alt Hacker NewsTax property values.
We could talk about the merits of Georgeism but honestly let's set that aside - conventional property taxes are sufficient here. Most of Manhattan apparently has <1% annual property tax, and the eclectic sometimes regressive way it's calculated in NYC is suggestive of corruption. These asset bubbles can only inflate because the owners make nearly as much money sitting on a vacant property as they make with tenants, so they borrow approximately All The Money to dump it into real estate. Property taxes are not just a necessary evil to keep the schools running and the garbage collected (cough), they're a tiny fractional "decommodification" of property as asset, because the money collected from the owners is spent on the residents. Most of this money passes through directly into higher rents, and we shouldn't care about that, because it's spent on the residents (if the residents don't want good public services, literally hand them a check, direct redistribution). This punishes vacant properties appreciably, and pushes them back into the market.
The ecosystem of debt and bank collateral that has grown around near-zero property taxes has strongly encouraged high vacancy rates, because the banks directly demand that what rents be collected, are high enough to justify the collateral valuation, but don't actually demand that rents be collected.
Set property values to the rate of inflation (depending on your preferences, CPI or local COL or local selling prices or S&P), and you have fully "decommodified" housing without lining the landlords up against the wall and shooting them, an option that is increasingly popular.
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> Most of Manhattan apparently has <1% annual property tax, and the eclectic sometimes regressive way it's calculated in NYC is suggestive of corruption.
While NYC has never lacked for rot and corruption, those really aren't needed - or even particularly useful - for something like this.
As soon as you've got any sort of law / regulation / status quo that benefits a class of well-to-do people, there will be intense pressure to maintain that situation. Vs. the opposition - honest reformers, idealists, the poor, whoever - even if they're far more numerous, just never seem to have the zeal / focus / attention span / whatever to correct the problem.
> These asset bubbles can only inflate because the owners make nearly as much money sitting on a vacant property as they make with tenants, so they borrow approximately All The Money to dump it into real estate.
The problem is, as long as the stonk based US pension system keeps flooding dozens of billions of dollars a month into the markets, there will always be enough money to flow into REITs and driving up prices, even for vacancies.
Now, introducing (or adequately hiking) property taxes has the problem it may cost the REITs a bit of their profits - but it will be a nasty issue for individual families and small shops, and the large stores will just pass on the cost to customers because even with that, they will still be cheaper than small stores.
Vacancy taxes sound good on paper, because they - if done well - only hit REITs that hope for value gains and other unproductive uses of rare real estate (like Chinese and Russians parking wealth in Western real estate so it can't be seized by the government). The issue with them is a second order effect. If made painful enough to be worth the effort and actually force landlords to either rent out if need be at a lower price or sell, again if need be at a lower price. That however immediately forces REITs to write off significant chunks of the asset value (if rented out) or, even worse, actually realize a loss on the books (if selling).
Unfortunately, the markets really, really do not like either of these two things happening, we've seen that during Covid and the hard pushback against remote working that followed.
I have said it before, and I will say it again: the US pension system being so laser focused on stock and asset markets is going to fry its host society alive, because what needs to be done for society to survive cannot be done because too much pensioner wealth would be wiped out.
Am I understanding your point correctly as you hoping that an increase in tax rates drives property values down enough thay aggregate tax amounts are reduced?
The practical rental math in NYC is simple. Buy a $1M coop in a building with near zero costs. HOA will be at least 2k per month with the majority of that being property taxes. Thats your base rent. If you have a loan, add that to the base. You will not get cheaper rent until you drive aggregate taxes or interests rate down. There isn’t a huge profit margin on rents in NYC. I looked at a unit next door, and if we wanted to have rents break even on mortgage we would need to offer 85% cash up front. Im on the board of our coop, so I see how all of our financials function and same for prior buildings.