cross-posted from: https://lemmy.crimedad.work/post/12162
Why? Because apparently they need some more incentive to keep units occupied. Also, even though a property might be vacant, there’s still imputed rental income there. Its owner is just receiving it in the form of enjoying the unit for himself instead of receiving an actual rent check from a tenant. That imputed rent ought to be taxed like any other income.
The amount of vacant units in cities where people actually want to live tends to be highly exaggerated (Manhattan is generally sitting somewhere around a 5% vacancy rate), but twisting income tax into some weird kind of tax on unrealized value is administratively messy and completely unnecessary when we already have much simpler solutions in the forms of land value taxes or even basic property taxes. Not to mention, increasing taxes on rental units just increases everyone’s rent, which is a rather odd strategy if the aim is to make housing more affordable.
People really will propose literally anything except the wild concept of building more housing.
Housing is constantly being built, then immediately purchased by corporations at ridiculous prices. This artificially raises values in the housing market, which is paid by people who rent these homes, because they don’t have an affordable home to buy. Sadly, it’s not as easy as just building more.
Things like that is exactly why there needs to be a limit on how many buildings/houses an owner can own.
Can you explain this to me? Surely a landlord charges the highest rent that the market can provide. Why would taxing the landlord increase the Tennant’s ability or willingness to pay a higher rent?
A policy like this would apply to the entire market. All landlords have vacancies at least occasionally, due to renovations or bad luck.
It won’t affect a tenant’s ability to pay more, but a policy that increases ownership costs across the board means that there won’t be cheaper alternatives in the competition, so the tenant will need to either find a way to pay the increase or they’ll have to leave to a cheaper market. The highest rent the market can bear will go up if it’s not possible to compete any further on lower prices.
Wouldn’t it only apply to the local market? A lot of people, particularly higher earning white collar workers have the ability to demand a work from home policy. Could they not move further away to cooler markets if their commute is eliminated or reduced to only a few days per week? Surely that would put downwards pressure on the inflated local market, moreso if a progressive tax system is implemented (eg tax rates increase % after value increases by a certain threshold).
Unless I’m grossly misunderstanding how land tax works, it won’t evenly apply across the board (even a flat % tax would be a higher burden for more expensive properties). This would drive people towards constructing cheaper housing as the bottom falls out of the top end of the market, which in turn would make housing cheaper for owner occupiers in those cheaper markets. Isn’t that the desired outcome?
It’s similar to credit card companies sharing merchants extra fees. They pass those fees down to the customers.
Credit card companies spend a considerable amount of time and money trying to work out how high they can optimize these merchant fee rates. A credit card charge is painstakingly optimized to maximize profits. Often credit card companies pay a portion of these fees because the competitive market will not shoulder the burden - customers will move to a cheaper credit card, which is why cards with high fees often try to entice customers with rewards programs).
Without the ability to influence demand, the seller can either eat the cost or remove themselves from the market, my question is how does increasing the tax move the needle on demand knowing that any rational acting landlord is already acting to maximize their return on investment? Are you suggesting that they’ll copy credit cards and increase rates but offer some bonus program to increase demand? I’m not convinced that would work.