How about this: crank up the taxes on houses people don’t live in. Make owning empty real estate so unprofitable that it’s better to rent it out cheap than to try to screw renters.
Make it a crime to own an empty house.
Fwiw in Florida we have what’s called a homestead exemption. You get a big slice of your property value axed for taxation purposes if you live in the home. You have to pay full tax on any other properties. I believe tax rate increases are capped for homes with the exemption as well, but that might be for all homes. I don’t remember exactly.
How do they verify you live there?
You can have 1 homestead. So you either live there or are paying full taxes elsewhere.
It also has to be your legal registered address.
You can only list one home as your permanent residence.
It’s 50k it’s pretty much a joke based on property values. They could increase property tax and increase the exemption but it’s not going to happen
I want to see an exponential property tax so you could have a house and something like a small cabin somewhere but anything more and then your tax multiplier is based on how many properties you own, you’d have to control for businesses trying to own property in an employee’s name, this might even help with large chain businesses not becoming a monopoly but hard to say if that’s a huge benefit or a monkey paw type thing
That’s a terrible idea. The real life effect is that prices will simply go up. You need to force down real estate prices in general, and offer very low interest rates for first time buyers.
They did this in 2008-09 with an 8k payment to homebuyers that wasn’t a loan and didn’t have to be repaid. This enabled me to but a foreclosed house and make it livable, and I’ve been living in it since then. It didn’t raise prices in my area, because no one was buying houses anyway because regular possible couldn’t afford it.
I don’t know if I would have been able to get so financially situated if that payment wasn’t there. I could’ve bought the house, but I would not have been able to fix it enough to ever stay on top of the maintenance and bills.
Would this be exactly the same situation? I dunno. But I know a similar push sure worked in the past.
Different situation, as that was after the market crash.
The argument isn’t that this payment won’t help people in the short term, it will. The problem is that if you have an extra 25k to spend and it’s given to every first time buyer, they’ll just shop in a 25k higher price range. And if the sellers know this, they’ll adjust the market for what everyone can afford now.
This is basic economics, you lower the quantity of available housing by allowing more people to afford it and the price will go up. There’s a reason our solution to every affordability problem works this way and breaks things. For student loans for instance, sure we can pay them off for you, but does that bring down the cost? No. It just means the government pays universities. Same thing here, the government is just letting you use your taxes to give to a real estate agent instead of addressing housing costs.
And didn’t advertise it well. I bought my house then and didn’t know I had this until it was too late.
It does rather sound like proposing an immediate 25k hike in house prices, yeah.
It’s not. First time buyers are a small portion of the market.
The fact that it’s limited to first-time house buyers will at least help mitigate some of the advantage that commercial real estate buyers have over ordinary folks that are just trying to get a roof over their heads.
At worst, youre partially right. Maybe they’d go up 10K, but certainly not 25K. That’s just not how markets work. It’s the same argument as saying UBI will increase prices - yes, it will, but not by more than or as much as the UBI is. If everybody else sells their home at $25K more, you can sell yours in a month by going down to $15K more than before.
I agree, and i didn’t say it will increase prices by 25k. Still think this can be tackled in better ways. Low interest rates over a 20-25 year loan can save you much more than 25k. Edit: let’s ban corporate from buying up blocks of residential areas. It won’t cost you any tax money and will immediately drop the prices
Yeah, that’s the real solution. We have to ban any one entity owning more than 2-3 residential properties. The $25K is simply a decent stop gap until we can actually make that law happen, because our capitalist overlords would never allow it.
Yeah a similar policy in the UK (from 10ish years ago) is one of the biggest reasons for hugely inflated prices among small properties.
Obviously, the only real solution is to work to lower real-estate prices, but that would be unpopular with most home owners (who are a majority in the US).
Most of the housing price increases are driven by investors, not first time home buyers. This will have its intended effect. Obviously we still have to build, but this is like claiming minimum wage causes inflation.
Require that homes that are not homesteads be sold within 6 months as a homestead or they’re auctioned off to the highest bidder that will take it as a homestead.
