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Old 07-11-2018, 11:24 PM
 
Location: Laguna Niguel, Orange County CA
9,809 posts, read 8,323,464 times
Reputation: 7917

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No wonder real estate prices keep going up and up.

https://www.cnbc.com/2018/07/05/more...aboolainternal
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Old 07-12-2018, 02:50 AM
kr7
 
17 posts, read 9,033 times
Reputation: 40
That sounds good for investment in LA. But I think that middle and lower classes will hardly follow the rental costs arises.
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Old 07-12-2018, 08:26 AM
 
Location: California
2,830 posts, read 2,033,091 times
Reputation: 2692
This sort of thing drives me up a wall. Not only is our relationship with China wishy-washy at best, but now they come in and buy up our most prized real estate. It's just ridiculous.

Full disclaimer, I am completely against foreign citizens buying residential property in the US, especially in the more desirable areas, and especially when the foreign citizens are our strategic adversaries. They should be prohibited from buying property here and the ones who do should be forced to sell back their property to US citizens, IMHO.

I know it will never happen, but I can dream.
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Old 07-12-2018, 08:43 AM
 
Location: In the heights
24,986 posts, read 25,540,511 times
Reputation: 13306
The monetary investment spurs construction jobs and moves capital from China to the US which is good in some sense. I think what I’d like to see for cities with housing shortages and high rents is a foreign ownership tax as well as a vacancy tax.
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Old 07-12-2018, 08:56 AM
 
Location: California
2,830 posts, read 2,033,091 times
Reputation: 2692
Quote:
Originally Posted by OyCrumbler View Post
The monetary investment spurs construction jobs and moves capital from China to the US which is good in some sense. I think what I’d like to see for cities with housing shortages and high rents is a foreign ownership tax as well as a vacancy tax.
It may spur jobs and move money to the US, but the bigger problem in areas like LA, OC, and SF is limited affordable housing for US citizens, something that will not be resolved by simply taxing foreign buyers more.

Furthermore, the buyers mentioned in the OP's article are Chinese millionaires/billionaires, who can comfortably afford paying extra taxes. Those taxes will not discourage them from buying property, so basically, the local and state governments will end up profiting from these buyers, and the housing market will remained strained.

Basically, it's:

-Good for residents already living in the area
-Good for Chinese buyers since they can still buy property here
-Good for local and state governments profitting off of the Chinese buyers
-Bad for US citizens looking to buy homes in the area
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Old 07-12-2018, 10:04 AM
 
Location: In the heights
24,986 posts, read 25,540,511 times
Reputation: 13306
Quote:
Originally Posted by ryanst530 View Post
It may spur jobs and move money to the US, but the bigger problem in areas like LA, OC, and SF is limited affordable housing for US citizens, something that will not be resolved by simply taxing foreign buyers more.

Furthermore, the buyers mentioned in the OP's article are Chinese millionaires/billionaires, who can comfortably afford paying extra taxes. Those taxes will not discourage them from buying property, so basically, the local and state governments will end up profiting from these buyers, and the housing market will remained strained.

Basically, it's:

-Good for residents already living in the area
-Good for Chinese buyers since they can still buy property here
-Good for local and state governments profitting off of the Chinese buyers
-Bad for US citizens looking to buy homes in the area
Those are good points and I’d like to add to them by using the example of Vancouver.

Vancouver is a much smaller metro area and city that has become a highly desirable city for Chinese investors (it’s pretty but boring). They launched a foreign ownership tax along with a mansion tax and it stalled home price appreciation and foreign purchases for a while, but that picked back up a while afterwards. One interpretation of that is it was ineffective since it did pick back up so ultimately did not fully accomplish its goal.

However, it’s hard to say how far off the mark that it is because that price appreciation would have likely gone up more severely without it and so even stalling and then dragging what could have been a much more severe price appreciation and foreign ownership numbers is something. Secondly, though the main intention was to keep Vancouver affordable to its residents, the revenue that came into the city is still sizable and something of value as it helps with city services such as roadways, schools, transit, supportive housing programs, etc. for residents. Vancouver is now trying to up these taxes since it seems like it headed in the right direction but not enough so.

Vancouver also has an empty homes tax (vacancy tax). With all the demand for housing, there also came a lot of construction of new homes as you would expect of the free market. However, that new supply didn’t result in actual more housing because those residences were serving as investment properties but not housing as many of these residences sat empty for most if not all of the year. Residences have effectively been decoupled from its use as actual residences (I’ve seen that firsthand in some of the new developments in Irvine). There’s little penalty for that save for property taxes which to someone very wealthy and using housing simply as an investment and often with no mortgage to pay off can decide the hassle of renting out their purchase without a tenant works fine enough. This is where a vacancy tax comes in as a high enough vacancy tax can compel an owner to actually have these homes as part of the housing supply as rental units and better meet the demand curve. In the event that they are not added, then the tax again at the very least contributes to revenue for city services for residents that otherwise would not have existed and makes property as simply investment vehicles just a bit less attractive.

Of course, there are a lot of other details to consider, but I think Vancouver’s scheme makes sense so far and it’s been adopted in other cities around the world that have also had to contend with property becoming a global investment vehicle for cities that have property values far out of reach of most residents. I’m of the opinion that direct foreign investments are not intrinsically good or bad overall, but it behooves the municipality affected by it to try to extract as much as is beneficial for its residents.
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Old 07-12-2018, 10:05 AM
 
3,437 posts, read 2,304,384 times
Reputation: 2459
better enact reciprocity laws. if American citizens/businesses are not allowed in other countries, the citizens/businesses of such countries should not be allowed to buy/invest/do business here
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Old 07-12-2018, 10:24 AM
 
Location: In the heights
24,986 posts, read 25,540,511 times
Reputation: 13306
Quote:
Originally Posted by payutenyodagimas View Post
better enact reciprocity laws. if American citizens/businesses are not allowed in other countries, the citizens/businesses of such countries should not be allowed to buy/invest/do business here
I like reciprocity, but I don’t think this is a case where it’s maximally beneficial to us Americans to do so. I think ongoing taxes and fees as basically a constant drainage for profits they make elsewhere would end up being more beneficial.
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Old 07-12-2018, 10:33 AM
 
5,566 posts, read 3,162,699 times
Reputation: 5454
Bring your money here. We welcome it.
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Old 07-12-2018, 12:14 PM
 
339 posts, read 238,930 times
Reputation: 411
don't want them

Homes expensive enough
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