.
I would add a progressively higher tax rate for each property beyond 2-3.
I’d argue that better urbanism is part and parcel of real estate reform. It would be much more difficult to entirely fuck up the housing market if we weren’t so utterly dependent on single family homes and there were more apartments being managed by small to mid-size firms.
We still need rental properties, and small local landowners should be the priority.
Landlords aren’t necessary for rentals to exist. We built hundreds of thousands of government owned properties every year(!) the UK’s post-war period. Some of them have bad rep for looking like soviet blocks, but modern social flats look like any other now so that isn’t a valid complaint anymore (I have to point them out to friends, they otherwise wouldn’t have a clue). These can and have been very much used for temporary accommodation, like private rental units.
If you’re more of a market economy fan: we also state-funded housing cooperatives, democratically owned housing. Vienna is the popular example where they even have shared communal swimming pools, but 20% of Norway’s entire population lives in them and they’re still growing steadily despite not having gov. funding for decades. It’s not impossible to come up with a way to use these as rental units while retaining the democratic element (i.e. the renters “own” the flat while they rent it and “sell” it on when they move). In Norway, for example, you’re exempt from property transfer taxes when you sell a coop flat meaning there’s no tax friction if you want to move from one coop flat to another. Since the flat is never technically yours in a coop (only the share giving you the right to reside there) it just goes back to the coop when you move out, and they can handle renting it on to someone else (so you don’t need a slow bartering process to move out). Your rent can also straight up go towards a larger share in the property, so you’re not propping up some landlord, the only thing you’re really paying for is management of the coop like you would with a privately owned block of flats anyway (except the coop probably wouldn’t spend thousand on an Xmas tree).
If we’re going to be thinking about government regulation and law changes anyway, we may as well try more than just small ““ethical”” landlords. They may well be part of it in some limited way but let’s think beyond just that.
I think there is value provided when someone buys a dilapidated house and renovates it into something worthwhile to sell, even if it takes less than 2 years.
Or for me personally, I bought less than 2 years ago but the experience has given me a better idea of what I really want and I’d love to be able to sell to break even on this place and buy a different place that more fits my needs.
High short term capital gains taxes would help with the 2nd case (as I don’t intend to make money from owning this place briefly) but not the first.
I’ll take capital gains tax as a reasonable compromise.
I will say that I don’t think keeping “renovation” flippers intact is a strong motivation. They are infamous for putting in shoddy cosmetic work to hide serious problems. At least if someone needs to occupy a renovated house for 2 years, they may actually be motivated to do things right.
I still don’t understand how this hasn’t been a bigger priority in government. I wouldn’t expect Republicans to care about it at all, but it feels like nobody is giving it any attention at the State or National level. These out-of-control rents and housing prices are insane. I’ve got a relatively ok salary and I’m barely staying on top of things, but I don’t know how the hell anybody else is still holding it together.
Lobbying and self interest.
These reforms may result in housing prices decreasing or holding steady. Which is a plus for anyone entering or laterally moving to occupy. It’s a negative for people using housing as an investment.
It’s not a stretch to assume that a lot of politicians are in the multiple land ownership territory. And thus, would “hurt” them personally.
Same with WFH endangering commercial real estate. Lobbies and personal interest. Plenty of business owners in politics.
It’s not a stretch to assume that a lot of politicians are in the multiple land ownership territory. And thus, would “hurt” them personally.
More to the point, it will cost them any support among suburban homeowners, which is how we got here in the first place. That’s a massive bloc of voters and very few homeowners don’t see their homes as an investment
There’s also the fact that plummeting property values is really hard to sell to the majority of the voting base. Many homeowners won’t vote for someone who will tank their often largest asset. A lot of the middle class has a lot of their money in mortgages on their primary home.
The Dems only real position right now is “not being Republicans.” They’re barely able to maintain the status quo and prevent us from backsliding further, there’s very little chance that any forward progress towards a better future is going to come from them.
Not sure why you’re getting down voted so much. We have no truly leftist or left of center parties in this country. We have fascism-lite and status quo right.
When Nixon won he won by a super large percentage. Almost all the states were red. Look at the electoral map for Nixon’s win, if you can find it, it’s shocking. You know why it looked like that? The DNC ran a progressive candidate. And they’ve not done that again since.
Not saying Dems aren’t better, by far they are, but they aren’t progressive and we can’t expect them to enact progressive changes.
Just gotta keep voting for the lesser of the evils until these dinosaurs either retire from, or die in, office. It’s sad, it’s frustrating, but it is all we can do for now. Keep voting for the party not actively rooting for a dictatorship and we might make it through this.
