UN report lays bare the waste of treating homes as commodities

This is crazy.<p>&quot;In such markets, the value of housing is no longer based on its social use. Properties are equally valuable regardless of whether they are vacant or occupied, so there is no pressure to ensure properties are lived in. They are built with the intention of lying empty and accumulating value, while at the same time, homelessness remains a persistent problem.&quot;<p>A home lying empty has a negative return (due to maintenance and operating costs, still have to water lawns, repair weather damage, etc). A home being rented has a higher return. There is simply no reason from an investors perspective to leave a home empty unless you can&#x27;t find a renter who will cover their costs, or you are trying to sell it.<p>It&#x27;s people like the author of this study that created the housing bubble in the US. They pushed to lower lending requirements, and pushed to have the US Government assume more risk so more easy money was available for housing purchases. With Fannie Mae and Freddie Mac, the US hasn&#x27;t had a free market in housing for 70 years.<p>And worse, Fannie Mae and Freddie Mac are integrally connected to both political parties, offering huge payouts to retiring politicians or their friends in return for their support. Google the ex-DNC chairman who made $100M+ as chairman of Fannie Mae&#x27;s board.

And in the extreme you have cases like Vancouver which introduced their Empty Homes Tax, unoccupied residential properties that are unoccupied attract a 1% of value tax. I would suggest at least a 2% tax as that matches the IMF&#x27;s usual inflation target. I would also suggest that the money raised is spent on subsidising affordable housing. But home owners vote far more often than the poor or homeless so they don&#x27;t want to see the last 30 years of value gains go down the toilet (let alone a margin call if they go underwater).

Taxing empty properties might help a bit. But it doesn&#x27;t address the root of the problem. That housing has become such a scarce resource it can be treated as a commodity. We have the technology to build denser and higher. There&#x27;s no economic reason that housing should cost much more than the cost of construction. Which should only get cheaper with time, as technology improves. Certainly not more expensive.<p>But this doesn&#x27;t happen. Why? Because the people commoditizing homes want to protect their investment. The scarcer housing is, the more money they make. It&#x27;s an incredibly perverse system. It hurts the poor especially. Even the middle class ends up losing most of their income to it. It leads cities to stagnate instead of grow.

I think the article means &#x27;assets&#x27;, not commodities. They&#x27;re saying investment in real estate is leading to (a) long commutes for poor people and (b) empty houses causing commercial blight.<p>Thought it was going to be about how cookie-cutter apartment buildings tend to have nice fixtures but thin walls &amp; inefficient heating&#x2F;cooling.

Their link to the report is broken. <a href="http:&#x2F;&#x2F;www.ohchr.org&#x2F;EN&#x2F;Issues&#x2F;Housing&#x2F;Pages&#x2F;HousingIndex.aspx" rel="nofollow">http:&#x2F;&#x2F;www.ohchr.org&#x2F;EN&#x2F;Issues&#x2F;Housing&#x2F;Pages&#x2F;HousingIndex.as...</a> is more recent and inclusive of the 2014 report.<p>The title of the original article is malformed. The problem of the empty homes is that they aren&#x27;t treated as commodities. Commodities are synonymous with low margin and exchangeability with like kind. If homes were seen like normal depreciating commodities, and less like the special snowflake, all legislation must cause them to rise in price gifts to the capital class, they&#x27;d be less of a problem.<p>Thus, homes if actually treated like commodities should exhibit less of the problems the empty homes in this article describes. Artificially cheap&#x2F;government subsidized credit for home purchase has distorted the housing market, as it has now also done to education. I hope the next bubble they blow up is in healthcare.

Land Value Taxation. Stop taxing property, and tax land value and land ownership instead and most of these problems go away.<p>This might be more of a hard-sell than basic income though.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Georgism" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Georgism</a>

Are houses the new tulips? If value isn&#x27;t linked to utility and only to speculative investor demand, it&#x27;s hard to conclude otherwise...

The building of homes for investment purposes should be making housing more affordable, not less. Simple supply &amp; demand: more supply should mean lower prices.<p>Which implies that these homes aren&#x27;t actually being added to supply. Why are investors choosing to forgo rental income? There are lots of potential answers to the question, and answering them might magically fix the problem.

Just reinstate the GS Act, already! Must we wait until the banks, funds &amp; their ilk completely ruin more markets and put mllions og REAL PEOPLE in more desperate, stagflating situations on more fronts? Let the wealth managers apply their smarts to actually creating tangible value to society instead of nicking more margins for &quot;the investors&quot;. Parasitoid behavior kills the host every time.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Decline_of_the_Glass%E2%80%93Steagall_Act" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Decline_of_the_Glass%E2%80%93S...</a>

If something costs a lot of money, retains its value with a potential to appreciate, people will treat it as a financial commodity.<p>Oh well, &quot;shikata ga nai&quot;, as they say in Japan. Can&#x27;t be helped.<p>Funny how the talk always turns to human rights when Peter sets his sights on something he is lacking, which Paul happens to have.<p>If housing is a right, then even if you&#x27;re not a real estate speculator but an earnest home owner, some assholes out there believe that they have a right to what is yours.<p>Want to relocate somewhere temporarily to work? Hey, &quot;your&quot; home is empty: rent it to some trash that will destroy it, or pay up!

Should they go after anyone who owns more than one home? When does a vacation home become a &quot;Bad social construct&quot; or whatever phrase they want to use? All depending on where it is located?<p>Yes I understand there is an issue that many homes go unoccupied in some areas but I cannot tell from the article how long between owner uses does it qualify for this designation?<p>Now I can agree if the unit is never occupied, however if they visit a few weeks out of the year then I don&#x27;t see an issue. It is no different than owning a second or third home anywhere else.

There is a dead simple solution: cities must be allowed to use eminent domain for unoccupied (more than half a year is usually used as standard) housing if the city declares a housing emergency.<p>Radical, yes, but I don&#x27;t believe that there is any other viable solution left, including &quot;unoccupied taxes&quot; - because when the tax over a year is lower than expected value gain, investors just pay the fine instead of complying.

&quot;In prime locations for wealthy foreign investors, such as the affluent boroughs of Chelsea and Kensington in the city of London, the number of vacant units increased by 40% between 2013 and 2014.&quot;<p>How much of this is vacant vs AirBnB units? In heavily regulated markets a lot of owners will under-report that they&#x27;re being used for AirBnB.

<i>They are built with the intention of lying empty and accumulating value, while at the same time, homelessness remains a persistent problem</i><p>Yeah and Apple has $250,000,000,000 in the bank and at the same time.... Welcome to inequality in home ownership, stock ownership, money in the bank, education, crime rates etc etc.

Homes are such a critical resource. While other resources are passed down the stream from the rich to the poor — see for example food leftovers (waste) — this is not the case for homes. They remain where they are and don&#x27;t easily change ownership.