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Comment by djrobstep | Hacker News Reader

What's the point of cheap housing if the landowning rentier class keeps extorting everybody through higher and higher rents?

The only way to get actually affordable housing is to tax land so hard that it stops being an investment at all and becomes merely a commodity, like it should be.

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Yes, clearly the problem with housing is not enough taxes. Taxing people for owning homes will definitely not result in rents rising and fewer people owning homes.

He didn't say tax housing, he said tax land. Specifically non-agricultural land that has no homestead.

That is a double edged sword though (at least in the US). If we continue to try to divest of public lands (thank you republicans) but then tax private lands, what happens to conservation efforts?

You'd at the very least need to enact something that has an exception for land conservation, but good luck keeping out the loopholes. Minimum of 100 years before the land can be built on? And then an egregiously high tax at the end if it is to be built on?

Fewer people owning homes is exactly what he's talking about. More taxes means a higher incentive to rent to cover that cost. A tax on ownership is a tax break on renting, and more competition among renters.

Of course that also means more people looking to rent, so I don't think that will really work, but its not an absurd suggestion.

I disagree. If you tax the home owner, they will pass on the taxes to the family renting that home.

Of course. But the renter and/or rentee will still be paying less in taxes than people who just own.

Have you thought about all the outcomes that will be caused by this policy? Because one obvious one is old people and poor families being kicked out of homes because they can't afford the tax. I guess we can just increase taxes even further to pay for their safety net which will result in them living in nice beautiful public housing.

This isn't a drafted policy proposal. Tax laws are a little more refined than "tax houses". The tax would obviously be progressive and targeted at cities, to avoid affecting the poor, retired or rural.

You're arguing against a strawman of a concept I'm not even a real fan of. There's no need to attack via the fallout of flawed implementations. If you disagree with the fundamental concept that's valid, but it needs to be disproven on a fundamental basis.

Nobody is extorting anyone. Rents are set by the market price just like anything else. Landowners can only charge what people are willing to pay.

If there is a problem, it's with the availability of land for building new housing. Zoning laws and NIMBYism artificially constrain the supply side of the equation, which drives up rents. There is no extortion happening - just supply constriction.

There can be more than one problem at once, you know. Zoning laws do keep new houses from being made in some places, and investors buying houses and doing nothing with them or raising all local rents in the area to increase the average rent paid are both problems that need to be fixed. At least with the housing tax, we'd see a wealth redistribution, which I could argue is highly needed at the moment.

You have to decide if what you want is to provide people housing or want to raise revenue to do wealth redistribution.

IF you add a tax to owning a property, you make it less interesting for people to buy housing, since it will be sold for less, and thus creates less supply for the future renters.

> Rents are set by the market price just like anything else.

This isn't technically incorrect, but it overlooks some important details. Historically, prices typically reflected local supply and demand, but recently throughout the world we are seeing tremendous external demand from people with massive wealth entering local markets and driving up prices. In other words, in your statement "Landowners can only charge what people are willing to pay.", "people" is not the same thing it was 10 or 15 years ago.

Of course, this has always been the case to some degree, it's just much more widespread now.

This is technically incorrect. First because there are places where rents are regulated, then because rents are often artificially inflated. In other words market prices can be and are manipulated to make more profit to owners.

Also gentrification.

I don't think I understand what you're saying?

The global demand thing is a temporary market condition. It's purely a function of the need for kleptocrats in a few countries to launder money, and the willful blindness on the part of various governments. That will eventually change.

Even then, locality still matters. The children of chinese industrialists or party officials aren't buying property in Littleton, NH. Just in places like NYC, Miami, Vancouver, etc.

Like anything real estate, boom leads to bust. Mere millionaires will be living it up in NYC penthouses again soon enough.

Actually, a friend of mine was looking for a flat (a rented house) about 3 years ago. He and his girlfriend were waiting to interview with a real estate/rental management agency in Dunedin, when a (probably) Chinese man walked in with an interpreter, walked over to the rental board, pointed out half a dozen houses and whipped out his cheque book.

