[rst]

It also neglects a huge factor in several hot markets, particularly New York: rich out-of-towners buying apartments as investments, and leaving them unoccupied. The owners aren't living there, and the buildings are typically reworking or replacing former residential units where people actually resided, so the net effect of that new construction is that the stock of housing available to house people who actually live in the city is reduced.

[danieltillett]

This problem is so easily fixed via the tax system I am surprised it has not been done already. Just tax high and rebate for residency.

[Radim]

Too naive, I'm afraid (as well as, in my opinion, misguided).

Just put yourself in the shoes of the investor. Government announces they're gonna make you pay through your nose if no one "lives" in your apartment.

Leaving aside the dubious morality of such penalization (it's a slippery slope!), is your reaction going to be "Oh noes, I am ruined! Better sell my apartment now."? Or can you think of half a dozen simple, practical ways around it?

I bet you have already.

[spc476]

Florida does this already, the Homestead Exemption, which taxes homes (condominiums and townhomes, etc) by lowering the home appraisal by $25,000 (for tax purposes). But it only applies to one house as long as you designate it your "permanent residence" (so if you only live in Florida part time, you don't get it). Somehow, we still have plenty of apartments here in Florida.

[danieltillett]

It is very hard to get around residency because someone living at that address needs to pay income tax. You can even rebate back the occupancy tax via the income tax or sales tax systems.

If you don’t want to do this you can do random surveys of the suspect property (say any property without a taxpayer) and if it is unoccupied more than a few times and not registered as unoccupied then a big fine results.

Finally, the owner does not need to sell, just have tenants. What you want to avoid is housing sitting empty or only being used as a holiday home a couple of weeks a year.

[Radim]

Right. Let's send a secret police on "random surveys" to "suspect properties", checking to see who lives in people's homes :-)

Did I mention "slippery slope"?

You don't have to be a diehard libertarian to find this whole concept somewhat creepy.

[danieltillett]

I hate to break it to you but there are dozen of authorities that can come around and inspect your property whenever they want - this slippery slope has long gone.

I have no problem with someone with the appropriate authority politely knocking on my door to see if I am home if I am claiming a large tax refund for living there. The IRS and its fellow ilk are far more intrusive - the IRS makes my life a pain as it is and I am not even a US taxpayer.

[Radim]

Where do you live that "dozen of authorities" can come around and inspect your property at will?

I see where you're coming from, but as is probably obvious, I don't subscribe to your "If you've got nothing to hide, you've got nothing to fear" world view on government surveillance. This seems to be the root of our disagreement here.

https://en.wikipedia.org/wiki/Nothing_to_hide_argument#Argum...

[LukaAl]

I don't get that. What kind of investment is? I buy an apartment that has for sure some expenses related (concierge of the building, taxes) and depreciate over time hoping that prices will go up? Why not renting that apartment? I mean seriously... Why I can't rent that apartment for few thousands dollars a month? A 1M$ apartment that rents for 4k$ a months returns 4.8% before taxes and expenses, probably 2.4% net. Not a great returns but relatively low risk. And then, if market price raises more than inflation, I could have a good return once I sell it in the future. The same apartment, empty, give me money just in the future if prices goes up. Do you have any statistics for this issue besides anecdotal one that is what I found?