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Showing posts from March, 2019

Tax Surcharges for Non Primary Residences

Here's a good idea. New York should do this, Chicago should do this, everywhere should. Tax non-primary residences at a higher rate. Opponents argue that it would "weaken the property market". I say good! Housing is too expensive. Higher property values are a bad thing if they don't bring more true value (i.e. better jobs, less dependence on autos, better education, etc.) with it.

Developers will react to this tax, but it's most likely they'll start building things that are a better fit for average households. And those pencil apartments? Likely they'll become cheaper. More will be purchased by residents. Those residents will still likely be very wealthy, but if they are true residents they would have competed for housing somewhere else in New York, so this will reduce the rates (if ever so slightly) of other property.

The real value however is putting developers focus back on building housing for a broader segment. If zoning is not so egregious as to pre…

Slow developers and profits

I hear stories like the below from time to time, that developers either hold on to properties, or build slow. Sometimes I think it's conspiracy theory talk, but I'm sure it's true at times too. What could we do to address it?

"There is also evidence that big builders acquire large plots of land in a local area, then put up houses deliberately slowly in order to maintain the local market price."

A common cure to this type of behavior is competition, so this tends to happen where there isn't competition. Maybe a developer owns too much of the land in an area, or maybe it relates to a local rules and preferential treatment via corruption or other effect.

I don't put much stock in the idea that developers are getting together to rig the system though. Multi-party, secret agreements like that, where one whistleblower can bring the whole thing down are uncommon. The typical corruption system of powerful "brokers" is a more common arrangement.

A soluti…