Is second/third home ownership ethical in this economy?
Especially when those 2nd, 3rd, + properties are being used as passive short term rentals. Observing the state of the housing situation "Hmm there aren't enough homes for normal families to each have a chance, I should turn this extra property of mine into a vacation rental." does this make said person a POS?
The problem isn't people owning an extra house for a nest egg. It's companies owning hundreds of them.
If housing is an investment ("a nest egg") then the people and policies that support it as an investment will stand directly opposed to people and policies that want housing to be affordable and a right.
Housing cannot be an investment vehicle akin to stocks in a society that meaningfully values housing for everyone as an objective to strive for.
Real estate as an investment, retirement provision or object of speculation is precisely the problem. Every home that gets bought as an investment in an inflated housing market directly contributes to the problem, by cutting people out of the opportunity of ownership and making them dependent on paying rent.
I'm far less concerned about individuals buying an extra house they can rent out. I'm more concerned with hedge funds buying up cities with cash offers that normal people can't compete with.
I personally wouldn't own multiple homes for many reasons, but for people trying to eject out of the corporate grind, I get it.
I like what Mike Lynch (famous leader of one of UKs biggest union) said during his Novara media interview.. I'll paraphrase from memory. "Back in the day, your retirement was secured with your job. You'd get a pension from your employer when you get to retirement age. Then Thatcher and Reagan happen.. Now days, there's no security, benefits or high salaries anymore. So people do whatever they need to do to secure their retirement. And if it's buying another property, so be it."
Quick edit: before anyone gets angry. Neither myself or him want this to continue. It's shit and we should fight to bring back dignity to people's careers. But until that's sorted, I think it's ethical to care for your own and your family's survival.
Thanks for this. I've been having an internal debate myself over the ethical implications given the state of so many struggling with housing. I'm maybe 5 years out from paying off my home and have considered buying another home at that point for income as I get older. When I say income, the only reason I'm considering buying a house are exactly the reasons you listed; career instability, retirement income instability, but also medical care costs that are impossible to project in the future other than "astronomical".
When I'm thinking of a second home income it's so I can pay for a future hospital visit for me or my partner, not lie on a beach in the tropics. It's maybe something for my child so they don't have to start from zero or experience housing insecurity. It's a relatively very privileged position compared to many in the US, but I'm not looking to gouge some poor renter, just be able to have basics in old age. Basics, however, now require relatively large amount of privilege thanks to conservatives stripping them away for 50 years.
I'm still undecided, but I appreciate the nuanced take.
Are you denying another family a house they would've otherwise been able to buy? Then yes.
Not necessarily. We were a young family that had to move quite a bit for my job. We made due with apartments, but we preferred renting a house. We were in no position to buy, and we knew we were only in the area short term, so we appreciated house rentals.
Honest people with a second or third home for rent aren't doing any harm.
How do you answer that question honestly though? Say I've got enough liquid cash/ income to buy a second home, if I decide to just sit on this money or throw it in the stock market, does it magically make the family of four able to afford it? No, the house remains the same price, the family has the same amount of money, and the seller moves to the next buyer and sells it to them instead of me.
If anything I'd rather my landlord be someone who owns 2 or 3 homes and rents them than a huge real estate company
In healthy system they should be able to afford to build it.
We have a second house (a trailer, really) and rent it to my mom for way under market rate. 100% of the rent goes to paying off the debt from rehabilitating the trailer and paying off her utilities. It's not like we're out here just raking in the dough, we're just trying to keep my mom from being homeless. I know for damn sure we've got to do it, because the state is way happier spending its money bashing homeless people instead of preventing homeless people.
I own a 2nd property but bought it for my son to live in. I figured that if I was going to be providing that much financial assistance that I'd rather buy a condo than pay rent.
There's a lot to unpack here. My two cents are:
I agree in principle but I think we should clarify whether that additional house is intended for short term rental, lomg term rental, or an additional "vacation" house. I think all 3 should have different taxation schemes.
