I'm talking about the size of the building. An actual apartment complex. I'm not even sure renting homes in general is a good idea. Let the market figure it out for someone who wants/can afford to own it.
> I'm not even sure renting homes in general is a good idea.
Let's review the situation here. 1) The large majority of the land in the area is zoned exclusively for single-family homes. 2) Some people don't have the money to buy, e.g. no down payment or bad credit.
That doesn't follow at all. If you reduce investment then you reduce production. The price only goes down if the cost of creating more of them goes down, unless you can remove so much of the demand that you no longer need to add more supply. The small percentage of single-family homes owned by corporations isn't that.
Nah. There's 30 homes and 30 people. 10 people own two homes apiece that they live in 50% of the time. That leaves 10 homes for the other 20 people to fight over, driving the price up. Pretty simple.
I'm pretty sure you lose a lot of tax advantages on rental properties (mortgage interest deduction, depreciation etc.) if you don't rent them at market rate.
If they rent it for a nominal amount, they're effectively losing money on the property and gambling on appreciation. If someone wants to do that, good luck to them.
You can't deduct depreciation on an owner-occupied house to begin with. The premise is that you're trying to distinguish between landlords and people who have a second home for themselves. But they can just rent it to a friend who in turn lets them use it.
If they're buying multiple homes to rent out at market rates to the general public then they're just an ordinary landlord -- the thing that wouldn't be paying a tax on "second homes" by design.
I thought the tax on "second homes" was a tax on landlording and speculation, not a tax on vacation homes. I think we might just be talking past each other here.
Why would taxing landlords reduce housing costs? It just increases housing costs for landlords, and in turn renters, as landlords become unwilling to pay for new construction until rents increase to cover the tax.
If landlords become unwilling to pay for new construction, that reduces the demand for new housing supply hitting the market. Which reduces its price and makes it more affordable to owner-occupants.
I don't know if it definitely works. But it's plausible. Tax what you want less of, right?