The impulse to enlist the government to regulate private property and investments is not productive and results in endless encroachment of individual liberties and rights to governments.
AirB&B has been a terrible experience, so many people buying up houses just to lease them out for a weekend has definitely contributed to rising housing costs and over-all cost of living
Foreign-owned homes are a problem for asset acquirers. Vacant homes are a problem for anyone who needs housing. The former seems to get a lot of visibilty when concerns around the latter get raised.
> “This guidance reminds lenders that denying someone access to credit based solely on their actual or perceived immigrant status may violate federal law.”
Ref: https://www.justice.gov/opa/pr/justice-department-and-consum...
From many points of view, having foreign investors buy property without immigrating is a best case scenario for governments.
Raise that fence too high and you turn landlords into the community's gatekeepers. (How else could a non-resident become a resident?)
But they pay taxes without demanding any services and the seller assessed they had better use of the capital, they could buy or build a more suitable home.
If I lived in a location with 50% vacant homes all paying property taxes then wouldn’t my schools and streets and all local government services be extremely well funded?
If the polity is smart, yes.
It looks like British Columbia gets about 15% of its revenue from property taxes and transfers [1]. So you'd need adjustments to make up for the personal, corporate, sales, fuel, carbon, tobacco and insurance premium (?) revenues the vacant homeowner isn't paying.
[1] https://www2.gov.bc.ca/assets/gov/british-columbians-our-gov... Table 2.3
The Power of Pricing is a thing that exists whether you want it to or not. Smart policy uses it to great advantage. Dumb policy redirects this to hurt those it intends to help. Rent control, restrictions on production, byzantine zoning and construction rules... all contribute to distorting the market in ways that push back on the original (or at least, stated) intentions.
You want housing to be cheaper? Increase supply. That's it. You don't want foreign investment in your properties? Don't make them so damn attractive as pure investment vehicles. How? Increase supply.
There's always a boogeyman to be blamed when markets are so broken like this.
Drastic? Well, then: kill NIMBYism. Just off with its head. We know the 18th century in England as the "Gin Craze", future generations will look at our period as the "NIMBY Craze".
Large-scale construction is absolutely possible. There were periods of massive construction booms all around the globe, especially after wars (when a lot of housing had to be rebuilt immediately). You can absolutely build a lot of comfortable middle-class housing in a fairly short time. Most German cities were rubble in 1945 and fine again in 1960.
But you need density and straightforward approval processes. No artificial scarcity caused by one-family home zoning and endless environmental reviews that are abused to stall developments for decades.
So if I buy a place there and move, it's win/win for everyone!
The USA (and maybe Canada) has large stocks of government land. In my country, most land is privately-owned; interfering with landowners' property rights is seriously destabilising. Property law is the basis of most law.
But that's the problem, isn't it? The basic necessities of life shouldn't become a vehicle for speculation.
FTR, all of my wealth is in two homes.
Also, strategically, having powerful people own expensive real estate influences them to visit and maybe not bomb it... at least, it's better than them never having stepped foot there. The famous example is Kyoto not being nuked because an American leader had seen it firsthand[1]. The Nazis spared Paris was apparently spared for similar reasons[2].
The counterexample is NYC which everybody loves to crap on (Gerald Ford "drop dead", 1993 bombing, 9/11, and lots of failed terrorist attacks since), presumably as a symbol of American greed and excess, but also as a symbol of urban chaos, rot and violence.
Austrian economics teaches us that restricting foreign investment misinterprets how markets work. Vacant homes signal opportunities for builders, not losses for workers. Investment flows where it’s valued, stimulating demand and construction, not stifling growth. Misallocating housing due to artificial constraints only distorts the market, harming those you aim to help. Let’s not forget, economic growth comes from creating value, not redistributing scarcity.
I live beside the river Thames, which private "investment" has transformed into a sewer. My access to food has shrunk; I used to have access to butchers, greengrocers and so on. Now all my food comes from supermarkets. The health system I depend on has been gradually privatized, and it is now at breaking point.
> the lessons of history
History is squishy stuff; we mould it to support the conclusions we want to draw.
[Edit] I'm interested that you didn't challenge my equating of investment with speculation, because I didn't mention investment. Obviously, without capital investment, you don't get capital assets like houses. But my neighbourhood is blighted by absentee landlords; one neighbour is an AirBnB, the other has been empty for 5 years. Both are owned by absentee landlords, one living 2,000Km away. That's not investment; that's speculation.
There are loads of cheap houses in the USA. They're just in places where most people don't want to live.
Here's a cheap house:
https://www.zillow.com/homedetails/420-Tyler-St-Gary-IN-4640...
The commute to Southern California is pretty killer though.
Lamenting the rise of supermarkets as a death knell for local butchers and greengrocers is a misplaced nostalgia that ignores consumer choice and market efficiency. Supermarkets thrive because they offer what consumers demand: variety, convenience, and affordability. To decry this as a market failure is to advocate for a return to less efficient, more costly ways of living, under the guise of preserving tradition. It’s an affront to consumer sovereignty and a free market that naturally evolves to meet changing societal needs. Yearning for a past that restricts choice and elevates prices is a backward step, not progress.
Criticizing absentee landlords as mere speculators ignores the benefits they bring: paying property taxes and injecting capital into the economy. This isn’t about speculation; it’s about fulfilling market demand and facilitating economic activity. The real issue lies in state-imposed barriers that prevent adequate housing supply, not in the actions of individual investors. Blaming investors for taking advantage of market opportunities is misguided and diverts attention from necessary reforms to increase housing availability and affordability.