I'd imagine those would be separate taxes. One is a property tax because you own that property, and then if you earn money from it via short or long term rentals you pay taxes on that.
I mean someone who owns 4 houses just so he can visit them throughout the year should be paying a higher rate of property tax than someone who owns 4 houses but rents out 3 of them to long term tenants. Probably more in property tax than the landlord pays in property + rental income tax.
I see what you mean, that makes sense.
You could probably sell it as an incentive thing. Rent your property, pay less property tax on it.
But I'd say the tax on rent should still be there, and be proportional to it. Since the property tax would also be dependent on the value of the property, what you say could still be true.
The math I came up with to make multiple property ownership moral is that every homeowner should be charged a separate federal tax that is equal to their (city, state, county) property tax times the number of properties they own minus one.
So for instance, if you are currently paying $5,000 a year in property taxes and you buy a second equally taxed home. Right now you would pay 5000 extra dollars for that second home.
Under my scheme, you would pay $10,000 a year for that second home., or $15,000/year, $5,000 of which goes to the federal government as part of an anti-homelessness fund.
And if you got a third one at the same price, you would now pay $15,000 for each of the two extra homes, and now $10,000 for the first one, or $45,000/year, $30,000 of which would go to the anti-homelessness fund.
This would make it so that owning multiple homes would be something only the very wealthy or the very spendthrift could pull off, and it would disincentivize companies whose sole purpose is to profit off of making Americans homeless.
I think such questions are hard to answer in general. I would say a person living in one (small to normal sized) flat and owning + renting another isn't worse than one person 'occupying' just one but bigger livingspace. If an old lady lives alone in a big house where there are sufficient rooms for 6 people+ she's taking away as much property from the market as the small-scale landlord. Sure that's not optimal for society but I also wouldn't necessarily consider that unethical.
If there is a housing crisis in an area, one can argue that short time rentals are evil but also short term rentals are important to some extent. If everything becomes an AirBnb that's obviously bad but I think there's also a healthy amount of that. If a city or region has a lot of tourists or business travellers, they need to live somewhere and traditional hotels don't work for everyone.
From my perspective, there must be a healthy balance of personal livingspaces to buy, for long term rent, for short term rent and commercial buildings. Regulating that healthy ratio should be a task for politicians. Unfortunately, I have to admit that government regulation is not exactly working fine in most parts of the world.
With our european housing market, that old lady or man might not even be able to move to a smaller size, even if they wanted to. Or, they might have a ton of kids and grand kids sleep overs, or kids that need to move back (happens a lot in our country) because they cannot find a place to live, so i generally try to be careful not to assume things when i don't know details. It's something that is basically the fault of our politicians, who could see this problem coming decades ago, but decided not to act. It's not always the fault of people that are stuck in a house that became too big and can't move because there just is no smaller appartment available, but the people who voted for politicians who let buildings be bought up by greedy investors. Edit to clarify my agreeing with your points
Damn. Moral systems gonna depend on the economy too?
It really is the new deity!
I think owning anything more than your primary home as a residential unit is unethical.
I don't consider it unethical. For example if my father dies and I inherit his house where I grew up, he grew up, his father grew up and his grandfather built. That house has a lot of sentimental value in it. I have settled down very far from there. What am I supposed to do? Throw away the family legacy or uproot my entire life?
I think as long as I don't rent it out it's acceptable to own it. It's just extra cost for me to keep something of sentimental value in the family. I'd even be okay with paying extra tax on it considering I think every house you own that you don't live in should be taxed extra.
Ah yes, your family legacy of a house no one lives in is more important than a human beings ability to have shelter
Perfect is the enemy of good. You're not at home while you're working and if you do full time then a third of the day you're not using your home, why don't you let others use your home while you're not using it? You're also putting your individual needs above giving someone else shelter, the only difference is where you've drawn the line.
You're gross
Right, so tell me what is the course of action?
