I think there needs to be a strong fiscal disincentive against owning houses for investment. Houses need to be lived in, preferably by the owner. I'm all for a punitive tax on empty houses or houses with ridiculously high rent.
One step forward would be to just disallow any tax deductions for renting. Next step, increase taxes on rented or empty housing.
In a few years, the market would settle with much more affordable prices for buying. But we still would have a problem that building new houses would stop to a halt due to low ROI, and renting market would heat again. For that, I'm not sure how to solve this.
Wether a house is rented or owned by the person occupying it doesn’t effect the basic supply/ demand dynamics of the market. Punitive taxes on landlords isn’t going to cause housing prices to come down because the cause of high prices is a housing shortage. There is no indication supply is being artificially depressed by people letting houses sit unoccupied.
The report [1] the article is referencing is talking about housing units so it's not just homes but apartments (and possibly rooms that can be rented as a unit?). Furthermore, the very same report gives the distribution of the vacant units, of which only 21000 could be possibly considered "hoarded" (this is assuming nobody does repairs and renovations, all rentals go up for rent as soon as the previous tenants move out, there is no corporate housing, no housing is involved in legal proceedings and the buyers move to the new house on the closing day), which makes 5% of total housing in SF. Does not look like a huge hoarding problem to me.
They already have this in Texas (homestead exemption) and Texas is one of the hottest markets for single family rentals. They are building entire suburbs that are rental homes only. Millennials as a group don’t want to live in apartments anymore because of the effects of Covid 19 causing people to be locked into their homes.
Same thing in Georgia (punitive taxes on any residential property beyond your primary home), and Atlanta is still one of the hottest housing markets in the nation.
The important thing to remember about current timber prices is that our punitive lumber tariffs are the only thing protecting us from the red threat from the North.
But not nearly as good as being able to buy it (assuming the single-family, multi-year home that the author is describing). Communities need both options, but the current climate leans far too heavily toward renting in situations when buying would be better for everyone.
The usual argument I see for renting being good is that up-front barriers make home buying hard for a lot of people and that transaction costs make it impractical for short tenures. If those were independently solved somehow would renting still have notable advantages?
* Other investments may outperform home equity, even taking into account imputed rent, especially if homes are sustainably affordable (read: have no return).
* Other investments may be less correlated with your earning potential.
* Risk of being underwater.
* Risk of an expensive, unexpected maintenance or repair item.
* Chores you are no longer paying for, you have to do yourself.
In a few years, the market would settle with much more affordable prices for buying. But we still would have a problem that building new houses would stop to a halt due to low ROI, and renting market would heat again. For that, I'm not sure how to solve this.