This is why I hate the Dems. They aren’t fucking doing anything. Yeah, they aren’t Republicans, but they claim they can’t get anything done because the Republicans won’t let them. Then why are they letting the Republicans get so much evil shit done? How is it that one side can accomplish their agenda and the other side sits and goes "sorry guys, they don’t want to share their power so we won’t be able to accomplish our goals lol better luck next time. " Fucking useless twats.
Landlords have a constant stream of income that they can use to affect politics while that same stream of income negates the occupant’s ability to influence politics. Renters ought to unionize.
I absolutely agree that we need to focus significant energy on a more stable housing (not homeowner) market.
However
Ban companies (including hedge funds, etc) from owning condos and houses. Apartment complexes are still fair game, because society needs high occupancy buildings which require more capital to build and run.
This just means fewer homes get built, period, adding to the problem. Id support restrictions on these groups purchasing homes specifically on the secondary market instead of an outright ban/strong Pigouvian tax.
Heavy penalties for selling in under 2 (as an example) years. This will also curb the short term rentals due to added risk, as well as curbing the flippers relisting at 30%+ (and I’ve seen 100%) markups after 3 months.
This will straight up just lead to bankruptcy, foreclosure, and then cheap speculation. This would be incredible dangerous, and you’d need to put a lot of protections in for homeowners that wouldn’t somehow be abused by flippers.
I’d also love to see protections baked in for people who purchase prior foreclosure/condemned properties and turn those into marketable/livable homes - that’s an increase in supply and we should encourage it
What we primarily need is to rip our zoning policies out by the root and encourage lots of building, as I’m sure you’d agree, but that’s a local problem. These changes at the federal level, once hammered out, could help a lot.
Ban companies (including hedge funds, etc) from owning condos and houses. Apartment complexes are still fair game, because society needs high occupancy buildings which require more capital to build and run.
This just means fewer homes get built, period, adding to the problem. Id support restrictions on these groups purchasing homes specifically on the secondary market instead of an outright ban/strong Pigouvian tax.
Disagree. How does this discourage builders? Afaik, most don’t build with the intent of renting out individually. The intent is to sell. And at least in my high demand area, units are sold well in advance to actually being ready to live in.
Unless you mean the necessary first step of buying land with an existing home on it. In which case, it’d be easy to add fair exemptions.
Heavy penalties for selling in under 2 (as an example) years. This will also curb the short term rentals due to added risk, as well as curbing the flippers relisting at 30%+ (and I’ve seen 100%) markups after 3 months.
This will straight up just lead to bankruptcy, foreclosure, and then cheap speculation. This would be incredible dangerous, and you’d need to put a lot of protections in for homeowners that wouldn’t somehow be abused by flippers.
How so? Most buyers are entering a 30 year mortgage with their finances thoroughly vetted. If you’re saying the first 2 years is extremely risky, maybe those loan regulations need to be revised.
Besides which, as someone else in the thread mentioned, perhaps a heavy capital gains tax in the first 2 years is more appropriate.
What we primarily need is to rip our zoning policies out by the root and encourage lots of building, as I’m sure you’d agree, but that’s a local problem. These changes at the federal level, once hammered out, could help a lot.
Of course, building is a necessary component. But it’s touted as the only solution. Realistically, building high density living won’t make a dent in housing prices, because new high density living in high demand areas will always be built as “luxury” condos that demand a high price. Builders are not motivated to flood the marked to lower their own returns. They will time their projects to trickle out to keep demand high and returns maximized.
Besides which, as someone else in the thread mentioned, perhaps a heavy capital gains tax in the first 2 years is more appropriate.
I didn’t see this, but I would definitely agree with this. Really simple lever to pull, something that can be offset if need be, and will definitely have the impact we’re looking for.
Realistically, building high density living won’t make a dent in housing prices, because new high density living in high demand areas will always be built as “luxury” condos that demand a high price
This frees up housing downstream, and the builders make money by building, not by the eventual value of the home.
This ties in with point 1 above and why I think it will cut production. Right now there is essentially 0 risk in serving as capital to build housing, and we should be piling on that to build as much as possible.
HOAs should be banned too. They’re nominally constitutional under the first amendment but the restrictions they impose are not worth the price you pay in dues and they only serve to restrict the actual property owner from pursuing happiness. Everything the HOA could do is a function of local government, there’s no sane reason to pay both property taxes and HOA fees.
I don’t think they should be banned, but their power should be severely restricted.
My HOA is actually useful because they’ve banned short term rentals, put a cap on long term rentals, and cover the insurance. Granted, this is a place where walls are shared.
I also don’t see my local government ever taking care of these things under any realistic scenario.
Exorbitantly high residential property tax rates, with even higher owner-occupancy credits.
Landlords will stop renting, and start issuing land contracts or private mortgages. “Tenants” will hold the deed to the property, and be earning equity. “Landlords” will have a major incentive to get their investment properties under contract and out of their name, lest they face a huge tax bill.
