And that is why you need tax penalties such as long term unoccupied property taxes and non-resident investor taxes to counter incentivize such behavior.
I’m skeptical that taxes themselves can resolve the problem. The people who engage in these tactics are already quite good at gaming them. Housing would have to revert to circumstances like Japan, where homes are largely a depreciating asset.
The land value should be taxed, but it isn't a simple answer. Large buildings imply more people which mean more use of city services. I'm not sure what the right answer is, but I am sure simple answers that would fit into a comment box here are wrong.
They're physical luxury goods that deteriorate as you use them, like cars. They appreciate largely because of nearby corporate and government investment (in office complices, schools, utilities).
That people make money off of them suggests that the government isn't being nearly aggressive enough about capturing the value it's creating here.
It is really weird. My home is a wood-frame house >100 years old. Although some aspects are better than new construction, it seems weird that the underwriting is basically the same as a new property given the term of the loan I just refinanced. Even insurance is almost the same!
I can travel a mile down the road and due to a "bad" neighborhood, many properties are literally negative value. They sit till they burn because demolition is more costly than the value of the land.
Markets don't price risk well. Housing markets definitely don't price capital investments or liabilities more than 5 years out well.
Yes, I agree entirely. Removing socially necessary goods like food, housing, and healthcare from financialized speculation would resolve many that issues countries like the US face.
Well, in NL you were allowed to squat a property if it was vacant for more that a certain amount of time. Then the local Liberals (Mark Rutte) outlawed squatting and it’s basically like the parent comment described.
