S.21-2.9: Defending Homeownership Act (Law'd)

[reagente]

Defending Homeownership Act

Section I. Title
i. This bill may be known as the “Defending Homeownership Act”

Section II. Substance
i. All minimum lot size limits for new homes in the Southern Region are henceforth outlawed. This should not be construed as undercutting any other housing regulations on local or state level.
ii. Investment companies and non-permanent resident non-citizen buyers face a special tax of fourty-five percent on all transations involving the purchase and sale of a home, except for multi-family housing units with at least 4 floors, and within the borders of a county with a population of over 400,000.
iii. All residents who can prove they own a residential property and whose annual income is 150% or less of the poverty line gets a deduction of ten percent off their overall tax bill.

Section III. Implementation

i. Article II in the previous section takes effect immediately upon this bill being signed into law, and the rest of this law takes effect on July 1, 2021.

Sponsor: reagente

I think what BlackRock and other private equity firms are currently doing in the Housing Market is alarming (for those not aware, read here or google it). Not only is homeownership the bedrock of the Atlasian Middle Class, but this kind of speculative investing could create another housing bubble if left unchecked. I think the Southern Region needs to nip this destructive activity in the bud (and if we are going to go after this, we might as well take the opportunity to ban foreign speculative investment in the Atlasian housing market)

Minimum 48 hours debate

[President Punxsutawney Phil]

I agree with the sponsor that the activities are alarming, but I feel a vacancy tax is the best option. Banning foreigners from owning or renting more than one property strikes me as overly crude as well. It might in fact harm development in some corners of the housing market, particularly high-rise developments in big cities.
Putting away the sledgehammer and taking more considered action will produce better outcomes for the region.
There are numerous ways we could stop a hypothetical bubble from taking shape. Upzoning would be more helpful than this.

[reagente]

I agree with the sponsor that the activities are alarming, but I feel a vacancy tax is the best option. Banning foreigners from owning or renting more than one property strikes me as overly crude as well. It might in fact harm development in some corners of the housing market, particularly high-rise developments in big cities.
Putting away the sledgehammer and taking more considered action will produce better outcomes for the region.
There are numerous ways we could stop a hypothetical bubble from taking shape. Upzoning would be more helpful than this.

Did you envision a vacancy tax applying in a general context, or specifically to these sorts of investments? In either case, isn't there a concern that these equity firms could still turn properties into rental units quick enough that the vacancy tax wouldn't apply?

With regard to foreign investment, while it undoubtedly does enable the construction of some housing, it also is driving up the cost of housing a lot in many metros where it is already expensive to live, and is often used to make ill-gotten money abroad into "clean money" here. It has occurred to me that existing investments should probably be grandfathered in, but I don't see the housing market as something where we need foreign investment.

I agree upzoning would be helpful, but establishing a region-wide zoning policy applicable across the entire South strikes me as quite daunting.

[President Punxsutawney Phil]

I agree with the sponsor that the activities are alarming, but I feel a vacancy tax is the best option. Banning foreigners from owning or renting more than one property strikes me as overly crude as well. It might in fact harm development in some corners of the housing market, particularly high-rise developments in big cities.
Putting away the sledgehammer and taking more considered action will produce better outcomes for the region.
There are numerous ways we could stop a hypothetical bubble from taking shape. Upzoning would be more helpful than this.

Did you envision a vacancy tax applying in a general context, or specifically to these sorts of investments? In either case, isn't there a concern that these equity firms could still turn properties into rental units quick enough that the vacancy tax wouldn't apply?

With regard to foreign investment, while it undoubtedly does enable the construction of some housing, it also is driving up the cost of housing a lot in many metros where it is already expensive to live, and is often used to make ill-gotten money abroad into "clean money" here. It has occurred to me that existing investments should probably be grandfathered in, but I don't see the housing market as something where we need foreign investment.

I agree upzoning would be helpful, but establishing a region-wide zoning policy applicable across the entire South strikes me as quite daunting.

