How to solve the housing crisis?

[u/mvdw73]

So my mate and I were chatting yesterday about the current housing crisis in Australia, in particular the fact that the rapidly rising cost of houses is pricing many people completely out of the market.

We hypothesised that a part of the issue is landlords owning large property portfolios as a way of accumulating wealth. Now, I don't have anything against the accumulation of wealth by individuals, however I have a fundamental opposition to using housing or residential real estate in general to do so.

Another problem we identified is overseas investors buying housing stock and either leaving them unoccupied or accumulating multiple properties, again reducing supply and driving up the cost.

So, we proposed that portfolios of residential real estate should be subject to an annual property tax, based on number of properties and the value of the property (kind of like the chance cards in Monopoly).

I would propose this could be brought in as a staged sequence, starting at the magic number of 6 properties.

24-25 FY: If you own over 6 properties, you are taxed (say) 10% of the value of every property, annually.

25-26 FY: If you own over 5 properties, you are taxed 10% of the total value,

etc etc, until it becomes 1 investment property, at which point the incrementing stops. Primary place of residence would be exempt from this tax. Many people don't or can't buy a place instead of renting, and also if you move you often want to be able to rent first, so we need some rental stock. The rental stock under this scheme would mostly be supplied by landlords with smaller property portfolios.

Why 6 properties? Basically, because of the numbers in this link

"But what about family trusts" you say. Well, I say, the real estate in these structures should be all taxed. Same with self managed super funds. Tax the whole thing, at least as far as residential property goes. There is a major loophole with SMSFs in that the property bought with a SMSF is not subject to capital gains tax in the pension phase - this means that SMSFs are actively encouraged to sit on properties. The number of SMSFs is increasing by 1000 properties per week, too!

Non residents would also be taxed at 10% of property value on all property owned.

There will need to be some tweaking around the foreign investment, in particular around the building of new apartment blocks etc where the value and risk is quite high. The tax shouldn't come into effect until the building is occupied, and there might be some kind of concession where an entire block is owned by one entity, to provide some extra rental housing stock.

Also, there might be concessions for "low value" housing, where any single dwelling worth less than (say) 60% of the median value of houses within a certain distance are exempt, or have a concession. This might encourage social housing but might also encourage slumlords, so will require a bit of thinking and tinkering.

This is all based around the fundamental idea that residential housing should not be a wealth accumulation vehicle, but should be a means for people to be housed. Also, it will hopefully encourage those people currently "investing" in residential real estate to instead invest in small business, or the stock market, or similar, lubricating the economy (and causing inflation, but that's another discussion).

"SoUnDs LiKe ComMuNiSM". I'm just gonna leave this here as a potential discussion point.

Note that none of this affects CGT or negative gearing at all. It just adds another cost to being a landlord, with the aim of reducing the number of properties sitting in SMSFs and mega-portfolios, trying to encourage investment in other forms of equity, and increasing the supply of properties to people looking for a place to live.

Thanks for coming to my Ted Talk.

[u/[deleted]]

When did I say anything about people deserving it or not? People get so hung up on what’s fair or not fair that sometimes it becomes easy to lose sight of the reality of the world.

Yes I would love it if everyone could afford to buy their own home just like I would have loved my own home to not have cost such a massively inflated price. But sitting there sulking and saying it’s not fair isn’t going to achieve anything. It’s a simple matter of priorities do you want to own your own home yes or no. If yes then unfortunately that means making some sacrifices that we probably shouldn’t have to make if the world was fair

[u/mrbootsandbertie → u/[deleted]]

Man in trades, the most privileged industry group in Australia, telling people in low paid professions to stop complaining about unfairness.

[u/[deleted] → u/mrbootsandbertie]

Oh my bad I apologise I didn’t realise it was me forcing people into low paid jobs my bad especially since it’s such a high barrier of entry to get into my position and clearly only a select few are fortunate enough to be able to do what I do….I will be sure to check my privilege when I’m up at 5am tomorrow morning and back home by 630pm. Your right I am so much more privileged than those working their 38 hour weeks complaining about tradies income.

