> All-cash transactions have come to account for a quarter of all residential real estate purchases, “totaling hundreds of billions of dollars nationwide,” the Financial Crimes Enforcement Network – the financial crimes unit of the federal Treasury Department, also known as FinCEN – noted in a 2017 news release. Thanks to the Bank Secrecy Act, a 1970 anti-money-laundering law, the agency is able to learn who owns many of these properties. In high-cost cities such as New York, San Francisco, Los Angeles and Miami, it’s flagged over 30% of cash purchases as suspicious transactions. But FinCEN also cites this bill to hide this information from the public, leaving the American people increasingly in the dark about who owns their cities.
> For journalists, it requires undertaking a tremendous investigative effort to find the real owner of even one property, let alone millions.
And then the owners can do what they did in Vancouver and rent the properties out to students for a couple months before tax time, claim the lots aren't vacant and avoid the tax, then jack up the rent so high they're forced to move.
A better variant was proposed by an economist at UBC (Tom Davidoff). There would be a high property tax on ALL properties, which you could reduce by the amount of income tax you actually pay in the province.
Whether the property is vacant or not, the tax must be paid. But if you actually pay taxes for working here, it’s cool.
A large investment property would probably cost several tens of thousands of dollars in property tax per year? Not many residents probably pay that much income tax, what do you do with those?
I didn’t capture Davidoff’s proposal accurately. There is a basic property tax that everyone pays. An additional tax is the one that you can write down to zero by earning income.
Even better, just aggressively tax owners based on the land value. This requires them to either eat high costs for their speculation, or use it for income-producing purposes (someplace to live or someplace to work).
What about the old people who didn't buy a house a long time back and now face high rents? Why is it always a selective group of old people we are supposed to carefully design policy to perfectly accommodate?
High enough land value tax, consistently applied, will make the land cheaper and affordable to said old couple, because it neutralizes the phenomenon that land continuously increases in value as long as the population keeps growing.
Because home equity is highly liquid. You can refinance your mortgage (and take money out), or take out a reverse mortgage (which pays you monthly in exchange for eventual ownership), or a home equity loan. Tons of ways to turn your home equity into cash.
Applying a tax commensurate with income-earning potential is the usual explanation.
Given the wide range of possible incomes to various professions, this can be problematic. Your $7.25/hr federal minimum wage worker ($14,500/year) competes against a $290k/yr SV tech worker, with 20x the income. Unless that's mitigated by other factors (residence size, amenities, etc.), a land tax might prove further discriminatory.
But in general, a tax that's sufficient to kill the prospects of real estate as simply a bankable nonproductive asset would be a net benefit.
why should property tax only be a function of property? Shouldn't property tax be a little like income tax and also be a function of the 'ability to pay'= Function(wealth, income,dependents)
There are ... some ways of achieving this somewhat equitably.
One of the notions behind property tax is to make efficient use of land -- someone simply squatting on a property and not contributing to the local economy is a less efficient use than someone who's actively engaged. In particular, high-density uses are preferable to low, where land value is high.
That conflicts with the notion of neighbourhood and social stability. Kicking out pensioners (or young families) simply because they cannot afford to pay taxes ... is highly disruptive. For a sufficiently growing market, it need not be a necessary problem, tough much experience with gentrification (or its less genteel earlier forms of land appropriation and expropriation) show.
One possible compromise is to allow taxes to accumulate, but to factor against the value of the property itself. When the property is sold (or transfered in estate), those taxes come due, and are debited agains the value of the property. You don't evict those unable to pay, but the benefits of squatting do come with an (ultimate) cost. That cost is also a bankable asset to the government authority, who can consider this a future receivable.
I would be okay with, for example, demonstrating that a property was my primary address, perhaps via affidavit, or in the case where I was renting, providing a signed lease.
Your comment makes it sound like the Gov't would start requiring some incredibly invasive monitoring. I think it more likely would merely require documentation and sworn statements similar to what we have long done with just about everything that is taxed.