The collectivist dismissal of history as "squishy" is a deliberate evasion of undeniable truths. History is replete with the failures of socialism and the triumphs of capitalism. To mold it to fit a narrative that justifies state control and collectivism is intellectually dishonest and dangerously naive. The empirical evidence is clear: wherever socialism has been tried, it has led to economic stagnation, misery, and the erosion of freedoms. Capitalism has lifted billions out of poverty and spurred innovation and prosperity unmatched by any collectivist scheme. Ignoring these facts is not just an error in judgment; it's a willful blindness to the lessons that history has painstakingly taught us about the superiority of market freedom over state control.
Whenever the cry of "market failure" echoes, a closer inspection often reveals the true culprit: state failure. "If someone considers that there is a market failure, I would suggest that they check to see if there is state intervention involved. And if they find that that’s not the case, I would suggest that they check again, because obviously there’s a mistake." This wisdom holds true across the spectrum of economic grievances. Time and again, what is hastily labeled as a failure of capitalism turns out to be the unintended consequences of excessive regulation, misguided policies, or government overreach. The path to prosperity is not paved by increasing state control but by unleashing the creative and productive powers of the free market.
Maybe the USA and Canada could do something similar? I find it ironic that it’s primarily Chinese investors who want us to keep our property markets open.
Free markets are great, until they start incentivizing weird behaviors (NIMBYism, bubbles) instead of investments (construction, renovations) and efficient allocation.
Successful cities have walked the balance successfully and stepped in (only) when necessary.
> Vienna and Singapore are outliers [...]
A model that has to explain away two historically, culturally, and geographically distinct cities as outliers is not very compelling to me.
Again, I'm not proposing that more regulation is always good, but as soon as e.g. long-term residents are massively getting priced out by outside investors or homeowners start opposing new construction exclusively because of the impact on their property value due to an increase in supply (rather than for actual decreased quality of life), the incentives of the free market start drifting apart from those of the people actually living there.
Sure, property taxes are paid on the house.
But unoccupied homes don't buy groceries and clothes, don't go to restaurants in the local economy.
So they do harm the economy, in the sense that they don't contribute as much to the economy as an occupied home.
> The real issue is the collectivist delusion that more state control is the solution
My head hurts.
> The collectivist dismissal of history as "squishy"
Firstly, I am not a collectivist. Secondly, I don't dismiss history; I think it's very important and illuminating. Thirdly, Karl Marx, the arch-collectivist, hardly dismissed history; his entire theory was based on historical analysis. History is not a list of facts; what real historians do is largely interpretation. History is almost completely unlike maths. Expressions like "history tells us that ..." are rather stultifying; history tends to tell us what we want to hear.
Your comment seems to be a catalogue of free-marketeer articles of faith, expressed as bald assertions, as if only a fool could fail to see their obvious truth. Well, we've had free-marketeers in charge here for 15 years now; everyone knows that things have got worse.
Government intervention to forcibly lower property values or curb vacant properties is misguided and would likely diminish overall prosperity. Instead, efforts should concentrate on dismantling barriers like excessive zoning restrictions and streamlining building permits to encourage development and increase housing supply.
Viewing luxury or seaside properties remaining vacant as a problem ignores the unseen advantages these transactions provide. Sellers receive capital, presumably to be allocated more efficiently, while buyers secure a safe investment, indirectly contributing to the economy’s health. High housing prices signal a need for market adjustments, not for envy-driven policies that would only stifle growth and innovation. The sentiment of envy, while potentially motivating in small-scale societies, can lead to destructive policies in complex modern economies, detracting from the foundational principles that drive progress and prosperity.
Per capita!
You: "row upon row of vacant luxury properties represent significant capital inflow!"
Real world: vacant luxury houses can cause blight and other problems just as much as low-income housing.
Also, the value of the vacant property does not decrease because it is occupied. Unless your claim is that the local burden of people existing in a community is larger than the combination of their property and other contributions.
So an occupied property represents significant capital inflows AND enhances economic well-being on a per capita basis, AND does so moreso than the vacant, because there's the capital inflow AND the local spending.
Otherwise you end up with the absurdist trope of talking about public budgets as "homes and communities are worth more if no-one lives in them".
"Assume a spherical cow..." "Assume a row of oceanfront villas that have roads and sewage and utilities that require less maintenance because they're all vacant."
Phrasing it, as you repeatedly do, as "envy-driven" and "anti-free market" and libertarian ideology is sophistry. "You just don't get economics" - no, people understand that housing isn't a purely economic construct.
The idea that homes might be ‘worth more if nobody lives in them’ reflects a misunderstanding of market dynamics in exclusive areas. These properties offer significant economic benefits by providing substantial tax revenues and maintaining high property values, which support public budgets and infrastructure with minimal physical wear and tear. This scenario underscores the often-overlooked reality that absentee ownership can contribute positively to a community’s economic and physical landscape.
Furthermore, dismissing the economic construct of housing ignores the foundational principles of supply and demand that govern real estate markets. All aspects of housing, from affordability to availability, are indeed shaped by economic forces. Acknowledging this doesn’t detract from the importance of community and social well-being; rather, it provides a basis for understanding and addressing housing challenges in a manner grounded in reality, not ideology.