The problem is that we have a system that financially incentivizes owning property while not using it.
If there was e.g. a heavy tax on owning unused property, this would cause people to sell unused property, driving down prices which would allow many homeless people to actually be able to afford a mortgage.
Property is there to house people. Keeping it as investment without renting it out is abusing the system for personal monetary gain and a system that allows that is flawed and should be fixed.
Not a huge amount, maybe. I joined a party in my home country that’s supposed to fix things like that. I voted for an underdog candidate in the internal leadership election who had very classical left talking points (among them a vacancy tax).
The party managed to get into government for the first time in a long time at the next election afterward, but as a junior partner to the conservatives. Now they do hardly anything out of fear that the conservatives blow up the coalition and instead do a coalition with the right wing extremist party.
So that’s that for now.
Other than that I talk to people and tell them about stuff like that. Because while the majority of the voting public would benefit from e.g. a vacancy tax, the majority is not for a vacancy tax because they neither understand the tax nor why it is necessary. So I educate people and bring them around to the idea. I can’t change the country, but I can change people around me. And if enough people do that, movements can form and things can change.
One such movement managed to ban nuclear power in my country in the 70s (famously, right after they finished the first nuclear powerplant, which then never got turned on).
because the value of the property goes up more if it isn’t rented. it’s used as an asset to borrow against.
renting a property is work and risk. not renting it… is no work and no risk.
the issue is you are thinking like a poor person. not a rich person. rich people don’t need more income… they need assets which they can borrow against. often they borrow against one building… to buy another, now they have two buildings they can borrow against… and as long as the value keeps going up they win.
just like stock. rich people don’t sell their stock. they borrow against it. and it’s tax-free that way. poor people sell their stock to make money.
it’s also why rich people want the interest rates to be near zero. because it makes borrowing dirt cheap.
In Austria, where I am from, there’s an average yearly appreciation of property value of 6% (average over the last 25 years, average inflation over the same time was around 3%). Yearly rent is on average 3% of the property value.
So investors have the choice of either taking 6% with no risk and no work or taking 9% but having to service the appartment, having the trouble of satisfying a renter and their legal rights and always having the risk of getting a renter who trashes the apartment and/or doesn’t pay the rent.
And yes, legally a landlord can sue for damages, but if the renter has no money, then all the landlord has is the security deposit, which might be far less than required to cover the damages.
So if you are looking for a super-secure low-risk low-interest investment option, keeping a flat you own empty is a good choice.
A way to counteract this would be a vacancy tax that is as high as the property appreciation. That way, keeping a flat empty nets you 0% ROI, while renting it out nets you 9%. This would disincentivize harmful behaviour (hoarding empty property for investment) while not affecting the behavior we want (renting out property).
You don’t have to give it away. Just rent it out or sell it. If you have no need for a property, put it on the market so that someone else can use it.
It’s a massive mistake that the system is setup so that you can profit from owning but not using a property, and this needs to be fixed systematically (specifically, via a heavy vacancy tax).
If you want to park your money somewhere and want some ROI we already have stuff for that (e.g. stocks). We don’t need to abuse a limited and vital resource for that.
It’s a common misconception in this type of discussion. You also get a lot of people who are like “but that would harm the people who own an empty property and can’t find a renter”. Well, nobody needs to own property they don’t use, even if it’s only because they can’t use it, and not because they don’t want to.
You can always sell property. Nobody is required to own anything.
While that’s true, I’m not sure it’s about passing judgement so much about critiquing the system that promotes that behavior, like corporate ownership and super rich sorts.
While I don’t see the end to capitalism anytime soon, a good middle ground proposed is the end to corporate ownership of properties, since the main reason there are empty homes are land developers using them as a commodity for buying and selling. Ending the concept of summer homes and such would be nice, too, but at the ratio we’re seeing it probably wouldn’t even be necessary to fix homelessness if we ended the corporate thing.
I would be willing to bet most anything that if anyone here owned another property, they would not freely just donate it to the unhoused.
And that is entirely because passing judgement is very easy and requires no effort or financial loss.
“You shouldn’t judge landlords, because if you were a garbage piece of shit person then you’d be just like them, too.”
What a terrible fucking defense of this situation. Eat my ass.
The problem is that we have a system that financially incentivizes owning property while not using it.
If there was e.g. a heavy tax on owning unused property, this would cause people to sell unused property, driving down prices which would allow many homeless people to actually be able to afford a mortgage.
Property is there to house people. Keeping it as investment without renting it out is abusing the system for personal monetary gain and a system that allows that is flawed and should be fixed.
the people who own all those properties tend to be the people who own the government.
