[leehuffman]

> Genuine Question, why can't we just charge a federal property tax 3-4x local property taxes for individuals who own >1 property (which would likely be distributed back to the locality, specifics not important)

I am that person.

I own two duplexes in addition to my primary residence, for a total of four residential rental units – all 2/1s made up of ~750 sq ft each. Those additional properties that I own provide housing to 6 humans who can't purchase, or just prefer not to.

What you're proposing would result in one of two moves from my end:

1. I sell both properties and let someone/some entity (who doesn't work and/or manage the properties themselves, have any relationship with the tenants, will push rents to market prices immediately, etc etc) deal with it.

2. I scrape the lots, stand up single family homes, take my gains and walk inside ~18 months. That puts the 6 humans mentioned above out into a (very tight, <= 1% vacancy rate) rental market that'll bump their monthly rent expense by ~25% minimum and, overall, very likely reduce the headcount of humans housed.

Either way, it's a high level hit to individuals, the market, whatever. It doesn't result in any gains or economic corrections to the RE market.

> (which would likely be distributed back to the locality, specifics not important)

That's already happening in my scenario. I own & operate a General Contractor LLC entity that issues invoices to me, the property owner. The local city, county, and state are paid B&O, sales, etc taxes on those GC LLC invoices out of my personal pocket. Separately, my personal rental income is taxed appropriately at the federal level.

> I think this would just price in the externalities of corporate versus natural person living in a property for a locality.

You know what else can be priced in? Or wildly swing a market into affordability, normality, etc? Letting people build things. My lots are massive, but they consist of sheds and lawns instead of multiplying my units and housing more people.

It's impossible in my local market, and that's why it's carrying the <= 1% residential vacancy rate it has for 15+ years, and why rents are increasing at wild rates that no industry/job market inside 80 miles can support. Economics 101 says supply vs demand etc etc. Easy layups for anyone with half a brain. We don't have to modify anything outside of city/county zoning & the ability to infill everywhere.

[toomuchtodo]

Fellow housing provider here. To your point about scraping the lots and building SFHs, I would counter the solution to that is to outlaw zoning for SFHs for tear downs. Raw land, go for it. But if a structure stood on a parcel, you can only increase density when rebuilding and upzone. This also potentially avoids situations like Naperville, Illinois, where you have a housing shortage at the same time obscenely wealthy folks tear down older modest homes to build McMansions to the lot lines.

https://legallysociable.com/2021/12/28/new-publication-more-...

[snapplebobapple]

That would be a bad idea because the problem isnt the need to increase density, that is obvious and wanted by nearly everybody building. The provlem is the zoning often limits lot coverage to one or two units and some percentage less than 50 % coverage. You dont jave to be a dick to the one guy in the hundred building that wants a small single family and lots of land, you need to let the other 99 act in their own self interest and build much higher density with a much jigher unit count.

[toomuchtodo]

My suggestion does not prevent a SFH and lots of land entirely, only if an existing structure was torn down to make way for it. You can still buy an existing SFH, or build one on vacant land. You simply can’t replace an existing SFH or multi family with another SFH. Density line only go up.

[snapplebobapple]

Yes, that's a good summary of the bad idea. Again, this is a bad idea because it discriminates against one tiny sliver of the resale market (those that want to buy old houses because they like the area the land is in and tear down the house to build a new one). It's not going to work. What you are going to cause is that tiny sliver of people to say "ok, how much do I have to keep to call this a reno and get it through the system?" and then keep that minimum. You are also going to cause an expansion of the government to deal with this new level of regulation, increasing everyone's costs and making us worse off for no discernible benefit because this deals with a part of the new house pipeline that isn't the problem.

The problem is that in most of these place no matter what one does one is still stuck with low lot coverage and low allowable unit numbers (i.e. in my city the overwhelming majority of residential tops out at 45% lot coverage, 15 meter heights, and one unit maximum (a small chunk of the overwhelming majority zoned this way allows 2 units in a restrictive manner as either garden/over garage or basement suite). So instead of wasting resources increasing regulation, the solution is to decrease regulation. rezone all this stupid stuff to allow much higher lot coverage, height and unit count and then approve everything that fits in the zoning in a short period of time rather than dragging it out for months and months through bureaucracy. You get smaller, cheaper government (big win), faster development of the available land (huge win) and you refocus the large contingent of businesses currently focused on buying old single family in places zoned for 2 units, subdividing and building two units onto building much bigger, higher density things like multi unit walkups in the same space raising the unit count from the current max 2 units to 4-10 units on the same piece of land. This will solve most of the problems while giving people the freedom to do what they want (but the incentive to do what is best for society) vs decreasing freedom for no benefit and moderate harm.

[tnel77]

To be honest, I don’t really care about the one guy who can afford to buy a run down house in a nice downtown area just to level it and rebuild a $3-5M modern travesty.

[hahahacorn]

Parent here, sorry for taking so long to get back and thanks for such a thorough answer.

