The result is that for every house thats sold, there isn't just someone who wants it as a living space, but also 5 people who want it as an investment. So 5 people outbid each other, the highest bidder gets it, and then the sucker who wanted to live there but couldn't afford to buy it ends up renting it.
The problem (at least where I live) is absolutely not that there's too little housing. The problem is that a lot of people want to make money from the real estate market, which drives up prices.
Also, because these investors really really want to make a profit, they'll rather let an appartment sit empty than charge lower rent. The appartement I live in was empty for a year because nobody wanted to pay the high rent. (I was able to negotiate a bit, but it's still pretty high)
Pretending that the people who use the real estate market as investment don't profit off the working class who can barely afford housing is laughable.
Something like a 2x or 3x multiplier on property taxes or something, especially in densely populated areas, and especially in areas where there is rampant housing insecurity. The tax needs to be greater than the potential gamble of waiting for occupants. This should be both for residential and commercial use real estate.
*facetious
Construction companies that build residences are clearly creating value for society, so they should be allowed to make some kind of profit. Real estate agencies that buy property from construction companies are doing a very bad thing by renting them as "luxury" housing to people who otherwise have no choice since their livelihood is tied to an urban area.
Why not put a cap on the profit that can be made from a residence? Something like 5x construction costs, plus ongoing costs of maintenance. Suddenly, the "luxury" housing market is no longer suffocating all the affordable housing out of town since the property owner can't expect to rake in the piles of money every month.
So if you have house A that you live in, whose tax bill is $10K, and house B that's empty, whose tax bill is $7K, then your total tax should be $17K.
If you additionally have house C that is also empty, whose tax bill is $8K, then your total tax should be $10K + ($7K + $8K) x 2 = $40K.
If you additionally have house D that is also empty, whose tax bill is $5K, then your total tax should be $10K + ($7K + $8K + $5K) x 3 = $70K.
This would strongly incentivize against this activity of having one person or entity simply hoovering up homes and treating them like bars of gold.
You won't solve sh*t. Just like the other gazillion times new taxes were introduced to solve something.
Well, I mean, unless your goal is to make the poor even poorer.
Monthly council tax will double for properties that do not have occupants. This is due to my area having over 10% of houses being bought as holiday homes or investments that stay empty for most of the year.
Once you moved in, increases in rent used to be regulated. Now a landlord can charge whatever they want after the initial period and if you can't afford it you have to leave.
Landlords used to have to maintain and fix the property. While they still do in theory, in practise they often just threaten one of the two options above to anyone who wants a repair done.
That's not very smart. So the current tenant leaves, and then what? Good luck finding someone else to rent the property at the original price without fixing the issue…
I would argue that it is low interest rates AND low supply. If supply was sufficient then renters would just rent the houses which were purchased, possibly at a discount.
If you want the profit, then hold the risk.
If you want the freedom of mobility, then rent.
It's a pity if a flat is empty for a year, but that in itself also does not cause a shortage. After all, it was rented out after a year.
The market is supposed to deliver the flat to the person who needs it most. In that case, apparently it was you. Without the speculator, somebody would have rented it for a very low price long ago, and you would not have been able to live there at all. So maybe the market worked.
If the market worked, you'd see people building multi-family units everywhere until supply caught up with demand, and then you'd see a huge crater in prices as people who took a bath on real estate speculation were overrun with the resulting supply glut. This doesn't happen, for a host of various reasons. Governments want housing to be simultaneously affordable and an investment, which is impossible. Hence most cities wind up building a sort of shadow immigration system, through rent control, selective property tax moratoriums, and so on. People who have lived in a city all their life enjoy lower rents, subsidized by people who just moved in and have to buy at market rate.
Something like 60% of US people own a home. 30% even own their home completely outright, with no mortgage.
Obviously 30%, let alone 60%, of the population cannot be considered 'upper class', and 'middle class' is probably even a stretch.
The home ownership rate seems broadly stable since the 60s to me, with gentle ups and downs with the economy, so as well as saying home ownership is an upper-class or middle-class thing not being true it's also not the case that 'it wasn't always like this'.
https://en.wikipedia.org/wiki/Home-ownership_in_the_United_S...
Which tells me that they likely bought their house over 30 years ago. Which tells me that they have been largely unaffected by the complaint you are responding to.
Huh? Why can't 30% (or 60%, for that matter) of the population be middle class?
Wikipedia [1]:
> The American middle class is a social class in the United States.[1][2] While the concept is typically ambiguous in popular opinion and common language use,[3] contemporary social scientists have put forward several ostensibly congruent theories on the American middle class. Depending on the class model used, the middle class constitutes anywhere from 25% to 66% of households.
If owning a place to live is too expensive, it follows by logic that renting is cheaper than buying. Otherwise for the price of the rent, people could get a loan to buy.
So it really doesn't seem obvious that this is an issue of rich vs poor.
Do you really think that’s a factor? That the wealthy say “My family has all bedrooms they need, so I’m done investing in real estate?” PE firms buy up entire communities and repackage their mortgages into investment products. Foreign investors will buy property regardless of location and never step foot in it if it’s in a more stable country than theirs. Real estate investing is not about finding a place to live for the wealthy.
Invitation homes owns over 10k homes https://www.google.com/amp/s/www.newsweek.com/us-largest-pro...
In 2015, about 1/3 of vancouver homes bought were to Chinese nationals as investments https://www.fortunebuilders.com/one-third-of-vancouvers-real...
In the UK there was a trend for Baby Boomers to buy up one or two (or more) properties and rent them out as a "nice little side income" etc in addition to their pensions at a time when savings interest rates were low, so there was no point saving (since returns were awful) and property loans were cheap. You even got a tax break on the loan interest!
These people are not mega-rich - just middle-class anybodies. I don't blame them - why leave large sums of money from your pension in the bank where you'll earn 0.05-0.5% interest a year, when you can spend it to buy a property that you can rent out for 5% yeild and benefit from property value increases if/when you need to sell.
The laws have changed a bit now to make it less attractive (no more tax breaks on loan interest, and more tax on "additional" properties you buy beyond your own personal home), and there is anecdotal evidence that "amateur" landlords are exiting the market in droves. Even so it has stoked the market considerably over a good decade or more, and so prices for even very modest "starter" properties (think 1 bed flats, small houses etc) are relatively unobtainable for the average person on the street or first-time buyer.
There's literal mansion districts in my major city, where not only is building an apartment illegal, but even building a small detached house is illegal. How on earth did that happen??