Having experienced this kind of policy in Australia; it’s great in theory - but the issue is that builders/sellers just ended up jacking up the prices of their homes to absorb the grant.
It’s the reason colleges here are stupid expensive as well. Greed.
It still shifts the balance of power in favour of first time home buyers. Landlord fucks have to pay extra.
Watched the same thing happen on a smaller scale back when analog TV broadcasting was phased out and we got vouchers for digital TV tuners in America. They all cost around $25 or less. As soon as the vouchers were given out, the prices doubled to $50
Surely this is a well studied phenomenon with a name, right?
Pretty sure this is inflation
No. Inflation is a general increase in price/decrease in buying power per dollar. This is specifically about one class of item increasing in cost to absorb a government subsidy, especially when that subsidy was meant to alleviate a cost to the citizen.
Yup, this is just going to put an extra $25k from every sale into the builders’ pockets.
Ya’ll are getting newly built homes?
I don’t think this is possible. First time home buyers aren’t buying in cash. They have to get bank loans and banks won’t loan if the appraisal doesn’t match the buying price.
Obviously I don’t know Australian law but at least in Texas this would prevent the house from closing.
What’s the exact policy in Australia?
It varies a bit by state, but it usually only applies to new builds now: https://firsthome.gov.au/
Well there’s the issue. Builders can control the amount of new builds to max out that $25k. They can’t control the number of first time buyers though
can’t wait for all homes to go up 25k in response. Without purchase control this is useless
I don’t think this will happen so literally but to your point this is a supply issue. All this does is increase effective demand (i.e. the number of people able to purchase a home). This is a band-aid over a hole in a sinking ship.
Well, its only for first time buyers, so that will temper things. I predict homes will only go up about $23k.
more like 60-125k since people will have more for a down payment
“Can’t wait for burgers to cost $25 because the minimum wage went up”
I mean we are almost there tbh, it’s not due to min wage though it’s due to producer greed. Super high cost for producers means super high ingredient cost, plus the shops greed means burgers are now over 4$ for fast food and > 12$ for actual burgers. 16$ for 2 burgers and a thing of fries at McDonald’s.
The reason I know it’s not the wage but greed, if that was the case the price would be stagnant in states closer to federal min wage, but those states are the similar pricing as well. For example, currently for 2 bacon mcdoubles a large fry and a large lemonade at mcdonalds Huston texas; min wage $7.25; order cost: 12.56 Maine: min wage: $14.25; order cost: $15.76
Yes there is a difference in price but, the fact that one order makes up almost the difference in pay for a single employee at the establishment. The price is marked way higher than wage markup, it’s companies using it as an excuse to raise prices
This would be great but you know centrists will fuck it up and it’ll be like, “You can get up to $25,000 as a tax credit if you’re a veteran who owns a small business in an opportunity zone and have a low income but also somehow have a spouse who is a lawyer and can spend 30h finding and filling out the paperwork and tracking down bank statements from when you both were 19.”
On top of that just pumping support money into real estate doesn’t fix either of the core problems: people aren’t being paid enough to afford homes and we’re not building enough homes to keep prices reasonable. The end result of this is that home prices inflate even further. If we treated houses as housing rather than investment vehicles we could actually do something about our housing crisis.
This dude bureaucracys
We had a help to buy scheme in the UK similar to what Harris is proposing. Spoiler warning: it didn’t help.
Only thing that will stem the demand is a massive house construction scheme and outright building new cities.
Only thing that will stem the demand is a massive house construction scheme and outright building new cities.
Even this won’t work, because we already have more houses than people. The issue is that corporations bought up all the houses, and are intentionally letting them sit vacant. The end goal is artificially reducing the supply, so they can sell fewer homes at exorbitant rates.
Basically, imagine there are 1000 homes, for 1000 people. Each home goes for an even $100k at fair market value. Big Corporation buys 250 of them, (for a grand total of $25M) and lets 200 sit vacant. Now the remaining vacant homes are going for more than $100k, because the supply has been artificially reduced. Now when they sell those 50 homes, they can do so at $300k each, making a total of $10M (that’s $15M from their 50 sales, minus the $5M they paid for the 50 originally) off of just 50 houses. If they just bought and flipped all the houses, they’d only be making small profits per house. But by sitting on a bunch of them, they’re able to make more per house.
