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[Housing Policy] Home ownership and rental and the policy thereof
Stabbity Style
He/Him | Warning: Mothership ReportingKennewick, WARegistered User regular
He/Him | Warning: Mothership ReportingKennewick, WARegistered User regular
I think we had a couple calls for a housing policy thread throughout the various political threads we've had (notably the party thread and the congress thread) so I figured I'd take the initiative and make one. It's also something I've been thinking about and have some questions about that have probably already been discussed to death and have proper literature about, so this should be an ideal thread to pursue that.
So what is this thread for? Discussions about the ethics of housing, including landlords, foreign investment, owning multiple properties, homelessness, etc. Discussions about actual policy and legislation that could address housing, such as funding for public housing, zoning for housing / mixed use zoning, laws restricting / limiting amounts of housing a single person can own, rent fixing and caps on rent or rent increases, etc. Discussions of specific pieces of legislation or the like concerning housing. Discussion of specific housing markets and their problems and potential solutions. Racial and class and other problems with with housing and potential solutions. Historical housing policy and its implications on the present and future. And so on, I'm sure there's probably tons of stuff I'm not even thinking of.
Anyway, what prompted me to create this thread was specifically the thought of people owning multiple houses, companies owning multiple houses, landlords, etc. and the prospect of home ownership vs renting (and the problems inherent with it). I was thinking about the question of "what if people were only allowed to own two houses." Would that be a good solution to anything? What loopholes are inherent in it (shell companies which could potentially be regulated but I'm not sure how, putting a house in a relatives name or something, etc). Renting being affected by it would probably be the biggest impact since there'd be fewer potentially people would only have one property they could rent out (assuming they're not renting their own home as well and not using that second house personally). Do people actually want to rent instead of own or is the market shaping that desire? Is home ownership for everyone something that's even feasible? I know there's more houses than people, but that is skewed by condemned homes and homes in places people don't actually want to live. Between land and construction costs, there's a floor to how much a home can cost. Is that floor out of reach for people on the lower end of the income spectrum? Would the government supplementing the cost of a house make that feasible?
There's probably more to it than that, too, lots of stuff I'm not considering or whatever. Anyway, sorry to start things off on such a hypothetical, I'm not here to dictate where the thread goes, if there's something else people wanna discuss on the topic of housing, feel free, this is the place to do it.
So what is this thread for? Discussions about the ethics of housing, including landlords, foreign investment, owning multiple properties, homelessness, etc. Discussions about actual policy and legislation that could address housing, such as funding for public housing, zoning for housing / mixed use zoning, laws restricting / limiting amounts of housing a single person can own, rent fixing and caps on rent or rent increases, etc. Discussions of specific pieces of legislation or the like concerning housing. Discussion of specific housing markets and their problems and potential solutions. Racial and class and other problems with with housing and potential solutions. Historical housing policy and its implications on the present and future. And so on, I'm sure there's probably tons of stuff I'm not even thinking of.
Anyway, what prompted me to create this thread was specifically the thought of people owning multiple houses, companies owning multiple houses, landlords, etc. and the prospect of home ownership vs renting (and the problems inherent with it). I was thinking about the question of "what if people were only allowed to own two houses." Would that be a good solution to anything? What loopholes are inherent in it (shell companies which could potentially be regulated but I'm not sure how, putting a house in a relatives name or something, etc). Renting being affected by it would probably be the biggest impact since there'd be fewer potentially people would only have one property they could rent out (assuming they're not renting their own home as well and not using that second house personally). Do people actually want to rent instead of own or is the market shaping that desire? Is home ownership for everyone something that's even feasible? I know there's more houses than people, but that is skewed by condemned homes and homes in places people don't actually want to live. Between land and construction costs, there's a floor to how much a home can cost. Is that floor out of reach for people on the lower end of the income spectrum? Would the government supplementing the cost of a house make that feasible?
There's probably more to it than that, too, lots of stuff I'm not considering or whatever. Anyway, sorry to start things off on such a hypothetical, I'm not here to dictate where the thread goes, if there's something else people wanna discuss on the topic of housing, feel free, this is the place to do it.
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And use that for low income housing and homeless programs.
It would raise tax revenue and reduce property values.
And if other nations retaliate by taxing us purchases of foreign property, I don’t particularly care.
Additionally companies shouldn’t be able to buy homes. This one probably needs to be done more through local zoning, but it’s what appears to be the single biggest contributor to both the current housing crises and the above rent cost issue.
Kind of disagree, the biggest contributor to rising house prices is single family zoning and giant lot sizes making living near your job impossible past a certain density. Driving up prices. Since the zoning means that you can't build more houses the only way prices can go is up.
