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Negative real interest rates, if passed on to the consumer, make expensive houses more affordable, and are not in and of themselves the problem. The commodification of housing, which sees it as an asset class for investment rather than a home for homeless families results in a shortage of houses available for real families to live in, especially low income families.

Taxing houses owned by corporations and large scale landlords, plus vacant houses not used for anything other than as a store for assets, would release a lot of these houses into the market and solve the short and medium term supply and pricing problem for medium, low income and homeless families. Existing policies seek to incentivise building, but that is only a long term solution.

We should prioritise the utilisation of assets we already have, and stop the financialisation of what should be a human right.

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 27th, 2021 at 04:33:19 PM EST
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The economic consequences of low interest rates | ECB - Oct. 2013 |

The key ECB policy rates are at a historical low. After being cut to 1% in May 2009, the interest rate on the main refinancing operation (MRO) has remained at low levels over the past four years. It currently stands at 50 basis points.

The main reason for maintaining highly accommodative monetary conditions has been to avert the risk of an economic depression and to counter deflationary pressures. At the same time, given the financial disruptions which led to what is now widely called "the Great Recession", the reduction of interest rates has helped to offset the excessive increase in borrowing costs caused by the widening of financial spreads. From this perspective, monetary policy actions have favoured borrowers.

How Europeans' household net worth is 'now exclusively driven' by negative interest rates | Business Insider - May 2019 |

Low interest rates makes saving up for retirement more expensive | policy Dutch Central Bank |

by Oui on Wed Oct 27th, 2021 at 06:16:16 PM EST
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A high property tax on more than two homes owned by any single person or corporation would quickly remedy the situation. Might be easier to implement than a vacancy tax. How is vacancy to be established?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Oct 28th, 2021 at 02:33:49 AM EST
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Here you have to have a primary residency. I'd just put a tax on every address that has no primary residency registered.
by generic on Thu Oct 28th, 2021 at 04:57:36 AM EST
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Right after the WWII when there was a huge housing scarcity in Finland due to bomb damage and refugees, the government established a "room per person"-rule as a quick solution. Every municipality had a board tasked with locating houses and apartments with more rooms than dwellers, and those extra rooms were then assigned to lodgers.

Naturally there was corruption and shenanigans, but nevertheless it made every layer of the society a stakeholder on the issue and by the end of 40's a huge communal housing construction boom was on the way.

Might explain the current Finnish policy, too. Finns learn at school that homelessness has a very simple solution: give people homes.

by pelgus on Thu Oct 28th, 2021 at 07:25:02 AM EST
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Every landlord is supposed to be registered and have tenancy agreements for his properties established and is liable for income tax for any rent received less allowable expenses. Thus vacancy for rental properties could be established by the lack of rental income.  If the landlord fraudulently claims non-existent rental income, he becomes liable for income tax on it. So he either pays the vacant property tax or income tax.

For non rental properties, occupation could be established by payment of electricity and other utility bills. Vacant properties tend not to use much electricity or heating oil etc. Of course some rules would have to be established, e.g. a property would have to be vacant for at least 3 months before it became liable. This would allow time for landlords to find new tenants if one left, or for renovations to be carried out while the houses was uninhabitable.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Oct 28th, 2021 at 07:39:24 AM EST
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