In short, they made absolute bank on those 50 houses, and can now buy more houses to repeat the process. They haven’t made all of their money back (yet) but they don’t care about the short term because they can just repeat the process again and continue driving rates up.
So when they eventually sell those 200 homes they’ve been sitting on, they can do so at those exorbitant prices that the market has come to expect. And when it causes the market to crash (because they’re no longer letting houses sit vacant) it’s the homeowners who are all underwater on their mortgages. So the company is able to get away scot-free by ditching their supply, while the homeowners get fucked.
Landlords are also doing the same thing, where they’ll own 1000 units but only rent 200 of them, so they can charge higher rent on those 200, while the rest sit empty.
What they need to do is implement a scaling tax for vacant homes. The more vacant homes you own, the higher the property tax is on each one. So the upper-middle class people can still own a summer and winter home without getting fucked. But make it unprofitable to buy and sit on hundreds of vacant properties, just to artificially reduce the supply. If a home or apartment is vacant for more than one calendar month in the year, it counts towards your vacant property tax. Incentivize the sale and rental of homes, instead of allowing them to quietly buy up and sit on properties.
I would like to see a tax on third properties and above that sit vacant for more than 6 months a year then 10% of the property value as a fine which would go to a ministry supporting unhoused people.
There would probably have to be some provision that if the property is rented out then for tax purposes the rent must be considered at the market rate -15% at the time the agreement was made. Eg a corpo couldn’t rent a bunch of units to a subsidiarity and call them occupied since they are rented arrive they would have to pay income tax on the income.
I’d argue we don’t necessarily need more homes. I think what most cities need is really to end zoning.
There is more than enough commercial and industrial vacant properties over the US that could very feasibly be turned into residential housing to house every person ten times over.
Zoning really is the problem because developers are essentially being forced to build unwalkable communities. You’re just not allowed in many cities to buy old warehouse space and develop it into housing or to build small businesses (groceries, shops, etc) in areas zoned residential.
Ending/reforming zoning would solve so many issues… (I say /reforming because there are limits, most people don’t want to live 10ft from a factory). But I hardly hear anyone talking about it whether on Lemmy or in the media… but it seems like it would fix so many issues.
I remember when I went to Germany and saw apartments with stores on the ground floor, blew my child mind at the time but it’s so obvious it hurts.
Unfortunately in Germany this is only in the older city centers. It’s far less common in newer “suburban” developments.
Incentivizing new construction for homes people actually live in is another facet of her plan.
I agree here. I don’t see how anything will help that does not involve buidling more. heck build it till its not profitable rent property. didn’t china boost their economy with building housing?
You don’t need more cities when there’s about 7 times the empty, perfectly functional living quarters for the amount of homelessness.
More houses is not the answer. There are plenty. Making more just make greedy capitalists more fuel.
Use what we got more efficiently.
Helping with a down payment makes it easier for a homeowner to assume debt, but that doesn’t make the houses cheaper.
This actually makes houses more expensive, because now buyers have more money to outbid each other.
So giving first time homebuyers cash assistance in buying a home is a bad thing, because letting millennial and gen-z Americans have spending power will just make things more expensive?
I don’t buy it. How is $25k in cash assistance worse than no assistance at all? Would a $25k penalty be beneficial because buyers would have less money to outbid each other?
This just sounds like a boilerplate argument against helping the working class.
The issue with housing is that the supply is limited. If you increase demand and not supply you just increase prices. Giving buyers $25k extra to spend means every home owner is now gonna jack up their selling price by $25k. This is, in the end, a subsidy for existing home-owners. Who already are doing pretty well, thank you very much.
Denying the existence of supply and demand always lead to policy failure. The way to address housing cost is to lower the cost of housing, not make housing more expensive by helping people outbid each others.
