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0 pointsindymike4mo ago0 comments

> Additional property tax if you do not live in your home fulltime.

In states I've lived in with property tax there is a homestead exemption for the house you live in. In my current state that's about twice the tax.

The effect: Rent goes up to cover the tax and margin is added, so the rent goes up more than the tax.

>Rich investors and companies effectively get to buy homes at a discount vs average joes.

Usually the difference is that the big investor bought the property at lower price, and your rent is based on the lower valuation. Annual rent increases are usually are much lower than market increases - there's a lot of value in keeping a tenant year over year.

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estearum4mo ago

> The effect: Rent goes up to cover the tax and margin is added, so the rent goes up more than the tax.

Well-established effect and it applies to everything. A huge portion of all technological improvement/productivity gains and nearly all public investment money ultimately accrues to land rents which we then later just call "the cost of living."

https://en.wikipedia.org/wiki/Henry_George_theorem

bs72804mo ago

You are right to call this out, and is why the legislation for this idea will require a lot of thought. But the important part of this idea is that only the "big" landlords will have a significant increase in cost.

In order for the economy to function there has to be ~ SOME ~ landlords. In my experience the random people that rent out their second property are usually good landlords, whereas the massive players treat people poorly. If this tax were implemented well, the latter group would be taxed more forcing them to stay honest. The small landlords would have a competitive pricing advantage over the big players, which should go a long ways to keep rents fair.

indymikeOP4mo ago

As long as costs are marked up and passed on to the consumer, this is a non starter. Also, government charging more taxes just gets paid by the consumer. Money is fungible. Small landlords have significant advantages in their being able to be more agile, use different rent structures (i.e. rent to own, short term, barter, etc, leverage owner elbow grease to get more profit). The key is to make sure the big guys don't have a financial advantage.

> In my experience the random people that rent out their second property are usually good landlords, whereas the massive players treat people poorly.

I don't think there's really all that much of a difference. Small landlords have low cash problems (slow repairs, stupid disputes on damage deposits, etc...). Big landlords have policy and bureaucracy problems (we forgot you were disabled and removed the ramp from the deck, we evicted the wrong property).

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