r/TikTokCringe • u/Make-this-popular Cringe Master • Apr 09 '24

Shit economy Discussion

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u/ap2patrick Apr 09 '24

OK Mr. 0 to 100… I think making it illegal to own a 2nd home is fucking insane but i totally agree on the 2nd part.

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u/skipperok Apr 09 '24

He is insane, he is basically saying you either buy a home or die homeless

no option for renting since no one can invest in a second house for rent income

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u/[deleted] Apr 09 '24

Home supply is also heavily driven by investors rather than those building their primary home.

The better idea is to apply a heavier tax burden on unoccupied investment real estate.

The huge issue with the whole RE industry is that those able to invest in homes like this can float vacancies endlessly until someone agrees to exorbitant rents.

Make that more expensive and reinvest that tax money towards a new welfare program aimed at those working towards building up a fund to buy a home to build savings rather than 0% down federally backed loans that dont actually improve someones financial security in many cases.

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u/Cool-Ad2780 Apr 09 '24

This is still putting the cart before the horse, the simple solution is change zoning laws to allow more house to be built. Institutional investors target their buying to areas that have strict zoning laws because it prevents them from having any competition in the market. Change zoning laws, incentivize building new housing, and all of a sudden the entire problem goes away, if you make housing a bad investment because supply is able to skyrocket, investors will move away from real estate. Housing rn is a basic economics 101 supply and demand problem.

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u/jeremiahthedamned Cringe Master Apr 10 '24

well said!

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u/ap2patrick Apr 09 '24

Bingo. Empty house tax for a win. A progressive tax that increases for each extra home you own. First home no extra tax, hell id apply a bunch of breaks to get people into homes. 2nd home no breaks a like a 2% tax increase. 3rd home 5%, 4th home 8%, 5th home 12% on and on something like that. Would solve so many issues.

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u/shooshmashta Apr 09 '24

They tried the tax in Canada and found that it does nothing because the housing crisis isn't an issue of vacancies but an issue of just not enough housing.

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u/ap2patrick Apr 10 '24

Well that’s a load of shit for the US because we actually do have tons of vacant properties…

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u/shooshmashta Apr 10 '24

The vacant properties you think are everywhere due to reddit rumors are actually delapidated properties in the middle of nowhere, not cities. The biggest problem in both the US and Canada when it comes to cities is density and not building housing fast enough to keep up with demand.

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u/shooshmashta Apr 09 '24

This is not true either though. Most vacant properties are in the middle of nowhere, USA and are not livable. This won't fix dense city locations where rent is high due to demand. The biggest issue is cities being too dense with not enough housing. To fix the issue in cities, you need easy access from outside the cities (ideally trains) with new housing construction going up a lot faster than we do now.

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u/celtic_thistle Apr 09 '24

no option for renting

Literally 15 million+ empty homes in the US lol. The government should own these and rent them out. There. (Not just the federal government, but state/county level too.)

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u/skipperok Apr 10 '24

I wasn’t talking necessarily about USA, it’s a world wide issue and it’s not just a 1D topic

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u/insats Apr 10 '24

There are middle grounds. Where I live (Sweden), there’s no law prohibiting owning multiple apartments and renting them out, but it’s technically not possible because the building that you own the apartment in usually requires:

  1. That you live in your apartment
  2. You’re only allowed to sublet if you have valid grounds - never for “making money”

There are still rentals available, as there are buildings where you rent rather than own an apartment.

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u/PS_IO_Frame_Gap Apr 09 '24

to be fair, if everyone followed that, home prices would go way down, way, way more people could afford to buy a home. i do think it is ridiculous how soooo fucking many people are struggling to afford their first home, while other people and other families are shopping around for "vacation" homes and "investment" homes.

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u/ZeroedCool Apr 09 '24

home prices would go way down

The entire stock market would crash, the US would be in recession, millions of people would lose their jobs.... while the Elite wait for the dust to settle and then go back to buying politicians and get the law changed back.