Only the high value suspicious ones. If a residence in a high value area is claimed as occupied, but no one put it on their drivers licenses/ID or any other existing government interaction then request additional documentation. Let neighbors report vacant property and require multi-family building administrators to report suspiciously under utilized units.
in the age of deep learning, streetview and daily satellite images it should be possible to determine automatically. Of course such an operation opens the door to all sorts of surveillance.
I quickly read the second link you provided and didn't see anything backing up your claim about landlords jacking up rents but I could have missed it. It's also worth noting that there are laws that prevent large rent increases in Vancouver.
I live in Vancouver, and the vacancy and foreign ownership taxes have moderately improved the rental situation. It has also just encouraged the worst types of buyers to move onto other jurisdictions.
To be effective, they probably need to have the tax rates on an elevator until the market corrects though.
And if we started treating behavior like this as equivalent to the search for bug bounties, we could iteratively patch the law until it is no longer cost-effective to search for them.
This. I was working with a startup and on my first day onsite, I was sat next to the company lawyer. He told me he had just finished up a contract that was riddled with landmines. He seemed so proud of himself.
At a later point when renegotiating, I was given one of these dangerous contracts to sign. When I brought to light my concerns, said lawyer set up a face to face with me. His first words were, "If you weren't an engineer, you would have made a good lawyer."
Somewhat jokingly, somewhat seriously: I wish that laws and changes to them were organized and published like repos and pull requests on github.
It'd be such a lead forward in transparency if 'bugs' (loopholes), authors, and proposed changes were out in the open -- and the history and reasoning behind them equally public.
In theory I think this is the way many countries legal systems already work: the case law and regulations are technically public. But it's generally only accessible (in both the sense of retrieval, and also in the sense of understanding the language) to subject experts.
Software bugs and proposed changes _are_ accessible only to subject experts, or people keen enough wrt. software to be of above average technological competence.
The only difference is, were the subject matter experts in the domain where GitHub and the likes rule.
At least where I live, court records are accessible to the lay person (after clearing some hurdles). Will anyone look at them aside from lawyers and law students? Probably not...
Greater transparency in lawmaking and governance is always a good thing, though, and most government's don't achieve it to any great extent.
In the UK we have council tax which is a fee to local government paid monthly for services like road maintenance and waste disposal. In recent years the majority of councils have started charging double the rate on properties that are empty, even for just one month. I hope this will start to balance the disparity between empty houses and the number of homeless people.
That would have a very regressive effect on those who don't have the capital or credit to outright own their home barring largly outmoded
boarding house style rentals. That property tax would be passed on to the renters.
The best way to implement that is with a local income tax credit, at least for cities with an income tax.
That is, double the property tax but offer half of it as a rebate to, and only to, people paying the local income tax (i.e. residents)—-including owner-residents and renters on a pro rata basis.
I'd rather radically reduce building restrictions and crash the housing market so more people can find adorable housing and this houses stop being good cash sinks.
How about massive social housing projects that provide high quality affordable housing to anyone who wants it? I'm sick of living in over-priced rentals that are hideous, cookie-cutter, stacked, shoe boxes, all built shoddily in a rush, filled with the same terrible finishings and appliances and never maintained by their owners/management. Force these investors to do a decent job by making them compete with actually good and reasonably-priced alternatives.
The primary residence scam is popular. Pretend to live there, pay no capital gains. Especially lucrative if you tear down and old junker and build a fourplex and laneway house.
How about bulking better train and commute options? This will give people to live far away from their work place, yet keep roads free and will reduce pressure on properties. At least in the Bay Area, Bart, Caltrain, VTA and the bus’s system is a joke, this forces people to move in closer. Another issue clogging the roads is they are now open to all EVs, car pooling should be 3 or more people.
"Modest single-family homes, owned for generations by families, now are held by corporate vehicles with names that appear to be little more than jumbles of letters and punctuation – such as SC-TUSCA LLC, CNS1975 LLC – registered to law offices and post office boxes miles away. New glittering towers filled with owned but empty condos look down over our cities, as residents below struggle to find any available housing."
Yes, but that's definitely not the main point here. There is a seemingly huge money laundering operation at play.
