u/Dawn_Kebals

Housing and affordability in the USA is in a bad place. Not exactly a hot take. Here are my thoughts on how this ship can right itself.

1. Give a 4 year notice of the following changes before they take place as to allow time for the market to adjust accordingly.
2. Corporations, LLC's, foreign governments cannot own residential properties. Apartment buildings can be (excluding foreign governments). Any properties owned in a manner that would conflict with the new policy must be sold off in the 4 year introductory period. Failure to do so will result in the affected properties to be seized and auctioned off.
   1. Edit - To clarify: Change policy so that Corporations, LLC's, foreign governments cannot own residential properties. Change policy so that corporations and LLC's (but not foreign governments) can own apartment buildings.
3. Property taxes are removed from the first $125k of the house/land value of your primary residence. 250k if you are married. Elevate the base rate of taxation to help offset that subsidy. (Rate depends on state.)
4. Introduce a progressive tax system which increases the tax rate on each subsequent home you own that is not your primary residence (taxing your lowest valued property lowest and highest value property highest). Just throwing numbers out here because I have no access to data but where I'm at it's currently 1.5% of the home's value per year. Let's adjust that to 2.25% in accordance with point #2. Every non-primary residence increases the property tax by 0.25% on the next higher value property.

How would that look? Let's assume you and your spouse own 3 homes, 1 of which is your primary residence which is valued at $300k. You rent out the other 2 secondary properties which value at 200k and 300k respectively. Your primary residence would only be taxed on 2.25% of (300k-250k)= $1125/yr (at current rate would be $4500/yr.). Your 2nd home would be taxed at 200k * 2.5% = $5000/yr (currently $3000/yr), the third home 300k * 2.75% = $8250/yr (currently $4500/yr). Continue on for every property in ascending value.

Obviously the specific numbers are somewhat arbitrary. I don't have data to get specific - I'm putting numbers to the post in order to better illustrate the point.

What is the outcome?

• This would put downward pressure on housing prices, which would expand how much impact that $125k/$250k tax barrier on your primary residence has and who it effectively reaches.
• It HEAVILY incentivizes local and state governments to build and support homes near or slightly above that price point and for families to own a single primary residence for those homes (putting further downward pressure on housing prices by way of increasing supply).
• It also allows for people who have the means to have a rental property or two and make a profit while simultaneously annihilating the ability for the .01% from accumulating massive amounts of housing under a single entity or hide under shell corporations.

I'm looking to refine my position. Let me know what y'all think.