And now we get back to the core of the problem.
and what are you going to do about it? exactly? because vast majority of the voting public wants it this way and benefits from it being this way.
Not a huge amount, maybe. I joined a party in my home country that’s supposed to fix things like that. I voted for an underdog candidate in the internal leadership election who had very classical left talking points (among them a vacancy tax).
The party managed to get into government for the first time in a long time at the next election afterward, but as a junior partner to the conservatives. Now they do hardly anything out of fear that the conservatives blow up the coalition and instead do a coalition with the right wing extremist party.
So that’s that for now.
Other than that I talk to people and tell them about stuff like that. Because while the majority of the voting public would benefit from e.g. a vacancy tax, the majority is not for a vacancy tax because they neither understand the tax nor why it is necessary. So I educate people and bring them around to the idea. I can’t change the country, but I can change people around me. And if enough people do that, movements can form and things can change.
One such movement managed to ban nuclear power in my country in the 70s (famously, right after they finished the first nuclear powerplant, which then never got turned on).
IDK about the American tax system but here in Australia this argument gets trotted out a lot but it just doesn’t hold water.
Why wouldn’t an investor want to rent their property and make more money?
because the value of the property goes up more if it isn’t rented. it’s used as an asset to borrow against.
renting a property is work and risk. not renting it… is no work and no risk.
the issue is you are thinking like a poor person. not a rich person. rich people don’t need more income… they need assets which they can borrow against. often they borrow against one building… to buy another, now they have two buildings they can borrow against… and as long as the value keeps going up they win.
just like stock. rich people don’t sell their stock. they borrow against it. and it’s tax-free that way. poor people sell their stock to make money.
it’s also why rich people want the interest rates to be near zero. because it makes borrowing dirt cheap.
Can you cite statistics that show vacant properties increase in value more quickly? Im incredulous.
Renting a property is work and risk, but in exchange you receive rent income.
If you have a portfolio of properties, you’re not about to leave that free money on the table.
The issue here is that youre thinking like an idiot.
The problem is the same in most places.
In Austria, where I am from, there’s an average yearly appreciation of property value of 6% (average over the last 25 years, average inflation over the same time was around 3%). Yearly rent is on average 3% of the property value.
So investors have the choice of either taking 6% with no risk and no work or taking 9% but having to service the appartment, having the trouble of satisfying a renter and their legal rights and always having the risk of getting a renter who trashes the apartment and/or doesn’t pay the rent.
And yes, legally a landlord can sue for damages, but if the renter has no money, then all the landlord has is the security deposit, which might be far less than required to cover the damages.
So if you are looking for a super-secure low-risk low-interest investment option, keeping a flat you own empty is a good choice.
A way to counteract this would be a vacancy tax that is as high as the property appreciation. That way, keeping a flat empty nets you 0% ROI, while renting it out nets you 9%. This would disincentivize harmful behaviour (hoarding empty property for investment) while not affecting the behavior we want (renting out property).
If you have multiple properties the risk of a single tennancies damages exceeding the deposit is manageable.
I don’t disagree. There’s definitely a problem with how it’s handled. It’s the people that are telling others to give it away that I’m on about.
You don’t have to give it away. Just rent it out or sell it. If you have no need for a property, put it on the market so that someone else can use it.
It’s a massive mistake that the system is setup so that you can profit from owning but not using a property, and this needs to be fixed systematically (specifically, via a heavy vacancy tax).
If you want to park your money somewhere and want some ROI we already have stuff for that (e.g. stocks). We don’t need to abuse a limited and vital resource for that.
Good point and agreed. I misunderstood.
It’s a common misconception in this type of discussion. You also get a lot of people who are like “but that would harm the people who own an empty property and can’t find a renter”. Well, nobody needs to own property they don’t use, even if it’s only because they can’t use it, and not because they don’t want to.
You can always sell property. Nobody is required to own anything.
if I was as wealthy as some of the celebrities you smart people keep sucking off, I would definitely be funneling my wealth to those who need it.
While that’s true, I’m not sure it’s about passing judgement so much about critiquing the system that promotes that behavior, like corporate ownership and super rich sorts.
While I don’t see the end to capitalism anytime soon, a good middle ground proposed is the end to corporate ownership of properties, since the main reason there are empty homes are land developers using them as a commodity for buying and selling. Ending the concept of summer homes and such would be nice, too, but at the ratio we’re seeing it probably wouldn’t even be necessary to fix homelessness if we ended the corporate thing.
You know, leaving your estate to your children is a very common thing to do, right?