I would try to sneak reform at the state/province level by forcing upzoning, and requiring a majority vote of the people living in an area to block a project. If 50% don't bother to vote, then it's a minority that's whining about the project.
Also, tweak the rules on public consultation to make it clear that the point is to tweak the project, and prevent environmental disasters.
The advantage with upzoning is that it takes some time for it to take effects, so government should be able to survive passing that law, if they are far enough from the decision (i.e. not municipal.)
The rest, once the zoning idiocy is dealt with, is to go full transit oriented development, and have the transit society keep ownership of the new development.
That way, they get more money if the transit network is good and useful.
This kind of xenophobic feel good populist policy is just plain bad. It would do very little to address any of the actual issues involved while probably having an outsized impact on US global competivness.
Rent controls just distort the market and ultimately contribute to limiting investment needed in new construction. Such schemes also I believe often result in the price always going up the statutory maximum even when they otherwise wouldn't because it becomes a use it or lose it kind of thing.
It is not. The biggest contributor is not enough housing being constructed.
I'm including basic services in housing, and that 50% requirement is not just for housing, it's also for transportation, etc.
Sprawl and the suburban abomination have to be addressed some other way. I would start by making them pay the full cost of their infrastructure. Stop forcing poor people to pay for middle class homeowner.
That being said, having higher level government going all in on TOD should deal with the problem quickly.
Presumably, the government would contract out the actual building of the thing.
And I don't necessarily trust building conglomerates to not cut the same corners. See the architect scandal in NYC, for example.
A ton of corruption with how developers find pet pols to help get their projects approved with huge tax incentives and the “whoops, can’t do that afterall” on the parts the developer was supposed to pitch in on infrastructure and public use parcel development (parks, pathways, new wild habitats, etc)
No more public money for pro sports stadiums, the mob wishes they were as successful a cartel as US sports owners who personally suck out 8 figures of public tax revenue annually per franchise they own
…..you know, just shows how voters are thirsty to vote for people that campaign on “jobs” but vote against people running on “housing”
/sigh
Rent control will cause supply to drop, yes, as will any kind of regulation. But "rent control" is very broad, with many levels and different effects! There is highly restrictive rent control and related policy — things like lease transfers that, combined with rent increase caps, prevent landlords from raising rent at all between tenants — and there are more modest controls, like "you can't double rent with a flimsy excuse to drive people out of a building."
Rent control depresses supply, and in the long term, by itself, can make conditions worse for renters. But it is also necessary in the short term to protect people from predatory landlords and evictions. Precarious renters being tossed out on the street so that landlords can make a profit is not an acceptable outcome. If the government doesn't protect those renters, then people can and should resort to direct action, like organizing to physically block evictions from being carried out.
But rent control has to be paired with a strategy to increase supply in the long term. Social housing is the only real solution to providing affordable housing, IMO, because if you treat housing as an investment, it cannot also be treated as a human right. But investment in social housing has really fallen out of favour and doesn't seem to have much political support, at least not as a broader housing solution.
The demand for commercial housing is vast and deep. Right now developers aren't able to build houses and units fast enough to meet demand, and people need housing right now, not in 10 years. A supply-only commercial solution isn't enough, especially with weak laws allowing REITs and similar entities to buy up big chunks of housing to turn into rentals, with the implicit goal of making home ownership impossible for most people and rental the default housing situation.
We have a housing crisis. And part of it is that homes in the US are great investments. So let’s remove 20% of the buyers. The foreign investment effects and long term trade effects are less concerning to the immediate housing crisis and homelessness problem.
I would love to combine a tax with rent controls that limit how much you can increase rent each month and squeeze all of the foreign investment out of the US housing market.
By building and more importantly not selling or privatising housing all over the city.
https://www.wienerwohnen.at/wiener-gemeindebau/municipal-housing-in-vienna.html
The recently crazy housing market is putting some pressure on that concept though
This is market-dependent but apropos to this, my wife was just recruited to be a mortgage officer for a company specializing in loans for foreign investors buying investment property in the US (and US residents buying abroad), because she’s so good and renowned they figure she would make the deals happen regardless of the hoops for non-residents/non-citizens buying investment property
When she asked about the sustainability of this business model, the owner (who was recruiting her) told her that in some US markets (and London specifically) over a third of all homes are being bought by foreign investors
…she almost took the job and may in the future because she can work for this company anywhere globally (as long as she makes herself available regardless of her clients’ time zones) in case we need to flee the full fascist takeover here
In addition to being incredibly unpopular, my understanding is that previous experience and most studies and research indicate that creating these kinds of concentrations of poverty has a lot of negative effects. And mixing in low cost housing with other kinds has better outcomes.