Its become a worldwide problem because airbnb brought in extra demand from the luxury hotel market. Even if you tripled the housing supply it might not make housing affordable given that like a security guard that wants to buy a house will never make enough to compete with like the millionaires going on vacation every other week.
There needs to a be a large tax on airbnbs in residential areas that helps pay for public housing.
Consider how the federalization of Student Loans has contributed to the price of college outpacing inflation by many times, and income by a magnitude.
That’s still only part of the problem, of course, hiring university leadership from the for profit business sector, privatizing loan servicing, etc. have all made college tuition skyrocket, but the loan program is a major issue.
A better option for college would be to subsidize universities directly with the requirements that their tuition stay within a linear relationship to inflation. Somewhat like state colleges offering low tuition for residents.
Housing needs more federal controls, which, to her credit she has explored in her platform along with disincentivizing, exploitative investment in private housing.
This can absolutely change people’s lives. Paying rent can make it impossible to save for a down payment. A 30k windfall (inheritance) helped my wife and I make the down payment on our first house. And then our mortgage payments were cheaper than our rent was. Even if the overall “sticker price” of a home is higher, it’s a negligible difference over the lifetime of a loan.
They should give lower interest rates to those with less means instead of the other way around.
Let me preface this with:
I am 100% on board with treating housing as a human right, but this proposal misunderstands the point of interest rates.
Interest rates are a best guess by financial institutions about your likelihood to repay and their expectations for inflation over the course of the loan. Interests rates are higher for poorer people because the risk of them not paying it back is higher. Google the “sub prime lending crisis” which is exactly what crashed the global economy in 2009.
One other commenter notes that an alternative would be to build state owned housing and rent it at reasonable rates. Unless it’s mixed income housing, that model has failed everywhere it had been tried-- from Cabrini Green in Chicago to the commie blocks of eastern Europe. Why? because it creates specific areas in a city where a business is essentially guaranteed to have less revenue than anywhere else. This is why urban centers have food desserts and why people who live in the massive public housing blocks in Coney Island have to commute 90 minutes to Manhattan – why would you open your business in a poor neighborhood rather than the financial district?
Even with the mixed-income model popular across Scandinavia and the Netherlands, it’s not like they solved the housing crisis as this does nothing from stopping the investment properties and the airbnb-ifcation of city Centers.
Here’s a congressional report on how increases to student grants (Pell grants) are highly correlated with increases in tuition.
https://crsreports.congress.gov/product/pdf/R/R43692/4
Again, I think everyone should be able to afford a home, but this policy is as ignorant of history as it is ineffective at addressing the root cause of the housing crisis.
I understand your point, however it’s flawed from the start in that government interest rates should not be used for a means of risk assessment, in my opinion. Your argument makes sense for private institutions. Bank loads should follow your logic. The government, however, should use interest rates to funnel new money where it’s needed most, and not towards private investors.
I agree with the platitude, but subsidizing interest isn’t giving money to poor people-- it’s cutting a check to a bank, using tax money that rich people avoid paying. If you want to increase the supply of cheap houses, you have to build cheap houses. If you want to lower the price of housing, artificially injecting a bunch of money into a market is going to raise demand and do nothing for the supply. Nevermind that in the US in particular, the problems exacerbated by a massive demographic shift towards dense urban centers that were not bombed out and rebuilt in the mid 20th century and therefore do not have housing stock appropriate for the lifestyles of today.
You also ignored the comment that subsidized interest is already an existing thing in the US and that the last time they tried giving houses to poor people that they could not afford to maintain, it crashed the global economy and was the single greatest wealth transfer towards hedge funds in history. NYC’s newest policy (after moving away from the structural failure of consolidated public housing) is that all new construction must have a certain number of low income, middle income, and high income units. That’s an actual supply side solution and the ratios and income thresholds are determined by the already existing demographics of the neighborhood as a way to fight both gentrification and white flight.
