Author Topic: Why are we subsidizing property taxes of millionaires?  (Read 1509 times)

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Offline TimG

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That's the assumption?  People have chosen to rent because they're making a bad decision? If they were aware that their rent includes money that the landlord will use to pay property tax, they'd make a different choice such as buying a home of their own?
I was using the term "bad decision" as a statement of economics rather than morality. Credit cards hide the costs and therefore charge more than they would be able to charge if the cost was in the open. This is bad from an economic perspective.

How many landlords actually create rental properties?  Not many.   Some turn their basements into rental suites... but most landlords are buying properties condominiums off the real estate market and renting them out.  Making landlordship even more profitable is primarily going to increase demand for real estate even further, putting home ownership even further out of reach for the less wealthy and giving the more wealthy even more advantage.
These activities are called "creating rental properties". People do not have to rent out basements if they do then those are new rental properties that never existed. Investors can and do buy properties for capital gain. They do not have to offer them as rentals. Choosing to offer them as rentals is expanding rental supply.

Here in my town the city council approved a subsidy for a developer to create Affordable Housing. The developer went out and built an apartment building with smaller, less luxurious units, intended to be ideal "starter homes" for first time buyers and young single working people and that sort of thing. And before the mortar was even dry, rental listings started showing up for apartments in the new building, renting at the same outrageous prices as everything else in this town.  So much for "affordable housing".  City council accidentally subsidized yet another way for the wealthy to cash in.
The prices are not going to be affected by a single building. It takes time for prices to adjust to new supply and a city that encourages people to rent out housing will see lower rents than a city that puts up barriers..
« Last Edit: February 06, 2017, 11:03:35 am by TimG »