[aaggarwal]

Most housing discussions seems to avoid one of the main reason driving the prices up, their treatment as an investment vehicle.

Residential housing should not be used as an investment vehicle. Period. Its primary purpose is to allow families to own and live in the house. Mandating that can eliminate the rich landlords/foreign investors buying houses just for investment, stabilize the demand and drive down the prices.

One way to mandate that could be progressive property tax based on how many properties you already own with a max cap on number of allowed residential properties one can own. This might decrease incentive to build new housing for developers, but can be solved by temporary tax breaks for building new housing.

Am I missing some second order effects?

[ItsMonkk]

Yes.

Anytime you create a new law, you should, like good code, remove all of the hard-coded values within it. Ideally all laws should be pointfree[0]. Having a max value of owners can easily be routed around(I don't own this house, this company, that I happen to own, owns this house!), or setting some tax breaks for developers are both nasty hacks that wouldn't make it through code review. The Land Value Tax would.

[0]: https://wiki.haskell.org/Pointfree

[tryptophan]

>One way to mandate that could be progressive property tax based on how many properties you already own with a max cap on number of allowed residential properties one can own.

This would do nothing. Investment ownership of housing is tiny. It is the homeowners who push for policy to reduce construction of housing and boost prices.

Getting rid of zoning + Land value taxes are the answer.

[akamaka]

The second order effect is that without real estate investors, the market for rental accommodations will eventually disappear. Having no rental market would by default accomplish the goal of having everyone own their own home, but it would cause plenty of other social and economic pain.

[jungturk]

A high tax on the capital gains at sale could also work well here.

I'm also curious whether decoupling housing from investing could be useful in stabilizing prices.

[aaggarwal]

One problem with high tax based on capital gains at sale is that it needs the sale to happen and you start running into issues where people never sell and houses will get inherited. This still doesn’t tackle the problem head on.

[akouri]

Who will supply the capital to build housing in this world you propose?

[aaggarwal]

City and state governments can offer temporary tax breaks for building new housing in certain zones to attract capital. This is already done in a way when government is trying to attract capital for new industries via SEZs.

[jungturk]

Homeowners, coops, collectives, local government, or NGOs?