Don't own more than one house. Why is that so hard for you people to understand
This is why nobody listens to people like you. Someone has a legitimate grievance trying to do what you want them to do and what is your response? Completely ignore the grievance and go "I can't believe how fucking stupid you are, just do the thing." Really helpful.
The desire to hoard unused property when other people are struggling to find a roof to live under is not "legitimate." In fact, it is an entirely illegitimate and selfish grievance.
The desire to not let people live in your place while you're at work is in fact entirely illegitimate and selfish.
I would say owning it while not using it very much and not renting it out is the least ethical choice as no one can use that house.
The most ethical option besides not owning it is renting it out at a reasonable price, so someone else can live there and you are not squeezing every last dollar out of them.
I guess I should've specified. I don't think it's rent-able. It's more than a 100 year old house in the middle of nowhere with more than 100 year old plumbing (hint, no plumbing), no internet outside of mobile network which is also very flaky since there aren't many cell towers nearby, water comes from a nearby well which limits the amount of water you can use because it's not a deep well and the list goes on. It's not a modern house that's going to just sit empty, it's a relic from a different era where the main value the house has is of sentimental value. If it was to get sold the next "owner" would most likely tear down the house and turn the entire plot of land into agricultural land.
If it was a decent apartment somewhere where people would actually want to live I'd absolutely "rent" it out. Not take any profits from it, put a bit to the side in case something breaks and if they leave without breaking anything they get their money back.
Ok, thats a bit different, if the house is somewhere where noone wants to live anyway (and if they want there are enough options available), then it really is ok morally, at least for me.
One could argue that the space should be used for farming, but that depends on how big the property even is if that makes a difference at all.
If it has a really big property with lots of grass it would be a good thing to rent that part out to a farmer. If it is more of a forest its probably better if it stays that way.
I wouldn't mind that also. I think a decently sized land value tax is the way to go so that land area isn't just used as parking because the person still makes a ton with increase in land value.
We have this nightmare in the UK. I'm very fortunate to have a small house just about paying mortgage on a tiny wage, but not really big enough to rent a room. I feel bad for people in their 40s (even couples) who can't afford a starter home because all the properties are locked up in a rental market.
A lot places are making zoning laws against short term rentals, or making the permits prohibitively expensive. Where I live, there is an often repeated narrative about a "housing shortage" but the reality is the population is going down every year and apartment complexes and housing developments are spreading like rashes. Corporations are buying them up in order to control the market.
A family renting out their mom's house that they inherited after she died because they already bought a house and don't want to live in hers? Are they assholes for not just selling the place (likely to a corp) and investing that money in other ways? No.. I don't think so..?
I believe business should be limited in ownership of single family homes for sure.
Where? In areas with tight housing markets, maybe. In places with houses in abundance, I don't think so.
I have a second home but I inherited it. It would need 100s of ks in renos to rent out. It wouldn’t bring me much money to sell it - would probably need to sell for land value only.
But - it’s a place of refuge for my family member in an emotionally abusive relationship, a friend struggling with her marriage, a crash space if anyone I love is in a rough spot. It’s brought my family together and it’s where we gather.
I don’t think this is wrong because I am using it for net positive purposes in the long term, and someone otherwise probably couldn’t use it - it would be a tear-down.
If it's legally habitable, someone could be living there imo. Just price the rent adequately low for the value. I'm not saying it's morally evil for you to have it, but it's definitely a luxury.
It is likely not legally habitable. And to make it so for a renter would be beyond my current financial capabilities.
Ah, in that case I think you're looking at it the right way.
Every restaurant and store that fails fails because of rent. Owning a property you're not living out of or doing business in should be illegal.
There are three aspects of the economy. Labour, capital, and landowner. Of the three only landowner contributes nothing.
Idk, I think the restaurant Don Pancho owned failed because of the roach infestation my comadre reported.
100% land value tax would solve this @asklemmy
I don't think so. People need homes, but not all people can buy homes. If you can afford to maintain the property to a reasonable level without completely gouging your tenants, I think you're providing a valuable service to your fellow citizens.
