capped property taxes seem like just another hand out to boomers.
I lived here for thirty years, so I pay $2,000 in property taxes
I bought last year so I pay $10,000 in property taxes.
Won’t those taxes just get passed down to renters?
Not sure anything other than rent control and building more housing solves this.
If you pass rent control, doesn’t that encourage less renting? Why would I want to rent if it’s going to be capped and I can get a better return elsewhere?
I think the tax on “unoccupancy” makes the most sense. As does a land value tax.
Keep going, what happens next.
I think this is a myth that has become generally accepted fact after generations of Chicago school propaganda.
Tenants’ total occupancy cost is dictated by the market. If I can pay $2000 I don’t give a shit what percentage covers the landlords tax obligations. Higher taxes in this case means less profit for the landlord which means a lower asset value and more affordable home prices.
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You could also do a progressive property tax rate, where the more you charge for rent, the more you pay in property taxes. But I think just doing rent control is far simpler.
One goal behind my idea of an unoccupancy tax is wanting to create a financial incentive to build smaller houses on smaller lots. McMansions should be taxed at a higher rate than more modest homes and two people living in a McMansion should be taxed at a higher rate than two people with kids and maybe an elderly parent living in the same-sized house.
less rental units would be built? it seems like it would be good for those who already renting who will have their rent capped and bad for those who will rent in the future, since I imagine initial rent will need to be higher than market price to make up for future capped rent? it seems like it will also encourage landlords to not upkeep properties of long term tenants.
Landlords charge the market rate. The presence or absence of taxes has nothing to do with it.
To cite otherwise is to acknowledge that the propaganda worked on you.
Just, rhetorically, that’s a really something sentence.
I didn’t mean anything by it if that’s what you mean. It sounded snappy in my head.
“Landlords charge the market rate.”
But doesn’t it effect the number of future units that are created (just like rent control)
In theory there is some equilibrium I’m sure between tax rates and new units built.
In practice there are so many other things that are more immediate and significant impediments (zoning, construction materials, lending environment). Not the least of which is the people making the decisions aren’t perfectly rational.
Where I live the ONLY item changing the number of units created is NIMBY local governments. Raising property taxes here would lower rents, I’m quite sure. Allowing enough new building to let supply meet demand would be even better.
I’ve never heard of rents being lowered because property tax rates went down. Only from lack of demand or perceived lack of demand.
In places like the Bay Area not letting developers build vertically seems infinitely more important than tax policy. Single family homes being dominant is just asinine.
I’m saying the other way. Raise taxes and rents will go down.
The low taxes (in California your property taxes are always against the purchase price, they don’t go up) increase home values quite a bit. Because moving triggers a price increase ownership stays frozen. The tax structure thus reduces supply in this way.
Also, if people who paid $50,000 for a house got a bill for a $1M assessment, they would have to sell! As they should! Which would result again in more supply. Instead the retired couple exploits their much lower tax costs and rents it out. The renter having to pay rates which reflect the underlying inflated value.
Sometimes more rake is better. In particular, the mismatch between some people paying $2k/mo in taxes while their neighbor pays $100/mo reduces supply and keeps prices higher.
Build like Singapore does and rent will get cut in half. Commute times down too!
So you just like, evict those folks? Force them to sell? Maybe it works generally but the edge cases are bad.