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I had an idea that would allow people to buy their own homes that they are currently renting:
- Every home gets appraised to determine what it would sell for. This is done by the county and is used for property taxes too.
- Every renter is allowed to buy a percentage of their primary residence from the owner. The owner has no choice in this. It's a requirement for being able to rent a property. Edit: Since people are confused about this, the renter is not required to buy anything. They have an option to buy.
- Renters can pay as little as $100 extra per month and the county puts their percentage ownership on the deed. If the home is sold, the renter can't be kicked out involuntarily. If they do leave, they get the percentage of home value they own.
Pros:
- This would avoid the issue of high interest rates hurting primary homeownership.
- This would blunt the impact of corporate landlords having a monopoly where they refuse to sell. They are forced to sell at a fair price.
- This would create a simple decision between owning their home and spending money on luxuries or eating out.
Cons:
- This would hurt small landlords who would have their property bought out from under them. This is actually a good thing because the benefits of rising property values are now shared.
- The implementation is hard. This is actually a good thing because bad landlords would sell property they didn't want to manage, lowering prices for renters who want to buy.
- It would cost the county money to hire appraisers. But this could be paid for by increased property taxes due to better appraisals.
- Property taxes would go up for landlords. But this would be good, as it encourages them to sell the property. This appraisal process and increased property taxes wouldn't affect people who just lived in their home without charging rent.
I think it would be more useful to dramatically increase taxes on unoccupied or AirBnB properties. Increase penalties on slumlord behavior. Similar things to gently (or not so gently) discourage people from hoarding residential real estate.
Otherwise, if someone was renting my house and they wanted to buy it at $100/month, it would probably take more than 800 years to buy (if I could afford to get it into shape to maximize the appraisal).
That's another benefit: you might improve the home to maximize the appraisal. That would help tenants.
Of course your property tax would be based on a higher appraisal too, so you probably wouldn't go overboard.
If the owner improves the home and the appraisal goes up, wouldn't rent go up?
Rent depends on the rental market, but most likely yes. That's not different from now though. If you improve your rental property, you get more money from it.