We don't get along, but my landlord is an old lady who bought 2-3 blocks of apartments after her husband left her a bunch of oil money. She keeps up the grounds (for the most part) and my rent has been pegged to inflation since I moved in. If people like her didn't exist, people like me would be stuck renting from a big property company.
Yes
It depends.
I think 1 home per adult is fine, for instance.
I also think some places are designed to be short term rentals and have a heavy tourist local economy.
I personally would like to tie some extra taxes to people that own more than one home.
I’m thinking of buying a property near a lakeside town. Ideally it would be a townhouse or have 2-3 separate houses or cabins on the property; one for me and my SO to live in 2/3rds of year, the others for rentals or guests.
Does that make me an asshole?
Tax multihome owners on an exponential curve.
Curve gets relaxed as the housed proportion of the population nears 100%.
To be honest, the mix of it is, I understand the concept of your hardwork going to essentially a pension for yourself. Which is what historically reliable invests typically amount too, but I also see removing access to liviable land and the houses on them as unethical in a world where people don't have housing.
I would prefer more modest investments like loans to cooperatives, government bonds, and mural funds over it and instead choose to take the surplus value to create things like community land trusts or housing coops to make where you live more safe and sustainable.
There is also the choice to invest in micro generation of energy, community or personal gardens, home effeciciny, and making your home handicap friendly (which is a huge help as we age). Of course paying off debts can also be a great place to invest in to lower your liability.
Just my plans and thoughts.
Whenever this comes up I find people are incapable of grasping the scale of the issue.
Owning a second home isn't unethical. I think a rental market in an economy is healthy. This can be provided by individuals or companies.
The issue is supply and demand. The houses cost that much because people will pay it. Why? Well there isn't enough for everyone. If renting was banned housing numbers would drop. It would short term help some people buy a house but more people would be out on their arse than magically in a house they own. The issue is then increased in the next generation. Banning renting is not the answer.
Why is there a supply and demand issue? Because people with wealth want to keep it that way. If someone lives in a house and intends to say in it until they die it doesn't matter if their house is would 0 or value of an entire country. People buying and selling for a profit in the future is the issue not renting. That profit is only their with supply and demand issues getting worse so no new houses can be built. This means zoning laws, no higher density when a city gets 100x more people and no building on greenery meaning the city can't go up or out (going up is much, much better). No new cities are built. Then for demand issues population must go up at all costs, so immigration is a must. These same people have businesses usually so this is good because it can also keep wages down by getting people in from the third world and keeping house prices high and wages low.
Then there is the issue of debt and intergenerational transfer of wealth from the young to the old. Which really fucks with an economy and society at large when you think about it.
The solutions are this. The world and countries are finite, population would ideally go down. There is demand for high density buildings. Build it, knock down entire areas and rebuild. Build a new city, build more public transport to nearby towns that can be commutable. Just build! The young start off in debt and give money to corporations or the older generations that have no debt and everything they need for life. The youth need things so give it to them. Even low government loans or even better money. You need 20% deposit get a cash transfer from the government at say 25 worth 20% of an average house national wide. That will sort out the problem.
There is so so much money held up in mortgages and rent that if houses prices collapsed a lot more people would have a lot more discretionary income to spend and that would grow the economy.
I think the question should be: Are artificial barriers against increasing density of residential areas and other limitations on new housing ethical. The answer is no.
I'm always astonished when I read another news about housing getting even more expensive.
Block apartments, are mass produced goods. In the free market economy they have no right to appreciate in value, for the same reason your average car doesn't - as building houses gets more profitable, the construction industry should ramp up.
Not ethical, yes pos
Imo, the ethical limit is 3.
There's no real reason to own more property than that. If you have extra money to invest put it in actual business. Into new housing construction for example you get quite a return on that, and it doesn't make you unethical.
Edit: This also applies to companies. Actually companies shouldn't own any housing at all. Selling at a profit that's acceptable. Owning it as an 'investment' - absolutely not.
