this post was submitted on 11 Jan 2024
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Landlords follow market pricing, so if there's enough housing the prices go down. Landlords are not the reason rent is high
If being a landlord is profitable where do you think that profit comes from? Logically landlord's need to be making housing more expensive so they can get their cut.
Return on investment. Not everyone has money to buy a house. Home prices being high keeps rents high. Increase housing supply and it will resolve the issue
And where does this return on investment come from?
To put it another way: if a law was passed that owning a property you don't live on is going to become illegal, there would suddenly be a lot of cheap property on the market.
It comes from owning an investment. The stock market has similar returns to the real estate market.
But the real estate market doesn't need to keep going up. For example, after the increase in supply of housing in Austin, the prices are down 16% off the 2022 peak
If this could be replicated for the whole country, it would improve the situation immediately.
I don't understand the law you're proposing. Would it apply to hotels? Do you need to live in the hotel you own? Apartment building? Hot spring resort? Ski lodge?
Only if they're selling the house. Owning builds equity but you can't live off that unless you sell the asset to get access to the money. In order to live off of it the profit has to come directly from the renters.
It was a hypothetical to prove a point, not an actual proposed law. I would propose a significant tax increase on any residential land a person owns but doesn't live on. This would have no affect on hotels, resorts, lodges etc. because there is a well defined difference between commercial and residential. This would affect apartment buildings by heavily encouraging the owner to live in one of the apartments, which would also encourage them to keep everything in the building running smoothly.
That would encourage investors to buy up property to build hotels on it, increasing residential prices by decreasing supply
There's a limit to how many people are interested in staying in hotels in a city.
There's also the zoning issues between residential and commercial.
There's also the fact that it's far easier to buy a residential home and rent it than it is to tear it down, build a hotel, hire staff, and operate an actual business.
I realize you have a knee jerk need to defend landlords and reject anything that interferes with them making a profit of other people's basic need for shelter, but try to take a moment to think if your argument sounds in any way reasonable before just throwing it out there.
My kneejerk reaction is not to landlords. It's to "there should be a law"
If you implement this, people will be living long term in hostels in 6 people dorms because the landlords are not required to live in them.
I suggest reading Freakonomics, it explains how similar laws created perverse incentives in the real world
Someone who legitimately thinks "People will just replace houses with hotels" is not someone I'm going to look to for advice on this subject. Hotels are already more profitable for their owners than rental properties. If what you suggested was in any way feasible it would already be happening.
First, "This law that doesn't exist has a loophole" is a stupid argument. I'm not proposing the full legal text of the law, that would be for the government to figure out. Any imaginary loophole you come up they can also predict and not allow (include "hostel" on the list of properties the owner needs to also live on. Boom. Done.)
Second, you are suggesting people who currently live on their own will suddenly live in 6 person dorms. So what happened to those other 5 houses those people were living in? Are they also filled with 6 people dorms and we've magically created 6 times the population out of nowhere? Are they empty because they've been purchased by people who don't live there (you know, the entire problem here) who are now paying taxes on properties with no occupants until they are forced to sell?
Why is my hypothetical disqualifying? A lot of people actually use their houses as hotels, it's called air bnb. It's pretty profitable to use the property like that
If you include the hostel owners to live in them, they will be converted into hotels that don't have that requirement. That's not my argument. My argument is permanent residents will be forced to live in hotels as apartment buildings get converted by their current owners who can't possibly live in all of their properties at the same time