Comment by ethanbond
2 years ago
There’s no conflict. Developers are building and selling as soon as they can. That’s their job and that’s their business model.
The people withholding units from the market are your normal landlords and speculators who can stomach reduced rents in the income. They need to be taxed out of existence. LVT continues to be the right answer here, both for incentivizing development and disincentivizing speculation/holdouts.
The vacancy rate suggests most vacant units are in-between occupants, something you'd require for a healthy market. The vacancy rate should probably be double what it is -- it's probably at historic lows.
Edit: Yep, vacant units per capita are at historic lows. We have a construction problem not a vacancy problem: https://fred.stlouisfed.org/graph/?g=131FW#0.
That definition of vacant does not seem include empty units with owners elsewhere.
You're reading it wrong. Those would count as vacant.
> In addition, a vacant unit may be one which is entirely occupied by persons who have a usual residence elsewhere.
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We have both problems, but the issue with low construction is not developers simply deciding not to build and/or building but deciding not to sell.
The headwinds on construction are labor shortages, material shortages, zoning, and land prices. Zoning and land prices are both also alleviated by LVT.
Another option that I really like is forcing rent control on landlords who don't have at least 80% occupancy. Don't want to reduce your rents to market rate? Fine, the law will do that for you.
Places like Vancouver, Canada do this through a vacancy tax. It doesn't appear to do much as those leaving the unit vacant are the extreme wealthy and just factor in the tax to the cost of maintaining the house.
Then the tax is too low to achieve the desired effect?
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