If we are just putting our own ethical limit, for me it's 2.
Main residence, a traditional home like house, townhome, condo, whatever, but with full service like garbage hydro ect as is standard for the area.
Land, sort of what you are saying a country home, but it has to be zoned as such, not just another home in someone else's neighbourhood. So purpose built seasonal homes, or off-grid properties with an outhouse. Not somewhere most people would be comfortable living as their primary residence year round.
After that taxes should be extreme. And companies should not be able to purchase the main residence type homes. At all. Must be a person purchasing.
Why would you give a shit what anyone thinks? Charge a fair price, give them what they paid for. Don't be bloodsucker leach and follow your conscience.
Not really. It is ethical to build multiple units on the same property, but owning two individual units isn't.
The city of Tacoma has recently made it a law that adjacent dwelling units, basically tiny homes that you build on your own property, are permitted as long as you follow the other rules about living places.
Yep, and I feel that secondary dwellings like this are ethical because it means a greater overall housing supply while still not becoming a slum lord.
No. Unless it's like a family situation where it requires it I think it's unethical. People live in tents in the park in my city because housing is scarce and wildly expensive. It's not right to be able to hoard property.
Unfortunately op asked two inverted questions so no could mean not ethical or no not a POS, or, somehow, unethical but not pos.
No
Edit: to clarify, no it’s not ethical. Yes it makes person a pos.
I agree with you that it makes a person a POS, but it's also necessary in our current system. It would take so much change to fix this.
One aspect not mentioned is that sometimes, second homes are in places that have a good supply of houses available. This makes them cheaper, and easier to afford. It also has more potential to grow in value down the road. If that's the case, no issue. If not, it's complicated.
Fuck what anyone else think mate, if you can do it go for it. 99% of people spend a lot of time complaining about everything, let them alone with their protagonist syndrome.
Yeah, a second house for traveling workers or seasonal migrants is fine, bit luxury but fine, but renting them out is where you're starting to be a dick.
I hope you are aware that people exist who can't afford home ownership, and rental is their only option. If nobody owns a rental house for them to occupy, they have no chance of living in a house whatsoever.
Can't afford or simply don't want the trouble that comes with it
Oh sure, like myself. I hate the idea of ownership. Ties you down and comes with a ton of extra bills and upkeep... I prefer the flexibility and ability to f-off if something bothers me at any given time. But that's not the point the OP tried to make, so I didn't even want to bring that argument :-)
I hope you realize that they only can't afford housing because land lords create artificial scarcity.
There's more empty units in this country than unhoused people.
Basic Supply and Demand says people ought to be paying people to take houses off their hands because they're an oversupplied product.
Rent collectors are literally the only reason housing is unaffordable to so many right now.
Housing is unaffordable because someone has to pay the construction.
Check out this breakdown of a fairly low-end cost estimate: https://www.bankrate.com/real-estate/cost-to-build-house/#financing
Excluding land, you're looking at about 135k USD. Land, whatever. Labor estimate is 30-50% according to the article, so let's say around 190k (using ~40% and some rounding).
And that gives you a bare-bone structure without a lick of paint, furniture, carpets, curtains or any other interior (and exterior) decoration.
So even if you do everything by yourself on a gifted piece of land, I hope you can somehow understand that there are people out there who simply don't have and/or qualify for a loan of >130k USD.
TL;DR: Rent collectors are
literallyfar from the only reason housing is unaffordable to so many right now.Love how ya just skipped right over the whole part where there's more empty units than there are unhoused people to fill them.
You literally just completely ignored the actual substance of what the landlords are doing that makes housing unattainable in an oversupplied market.
Building entirely new houses is a luxury for people who've lucked out big, we're talking about the supply of housing that already exists, which in numbers alone, should be providing an all time low of prices adjusted for inflation.
The "shortage" is an invented crisis to not acknowledge that we'd have no problems if we took a closer look at how much those landlord parasites actually need that fifth unit they also don't live in.
