If you want to disincentivize nonproductive investment in real estate (Such as buying up re and holding it unoccupied as a kind of safe deposit box) that could be done with taxes and financial regulation. Where the money goes after that is not really our problem.
I think the problem is bigger than that. Consider the NYC housing market. Even though there's almost no vacant real estate, rents are always rising due to the constant flipping of property. I say flipping since most of these purchases don't fundamentally improve the property in any meaningful way. Moreover, this continues despite the city having one of the highest capital gains tax rates in the US.
If investors had access to an alternative asset class that allowed them to realize decent YoY appreciation without undertaking risky construction, demand would cool down significantly. The end result (in the long run) would be sustainable property values and affordable housing for the middle class.
There are alternative asset classes. There’s no market mechanism that can guarantee returns for any asset class. Even real estate takes hits once in a while.
Comments
If you want to disincentivize nonproductive investment in real estate (Such as buying up re and holding it unoccupied as a kind of safe deposit box) that could be done with taxes and financial regulation. Where the money goes after that is not really our problem.
I think the problem is bigger than that. Consider the NYC housing market. Even though there's almost no vacant real estate, rents are always rising due to the constant flipping of property. I say flipping since most of these purchases don't fundamentally improve the property in any meaningful way. Moreover, this continues despite the city having one of the highest capital gains tax rates in the US.
If investors had access to an alternative asset class that allowed them to realize decent YoY appreciation without undertaking risky construction, demand would cool down significantly. The end result (in the long run) would be sustainable property values and affordable housing for the middle class.
There are alternative asset classes. There’s no market mechanism that can guarantee returns for any asset class. Even real estate takes hits once in a while.