And either FinCEN is not disclosing so it can get to the point of making charges or it's providing cover for those in power. Probably a combination of both, honestly.
What I've read and heard is that things like KYC/AML laws made real estate the preferred vehicle for money laundering. This coincides with the first housing bubble quite nicely and also explains why housing reinflated to bubble values after the financial crash.
Politically it's very hard to address this problem because it benefits existing homeowners (especially those who bought long ago) and developers. Those are two extremely powerful constituencies.
So much biased language in that quote. Could just be "Many entry-level single-family homes are now corporate-owned, while luxury condo towers have owned but unoccupied units."
Yes? It drives up housing costs for everyone else. Which may sort itself out in the very long term (on the scale of decades), with sane people moving elsewhere and siting companies elsewhere, but in the shorter term you have a finite number of job opportunities, and (except for remote workers, obviously) you have to live one of those places, and every unoccupied residential property forces you to live farther from work or pay more (reduced supply).
Seems like it's mostly stuff like bans on multifamily buildings, mandatory wasted space between the home and the sidewalk, mandatory parking spaces, and multi-year permitting processes that drive up housing costs.
There's no inherent reason why "job opportunities" have to be in only a very few places.
I'm not sure anyway that local workers are fundamentally more entitled to be allowed to buy property than other groups of people who might want to spend money to acquire real property.
Okay, but these opportunities still are in only a very few places and housing is a necessity. A human right, if you will. So the issue of housing needs to be addressed in all ways possible, including making sure that properties aren't left off the market.
You should note that "owning" a property that you don't live in (or rent out) also requires the use of force -- state force to remove anybody attempting to actually use the space.
I suspect you're trying to make a pro-liberty / property rights point, in which case I think you should consider more carefully the basis of justified property ownership.
Even if you are inside it 100% of the time, it requires violence or the threat of violence to defend against trespassers that might just try to violently throw you out.
Violence is an inherent aspect of human affairs, so the question in every case isn’t whether violence is necessary but rather whether it’s justified.
This is not just a phenomenon of titans, there are plenty of mom-and-pop operations too. I worked with someone who got in a fight in the office with her father over the phone. He was pissed she wouldn't accept a $250,000 deposit into her US account from her uncle's account (his brother) in China. The goal was to buy a house in the name of her cousin in LA.
Majority are likely small-time landlords, local investors, and etc, as it is very easy to set up an LLC. Also, I wonder if HNers describe their startups as "anonymous shell companies"?
> I wonder if HNers describe their startups as "anonymous shell companies"?
HNers' LLCs probably have their names on them, they're not anonymous. This article is talking about it not just being the name of a company being in property records, but that the actual "beneficial owner" of the company not being named in the incorporation records.
Honestly property ownership being default-public seems like a weird anachronism. Why should anyone who has my address be able to tell if I own the property?
I haven't looked into the exact details as I've never bought a house but from what I can gather I'd want to wrap it in an LLC.
Also FWIW the Sean Hannity example in the article seems like a weird strawman conflating consumer protection laws with "name and shame" accountability. If it's wrong to evict someone for XYZ reason, that should be protected by the law, not by fear of being "named" as the landlord. [TBC I am no fan of Sean Hannity.]
> Honestly property ownership being default-public seems like a weird anachronism
Land registry is a necessary function of local government. But this is one of those things which was historically only available within a government office, and now can be found in a second on the internet.
Personally I would be perfectly okay if my local government required disclosure of the personal ownership of LLC property owners. But I have no idea if that's constitutional or legal under federal laws.
>But this is one of those things that was historically only available within a government office
If you want to know where a person lived pre-internet, you looked them up in a phone book, which is substantially less privacy preserving than looking up the owner of a house.
Well, post-internet, 2FA has been leaked to advertisers.
Lots of reasons, but the easiest: property can quickly become a nuisance, hazard or destroy the value of neighbors property. You need their ID to track them down.
also, if the house ends up being a meth lab, it's useful to track down the owner or landlord. or who's on the hook to pay property taxes. or whether your deed is a legitimate transfer. etc. etc.
