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@louiscouture Seems like a bad idea...
Lets assume I want to be a landlord, I get a mortgage and it costs me 1500 per month. I want to rent it out at-cost so that I can ensure I can cover the insurance so my house doesnt get damaged and pay the rental agency to handle the day to day, plus the mortgage. but other than breaking even I dont wish to make any money as the equity I build in the home will be my long term payout.. so presume this comes to 1800$ per month for me to break even.
Now i put my house up for rent at 1800$, but no one bites because the economy is in the shitter.. So I am forced to either rent my house out at a loss or the government will do it for me. Meaning I'm garunteed not to be able to make my mortgage payments and as such effectively have to loose my home all together, and in the meantime since I cant cover insurance either and the tenant damages my home when my mortgage finally defaults the value of the home will now be less than when I bought it so the house I bought it so I also am now 50,000$ or more in debt.
Why should a landlord have to loose their property and go in debt simply because the economy is nnot doing well.
@freemo: well if nobody can pay, then it's indeed at your loss. Just like the stock market, investments have risk and as a buyer you have to accept those risks
@louiscouture Not just like the stock market though.
The stock market doesnt require me to sell my stock when the market is doing poorly and take a loss. As an investor if it isnt to my advantage to sell stock I can sit on it for as long as I like and make money.
In this case they are forcing landlords to rent out their home even when it isnt in their advantage to do so and to take huge losses, where waiting and not renting it out means they can save themselves (potentially) from that debt or loosing their home.
@freemo: seized property 2/2
@louiscouture I never said the government can't, I said they **don't**, at least not in response to a faulty market.
The point is they dont because if they did no one would buy stock, it wouldnt be a wise investment if everytime the market went south the government had a rule in place you'd be forced to sell all your stock at a loss, it would be a garunteed bad investment and the stock market would crash and the economy would suffer.. So they don't, regardless as to whether or not they could.
It is no different with housing, generally most governments don't do this, because if they did it would mean buying and building homes at all would be a loosing investment. In turn fewer houses would get built, and the problem regarding a shortage of houses would skyrocket.
I said it was a bad Idea, and it is, I never said the government couldnt do it, governments enforce bad ideas all the time. The governments that do it too often tend to either collapse entirely or have populations that live in an extreme poverty as a result of these sorts of choices.
I think I'm missing something here trying to follow the argument. At the point when the landlord is paying his mortgage off at $1800/mo or whatever, those payments are due whether the house is occupied or vacant. If he decides to not rent it at a loss he has to eat the whole cost himself; if he rents it at a loss the rent money will defray part of the cost. Apart from keeping the housing supply low - which is exactly the problem Barcelona wants to fight - I don't see what advantage the landlord gains from leaving the house empty.
The part your missing is that when you rent to someone you can not stop renting to them anytime you want. Depending on the country you become locked in for anywhere from one year to 5+ years.
So if you are forced to rent out your home during a downturn in the economy then you no longer have the ability to wait a few months to a year to rent it out when the economy improves, when it would be economical to do so.
@freemo @louiscouture Ah okay, here that is a difference between renting and leasing. You might have to give some months' notice before raising the payments if someone rents a property from you, but if it were a lease you couldn't raise the payments at all before the lease term expires.
@khird
The fact of the matter is, if the intent of the person is to rent out their home, they will do what is most financially advantageous to them. So the only way they would let a house sit empty is if they felt that by doing so they stood to either make more money in the long run by renting it later, or would take less of a loss. No one is going to take a loss out of spite.
The only situation where I could see a house sitting empty and being financially disadvantageous would be if its a vacation home they use often. In which we are effectively trying to argue whether having a vacation home should be legal or not. Obviously I'd argue it should be and if they were made effectively illegal you wouldnt really solve any problems because it goes right back to the original point that if people are buying fewer homes (in this case no one buys vacation homes) then less homes are built or maintained in the first place.
@louiscouture