[px43]

My brilliant* idea to solve the real estate problem is to tax the hell out of properties that are sitting empty.

Something like a 2x or 3x multiplier on property taxes or something, especially in densely populated areas, and especially in areas where there is rampant housing insecurity. The tax needs to be greater than the potential gamble of waiting for occupants. This should be both for residential and commercial use real estate.

*facetious

[Aunche]

It's a myth that there are just a ton empty houses sitting idly like that. The reality is that the most expensive housing markets are also the ones with the least vacant. Even after a ton of people temporarily moved out of NYC during the pandemic, like me, the vacancy rate of NYC is still less than that of the entire US.

[px43]

> It's a myth that there are just a ton empty houses sitting idly like that.

Maybe where you live. NYC and SF are special in that they have very powerful people working to reduce the construction of new housing. This is obviously what needs to get fixed first in those markets, but it isn't a relatable problem in most of the US.

> The reality is that the most expensive housing markets are also the ones with the least vacant.

This is a basic supply and demand observation, and does not preclude the existence of people who allow their properties to sit vacant for long periods of time.

Looks to me like in NYC the vacancy rate is up to 6% (from a previous steady 2-3%) while housing insecurity is increasing.

https://www.cnbc.com/2020/10/08/empty-rental-apartments-in-m...

https://cccnewyork.org/press-and-media/family-homelessness-i...

To my eyes this seems like a tragically dumb problem with several really obvious solutions.

[p49k]

This exists in Vancouver. Unfortunately, the richest people once again find ways out of it, such as claiming the unit is uninhabitable due to renovation, and proceeding with the slowest and most inefficient renovation process imaginable.

[Robotbeat]

The solution is just a land value tax.

You don’t get taxed on improvements to the land, you get taxed on the value of the land (ie based on the value of the surrounding land... a vacant lot—or a lot being “renovated”—pays the ~same tax per acre as a 3 story apartment building next door instead of an order of magnitude less).

[ryanianian]

Not without pretty severe fallout for those on the other side of the equation. That same tax would force long-time homeowners and retirees out of their houses as soon as the neighbors start selling to build condos. Maybe this isn't a terrible thing if it leads to more density, but the profit still goes to the developer.

[Robotbeat]

On the contrary, in your scenario, the profit goes to the retirees whose land is now super valuable. That they can’t afford to pay the wealth tax on that land without selling/mortgaging some of it doesn’t mean they’re not now very wealthy. A mortgage or a reverse mortgage would allow them to live the rest of their lives there if they really wanted to. But they’d have to pay their fair share of the tax on that wealth.

[dntrkv]

You could waive fees for primary residences and tax the hell out of investment properties. I don't understand why prop 13 in California didn't work this way.

[reducesuffering]

Californians couldn't even majority vote last year to tax commercial properties at standard 1-1.5% rate, let alone investment properties...

https://ballotpedia.org/California_Proposition_15,_Tax_on_Co...

[kwere]

society still benefit from it

[Agenttin]

I've often thought this about those dark strip malls and grocery stores. They need to be incentivized to either lower the prices so low that someone will move in, or to demolish the building. Just marking it off as a loss every year while it slowly decays destroys the property values nearby.

[nostromo]

That’s a zoning / central planning failure.

We have too much retail space in America and too little housing, but zoning has often made it impossible to repurpose the land.

[benrbray]

I have a different idea that maybe I can get some feedback on here. Maybe it's really dumb for obvious reasons, so please tell me.

Construction companies that build residences are clearly creating value for society, so they should be allowed to make some kind of profit. Real estate agencies that buy property from construction companies are doing a very bad thing by renting them as "luxury" housing to people who otherwise have no choice since their livelihood is tied to an urban area.

Why not put a cap on the profit that can be made from a residence? Something like 5x construction costs, plus ongoing costs of maintenance. Suddenly, the "luxury" housing market is no longer suffocating all the affordable housing out of town since the property owner can't expect to rake in the piles of money every month.

[ryanianian]

If we say "no more profit after 5x" then buildings will constantly be torn down and rebuilt or otherwise "re-constructed" to reset the clock. Renting property has its own ongoing risks as any landlord will tell you, and we reward risk with (potential) profit.

Many buildings are "luxury" in that they cost 15% more to build but then ask for 50% higher rent. It's not hard to find buildings that were once "luxury" but are now kinda gross since the veneer has peeled off. But there's not enough competition in housing to force the rent lower.

What gets people fed up is the seemingly universal constant of rents raising 10% every year despite no additional investment.

[ryandrake]

The multiplier should be the number of empty houses owned.

So if you have house A that you live in, whose tax bill is $10K, and house B that's empty, whose tax bill is $7K, then your total tax should be $17K.

If you additionally have house C that is also empty, whose tax bill is $8K, then your total tax should be $10K + ($7K + $8K) x 2 = $40K.

If you additionally have house D that is also empty, whose tax bill is $5K, then your total tax should be $10K + ($7K + $8K + $5K) x 3 = $70K.

This would strongly incentivize against this activity of having one person or entity simply hoovering up homes and treating them like bars of gold.

[marto1]

> solve....is to tax

You won't solve sh*t. Just like the other gazillion times new taxes were introduced to solve something.

Well, I mean, unless your goal is to make the poor even poorer.

[ralphhughes]

This is actually being tried, starting this month, in my area (https://www.bbc.co.uk/news/uk-wales-56293250)

Monthly council tax will double for properties that do not have occupants. This is due to my area having over 10% of houses being bought as holiday homes or investments that stay empty for most of the year.