In case any redditors are here, anyone can set up a LLC in California for like $300. I am and have been in a bunch of them, but we've never been successful enough to look into Panamanian services :/
Why does it matter if owner is known or not known?
Person or entity wants to keep invested in real estate to protect assets against market fluctuations and frivolous lawsuits and it turns that real estate is a great investment.
Why is that wrong?
As long as person/entity complies with all laws (including whatever - empty housing tax?) - it shouldn't matter.
FinCEN has the right to know and it does, but it hides this info from public because probably some prominent political figures are in play here.
It's not wrong for an individual to choose an investment vehicle that aligns to their overall strategy.
However in an overall social sense, I do think that residential property investment in itself is wrong because I view housing as a utility and a basic necessity along the lines of water, healthcare, fire/police services and internet.
The issue is actually a simple trade off - whether it's more important to ensure people can own their own homes, or that people are allowed to use real estate as an investment.
I don't blame individual investors for this, but I do support the idea of introducing laws to limit property speculation. Bear in mind that I'm from Australia, where property investment has become a cancer that has drawn money away from productive assets (like startups) and into property, which is relatively speaking non-productive rent-seeking (outside of its effect on the construction and design industries). There's no net output from acquiring debt to buy a house so that you can do nothing but sit on it and flip it three years later for profit.
I'm very sympathetic to Georgism, but you all seem to have taken a wrong turn somewhere and ended up in a discussion about the real estate ownership anonymity.
Of course it will. You just need to charge the land value tax to the owning entity. The same is true now for any taxes, fees or fines regarding that property.
If those are not paid, government can seize and auction-off the property.
Yes anonymous ownership and Georgism aren't strictly mutually exclusive, but the path that led us here is a decidedly incompatible ideology of land just being another asset.
> However in an overall social sense, I do think that residential property investment in itself is wrong because I view housing as a utility and a basic necessity along the lines of water, healthcare, fire/police services and internet.
In China, the government owns all the land and citizens merely lease it for 70 years.
Yet even with no land ownership, there is still land speculation.
For the reasons enumerated in the article. Difficulty of local governments addressing violations, inability for neighbors to contact the owners to sort out shared issues, etc.
And more. There is societal good created when people are able to discover who owns property. No piece of property exists in a vacuum.
City and county government typicaly hold the deeds. If an anonymous LLC is being problematic just have them send a letter "Pay fine within 30 days or we sell your property on the courthouse steps." I prefer to know my neighbors but I also understand why some owners would want to stay anonymous. But being anonymous should not allow you to be an asshole as well.
There’s really no axiomatic reason why the LLC has to be anonymous in the first place.
The whole concept of an LLC is a construct, a fictional entity intended to take the place of a person before the law. It is fundamentally a state created thing, there’s no issue of rights or natural law at stake here. It’s a privilege.
The usual goals stated for allowing corporations to exist at all are shared ownership and limited liability, to enable productive and speculative enterprise.
A single person who wants to hide within that structure doesn’t have any special claim on that right, unless they can demonstrate why the state should allow it, an argument that has to be made on the grounds of increased social good.
If we want anonymous property ownership we should legislate it. We don’t, real estate transactions are usually public.
Beyond risk: they absolutely know how much money can come from real estate industry groups and benefitting themselves, and how little from opposing it.
I totally support the notion that if violations are remain unresolved and fines are remain unpaid, government should have full right to repossess the property and sell it on public auction.
Or to play the other side, why would anyone want to hide from public knowledge that they own a property?
All property records are public. You can go to the city or county and get the names of who owns any property in that area. But now 30% of those properties are owned by companies who's owners can't be identified.
So actually the public is losing access to something they already have. There is public benefit to the land registry being public. That is being lost.
IF you're a celebrity, your place of residence could be identified if these records are public (just takes time/work to collate/search the data).
If you want to hide the property from your spouse in a divorce, the data may compromise it and force you to lose the property in a settlement.
I can see that the data is useful in some circumstances, but i feel the data should be available only for law-enforcement purposes (and taxation purposes), not available for general inquiry.
You can find celebrities if you want. The paparazzi does.
