Or unoccupancy tax. Forcing landlords to let at the price renters are willing to give will probably do some to reduce rent levels.
Same goes for commercial, but in that case, I'd even suggest forefeiture if you are not reducing requested rent within a year of vacancy. Let someone else take over if you overspent.
For homes, I don't know if there are. But I think taxes should be levied in line with incentives. If you place a wealth tax on property ownership, the only tangible thing that will happen is rents going up to offset. Since the tax applies to all landlords, it will be the closest thing to rent inflation.
What you really want to avoid is homes built but sitting empty. Whether that's a builder who can't sell at asking price, or a landlord not getting the rent they want doesn't matter. If the city sold a lot to you, they did so for improving home supply, not the developer's profits.
For commercial, my opinion was based on Louis Rossman's YouTube channel about New York. The hypothesis there is that loans are based on property value, which are tied to requested rent. Asking for a lower rent might mean they have to put up more collateral, which they can't. So they keep asking for high rates and leave it vacant.
Generally, there aren't any meaningful number of completely vacant homes in desirable areas in major cities. The caveats are there for cities like Miami where there are a significant number of second homes, cities like Detroit and Baltimore that have failed in some sense and experienced major population loss at some point, and rural areas that also have been experiencing population loss for some time.
I don't have a problem with vacation homes and most Americans don't seem to either, but if you do, okay.
The areas with declining population aren't really relevant to the discussion IMO, other than it's cheap housing that exists as a counterpoint to the people who claim no cheap housing exists.
> But I think taxes should be levied in line with incentives. If you place a wealth tax on property ownership, the only tangible thing that will happen is rents going up to offset. Since the tax applies to all landlords, it will be the closest thing to rent inflation.
I agree.
> What you really want to avoid is homes built but sitting empty. Whether that's a builder who can't sell at asking price, or a landlord not getting the rent they want doesn't matter.
Sure, but that's not a problem today. Builders aren't sitting on homes for extended periods of time, and landlords aren't leaving units empty for extended periods of time either. They are already disincentivized from doing so by existing carrying costs, so they don't.
> If the city sold a lot to you, they did so for improving home supply, not the developer's profits.
They presumably did it to generate revenue for the city, though there isn't much buildable city-owned land in most municipalities.
> For commercial, my opinion was based on Louis Rossman's YouTube channel about New York. The hypothesis there is that loans are based on property value, which are tied to requested rent. Asking for a lower rent might mean they have to put up more collateral, which they can't. So they keep asking for high rates and leave it vacant.
The commercial market is completely different than residential. Loan durations are shorter, terms are different, and there are many other factors that differ.
That analysis can't be applied to the residential market.
Same goes for commercial, but in that case, I'd even suggest forefeiture if you are not reducing requested rent within a year of vacancy. Let someone else take over if you overspent.