The best solution is for the state to build public quality housing that is well located, and charge rent only based on “cost”.
Vienna did this when they had a socialist government (in the early 20th century lmao), and still to this day since there is so much public housing and the cost to rent is so low, it controls the wider cost. Even non-public housing there is much cheaper than pretty much all cities of its size.
Also, creating laws that desincentivise owning more than 1-2 properties (taxing the shit out of third homes for example, and more for each additional one), or just making it outright illegal.
There’s actually a far more elegant type of tax that would have the effect you desire: land value tax.
In short, it’s a progressive, difficult-to-evade, and extremely economically efficient tax that – both in economic theory and in observed practice – cannot be passed on to tenants. Further, it strongly incentivizes new housing development, heavily penalizes real estate and land speculation, and improves affordability. In fact, it’s so well-regarded a tax that it’s been referred to as the “perfect tax”, and is supported by economists of all ideological stripes, from free-market libertarians like Milton Friedman – who famously described it as the “least bad tax” – to social democrats and Keynesians like Joseph Stiglitz. It’s simply a really good policy that I don’t think is talked about nearly enough.
It reveals that much of the anticipated future tax obligations appear to have been already capitalised into lower land prices. Additionally, the tax transition may have also deterred speculative buyers from the housing market, adding even further to the recent pattern of low and stable property prices in the Territory. Because of the price effect of the land tax, a typical new home buyer in the Territory will save between $1,000 and $2,200 per year on mortgage repayments.
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The best solution is for the state to build public quality housing that is well located, and charge rent only based on “cost”.
Vienna did this when they had a socialist government (in the early 20th century lmao), and still to this day since there is so much public housing and the cost to rent is so low, it controls the wider cost. Even non-public housing there is much cheaper than pretty much all cities of its size.
Also, creating laws that desincentivise owning more than 1-2 properties (taxing the shit out of third homes for example, and more for each additional one), or just making it outright illegal.
Housing shouldn’t be a commodity.
There’s actually a far more elegant type of tax that would have the effect you desire: land value tax.
In short, it’s a progressive, difficult-to-evade, and extremely economically efficient tax that – both in economic theory and in observed practice – cannot be passed on to tenants. Further, it strongly incentivizes new housing development, heavily penalizes real estate and land speculation, and improves affordability. In fact, it’s so well-regarded a tax that it’s been referred to as the “perfect tax”, and is supported by economists of all ideological stripes, from free-market libertarians like Milton Friedman – who famously described it as the “least bad tax” – to social democrats and Keynesians like Joseph Stiglitz. It’s simply a really good policy that I don’t think is talked about nearly enough.
Even a quite milquetoast land value tax, such as in the Australian Capital Territory, has been shown to reduce speculation and improve affordability:
I do like some Georgism myself, not gonna lie. It is also a good solution and its also compatible with even more revolutionary changes to the economy.