Your other example of hiding property in a divorce is actually an argument in favor of not allowing this. IANAL but is that legal? If it is legal, and you want to say morality is up to the individual, then it's not an argument either way.
The government has the right to tax you for the land, to buy and sell land, etc. So ownership of land in your community is a matter of the government, sure... But it's also a matter of the people. If the government sells a public park to a private company, wouldn't you want to know that the LLC was owned by the Mayor's brother?
Don't forget that journalists (the 4th estate) are a check and balance on the government. Don't be so quick to give away your rights because you don't see an immediate benefit.
> Why does it matter if owner is known or not known?
Sometimes you need to contact your neighbor. If they don't live there (or if you don't live there) that can be hard without an actual name and address.
I manage a rental property. I've needed to talk to all the adjoining properties at some point for fence issues, tree issues, and noise issues. They are all rental properties, so none of us live in the houses (college town).
It's taken me 20 years to collect the contact info of two of the three adjoining properties. We still haven't managed to contact the owners of the property in the back.
Our house is the only one with an actual name and address. The others are trusts or LLCs.
I disagree with your argument that we shouldn’t care about this as long as it’s legal.
There are many things that are legal but still damaging or wrong. In many cases (including this one, IMO) we as a society should be able to know more about the behavior so that we can deal with it if it’s problematic.
For one thing, the "NIMBY" problem gets much worse when a multi-billion dollar company has a substantial portion of its worth tied to the value of the homes that it owns. The last thing we need is an incentive for huge firms to benefit from limiting housing supply.
Everyone can care about things they want to care about.
I own that house and I don't want you to know who I am - and this is part of my hard-earned assets protection strategy.
Why your casual curiousity to know is more important than my desire to legally own the property without disclosing information about me to everyone and their cat?
I'm no expert, but as far as I can tell, "The Law" has been a last resort in resolving local disputes between neighbors. It's heavy, slow, and expensive. Rather, custom and direct negotiation have been the mainstays for orderly civic relations.
Anonymity essentially takes all of that and ejects it. Without a new legal framework to replace it (that you almost certainly will like less because it will both cost more, and demand more access to you by the state), demanding that formal legal means be used in all contacts with you is demanding that your neighbours pay significantly more to achieve mutual ends. All while giving the rest of civil society the brush off: "I've got mine, you can kindly go have a nice day."
I guess the idea of community is pretty much obsolete, but the smallest unit of governance, like say a home owners association, would probably undermine your anonymity if you chose to participate.
In that case, shouldn’t there be a public registry of people who invest in weapons manufacturers, oil companies, and other corporations that produce unhealthy products?
Apologies if I'm just projecting, but this seems nihilistic.
Why does it matter if we know or don't know anything?
Why does it matter if we know or don't know who wrote, lobbied, or voted for a bill? Authored a commit? Bought an ad? Wrote an article? Funded a study? Owns a newspaper? Holds a broadcast license?
I would call it a bit more utilitarian personally. Philosophically there is some value to that attitude in theory but only if everything else is known about a concept such that origin is irrelevant.
If someone finds scientific and mathematical proof that say an antibiotic formulation is impossible for a prokaryote to develop resistance to it doesn't matter if it was done by a respected winner of a noble prize, funded by a meat industrialist who wanted everyone off of his ass about antibiotic usage, or a crackpot who stumbled upon something right for utterly wrong reasons. If it is right the origins don't matter.
In practice however we don't and the source hints at other aspects including conflicts of interest. Perhaps the hypothetical universal antibiotic technically works but allows viruses to proliferate and fill in many ecological niches meaning overuse is still bad even when disregarding digestive bacteria. And perhaps the hypothetical meat industrialist knew that abd covered it up.
Why does it matter if we know or don't know who wrote, lobbied, or voted for a bill?
Bill's are supposed to be created and voted on by "representatives" for the people who elected them. Transparency is how we know if they're doing the job we elect them to do.
Authored a commit?
Code is copyrighted. We should know who wrote it. It can also be helpful for having discussions with the author if needed.
Bought an ad?
