Preliminary note: I’m by no means an expert in this area and am currently affected by the housing shortage myself. I know that the current housing situation is complicated an can be attributed to various things. But while I heard a lot of discussions regarding floor & height limits, zoning restrictions, abusive objections, etc. I haven’t heard much regarding excessive rents and the simple abuse of the housing market as a cash cow. It seems like people and companies simply join the party to benefit from the high rents, but without any actual intention of increasing supply. The high profits are just seen as given and flow into private pockets to cross-subsidize other things (e.g. pension funds, personal life, etc.) instead of being adequately reinvested into the overheating market. So in the end paying excessive rents amounts to nothing as simply not enough new housing is built and market rents continue to rise again and again. But what if we could turn the extra money landlords make from (the current) scarcity into new housing instead of letting it “disappear”? How this could work: Figure out a fair reference rent, which would include building and management cost as well as a reasonable profit and other essential things Calculate the difference between this fair reference rent and the price landlords actually charge Based on this difference the landlord is then either taxed at a certain percentage (could be static or dynamically defined by the government) or has to invest an equal amount of money into increasing the housing supply, excluding renovation/replacement of existing housing. If the landlord decides not to reinvest and is taxed, the taxed amount isn’t lost: It is used by the government to increase housing supply as well e.g. by building state housing or subsidizing construction for additional housing. This would be different from a classic rent control as prices could still be higher than the reference during times of scarcity. However it would encourage the construction of new housing by forcing (some) reinvestment, making it less attractive for people who simply want to profit. This solution would still require making it easier to build new housing - Otherwise there would only be new bounded funds, which could still not be invested. I would be interested in hearing your thoughts on this. EDIT: Thank you for all the interesting and detailed replies. I can’t quite keep up with all of them. submitted by /u/phlhg
Originally posted by u/phlhg on r/Switzerland