I never really thought of the deep nitty-gritty details, but I think a vacancy tax is a good way to ensure housing in general is used with ideal functionality, i.e., as a place to live, as opposed to merely an investment used to park money. I generally thought more along the lines as a general measure though.
I believe it is possible for us to derive the benefit from foreign investment in housing while also curbing cost of living increases that can be partially driven by it.

It also needs to be said that in general the South is unlike other parts of Atlasia in that potential housing supply is generally quite plentiful here. This sort of measure might be of more immediate relevance in, say, Fremont*, where you have big cities restrained by geography and more zoning restrictions (cough *California* cough).

To the extent that housing costs are increasing in the South, foreign investment is not the main driver, far from it. Rather, internal migration trends favor the South and it's hard to properly build enough units to keep up demand.

Perhaps we could just outlaw minimum lot sizes, slap investment companies and foreign buyers with special taxes in housing transations (to kill off any chance of a institutional invester speculation-driven bubble), and introduce a tax cut applying to those who own a home (means-tested or otherwise).
*=apologies to Fremonters if this is an inaccurate representation of the realities of the housing market there.

[Biden his time]

I am in favor of this bill

A vacancy tax would be OK too but this IMHO is better seeing as the vacancy tax would go out of effect very quickly as soon as conversion is complete.

[President Punxsutawney Phil]

I am in favor of this bill

A vacancy tax would be OK too but this IMHO is better seeing as the vacancy tax would go out of effect very quickly as soon as conversion is complete.

This measure would be pretty ineffective at defending homeownership in a broad sense. I think the alternative I laid out would do more to make homeownership possible for more people, by ensuring we never run out of land, that institutional investors and foreigners face extra costs, and helping the finances of homeowners.

[President Punxsutawney Phil]

Would an amendment that modifies the bill along the lines I have suggested be taken in good faith by the sponsor?

[reagente]

Would an amendment that modifies the bill along the lines I have suggested be taken in good faith by the sponsor?

Feel free to make an amendment proposal

[President Punxsutawney Phil]

Defending Homeownership Act

Section I. Title
i. This bill may be known as the “Defending Homeownership Act”

Section II. Substance
i.  It shall be illegal for investment management companies, private equity firms, banks, or any other Investment company to purchase single-family houses for the purpose of turning those homes into rental properties.
ii. It shall be illegal for non-citizens to own or rent more than one property in the Southern Region

i. All minimum lot size limits for new homes in the Southern Region are henceforth outlawed. This should not be construed as undercutting any other housing regulations on local or state level.
ii. Investment companies and non-permanent resident non-citizen buyers face a special tax of fourty-five percent on all transations involving the purchase and sale of a home, except for multi-family housing units with at least 4 floors, and within the borders of a county with a population of over 400,000.
iii. All residents who can prove they own a residential property and whose annual income is 150% or less of the poverty line gets a deduction of ten percent off their overall tax bill.

Section III. Implementation

i. Article II in the previous section takes effect immediately upon this bill being signed into law, and the rest of this law takes effect on July 1, 2021.

Felt the special tax ought to go into effect immediately as to prevent a rush by big firms to buy up everything before the tax goes into effect. Decided to exempt apartments in order to make it practical to have a higher punitive tax on single-family homes.

[Biden his time]

I support the proposed amendment

[reagente]

Amendment adopted.

Motioning for a final vote. 24 hours to object.

While perhaps not the approach I would have taken, I think this amended bill is a strong enough start that its worth passing. If there are still issues with single family homes being converted to rental properties, even after this transaction tax, the chamber can take further action later.

[President Punxsutawney Phil]

No objection.

[President Punxsutawney Phil]

Final vote. 48 hours.

Aye

[reagente]

Aye

[If my soul was made of stone]

AYE

[Biden his time]

Aye!

[reagente]

This bill has enough votes to pass. 24 hours for delegates to change their vote if they wish.

[reagente]

This bill has passed 4-0-1 and will be presented to the governor for signature