It’s also been pointed out that areas that become expensive see a pretty big drop in population– both because of vacant units, and because other buyers may remodel two apartments housing a family each into a large, fashionable flat for a couple. This can cause problems because the local infrastructure is often geared toward a larger population, and local businesses go under for want of customers.
Finally, it would be much less of an issue if cities were willing to allow increases in density, because you’d just get a lot more apartments popping up, and prices would level off (which would also make existing apartments lousy investments, so you’d have fewer absentee owners anyway). But that’s decidedly not the case today.
]]>I’m happy to have all the construction we can muster for places that end up used as primary residences. I’m less interested in building pied-à-terres. Looking around Manhattan, what seems to happen relatively frequently is that crappy buildings that are primary residences for a few people get bulldozed to build a very large luxury building that houses many apartments that are essentially vacation homes. I think that’s a lost opportunity.
Our zoning laws are clearly out of wack and creating bad outcomes, but the debate has boiled down to nothing more than “Building: Good or Bad?”. I’m sure that building new supply would help drive prices down, but I’d love to see a combination of loosening restrictions on the outer envelope you can build with some rules that increase internal density.
]]>I ask this because it seems like they are paying significant amounts of property taxes (typically more so when non-owner occupied) while using little to no public services (schools, roads, ambulances, etc.)
It seems like a city would want lots of these buyers so they could funnel the surplus of property taxes into affordable housing for others.
I read into this with NYC’s situation, and it seems the problem is that the ultra-expensive penthouses are paying barely any property taxes. https://www.citylab.com/equity/2015/05/why-billionaires-dont-pay-property-taxes-in-new-york/389886/
That to me seems to be the problem, not that rich people would buy housing and sit on it. We should be fine with that (cities can make a huge profit of that) – but not when they pay a small fraction of the rate paid by middle-class homeowners.
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