I can't recall just how much I was told the offers were, but they were significantly over the listed price of each house. The cheques were signed and handed over (presumably to make a firm offer) and they left. So, at least one wealthy Chinese family are buying up in the smaller towns. (Perhaps they had a forecast that suggested property values would go up significantly. Who knows?)

It's worth noting that Dunedin's permanent population is around 75-80,000, but as it's a university town it can get as large as 120k during semester. Housing stock are small, old, cold, drafty, damp houses, and many student dwellings are literally falling apart but the rents per room can be more than $100/week (where the student loan or allowance approaches $200/week). Most landlords who own student housing expect to make a lot of money, and a number of don't care about the conditions the tenants live in.

If you're curious, go to Google Maps and look up Hyde Street, Dunedin. Or Castle Street North. A friend of mine had me go and look at a flat for her, while she was out of town. It was literally a woodshed that had been reclad and had a window put in, on Castle Street North.

They better start building more woodsheds, because if it's anything like Vancouver, that fellow won't be seen again for years and those houses will just sit empty and decaying.

It's getting to the point in many western nations where there are two classes of people: those who own real estate, and those who don't, and it couldn't be more obvious which one of those groups they are serving. If a Trump comes along in Canada, I think I would knowingly vote for a disaster, at least it would level the playing field. If those who lucked into wealth don't give two shits about anyone else, the least I can do is vote to destroy our economy and return the favor.

I'm not sure where you live, but right now on HN's front page there's a post about the housing bubble in Toronto and the 100k vacant homes in Paris. So what you say may be true where you live but it is not the case elsewhere.

Many people pay more than they were willing to or have to share their place to be able to pay rent. When the choice is between paying more than you were willing to or not having a place to live, you don't really have a choice.

I agree with your sentiment but not your language. Nobody pays "more than they're willing to" in economic terms. They have the choice to not pay rent and be homeless, and the price they pay in rent reflects their desire not to do that. But I'll agree that most people pay more than they'd like, more than is sensible and more than is fair.

People can also "choose" no to pay for food and eventually die of hunger. To describe paying for basics like its a choice is highly insulting to those who cannot afford those basics.

With the same morality it would be highly insulting to those who cant get food to worry about taxing properties in the city so middle-class have better access to them.

But even more, it would be more practical to understand why are people paying such high rents, not only because of housing supply, but because of the concentration of work in the cities, once again, making it way more sustainable to live in a city than in the country side.

It's an economic model. If you're starving you'll choose to spend all your money on food and none of it on rent. And you'll choose to buy the cheapest food. Incidentally I don't believe it helps for you to get offended on behalf of the starving.

> I'm not sure where you live, but right now on HN's front page there's a post about the housing bubble in Toronto and the 100k vacant homes in Paris. So what you say may be true where you live but it is not the case elsewhere.

I live in Los Angeles, and rents here are certainly higher than i'd prefer. Not as high as some places, but much higher than most.

But where I live doesn't really matter. What matters is that this is still a simple question of supply and demand. The fact that the real estate market has globalized has allowed these properties to get closer to their 'true value'. The true value of living in one of the most bustling, dynamic economies of the world turns out to be quite high. And that is a price that unfortunately most people can't afford.

For some reason people tend to view this as an affront to human rights. We don't view it as a violation of human rights when someone can't afford a Ferrari, but we do when they can't live in San Francisco. But at a fundamental level, your cities like San Francisco, New York, Los Angeles, Tokyo, etc..are the Ferrari's of cities. They are luxury products and life in them is priced accordingly.

> Many people pay more than they were willing to or have to share their place to be able to pay rent. When the choice is between paying more than you were willing to or not having a place to live, you don't really have a choice.

It isn't a choice between paying more or not living though. It's a choice between paying more and not living where you want to live. As I previously mentioned, it's also an issue of artificially constrained supply due to the political and social influence of existing property owners, which is indeed a huge problem.

