adjl posted...
The problem with any cost-increasing approach is that it tends to disproportionately punish good landlords, who aren't nickel-and-diming their tenants enough to absorb the extra costs in their larger margins. That means it's overwhelmingly them who end up selling, either to slumlords who are much less reluctant to jack rent up as far as they need to cover the new taxes (and then some, while also spending less on upkeep), or to developers that also buy up the rest of the neighbourhood to demolish it and build a complex that avoids the new tax while also being able to take advantage of the higher rents the new tax has generated across the market. The renting class - by virtue of having parasites clinging to them for most of their adult lives - generally doesn't have the capital required to take advantage of small housing crashes like that, so most of the buying opportunities that do show up will be snatched up by those that do have the spare capital to win bidding wars.
Yeah, it sucks for the few good landlords. But it'd help millions of people trapped in a cycle of endless renting and rent increases.
And the "buying opportunity" would not be like any other.
Those "homestead taxes" would stay. Institutional investors wouldn't just jump in to buy things up like other housing crashes -- they'd be the ones causing the crash as they desperately flee their investments that are about to turn into debt traps, trying not to be the last one out the door. If holding a property is gonna cost them 20% (for example) per year in additional taxes, it's no longer attractive as an "investment", which is entirely the point...
Any attempt to control rent needs to be comprehensive, not just increasing taxes or putting caps on how much rent can be increased. Every landlord needs to be required to have some percentage of their properties qualify as "affordable," which should in turn be defined based on median local income and not median local rent (my city defines it as 30% less than median rent, which isn't much help when median rent is more than double what median income can afford). Maintenance and livability standards need to be strictly enforced to keep affordable apartments from turning into slums (combined with assistance programs for landlords that genuinely can't afford to maintain their properties without making them unaffordable). Insurance costs and property taxes for rentals need to be based on rent currently being paid, to prevent market fluctuations from forcing rent increases (or forcing landlords who don't want to hurt their tenants to take a loss).
Again, the point of an extra tax on non-primary residences is to not increase cost at all for people just living in the one home they own and to severely punish those that buy up entire blocks of housing.
As much as it'd be nice to stamp out landlords altogether, there is in fact a need for renting, and they do provide an essential service. No matter how accessible the housing market is, there's still going to have to be a transitional period between reaching adulthood and having the necessary capital to buy a house, because merely being able to make mortgage payments isn't enough to cover other costs and risks. Landlords effectively provide insurance: By paying a premium over the actual cost of the property, they take responsibility for whatever goes wrong in the house to keep the tenant from having to deal with large, unexpected expenses. As a stepping stone to ownership, that's pretty unavoidable.
Yes, and that's what apartments, multi-family homes, etc... can be for.
The problem is that the market has been inflated by overzealous investors such that the capital needed to buy a house is very difficult to attain, made worse by greedy investors driving rent costs so high that amassing
any
capital is a challenge.
Hence my suggestion above to stop it...
This is what really bugs me, because it's something so many landlords use to justify charging high rents, and it's actually a legitimate excuse for many (especially those that generally don't try for excessively high margins and therefore don't have a huge safety net), but it's also really easy to fix:
* Mandate video walkthroughs with the tenants and landlord at the beginning and end of each lease, with both parties having a copy, to provide concrete evidence of who's responsible for any damages if a dispute arises. If the landlord doesn't do this, side with the tenant by default. If there is evidence of the tenant refusing to allow the walkthrough, side with the landlord by default
Sure. I insist on a walkthrough w/ the landlord after my first experience moving out of a rental...
* If the tenant is found liable for damages and/or missed rent, the government pays the landlord the amount owing (receipts and some manner of common sense check needed, of course, to avoid paying $400 for a can of paint and 20 minutes of labour)
* The government negotiates a repayment plan with the ex-tenant, including garnisheeing wages if necessary
There's already security deposits for this purpose. They withhold it until they verify the property and deduct expenses from it. If anything, the law is too generous for the landlords.
First place I rented was from a legit slumlord, and even though there was nothing (additional) wrong when I moved out, he didn't give my deposit back and tried ghosting me.
I had to hunt down his physical address and stake it out to verify he lived there, then get a lawyer to call him and threaten action.
Then he gave me the money back, but made me sign that I wouldn't seek any more from him.
THEN the lawyer gave me a $400 bill for the 5 minute phone call.
So excuse me if I don't feel pity for the landlords when it comes to security deposit stuff...