I might be on the fringe here, but I think second home ownership is always unethical in any economy. It is, however, a necessary evil in our current society.
Edit: I don't feel like responding to everyone, so I'll elaborate a bit here. Profiting off of something another person requires in order to live a happy/healthy life is unethical. In the current society we live in, landlords are a necessary evil. This is broad strokes, there are fringe scenarios where one might end up with another and not use it for profit. To be clear, I also think owning a second home to live in part time is unethical as well.
That seems weird, the opposite position makes more sense to me. You can't think of any possible economy where you could morally have two houses, and in this situation it's somehow necessary? Could you elaborate further, because it seems reasonably plausible that there could be an economy with significantly more houses than households, to the point of warranting multiple ownership. And of all the things to call second house ownership (convenient, luxurious, smart, excessive, warranted), necessary isn't the one that comes to mind.
So it was unethical for us to buy a cottage that had been for sale for months and that we got for peanuts at the peak of COVID rural exodus? No one wanted it, we're trying to sell it now and no one wants it even though we've lowered the price again and again and it's priced under what it would cost to recreate the same setup even if you got the lot for free.
What about in an economy with more houses than people?
Mh, I agree, but also disagree to some extent. I am a Democratic socialist and think that means of production should be used for the greater good, so keeping a house in order to make profit is exactly that: private property of means of production with the goal of $$$.
However, I think the question goes deeper than that. I think it's absolutely valid for a family to have a secondary home, e.g. when they want to go to a vacation. Sometimes renting out a hostel is difficult, one might not like the hostels available, or a plethora of other reasons. As soon as the person owning the house uses it for themselves for a significant amount of time, it isn't really a means of production anymore, but a private property. What is important in my opinion is that the time when the house isn't used by the owner, other people have a chance to use it - cheap AirBnB covering the costs maybe?
Tl;DR - renting the house out to others to make profit: yes, unethical. Earning money by a human necessity is, in my opinion, not right. Using the house yourself and/or renting it for sustenance cost: absolutely valid. You don't use the means of production to take money from the people, you use it for your own (and society's) benefit.
Here's the problem. Second homes (one that is lived in part time) tend to increase property values of the area where they are. Additionally, short term rentals also increase property values. On top of this, that is a home that is unavailable to folks who live there full time. This compounds to create a higher barrier of entry for people that want to purchase a home. Rising property values and nearby short term rentals also increase long term rent for people that live in the area. This isn't even to mention negative impacts on the environment, an additional tax burden for the area the second home resides, or additional carbon footprint being created.
On top of all of this. If you are renting a home to another person, this is exploitation. You are demanding money for providing something essential to modern life and increasingly to even exist in an area. Rent prices have also become a cabal and are constantly increasing due to landlords fixing rent prices. I think being a landlord is unethical, but they are necessary with the way housing is structured today.
We require massive revisions to housing policies and zoning laws, at a federal level, to solve these problems.
TL;DR Second homes are bad but there isn't a lot we as individuals can do about it right now.
Thank you for your reply! I will think about the first point. I didn't consider that second homes tend to increase property values in the area - that's a valid point.
I disagree with your second paragraph. When you rent a house at its price, aka only and exactly the price for electricity, water, and repairs of the building, I don't see any exploitation in it because you effectively aren't making any profit from the person living there.
However, I'm replying from a German standpoint. I presume that in the USA, the situation is different and in an advanced stadium of dystopican capitalism, so probably my thoughts aren't fully applicable.
Thank you for replying! I appreciate it.
I would agree with that. If you aren't making a profit, or if you are making enough profit to perform maintenance it sounds fine. If maintenance is a job, you should be obviously be compensated. That value doesn't seem to represent the level of work I see being put in.
I am writing specifically from an American point of view. All of the landlords set prices based on a data set that combines property values and rent cost. This basically means that rent prices have been rising rapidly, a long with home prices. It's all inflated value and the government doesn't seem interested in doing anything about it. Rent in my area specifically has more than doubled in the past decade and this is not uncommon.