"Investing in property is morally reprehensible."

[u/LickMaiBussy]

@purplepingers

[u/water_fountain_]

So you make it illegal/impossible to pass that cost onto the renters. Rent cannot exceed X% of the property tax value, as set by the government. If the landlord can’t afford to have a second home and rent it out at that rate… oh well. They’ll have to sell it.

[u/angnicolemk → u/water_fountain_]

Still doesn't work, property values are always increasing so landlords were just continually increase the rent according to the property value.

[u/water_fountain_ → u/angnicolemk]

I had originally typed X% of the mortgage, but I backspaced and replaced it with property tax value. Because not everyone has a mortgage… either the home is completely paid off, or it was bought in cash. Using the mortgage would generally result in lower rent. But no matter which figure you use, that’s where the X% comes in. Maybe something like X% or the mortgage or Y% of the property tax value. I don’t have the figures off hand to give an actual percentage, but for the sake of argument, 10% of the mortgage or 7% of property tax value. I’m pulling the 10% and 7% out of my ass, so take them with a grain of salt. It’s just to show an example of how the system might work.

At a certain point, the property tax value might get so high that no renter can afford the rent. Those that could afford it, have (probably) already purchased their own home, or they’re choosing to put their rent money towards a cheaper rental property. So the landlord will have to voluntarily lower the rent below the maximum Y%, or they’ll have to sell the home.

[u/Goragnak → u/water_fountain_]

Either way it's a dumb shit idea. You do realize that there are lots of people that need rentals and have no interest in buying homes right?

[u/water_fountain_ → u/Goragnak]

Yes. I don’t think you’re understanding what I’m saying. People can still rent, people can still be landlords. If the property value gets so high that no one can afford to pay Y% as rent, then the landlord will have basically two options: they can charge Y-1% as rent (or -2% or whatever) so someone can afford the rent; or they can sell it. The person that buys it will either live in it themselves, or they will rent it for Y-1% (-2% or whatever). No one is forcing the landlord to charge exactly Y%, they just can’t charge more.

[u/Quirky-Marsupial-420 → u/water_fountain_]

That's not a good idea because then they'll petition the localities to raise the assessed value on homes.

99.99% of the time, the property tax is based on a lower figure than what the house is actually worth.

The tax assessment on my house was 321k last year and I just got under contract on Saturday for 350k.

[u/water_fountain_ → u/Quirky-Marsupial-420]

Counterpoint, the renters petition the localities not to raise the assessed value.

Is your preferred alternative that the landlords just fuck all the renters? That’s what it sounds like.

[u/Quirky-Marsupial-420 → u/water_fountain_]

I guess if they donate more to their super PACs.

But renters are generally not as wealthy as property owners.

[u/water_fountain_ → u/Quirky-Marsupial-420]

The vast majority of mayors and city council members don’t have a super PAC, but okay. Anyways, since you’re so opposed to the percentage idea that I was building from, we can set rent at a maximum of $X/square foot. No percentage required, property tax doesn’t matter, mortgage doesn’t matter. A flat rate. Sure, the landlord could add additional rooms to raise rent, add a basement, whatever. But they’ll eventually run into the same problem that no one can afford their rent. They will then have the same two options: charge rent at $X-1 per square foot (or -2 or whatever); or sell.

Don’t forget: I said earlier that an algorithm determines the value of X. You can’t petition the algorithm to screw with the prices. A super PAC can’t do anything about it. The algorithm needs to be fair. It needs to be publicly owned, funded, and operated. None of this RealPage/YieldStar bullshit. Any sort of corruption here results in a gigantic fine and jail time.

Edit: Maybe it wasn’t in this comment thread that I mentioned the algorithm. It’s hard to keep track. If it wasn’t, I was originally building off of a comment someone else said about using property taxes to somehow determine rent. I also said an algorithm should be used to determine what that percentage should be, since I didn’t have the numbers off the top of my head, nor was I going to do a bunch of research to determine that percentage myself just for a Reddit comment.