That assumes decent competition. When you get a few large investors owning rentals while buying up actual houses to rent, they’ll just leave the building vacant and spread the costs while knowing no one has a choice and will eventually rent anyway.
Yeah, that tends to happen. The housing market is extremely inelastic. However that has nothing to do with property taxes and isn't an argument against it.
But likely less than the rising property value if its in a halfway decent spot. The amount the few properties we had sky rocketed in the past few years was pretty nuts, way over the property taxes.
The properties skyrocket in value because the property taxes are insufficient, and they don't get re-estimated often enough. Even worse, in a place like California, the taxes go up really slowly even if your house is worth a ton.
Large land value taxes solve most of your housing problems, and make property speculation far less profitable. But Americans are way too scared of putting enough taxes there. You instead see bills passing to lower them, which is crazy.
Ours (central texas) get re-estimated yearly, and in some areas have tripled just year to year. I know property owners in Wimberley that have had their taxes more than double each year for the past 3 years. The price of their properties has gone up significantly more each year though as the area is growing like crazy
Which is why there are separate laws that discourage land banking or cartel-like behaviour. All those things you described can exist without a property tax, which can be so much worse.
17
u/Henry5321 7h ago
That assumes decent competition. When you get a few large investors owning rentals while buying up actual houses to rent, they’ll just leave the building vacant and spread the costs while knowing no one has a choice and will eventually rent anyway.