I'm for this with political ads to prevent undue influence. I'm actually in favor of banning political ads sponsored by anyone outside the state, including parties. For non political ads I'm not sure if it matters.
Wrote an article?
This is not required.
Funded a study?
If the study is going to influence public policy I think we have a right to know who funded it.
Owns a newspaper?
Same so long as they offer political content.
Holds a broadcast license?
That's a government grant of monopoly on an o thg otherwise public resource. We should know who the government is granting exclusive use to. Same for land ownership.
Required? Perhaps no, but it's common, especially in serious journalism. The reason to do so is similar to the other reasons. Imagine an article talking about an Oil company that is donating money to a charity. If an article is written by a professional journalist with a history of accurate reporting, you are likely to trust it more than if you found out the author was a PR rep for ExxonMobil.
It's a matter of the negatives -- that come with allowing people to purchase large amount of property anonymously -- outweighing the positives.
As long as person/entity complies with all laws - it shouldn't matter.
Agreed. And one of those laws might very well be: "If you own more than X amount of property (of this type or another) -- you need to disclose some basics about your identity."
and this in itself bases itself on a whole pile of pre-assumptions about what's right and the proper scope of the state's and individuals' rights should me.
We argue heavily about the dangers of tax evasion but the fact that government consumption of GDP and spending worldwide is at near record levels doesn't deserve reconsideration?
We discuss how "dirty money" is laundered through real estate but how much discussion centers around the sorts of laws that make that dirty money become such in the first place. Many activities that require money laundering are extremely debatable in their illegality, but this gets put by the wayside because money laundering = automatically evil, intrusive laws of all types necessary to stamp it out.
Then there's the whole issue of simple privacy. Yes, maybe people should have a right to at least some financial privacy, even from governments and corporations, let alone their neighbors. Transparency has its benefits but when you've created a taxation and financial monitoring system so pervasively, parasitically intrusive that any private attempt at keeping ones financial assets is considered suspicious, then this might just be a problem with the system, not so much all of those who want a measure of privacy.
It's odd that many in the hacker news crowd, who supposedly value digtal privacy from intrusive ad tracking and the growing tendencies of surveillance capitalism seem to throw the entire underlying philosophy behind these notions right out the window when it comes to elements of financial privacy, for property or money.
Because some geniuses seeking to freeze time have made it impossible to build more anything at the scale required and therefore land not being used because it's an investment is bad because it jacks up the price of what's left for everyone else and we want to know who's doing that so we can shame them because that's easy and changing laws is hard (edit: sarcasm implied).
There really should be limits on who can buy residential property and how much of it one can own. Maybe property taxes that ratchet up exponentially the more residential property under one's ownership. Large anonymous property firms owning peoples' homes simply shouldn't exist.
The CEO of Spotify (based in Stockholm) told the government the housing shortage is a problem for their growth. I'm not sure which policies are to blame, but Stockholm's not an example of good housing policy.
I disagree with the notion that large firms owning residential property is necessarily a bad thing. I remember it being surprisingly hard to find single family homes to rent in at least two metros I’ve lived in- you had a much larger variety of options if you were buying. Additional professionally managed SFH properties would have been appreciated in those metro areas. I see no reason to punish scale in and of itself.
The anonymity is a major issue though, as is the practice of having large numbers of properties sitting vacant (presumably because they were really bought to launder money.) The article suggests some solutions to the first. I feel like some form of “unoccupancy tax” could address the second, all though designing it to not just punish distressed areas seems tough.
As long as there are multiple (6+) corporate owners in a market, it should be fine for tenants, possibly better with the service standards the corporate landlords bring.
The LLC have a name, it is an legal entity. It is owned by other people/financial structure just like Coca Cola, Alphabet or Amazon. Since it's private, you don't get to know. All of these are perfectly legal and to declare this case as illegal is opening a can of worm on the other side.
In some cases, those entities are a DoJ (Denial of Justice) attack. When you try to sue such a company, you find a chain of owners, each in a different jurisdictions - just figuring out the real owner for damages you may right fully deserve may take years.
The asymmetry in the costs of setting up such a structure vs decoding it works only for the “bad guys” as far as most society is concerned.
