Comment by kiba
2 days ago
Landlord, or property management, is a job, same as any other job you might have. The problem is not owning multiple properties, but not paying enough taxes on land. Otherwise, landlords benefit from the free lunch that comes with economic growth and real estate price appreciation, which is true for every homeowners in this country.
IF you want affordability? Tax land.
Doesn't matter who owns them. Your grandma or wall street.
> Landlord, or property management,
This is literally not true.
A landlord owns the property. Property managers operate the property. Sometimes these are the same people (in mom and pop scenarios), but typically and at scale they certainly are not.
Property management is a job. Landlording is not. It is simply owning an asset.
+1 on taxing land though.
Landlords have to allocate capital to fixing and improving the house, as well as taking care of insurance and taxes. Also, assuming that they're not living in the house and the value of the home goes up, they're taxes will rise whenever an appraiser reassesses their home value.
All improvements are excluded from a land value tax, which actually means improvements are even more incentivized.
Yes that is correct if you occupy land while your community makes it more and more valuable, you should not get wealthier and wealthier for no reason. All of that should be taxed away.
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> Landlords have to allocate capital to fixing and improving the house, as well as taking care of insurance and taxes.
These costs aren’t that high though, compared to rent. 3 months of rent covers a year of property taxes where I live. Major repairs are about a couple months rent. There is still another half year of rent that’s pure profit. Then they raise your rent every year, demonize rent increase caps, and then vote for reduced housing builds. I find it very difficult to accept them. If I had the money and the capital I absolutely would own a dozen homes and rent it all out, you would make insane money. Not to mention the mortgage costs being so low during ZIRP days. At the rate of AI coming for SWE jobs, landlords seem untouchable.
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The landlord of most of the United States is the American people since American public pension plans are some of the largest holders in these funds that purchase single family homes.
People act as if this is due to 'private greed'. It's not. American public pension plans are underfunded and need more returns. Thus they turn to the private markets, who offer them that which they are seeking to purchase. The market is heavily distorted by these public players whose policy and aims are not constrained by the market but by public policy.
If you tax land the only thing you will end up with is higher rents. You are punishing the wrong people.
Want to punish the right people? Cut taxes so that people can save cash faster, afford houses earlier and stop renting from their landlords.
Build more actually-affordable housing, too. Not these blocks of luxury apartments with swimming pools that nobody uses. (See HDB, Singapore -- that’s what the US needs more of)
Land is taxed but improvements are not. That tax is not passed down because landlords are already charging the highest price they can.
The tax simply redirect the unearned income to the public coffer which are either spent on public investment that further increase land value or redistributed as citizen's dividend.
Meanwhile landlords are free to construct as many buildings as they can without being penalized by higher taxes.
Empty lot, parking lots, and self storage facilities would be penalized because they wouldn't generate enough income to cover taxes on land, leading to more efficient utilization of land, as improvements are no longer penalized.
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> Landlord, or property management, is a job, same as any other job you might have.
Let's ignore property management for now and focus on landlords (i.e. people who own homes and collect rent from the people who live in the homes). That is very much not the same as any other job. Most jobs do not consistent entirely of literally rent-seeking.
>Most jobs do not consistent entirely of literally rent-seeking.
First off you're using "rent seeking" wrong, it's a specific economic term that means something else.
But using your definition....
There's entire industries built around renting capital investments. Sometimes purely, like rental equipment. Sometimes the investmentents are so expensive they come with the labor to operate them (the way many buildings have a building manager and a desk person). Many industrial transactions are structured basically the same way as commercial rent.
> First off you're using "rent seeking" wrong, it's a specific economic term that means something else.
It is a specific term, but it means: taking control of a limited resource (e.g. housing), most typically by ownership, that you do not have any direct use for, and then seeking revenue by then renting it to other people who actually want to use it (e.g. live in it).
Which, not suprisingly, is precisely what landlords are doing.
And also not surprisingly, those "entire industries" would be rent-seeking if the resources they rent out were limited. However, that does not apply to rental equipment, for example (though there are a few specific exceptions in the case of extremely expensive, very complex and/or very large equipment).
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Let's expand on this.
People assume that renting out property is rent-seeking literally only because they both have the word rent in them.
I would note that people don't use the word rent-seeker (or parasite) when it comes to banks renting out money. I assume this is partly because banks use the word `loan` and partly because referring to bankers as parasites would be a little too close to dog-whistle antisemitism.
> People assume that renting out property is rent-seeking literally only because they both have the word rent in them.
It's not a coincidence that they have the same word in them. It's literally just the same word with the same definition and etymology in both cases. Rent is a payment demanded by property owners from people who want to make productive use of that property.
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> people who own homes and collect rent from the people who live in the homes). That is very much not the same as any other job.
Why are you thinking of it as a job? Is putting money into the stock market a job? Owning property to rent out isn't a job, and that's perfectly fine. People make money off non-jobs all the time.
They said that because upthread someone else said that being landlord was just like any other job ...
No. If you want affordability, make the government efficient and tax people LESS.
The government steals half of my money, half of my landlord's money, and I have to pay my landlord’s income and property tax in addition to my own income tax.
This is why I still cannot afford a home even though I work in a senior role in AI. After paying all those damn taxes and everyone else’s taxes there is almost nothing left.
I’d imagine it’s less taxes and more you want to buy a nice house in the Bay Area where a lot of people are high earners and would be driving up prices on the low supply.
Yes and for some weird reason, the bay and all the nice places to live are all single-family and expensive as hell. Just build some soviet or Chinese style apartment blocks and give people housing like Singapore does its not that hard. This is not a democrat or republican issue, it is a have versus have-not issue.
The logical conclusion is that the residents of these desirable areas like the bay / San Diego / Seattle / DC actually want housing prices to stay high.
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