I’d be happy to have an actual policy discussion rooted in facts, but you can’t wave your hand over a stack of tax revenue and solve structural problems about housing stock, centuries of segregation, and the horrors of capitalism simply by wishing it away. There’s a lot of actual work to be done, and some of that might mean replacing historical housing districts with high density, mixed income developments. But that won’t ever happen, because the generations before us relied on home ownership as an investment vehicle for retirement and have spent decades campaigning against stuff like public transit, low income housing, and the existence of homeless people anywhere near them.
Feel free to diagree, but I’d rather give my money to a homeless person directly than subsidize the actuarial risk of a billion dollar investment bank via the coervice use of state violence if I decided not to pay my taxes.
Like, if you can’t come up with 3% of the value of a house (the down payment standard for subsidized homeowners in the US) how are you supposed to repair a roof or replace a major appliance? More government grants? From what revenue?
if the proposal is to disposses all the property owned by billionaires and use that to fund a reimagining of our cities such that they’re built for people and not cars, I’m game. If your idea is to raise taxes on working people to subsidize other working people while the banks, the construction firms, and every material vendor takes a profit, then fuck that.
Most of Sweden’s housing is owned by local governments (kommun in Swedish), but it’s also a 5 year wait list to get anything, impossible for immigrants/students to find anything because they don’t qualify for the queue immediately, and tied to a specific place. So, if you get a better job somewhere else, you’re still fucked because you would have needed to get on their queue 5 years ago or pay the inflated “market” rent because the supply of non-state-owned housing is so low. Denmark and the Netherlands have the same problem, but perhaps that’s more understandable considering their absolute size and population density.
As a side point, are you aware that the government has relied on deficit spending for more than a decade and that every new dollar spent is a dollar + interest that must be paid back to an investment fund?
For example, every time you ride the subway in NYC, you’re paying something like $.30 to Chase bank to service debt the MTA used to renovate the system in the 70s.
I guess my issue is imagining private banks being bypassed, but it seems you’re saying that isn’t a thing in the real world.
We tried that too. That was the USSR. It famously didn’t work out so well either, despite the superior working hours, vacation time, and education level when compared to the west. Even with well intentioned people acting on the best of intentions, there tends to be unpredictable side effects.
How Amsterdam accidentally created a violence and crime ridden ghetto by building consolidated public housing:
https://youtu.be/sJsu7Tv-fRY?si=1xAsX2Ipvu6L6ybN
Same idea, but Chicago:
https://youtu.be/_CogQmmBL9k?si=pSuz9dvf6G4vC8Qk
Yugoslavia:
https://en.m.wikipedia.org/wiki/Western_City_Gate
Granted, that’s not always the case. The “Kruschevkas” (commie blocks) from the middle period of the USSR are still in use across the former USSR and seem to be working well enough, especially since they were intended to be demolished in the 80s. But there wasn’t really income disparity like we see the west, so it’s hard to compare directly. We do know that over the long term, people got demotivated by shortages of luxury goods, tvs, chocolate, etc and this lead to a vicious cycle of shortages, being corrupt to circumvent the shortages, and demotivation because even if you worked really hard and saved your money, there wasn’t really anything to buy.
By the time they opened the borders, it was already doomed because, unfortunately, the average society citizen liked chocolate more than they liked the ideal of not relying on slavery and child labor to make exotic candy.
Agreed, instead of paying for some of it, enforce a strict 3% interest rate (with the remaining amount being paid for by the gov), this prevents the base cost of the home being raised by the amount of the subsidy
can you explain how that last point follows from the others? First time home buyers with 3% available for a down payment already get subsidized loans from Fannie Mae, which are then packaged into investment products and sold on the open market. When this went bad in 2009, it crashed the global economy. Are you suggesting that we do more risk reduction for multi billion dollar banks? Why not just cap interest at some fixed % above inflation like civilized countries do instead subsidizing predatory lending practices and guaranteeing said loans with tax money mostly raised from working people?
I’d rather have a fix for our broken credit system. Denying someone a loan that will be a 2200$ house payment in an area where they will be lucky to get a 3k apartment is insane.
Yeah. Throw more money instead of punishing predatory lenders and speculators. Jesus.
