| >There would also be no incentive to be a landlord, so the units would get converted to condos This is what I'm after. If too extreme then a tax point that sets the desired ratio of individual vs corporate owned housing units. That ratio should be 100% individual owned imo but I'd be happy with people at least legislating something on the issue. >most of the rent is going to loan interest, which is a legitimate operating expense Then don't tax payments on principal or interest. >rents would be just as high but the profits would go to the lenders But we would have successfully cut out a middleman with means, motivation, and opportunity to squeeze via anticompetitive practices. Having individuals negotiate rates with a bank is a much better situation than facing price fixed rents. I'm still granting that some amount of fees be charged to the tenants for shared resources (hallways, elevators, etc), so there is room for some money to be made, but that too should be closely monitored. |
There are tons of people who simply don't have hundreds of thousands of dollars to buy a condo and don't have good enough credit to get a loan. They need somewhere to live, so they rent.
And converting units to condos doesn't really reduce prices, because you still have the same number of residents and the same number of housing units. To lower prices you have to increase supply, the actual number of housing units, not just how people are paying for them.
> Then don't tax payments on principal or interest.
Now the landlord puts all the profit into principal to avoid the tax until the building is paid off, then sells it and buys another one. And if that isn't allowed then you're back to paying down principal being pointless and the rent stays high but goes to the lender.
> But we would have successfully cut out a middleman with means, motivation, and opportunity to squeeze via anticompetitive practices. Having individuals negotiate rates with a bank is a much better situation than facing price fixed rents.
The incentive is still there, you just move it around. The landlord still wants scarcity because they want the market value of their building to increase, because they can profit by borrowing more against the increase in value or by selling it to another landlord who takes a bigger loan. And now you've made the banks even more in favor of real estate prices going up because they get more interest now and loan amounts are closer to property values so they have more risk of defaults if property values go down.
> I'm still granting that some amount of fees be charged to the tenants for shared resources (hallways, elevators, etc), so there is room for some money to be made, but that too should be closely monitored.
This is the same problem as cost-plus pricing. Normally businesses want to reduce costs, now you've given them the incentive to waste as much money as possible so their cut seems like a reasonable percentage and award contracts to cronies etc.
The problem is not that landlords charge rent. The problem is that landlords lobby to restrict housing supply -- and so do homeowners, because they want home values to go up once they already own one.