This continues to misunderstand the cause and effect. Housing is attracting investors because the lack of supply means that rents are astronomical making it a good return on investment. It all comes down to the lack of supply. Fix that, and everything else fixes itself. People who would rather buy than rent will have homes available to buy, rents will go down due to actual competition, and that will make buying new houses to rent them out no longer attractive.
Or that they have bought a house in preparation for moving to the US? Again investment is irrelevant if these properties are being rented out. So show me some hard data that a significant portion of residences are sitting around empty long term.
Investment is part of how more new houses get built so actually we should want more foreign investment, if not for the huge bottleneck that is zoning.
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The only solution to the housing shortage is to build more housing. That probably requires state governments to override local zoning control. That may require people who don't own homes becoming a more powerful voting block than people who do.
The solution to people who can't afford rent is to give them money so they can afford rent. If rents are generally too high in your city the solution to that is again more housing and policies that will get more housing built: up zoning, tax incentives, making the approval process smoother, investing in infrastructure like public transit to connect more land to build more housing on, and so on.
The solution is going to be a mix of regulation to prevent parasitic wealth extraction by landlords and increased supply. And increasing supply isn't going to happen without reforming zoning issues among other things.
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For data:
16 million housing units are sitting empty.
https://www.census.gov/programs-surveys/acs/data/experimental-data/1-year.html
6 million homes sold last year.
It's not a supply of homes problem. It's a vacant houses problem.
of course different markets have different issues.
That's not really true. People won't move, they will move somewhere else instead, they will get a different type of residence, etc. Housing is not healthcare. There is plenty of consumer choice involved.
That's only the case for people who already own a house. Someone who is renting is functionally back at the market every time the lease is up and doesn't get a choice of "don't buy".
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As I mentioned in the other thread you need to drill down farther. Most of those "vacant" houses don't really count (houses empty but up for rent, houses empty because of damage / legal disputes etc) And a bunch of the rest aren't physically usable. That's before you get to things like a large number of vacancies being simply because no one wants that house in that area.
The rate of vacancy is also going down..
It's because of people like this that we don't have sane land use policy, and it's telling that she's in an uproar as California moves to remove zoning policy from local control.
The rate of vacancy is up from 2000.
And drilling down into the numbers you get:
1.3 million short term rentals (vacation rentals)
Vacant houses that that are for rent are 2.7 million
~9 million second homes.
I don't know about the other 3 million. I spent 30 minutes trying to reconcile the data, and I was unsuccessful.
I would totes being ok with taxing the vacation rentals and second homes.
These people need protection and support, and a supply solution flatly doesn't offer it. Rent control and tenant protections do. Insisting that the rental market be unregulated is a libertarian solution that ignores immediate and short-term needs. Regulation reduces supply, and we know and accept this because the alternative is allowing significant harm, so we compensate for it in other industries — it is entirely plausible to do the same for housing. People losing housing is too damaging to be permitted except in very exceptional cases. Eviction is a crisis.
Supply helps! And in fact, an aggressive plan for supply is particularly necessary when there are rent controls in place. But developers want to build profitable housing and let it depreciate (and degrade) until it becomes affordable. That's the established system, and it operates in units of decades, which will not address immediate needs.
I am also concerned that non-rental regulations are too weak. When you offer greater supply, and then REITs buy up more and more of that stock and make a great profit, you have not really addressed demand effectively or worked toward a desirable housing outcome— you have simply made more rent-earning assets available for predatory rent-seeking entities.
In a lot of ways, equity is a trap, and a lot of the malfunction in the housing market is because we've made housing an investment.
A tax on land. To encourage higher density development. With an exclusion for up to 1/4 acre of primary residence and farm land. And a rebate for low income renters.
It's more important to make sure people can live where they want than making sure their housing is ideologically correct. Not to mention that people protecting their property values is how we got into the current crisis.
The second housing goes from cost center to investment is the second housing because unaffordable. Owning vs renting should be a practical decision, not a financial one.
We can't do anything actually useful until we have built enough dense housing where it's needed to crater property values.
Well, I don't know how we would stop that. As far as I can tell, someone is going to be building money off owning a house and I think it should be the people living there instead of a company charging people to live there.
Fundamentally, owning land and a house in a particular area is a bet on where you see that area going. Do you believe in the future growth and prosperity of the town or city you live in? Then buying a home there makes sense as an investment because there is a finite amount of space and as that town/city grows, that land becomes more valuable. Like, unless you have government ownership of all the land in the town/city, I don't see it working any other way, because as a town/city grows, there is more demand which drives up the price.