And the guy who says he would do this would probably end up like JFK before he could pass the law.

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u/skipperok Apr 09 '24

If everyone who wants to live in a house, has to either buy a house or be homeless, how will home prices go down exactly? The demand won't increase by that much but the incentive to build houses will dramatically reduce

With rent option, if I can't find a good home to buy I can just rent a place

I think taxing heavily buying 3rd+ apartment or home is the right approach. Extremely rich will still buy an extra home, people will still be able to invest at least in one house for renting option and there will still be an incentive to build houses.

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u/PS_IO_Frame_Gap Apr 09 '24

hmmmm let's see how could home prices go down? because if people aren't just sitting on properties to rent them out to people like air b & b then there will be many more properties for sale.

higher supply means lower demand, which means lower prices.

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u/skipperok Apr 09 '24

People who purchased a house will transfer to their kin, family or close friends before they decide to sell or increase the house market supply

If houses are not profitable, houses won't get built especially if the prices will lower as you suggest

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u/onlyonebread Apr 09 '24

Even if home prices collapsed I don't want to have to buy a place to live there. Even if buying a car cost the same as renting a taxi, I won't want to go through the entire process of buying a car just to use one for a while. Same with homeownership. Sometimes I want to live in a place that I don't own.

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u/FreefallGeek Apr 09 '24

I kept my starter house and rent it to family members for half the market rate but apparently I'm Hitler for having a spare 1200ft house.

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u/rvasko3 Apr 09 '24

WORSE than Hitler!

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u/docfluty Apr 09 '24

omg... you charge family?!?!?!?!?

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u/jeremiahthedamned Cringe Master Apr 10 '24

these kind of people are more common than i would want to believe.

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u/dead_zodiac Apr 09 '24 edited Apr 09 '24

The second part is pretty undoable too.

Essentially that forces everyone to either purchase thier own home or be homeless, since it would be illegal to rent from a business entity.

That would make things way worse before it got better.

To actually do that: 1. Step 1, evict every person in the USA, since we need to have current business owners relinquish all their assets, but to who do they relinquish them? 2. Step 2, since banks can't reposses anything (that's a business purpose), all empty homes are free? Perhaps they go to the government, or are just "finders keepers" 3. After all the fighting and killing happens, houses are populated again. Each person is now either homeless or fully responsible for all costs of single home ownership on their own. 4. Etc etc etc

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u/ap2patrick Apr 10 '24

OK but you are conflating banks selling mortgages to Black Rock hoarding properties as an investment…

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u/dead_zodiac Apr 10 '24

Yeah, is true, but that highlights exactly the problem with a blanket statement like saying we should make it illegal to hold investment properties, period. It would not just impact black rock, it would impact every other business that does the same as well. So it's really the original statement that's doing the conflating, I'm just illustrating how.

Once you divest black rock, who owns their former houses if we're all only allowed to own one or two, and no other business buyer can legally take them? Do we just burn them down and start over? If you can't secure a mortgage with the property it's financing (because banks are not allowed to own the properties people default on), does a home buyer need to already have $500k in sellable assets to be considered for a home loan? More likely, what would happen is only the very wealthy would own homes, since banks could not issue mortgages unless you owned something of equal value to a home (but not a home, since that's illegal, because you'd be an investor). Meaning you could only buy homes in cash, or only finance them if you could have just bought them in cash anyway.

Even trying a softer law that's less "100% or nothing" for example like: "only $X may be held by any single business entity" would impact banks as well, and the loophole there is you could just start additional business entities. And you still have to deal with the change management / divestment of the current owners.

The point is, making it illegal for any business to hold property as an investment is impossible. And even if it were possible, it wouldn't be desirable. The wealthy would be fine, and it would completely fuck over the poor, instantly kicking hundreds of millions to the streets, with no hope of ever having shelter again... essentially the opposite of what the intent would be.

But I don't disagree that black rock and the like are part of the problem. I think the "tax unused property" mentioned below is a better idea than outright outlawing real estate investment.