Except the rentier class pays off the local politicians to keep land in short supply. Are you telling me you really didn't know about that?

I think it's less of an outright bribe and more that they are champions of protecting the value of their homes, which they see as an investment and not a commodity.

Pretty sure I said that in the second and third lines of my three line comment:

> If there is a problem, it's with the availability of land for building new housing. Zoning laws and NIMBYism artificially constrain the supply side of the equation, which drives up rents. There is no extortion happening - just supply constriction.

Yes, but you didn't specifically say that this is to a considerable extent due to the rentier class paying for it.

I constantly hear this argument, but I've never seen any evidence.

There's been a simultaneous skyrocketing housing costs in disparate parts of the world in the last 20 years - I find it implausible that they got NIMBYed to the tune of tripling the price of real estate all at roughly the same time.

There is definitely a global effect of house price increases. One explanation is that access to cheap credit inflated prices in the US, but after the crisis, its the feds general interest of money being low that continued that.

Its interesting to see that dwelling production in the US hasnt caught up with basic demographic demand: its possible the 2008 crisis hit developers so hard that its taking time to recuperate dwelling construction (generally world wide)

But how would that affect the house prices in, say, Sydney Australia where the prices have also skyrocketed but 2008 had little effect?

Investors that would usually invest in the US find those assets expensive, and thus invest in other countries. Even argentina, which was definitely shielded from the financial crisis, has had price increases.

I'll agree that that the two markets aren't isolated. But you can't be claiming that NIMBYism in the US is the dominant cause of a sudden tripling of house prices in Australia, can you?

The elephant in the room is that, during that same time period, China (and to a lesser extent, other BRICs) suddenly acquired a tremendous amount of wealth, and saw developed-world housing as an attractive blue-chip-investment/money-laundry.

You can argue that NIMBYism made it harder for the Chinese to dump money by the freighter into the real estate market, but is that really a bad thing? It caused(/is causing) a massive bubble in an area that should be stable, on account of it being critical infrastructure.

In any case, it's the giant piles of cash coming in that's the actual cause of the issue. NIMBYism (in the right-wing view), is taking the entire blame, when really it's only a factor, and it's highly debatable whether it's helping or hurting considering the potential downsides of the influx.

I dont think its nimby-ism, i think its just the development industry recuperating from a very high-high that made them go bankrupt very quickly.

The chinese money angle is interesting, and though it can definitely help raise prices, once development gets hold of demographic growth, and a tad more, even increase demand would be met with increase supply.

One of the great problems nowadays is that supply is not catching up and lots of measures are being put in place to limit demand, but once =supply catches up (which it can, and considering prices theres little reason to think otherwise), house prices could stabilize or even go down.

People are "willing to pay" rents only in the sense that people are willing to give a mugger their watch.

Nobody made land. So why should some people be able to demand money from others for it?

> People are "willing to pay" rents only in the sense that people are willing to give a mugger their watch.

That's a silly comparison. You could say that about literally any product that's charging more than you feel like paying.

> Nobody made land. So why should some people be able to demand money from others for it?

Now that is an interesting question. I think there is a strong case to be made against the ownership of land in general. The fact that people have been allowed to own land seems like an odd historical quirk to me. I think it should probably be changed.

That, however, does not make rent into extortion. It's still a commodity regulated by the same laws of supply and demand as anything else.

> You could say that about literally any product that's charging more than you feel like paying.

Exactly. Property is a system of violence.

The concept of property taxes is the way governments prevent you from truly owning your land. I'm paying about $450/month for the privilege of owning my house. Renters here are able to apply for a property tax refund based on their rental amount.

Policies which encourage high density are definitely the right way to go. Our cities should be filled with massive futuristic towers connected by rapid transit. If you want to live in a house or even a townhouse, move to a rural area.

Why isn't the landowning rentier class extorting everybody through higher and higher food prices?

You can transport food around, so there is competition. You can't conjure up land in the middle of a city.

Cannot blieve hn downvoted this. God this site!

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