[scatters]

> how is that not helping with house price and rent inflation?

Assuming they're sold to owner-occupiers who were previously renting, you've increased housing supply in that segment of the market, but you've reduced supply in the letting market, so the net effect will be zero. It won't change net demand or supply across the market as a whole.

If they were keeping those flats empty, that would be a different story.

[arturkane7]

Wouldn’t house prices go down if you make it harder to monetise RE via rental? Say by increasing rental income tax or banning buy-to-let?

[xwdv]

Nope. Houses price will shoot up. The only thing that really brings down prices is build a lot more homes that people want. Increase supply.

[aaomidi]

Removing any and all gains from “real estate investment” would heavily bring down pricing.

Housing can not be seen as an investment. We can not have it be an investment, and a necessity, at the same time.

Housing can not, and should not ever produce more returns than the most basic index fund. If it does, no matter how many you build it will still be inaccessible to many.

You may argue that well, if there is more housing then there will be less money to make from investing in it. But here’s the kicker: what do top share holders do if they suspect the operations of the company they have shares in is going to make their shares worth less? They work as hard as they can to change the operations and minimize what they can do.

The same is true when housing is an investment. A property owner will act in their own best interest to reduce the ability for their investment to become worth less money.

This could mean toxic environmentalism, where you don’t actually care about the environment, but you’re using it as an argument against building houses. It could mean actively not giving permits to new constructions. It could mean actively lobbying the government to prevent certain classes of homes being built. Heck it goes all the way to actively reducing side walks, public transportation, etc.

And this is why we can’t just say “uh build more”. The “lack of supply” is a symptom. Not a cause.

The cause is simply that we accept that real estate can be an investment vehicle.

[Gunax]

So without getting into whether we actually want that, how is that achievable?

In a sense, every house is unique, and land is certainly unique by it's location and also finite. There really are some number of acres within a particular distance of a city centre.

I guess my gut reaction is that your comment might be right (I am not sure) but strikes me as idealistic.

[aaomidi]

I think we shouldn’t let perfect be the enemy of good.

There’s a couple of things that can help here:

1. Right to build. No local government should be able to say no to you building a small multi family home or single family home on their land.

2. A graduated (by year) increase on renting income for homes. Places that had been rental residences for a few years prior to this also should be forced to stay residential for a while.

3. Empty home wealth tax. If a house has been empty for more than six months a year, it should be taxed a percentage of its fair market value based on vacancy months.

4. Mortgages returns on investment should be limited to a certain margin over inflation. Or just match inflation. More than that should be taxed.

Are these good ideas? Maybe, idk. I’m not the person that’s gonna come up with the model of how to accomplish this. But it’s potentially a starting point.

[Yoofie]

> 3. Empty home wealth tax. If a house has been empty for more than six months a year, it should be taxed a percentage of its fair market value based on vacancy months.

How would this work in practice and enforced?

[imtringued]

We solved it for parking lots by introducing parking fees.

[hackerfromthefu]

So not for profit? What about healthcare? Food? etc etc etc

[SantalBlush]

>Assuming they're sold to owner-occupiers who were previously renting, you've increased housing supply in that segment of the market, but you've reduced supply in the letting market, so the net effect will be zero.

Not really. The net effect would be a distribution of wealth across a broader number of people (former renters, now owners) instead of one person (landlord who is accumulating wealth by charging rents from a number of people).

[Gunax]

But the purchaser exchanged money for property. The transaction did not alter their wealth.

I understand that we typically think of owning property as a means of increasing wealth, more so than renting. But this is only true because we let home values increase.

And it might not even be true now, if renters places their savings other investments.

[SantalBlush]

Even if home prices stay flat, it would increase the would-be-renters' wealth. Their payments would not only build equity which can transfer to another purchase, but once they pay off a home, the payments are finished. That means more net-positive cash flows to their own pockets. The notion that home prices need to rise for wealth building is completely and unequivocally false.

[ac29]

> once they pay off a home, the payments are finished

Property taxes and maintenance costs continue forever.

[thatguy0900]

But why would rich people or corporations be in the market for a house if they couldn't rent them out? Especially the current above asking price cash offers from Blackrock and the like? That total number of families needing a house might be the same but the demand from entities with unlimited budgets and the ability to forecast not making their money back for ten plus years evaporates.