This archive report was first published on 22 September 2019.
As the 2020 presidential campaign heats up, Senator Bernie Sanders has proposed a range of housing policies aimed at addressing the nation's affordable housing crisis. One of these proposals, a tax on empty homes, has sparked debate among economists and housing experts.
While the tax is intended to target speculators who sit on vacant properties, it may also penalize homeowners who have struggled to sell their properties. According to Jenny Schuetz, a housing economist at the Brookings Institution, this proposal is trying to have it both ways.
"In some ideal universe, people would buy homes (or rental properties) that appreciated slightly faster than inflation, allowing them to build wealth, but without housing costs rising too fast to pressure renters, deter new homeowners, or create excess capital gains," Ms. Schuetz wrote in an email.
However, she is skeptical that such a market is possible, given the complexities of the private real estate market. "The problem is, with any semblance of a private real estate market, land and housing values don’t behave that way," she noted.
Mr. Sanders's ideas have also raised questions about how they would technically work and where their legal authority would come from. His adviser, Mr. Orton, has pushed back against the logic of economists who argue that rent control discourages developers from building and landlords from renting housing that Americans badly need.
"I would say to those economists, how is that working out?" Mr. Orton said. "That’s what we’ve been doing. When we’ve left this to private developers, everything from the crash of the housing market to how we’ve seen gentrification just explode in some of the most vulnerable communities, to how we’ve seen people priced out of what would normally be affordable housing — this current crisis is the result of that."