This is easily solved if we had the will to solve it via Ultimate Beneficial Ownership registries. There's no good reason to allow anonymous ownership of companies.
Anonymous from whom? Anonymous from the government? Maybe I agree. Anonymous from anyone who is curious (or nosy, depending on your feelings about privacy)? I think it's none of your or any reporters' business how many shares of AAPL I own.
We're not talking about shares of Apple, we're talking about who effectively controls LLCs and other corporations that are primarily used to shield the owners of real estate.. Your 23 shares of AAPL don't grant you effective control over Apple so it's not relevant.
The problem that the progressive tax solves is allowing small scale landlords while stopping large companies. An equal tax means that a person with an extra home they are renting out is just as unprofitable (or even more so, because of scale) as a large company.
Why is that a problem to be solved to go socratic about it?
A single extra home rental being less profitable will exist "naturally" as a matter of economies of scale essentially with fixed cost component redundancy.
Income inequality and imbalance of market influence (if one person owns 90% of real estate their high level of control can't even be called disproportionate because they actually do have that large of a stake) seem like issues better addressed by straightforward income taxation and antitrust respectively.
>(OP wants) limits on who can buy residential property and how much of it one can own.
>(Georgism is) an economic ideology holding that while people should own the value they produce themselves, economic value derived from land (often including natural resources and natural opportunities) should belong equally to all members of society.
> Advocates of land value taxes argue that they would reduce economic inequality, increase economic efficiency, remove incentives to underutilize urban land and reduce property speculation.
Maybe just outlaw the ownership of more than 3 houses? Landlords will throw a fit but they're a minority and I think they're doing fine if they have 3+ houses.
How would you "transfer" them? Some people need places to stay in the short-term and don't want to own a house. Also, it's not the government's house to "transfer".
Why don't renters own their own property? Lack of capital to build or buy. Guess who has the capital and uses it to establish the supply of rentals either directly by building or indirectly by paying someone who built it and enabling them to build more?
Even if you think the perpetuation of capital unfair the realities need to be acknowledged in order to even begin to think of a viable alternative.
Lack of capital isn't the only reason to rent. You might also choose to rent because you are not interested in investing a significant amount of your money in real estate, or because you don't want to make a long-term commitment to live in one place.
I suspect that what you'd find is both slightly fewer houses available for rent and more disorganized, part-time, hobbyist landlords in the market. I believe both of these factors would tend to harm renters.
I lived in houses rented by these part-timers and they were pretty haphazardly managed compared to the [fewer] times I lived in clearly corporate-owned and managed properties.
There’s no doubt these laws can be used to maximize gains by nefarious individuals.
At the same time, the ability to hold a property as an LLC, thus limiting overall liability to the property value alone in the case of a lawsuit, incentivizes more individual investors to purchase rental real estate. In many instances these assets help facilitate retirement savings that are more stable than market securities.
I’m all for transparency - and it’s likely the increase in LLCs could be attributable to more savvy, legitimate investors rather than only attracting wrongdoers.
> ...limiting overall liability to the property value alone
LLCs don't limit liability resulting from negligence, malpractice, or other personal wrongdoing, which may be germane in a lawsuit over something besides unpaid debts.
Seems entirely possible for the local government to hold the LLC accountable for following local rules without having to know who's behind the LLC
The meta-conversation going on within these threads is more to the point of folks suggesting hard-to-implement laws about who can own what, and how much of a thing they can own, and what sort of penalties exist to control the way that the population of owners can develop.
All that secondary stuff seems too chaotic to control... better to just -
a> allow for the LLC to do what it was designed for: protect the owner from liability beyond the cost of the house
and, b> let the municipality fine the LLC according to whatever rules exist about whether it's morally reprehensible to remove a renter for failing to pay a fine
The issue is that without knowing who owns the LLC, then you can use a different LLC for each property and skirt rules around taxes and other restrictions on multiple property ownership.
It would, but it wouldn’t help with a lot of the scenarios in the article, which sound legal but potentially unreasonable. The property owner or owning entity does not have to suffer reputational damage for executing a legal but inhumane/distasteful eviction.