I’ll start off by agreeing that supply is the primary issue. If I had to choose between increasing supply and fucking with tax incentives, I choose increasing supply 100/100 times.

However, you’re approaching this solely from the perspective of existing multi home owner.

(The following is directed both at you, but also the other dozen comments making similar points). The entire point of this change would be to drive prices down. Because carrying this inventory is more expensive. Rent is dictated by what renters are willing to pay, not by your property taxes. What you're willing to pay is driven down by the increased cost of ownership. This leads to more owner occupied lots.

Your third option that you didn’t mention is that you sell the duplexes to one of the renters or someone looking to buy their first home and rent the other half (who now have an advantage over serial investors, and prices are lower) and you can utilize the cash from your sale to invest in other assets that don’t carry as many negative externalities to be invested in as speculative assets (I can’t buy a fucking house!!!!!!!). This is also Economics 101.

But to be clear, 3-4x property tax is too high, it would make more sense in the 20% up to 300% and scales the more you own. Also let’s just build.

[dontlikeyoueith]

> Those additional properties that I own provide housing to 6 humans who can't purchase, or just prefer not to.

Of course you just ignore the fact that one of the reasons they can't purchase is because you're hoarding the damn houses.

You can't buy what isn't for sale.

[yonran]

The problem is not that rents are too low and sales prices are too high, which might make it appropriate to punish renting a unit and force landlords to sell. The problem is too few of both rental and ownership units.

[wholinator2]

I see this point oft repeated, usually as a shut-down for the above arguments. But i also see people claiming the complete opposite for their localities (that there are many many extra vacant homes being held than people that need them). It seems like the initial wave of arguments cited tons of statistics but over the months we've just stopped doing that for some reason as everyone's opinions have crystallized.

Stating such a strong assertion should still require at least a link

[yonran]

I think the best person who explains housing trends is Kevin Erdmann. This article provides an overview of his conceptual model for why prices fell nationwide in the Great Recession (people with bad credit were prohibited from getting a mortgage), why both prices and rents have been increasing since the Great Recession (when the Fed reduced prices too low, the construction industry collapsed), and why it is a mistake to attack build-to-rent landlords (they are a major source of new supply today). https://www.mercatus.org/research/policy-briefs/getting-corp...

[dontlikeyoueith]

There are plenty of ownership units in my state. They are just owned as second homes by people who don't live here. 80k of them sit vacant most of the year. There's only 6k homeless people in the state.

[Plasmoid]

Rented housing isn't hoarded. The argument might have some merit if there was no market for used buildings and no market to build new housing.

But that's reality. Go on loopnet and you can see plenty of buildings for sale.

[brailsafe]

> Easy layups for anyone with half a brain. We don't have to modify anything outside of city/county zoning & the ability to infill everywhere.

Right, that's why we'd both want to allow infill everywhere, and ensure market effects can be realized by simultaneously discouraging property vampires who've got an inflated sense of service to their community—however generous they may think they are—from capturing any/all new homes built with the gains they got from already milking the constrained housing market or being the wealthiest generation; it takes a long time to cool down the ocean.

A set of policies that would enable much more to be built on what were previously lower density lots, that people who were previously priced out have a realistic opportunity to access, and as well constrain the ability for individuals to capitalize on raw surplus ownership. Building more doesn't work if people with modest salaries and families can't even dream of buying or renting the new units, but also things don't get built if there isn't some kind of incentive to do so, and there's a lot of potential for nuance in how policy makers should go about doing that. However it works out though, it shouldn't favor those who show up and threaten to make people homeless as soon as their personal fiefdom seems jeopardized.

On top of those hypothetical policies, protections against displacement of renters seem pretty crucial, in terms of redevelopment of land and letting people move back in, as well as against just arbitrarily selling one's property and tossing your tenants to the wind or leveling their home.

[pxmpxm]

> Letting people build things

When the real solution is obvious and the proposals are nowhere near it, the game at play isn't to solve the problem: Remarket collectivist expropriation with some gen-z friendly word salad and backfill details on how this solves ____.

The paradox, to me, is that the set of people pushing for redistribution is almost entirely disjoint from the set of people responsible for creation of the thigns to-be-redistributed. One would think the skill set needed for the latter would make them exceptionally suited for the former, yet here we are.

[addicted]

If we assume that there is no way around this, and the options you suggest are the only options available. Actually, for the sake of argument, let’s further assume that the only option is the worse option. Razing and putting SFH instead.

That still doesn’t mean anything. Nearly any action, private, public, regulatory, or otherwise, will always have impacts that are on their own negative. The real question is how common your scenario is and as a result how do the negatives weigh against the benefits of the action.

[kavenkanum]

Just replace property tax with a land tax and most of your concerns will be handled. Any land upgrade (like buildings) should not affect the tax from owning a property.

Also I think that although rental cost may increase (but it's unlikely as individual rentals will be much more down to earth than those operated by a corporation that's driven only by quarterly earnings), the buying should be much more affordable.