They do not. All they do is favor current renters over prospective ones. Including people coming of age and wanting to move out, people trying to move into an area for jobs, etc. Price controls cannot magically make scarcity go away, they just distort who gets the scarce resource. And our problem is that there are physically not enough homes for everyone who wants one and the only, only solution to that is building more as fast as possible. Given that we have allowed the situation to reach a crisis point that may mean having to rubber stamp and churn out identical mass produced 5-over-1s for a couple years.
They do offer protection. A family that is renovicted by a landlord who raised the rent by 100% is harmed, and that harm is significant, with long-term ramifications that can destroy lives. Tenant protections that prevent such absurd tactics (which amount to at-will evictions) protect them from harm. My view is that that harm is not acceptable, so those protections are necessary.
For example, this woman in New Brunswick saw her rent double, because the new landlord wants to evict her without needing to evict her. The market in NB has abruptly become very hot and there are zero tenant protections (and in fact I believe they recently implemented a short-term rent increase cap for this very reason, very grudgingly). Do you think this should be permitted? It is extremely difficult to find an affordable rental in most NB cities right now, so there is always a chance that a single mother like this will become homeless and move into a shelter, or "hidden homeless," relying on goodwill from family and friends, if she is fortunate enough to have those resources. What do you think should happen here? Do you think this kind of rent increase should be permitted? What policy levers should we use to help her?
The harm of eviction is immediate, concrete and extreme, and cannot be addressed by future supply. The harm to prospective renters is deferred and potential, and it CAN be addressed by future supply. If there is a policy that can motivate developers to "churn out identical mass-produced 5-over-1s for a couple of years," which would require some extreme incentives, why is it incommensurate with rent control or tenant protections? Can those incentives not be extended to balance whatever disincentive is generated by rent control? If not, why not?
I am also curious what those policies would be that would motivate such a surge in supply. The only plausible solution I can see to offer quick, mass housing at affordable rates -- meaning under market rates -- is social housing.
Apart from that, there are physically enough homes to house every single person who needs them; they're just not in the right places. The US had 16 million vacant homes (nearly 1 in 10) according to the 2020 census. The number is very similar in Canada (1.3 million out of 14 million private residences). This is because the supply side favours building homes for investors and wealthy buyers/renters, especially in resort or vacation towns, because that's what's profitable. A supply solution would also have to include policy that shifts the balance between multi-home owners and prospective buyers/renters, which is extremely difficult because e.g. in Canada, the majority of people are homeowners who want to see their investments increase in value. When you build more homes, who are you building them for? Right now, you're building them for investors. In Ontario, 31% of private residences are owned by multi-home owners, and in NB it's 41%.
I also think there is a fundamental difference between regulation for what are basically consumer protections and regulation to control prices.
Unfortunately, many landlords already work to rule, especially the kind of landlord who is willing to no-fault evict a single mother. Or, honestly, less than that. Landlords get away with it because poor tenants can't afford to take them to court.
This is exactly why the NB government has been under enormous pressure to implement rent control, and they are considering it despite being ideologically opposed to it. They don't see another solution to stop from people having to leave their communities, or go to shelters, or be on the streets in the worst cases.
We can't let people be at-will evicted. It's not acceptable. This is why I don't see much light between "consumer protection" and "rent hike caps." Preventing those hikes is protection, because housing is so crucial to mental, physical and economic well-being.
Then all rent control would do is make sure the well established people have housing, and everyone else is fucked. It's not a solution. All it does is pick the winners, and ensure that young people, once more, suffer.
I'm not opposed to rent control, I just know it won't do anything to deal with the situation. Well, that's not true. It would prevent redevelopment, so housing would stay scarce.
The Fair Housing Act is literally about forcing landlords to keep tenants that they may not want, and I doubt you're arguing against that. So we've established that the government has a vested interest in constraining landlord behavior to achieve social goods and the authority to do so. We also have anti-slumlord legislation to prevent them trying to use disrepair as a way to push tenants out.
The point is that the most important measure and most effective solution is to avoid a hot market in the first place. These things don't happen over night, it's the result of years of undersupply. Fix that now and in the future and this will be a much rarer scenario to even have to worry about.
Sure. But what do we do about the people getting fucked right now, immediately? What is the short term solution?
Okay, that doesn’t exist in the present situation but pretending it does, moving in and of itself is an expense upwards of $4k when factoring in that you are likely to pay at least some overlapping rent at least one month (from my recent experience more than that as you can’t gamble on when something will be available and have to take what you can get), need to buy moving supplies (boxes, tape, etc.), new apartment expenses/fees, need movers or at least a uhaul and (hopefully?) have people to help you move.
Like, moving isn’t just this magical thing that just happens, it’s a significant expense.