Is it hard to enact laws to prevent this? I remember reading some German towns buying properties from shitty landlording companies to control housing situation getting out of hand.
I am a first time buyer and I am finding it hard to buy, despite making six figures a year
All this crap is essentially supported by a handful of countries: USA,UK( with all its dependant islands pretending to be innocent), Luxembourg, Switzerland, Netherlands and a few others. The rest of the world,including these countries themselves pay astronomical price for this. It's fascinating to drive down Park Lane in London and see empty building opon empty building in one of the most expensive streets on the planet.
Actually this sort of thing has been going on for hundreds of years in most European countries. In my city over half of the old town is owned by the Catholic church. This includes over 30 churches, but there are also many more adjacent buildings that are much larger in area.
Most are derelict or unoccupied, and in very expensive areas if you were to buy. Properties are not owned directly by the Catholic church, but by local parishes or diocese, i.e. subsidiary corporations that are controlled by them. This is no different than the situation in Vancouver, except the church doesn't need to pay any taxes :D
America in 2020: If I use a VPN I have to prove to google I'm not a robot... but using a shell company to buy up real estate? Definitely no picking out all of the buses in a bunch of pictures.
It reminds me of Moldova after the fall of the Soviet Union: oligarchs running wild, stashing their gains in buildings,” James Wright, an attorney and former Treasury Department bank examiner, told me. He now helps foreign governments combat money laundering. “Back then, you’d walk down the street, and people would say, ‘That building is a washing machine.’ Everyone knew it. Today, America is not that different.”
Look at Boston SeaPort. 80% of high end condos are empty and sold for a few years now. My guess is high networth foreigners- from Venezuela, China, Russia are “parking” their cash in these assets.
It's another bogeyman red herring. The issue is very straightforward: central planning fails.
Nearly all critical infrastructure in the form of homes (zoning), roads, water, and electricity and related services are centrally planned.
It is almost impossible to do anything outside of a municipality, which didn't used to be the case.
Without this central planning failure it would be impossible to "take advantage" of any market, as home builders would just build homes until the "launderers" run out of cash.
Have you ever been to a developing country? They work they way you suggest. People just run electricity and water wherever they can and throw up houses anywhere.
Turns out it’s not actually an improvement though.
Yeah living in the developing world is great when you’re there telecommuting and have an american or uk passport and can just leave whenever you feel like it.
It's even harder to find examples where government micromanagement has made a market fairer and more accessible to all participants. The mere existence of Addis Ababa can hardly be cited to justify housing policies in San Francisco.
> Have you ever been to a developing country? They work they way you suggest. People just run electricity and water wherever they can and throw up houses anywhere.
> Turns out it’s not actually an improvement though.
I have been to several. If you are trying to make some sort of direct comparison, your argument seems inadequate, as there are so many differences impacting economic activity.
Incendiary titles, written by ignorant writers, looking to impress politicians, and rattling the cage in order to gain eyeballs.
There are many reasons NOT to own a piece of Real Estate under an individual name, under a trust (for estate purpose) comes to mind and it's now very cheap to do and the public in general is more educated on it; so that alone accouts for a large chunch of declining in % of homes owned by individuals.
Then there are the Real Estate investors/entrepreneur landlord and flippers; who for liability purposes use LLCs.
And yes LLC need not to disclose the name of their unitholders (shareholders). So what? That is not a problem.
Yes money laundering is an issue, but picking the fact that LLC (and Corporation) are not required to disclose the name of their shareholder is not an issue. In some part of the world, those are called "Anonymous Society", sounds cool, but it ain't inherently bad or malicious.
Can we have better writing and reporting instead of these emotionaly-driven pieces?
>And yes LLC need not to disclose the name of their unitholders (shareholders). So what? That is not a problem.
Why isn't it a problem?
> Tenants can’t figure out to whom to complain when something goes wrong. Local officials don’t know whom to hold responsible for code violations and neighborhood blight.
> For journalists, it requires undertaking a tremendous investigative effort to find the real owner of even one property, let alone millions.