The plan to make housing affordable has been known for years, decades even.
You don’t cut prices, because it means cash-rich buyers will buy up the stock as investment in the long-term.
You don’t (only) give people money to buy, because you’re giving money to people that own property as a portfolio piece.
You:
- Freeze rent so that any increases fall below inflation, making it a long-term loss, but stable in the very short term.
- Provide opportunities for people to buy their rental properties, with tax incentives for those that sell at a cheaper rate.
- Freeze house prices and gradually drop over the long-term, so that they are a slowly depreciating asset.
- Assist those that wish to buy their rental properties.
- (Forgot to add this) Agree a gradual drop over the space of several years to push the price of a house down.
This gives those that own multiple houses the means to sell property with a one-time tax benefit. You’ll lose money initially, but in the long term people can afford houses and the market will move on from property as an investment piece. The reason no one wants to do this is because it’ll take years to come to fruition, and most leadership terms aren’t that long.
You’re right this won’t help - all it will do is push up the average house price by 25k. Freezing prices won’t do anything except drive shortage and lower quality property. Everything you mentioned will work once until people realize they can take advantage of it. We’ve seen it before - price freezes don’t help.
It is well known what we need to do.
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make property a bad investment. Heavily tax vacant properties and ownership of multiple, improve renters rights, increase interest rates for investment purchases. The goal is to drive down Qd quickly, reducing the value of other owned properties.
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significantly drive up quality housing stock - Increase of Qs. Tax breaks for new builds, government rent to own, density and infrastructure increases. No tax on new builds owned for 10 years. Longer plan that solves long term.
Haha, I realised that I forgot the last point!
You’re right, freezing won’t stop it, because it’s still a stable place to keep your money. What needs to happen once frozen is that prices need to be continually dropped over a long period.
Obviously, more housing is key, and helps push current owners towards selling sooner rather than later. The problem with housing stock, which we’ve seen in the UK and Ireland, is that the quality of “affordable” housing stock is often hilariously bad. Corners are cut, homes are too hot/cold to be considered safe, and issues like cladding that breaks the law is pushed back to the owner to fix instead of those that broke the law. That’s why it needs to be gradual and methodological.
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Raise a taxes to extreme an degree for commercial ownership of residential properties and maybe even a 1 time multi-home tax up-front, use the money to support single property owners who end-up upside down in their mortgages. fuck people profiting off blocking out huge swaths of the population from home ownership.
This will just add to the house price inflation.
This is a band-aid that does nothing to fix the problem. This kind of “solution” was implemented in my country as well. The direct result was an increase in housing prices across the board.
The problem isn’t that people are lacking the money for a downpayment. The problem is that volatility in the job market combined with ever increasing prices means you can’t commit to buy a place of your own and pay it for the next 30 years, because the first time you lose your job you’ll have lost all progress towards owning your home.
The fix you want is government-built housing. Make a neighborhood with government money. Sell the apartment for 1/3 of the price if the buyer is a teacher/fireman/doctor/other high-demand jobs in governmental employ. That way you fill the positions, the housing prices stop going up, and young people get to securely purchase a house before they’re 50.
But of course, that’s not the end-goal, is it? No the objective is to make more money for those who already own all the land and houses. And there’s no need to spend time thinking about it, just make some fucking vouchers. We all know who’ll end up cashing them in.
This is a band-aid that does nothing to fix the problem. This kind of “solution” was implemented in my country as well. The direct result was an increase in housing prices across the board.
Does this not apply to student loan repayment as well?
This is a band aid size solution on the gaping wound problem of housing shortage. She should really be putting her time into coming up with an answer to increasing housing supply
Increasing housing supply is explicitly part of her announced plan. Are you under the impression that this was the entirety of her announced economic plan?
Probably.
It’s like how Biden’s Student Loan plan was longer than the headline of “forgive x% of them” and people wrote paragraphs about how it also needed to do XYZ, without reading enough to see it did.
Are you under the impression that this was the entirety of her announced economic plan?
Welcome to the internet.
