The problem with housing shortage —

6 min readSep 5, 2022

is misdirected.

Take New York City, where I live, for instance, is at about 4.5% vacancy rate, where a vacated unit is defined as unit that is “Available for Rent that are Not Dilapidated or Otherwise Uninhabitable.” While 4.5% may not sound too high… (Actually it’s pretty damn high, that’s pretty much 1 in 20 units, and depending on your needs and the size of your family, it’d be even less!) However, the number is even higher in total at 353,400 [2]!

Among these vacated units, there are 94,198 listings in 2021 and 119,206 listing 2020 on Airbnb [1]. If we are to make a rough assumption (because I am too cheap to pay for the data) of roughly 15% of all listings are non-entire unit, this gives us a roughly 85k housing units not available in the market.

That is to say, the roughly 100k “vacated” Airbnb units may likely to have some overlaps with Pieds-à-Terre (Fancy word for Second Home), and I get it, New York is freaking AWESOME so I don’t blame those rich people. (Though if you are rich and own a second home in NYC, how likely are you actually going to list it on Airbnb risking a stranger doing stuff to your “sofa”? Just saying)

Recalling the definition of a vacated unit stated above, which means I haven’t even gotten into units that are in needs of repairs to make them inhabitable again. The number is about 40k by the way (20k in progress of renovation and 20k pending)[2, 4].

With all the numbers available above, we can effective say that there are about 250k potential housings available to renters and homeowners alike, with some that are multiple bedrooms, this pretty much means NYC could potentially house another half of a million people WITHOUT building new homes and/or GREATLY reduce it’s affordability crisis and some homelessness issues. (IMO)

Housing should be a right and I believe we don’t have as much of a housing supply issue, but an issue regarding how we manage land use and affordable housing. I also believe non-discretionary policies will be more effective than otherwise. As you may have seen from my other posts… Here are some potential ways I think would re-normalize the housing supply,

Increase property tax on all residential property owned by a corporation/LLC/partnership, etc

From 2002 to 2014, there is an uptick of 28% of purchases using an LLC in East Village, NYC [6]. Using an LLC, FAFAIK, is to have it served as a financial shield as well as a privacy shield from public domain search. However, using an LLC to buy generally means you are buying with cash or through investment loan, so you are either mad rich or rich enough to get an investment loan, so I take it you can handle some tax hike. If you just want privacy, there is no point for NY anyway because of [7]. Lastly, it’s reasonable that an owner of a multi-family home may want to create an LLC to protect themselves legally WHILE still living there. In that case, they could apply for residential tax exemption, but they would have to renew it every couple of years. Perhaps another option is to allow any natural person to own up to 2 properties (Primary Home and Second Home) with residential tax exemption. Furthermore, small landlords should be considered as allies to the system, so the first rental property may be tax following the current system.

In short, Property tax on all corporate owners should be evaluated at the three years moving average of the market rate (or the assessment rate whichever is higher).

Vacancy tax for all residential properties similar to that of the commercial properties with two exemption per homeowner

It would be a less harsh version of [5]. For any Airbnb host who owns more than one property that does short-term rentals, the Vacancy Tax would be pro-rated to the total number of days a home that was not earning (with limited justification). The exception, to me, would be on second home and one investment properties, because you know… to please the Capitalist Overlord we trust and get the votes needed. This should, nonetheless, great reduce the runaway ownership effect of LLCs and multiple vacated units under the same owner. Please also note any rentals may be double taxed for the income the rentals have generated and cannot write losses on the basis of vacancy should the Vacancy Tax criteria kick in.

Additional income tax on rents above certain rate of the AMI among the building complex’s tenants

Each property has its target audience, especially in NYC. If we want to keep tenants from being Rent Burdened, we should discourage investors, i.e. the corporate landlords in the previous points, from raising the rent too high; in this case, let’s say 45% of its tenant’s median income. This will force the landlord to either reinvest the extra income as deductibles or the city will take it and use it to create more affordable housing. With all these taxes, they will be adjusted accordingly so the landlords won’t be double taxed.

Develop new opportunities for Rent-to-Own (Which I believe could partner with BoA’s Zero Down Mortgage program for example)

With the new taxes in effect, we, the people’s government, would take this opportunity to buy and renovate the units in bulk (with Collective Bargaining power) and create programs to resell them or increase the affordable housing options to the people.

Low interest rate loan options for first time and only-home buyers

Seeing the increase in rate and how it deters potential homeowners is honestly disheartening. If we fix the entry interest rate for first time and only-home buyers, we wouldn’t be seeing all the FOMO buyers artifactually driving up the home prices, and in terms driving out other potential buyers down the line. Most of the loans are sponsored by Fannie and Freddie anyway, i.e. conventional loans, so we could set it to stabilize this. You are on your own if you want to buy more though.

Do away with generational affordable housing grandfathering

I am going to be a devil’s advocate for a bit, one of the biggest problems is people born into the affordable housing system stays in the affordable housing system. We should not allow people to add their kids into the lease, so we could keep the housing circulation open for those who are in need the most.

Adjust rent control thresholds to 45% of the AMI instead of a fixed dollar amount that offers landlord’s loopholes

One of the loopholes regarding any government controlled pricing, whether it’s rents or minimal wage, is this “fixed” number. Inflation and other things happens, it doesn’t make sense to have a “fixed” number to choked the supply and demand, i.e. deadweight loss. People would just find loopholes and dance around it. A more effective way is to reference the market, more specially, AMI. This means the rent increase should also be no more than inflation of the Area Cost/Price Index. Therefore, the entry should be no more than 45% of the AMI.

The goal of affordable housing is to 1) provide stable housing opportunities to people, 2) create an upward path for people to upgrade. You want the people to want to make enough so they can move to a fancier apartment, on another hand, things like layoff happens, so the upper limit of the rent , after the tenant has moved in after a year, should always reference the household’s AGI or a percentage of the Area’s AMI, whichever is lower.

Tax deduction for renters upto the rent control thresholds

Homeowners can deduct their tax burden with the mortgage interest, because it “encourages” economic activities, so should the renters. Rent is something that goes to a property often with a loan attached, this would force the landlord or the system to “trickle down” the benefits and encourages even economic activities.

First Position to offer by tenants when a rental building goes on sale, i.e. rental building to Co-op

If a rental building or complex goes on sale, the tenants should not only be notified but also allowed the opportunity to form a tenant association to submit an offer under a cooperative trust that the seller couldn’t refuse, legally. That is, if the offer is at a reasonable market value WITHOUT accounting for an unreasonable rent hike that the new buyer may have envisioned. In the case when the tenant association couldn’t secure a loan, they may partner and join to be part of a public land trust.