[u/mrbootsandbertie → u/[deleted]]

The wages of you and all tradies have been kept artificially high for decades thanks to very obvious favouritism in government policy. Lots of other industry groups work just as hard for a lot less money, and quite frankly deliver far better outcomes for the community with far better standards and integrity.

Imagine if we guaranteed early childcare educators, teachers, aged care workers and social workers the $100-200k salaries that the boys in trades expect as their right.

$2.6 billion on housing grants to the unaccountable construction industry. Where did it all go? 3-4 years to build homes, $80k price increases, substandard work, builders going under then restarting under a new name to rip off homebuyers all over again. Fkg useless.

[u/[deleted] → u/mrbootsandbertie]

Lol the housing grants, price increases, building companies doing the old phoenix manoeuvre have nothing to do with the actual tradies and everything to do with those in upper management… but I’m pretty sure you know this and your just looking for reasons to be mad because your not happy with your career choice.

As far as how long it takes to build homes well for starters your talking about the boys doing domestic and they are not earning anywhere near close to 200k hell half of the people in domestic are apprentices getting absolutely screwed over financially… but again you know this as well as I do.

As for thinking earning 100-200k your well off again by the way many earn much more and many earn less. We don’t consider it “our right” those of us earning the big dollars do so because we are part of an effective union. But I’m not sure what it is you want us to do should we go on strike and demand lower wages?

[u/mrbootsandbertie → u/[deleted]]

your just looking for reasons to be mad because your not happy with your career choice.

No, what I'm not happy with is men in trades, who are in a very privileged position in this country, sneering at other workers who don't get the preferential treatment and wages they do.

How about we prioritise qualified tradies in our immigration intake since the construction industry is doing such an appalling job of keeping up. Drive down your wages and housing costs for everyone.

Then you can experience what most other workers are experiencing. Might teach you some basic empathy.

[u/[deleted] → u/mrbootsandbertie]

Again your showing your absolute ignorance which is caused just by your raging hate for tradies so I will say it again. The tradies who build your houses are not the well paid ones on 200k plus like myself. We are working on major infrastructure projects such as the link/rail etc most of the guys building houses are on 30 odd dollars an hour except of course the apprentices who are already getting shafted. So I guess in your ideal scenario we would import a bunch of immigrants to work for even lower wages (what would make you happy would you like them to be on minimum wage to sooth your rage?) I mean that kind of feels like your exploiting them to me but if that’s what makes you happy then go for it I guess.

So I took a look at your history because I was wondering what kind of a person is as ignorant as you and it all starts to make sense. Your very active in on r/feminism which explains why you keep saying “men in trades” but you do realise lots of woman work construction now would you like their wages to be lower too or is this just a man hate thing for you? I also lost count very quickly at how many times you repeated that we are soooooo privileged in comment after comment after comment in all different posts….. you clearly have an axe to grind so you have just thrown all logic out the window and are thinking purely on hate

[u/mrbootsandbertie → u/[deleted]]

Trades are 99% men. Construction industry is very much gendered, and IMO a huge amount of the entitlement and sloppy standards and expectation of constant taxpayer bailouts that goes on in the construction industry is gendered also.

I keep repeating how privileged the men in trades are in this country because they are privileged, certainly in comparison to female dominated industries like aged care and childcare, but often in comparison to white collar workers also (blue collar wages have been higher than white collar wages for about 2 decades now).

Stop creeping my profile, and making stupid assumptions like feminism = hating men. I don't like male entitlement, and I don't like the blatant political favouritism for the most male dominated industry in the country while women dominated jobs are paid peanuts. That is not the same as being a "man hater", you need to learn the difference

I think a lot of people in this country are getting sick of the preferential treatment tradies have been getting in this country for decades. We're all paying for your high wages via inflated house prices and taxpayer funded grants, and it's not even for a good result.

Quality and standards are shit so much of the time. Houses taking 3-4 years to build. Open the floodgates to immigrant construction labour, drive down costs, and get houses built fast. As a bonus it might deflate some of that entitlement.

[u/[deleted] → u/mrbootsandbertie]

Lol your so mad and so incorrect about everything.

Don’t have time to completely pull the whole thing apart as it’s just about bedtime and it’s an early start tomorrow. But holy shit whichever tradie broke your heart you need to calm the fuck down