Don't Let Rich People Own Apartments They Don't Live In
It is not easy to find housing in big cities. In New York City, apartments are both expensive and hard to come by. Among the many ways to address this problem, here is one that should please almost everyone: make rich people live in the fucking apartments they own.
High demand and tight supply makes it hard to get things. When those things are, say, Faberge eggs, it's no big deal—we're all okay even if we don't satisfy our dream of owning a Faberge egg. When the thing in question is housing, though, it is a big deal, because everyone—rich and poor—still needs a place to live. This is the simple reason why housing (like health care) cannot just be left to the whims of the free market. People need it even if they can't afford it.
New York City is a bitch. In Manhattan, the average rent is more than $4,000 per month, and the apartment vacancy rate is less than 2%. You do not have to be a math genius to understand that each unit of housing becomes not just financially valuable, but also existentially precious. New York City has 54,000 people living in homeless shelters and a public housing system with a waiting list of a quarter-million people and $18 billion in unfunded budget needs.
Even so, there is little incentive for private developers to focus on affordable housing in a city so awash with money. Not just local money, but worldwide money. At the same time that hundreds of thousands of people who live in New York are unable to find any affordable housing for their families, thousands of spacious New York apartments are bought and held by wealthy people who do not actually live in them. They are used instead as wildly expensive substitutes for hotels. New York magazine's recent report on the phenomenon of rich foreigners (the "global elite") using New York real estate as a convenient place to stash money noted that "30 percent of all apartments in the quadrant from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year." And it's not just Manhattan real estate—the prices in Bed-Stuy and Crown Heights are being driven up in part by an Australian investment firm buying up buildings there. (For that matter, it's not just New York City dealing with what happens when scarce real estate becomes nothing more than a piece of an enormous investment portfolio: Norway's sovereign investment fund just spent more than half a billion dollars buying up some of the most storied addresses in London.)
This, of course, is just capitalism at work. The scarcity of and high demand for urban real estate is what makes it such a good investment, and the unflagging interest of extremely wealthy people in buying a second or third or fourth home purely as investments or pied-a-terres is what skews the real estate development market towards very expensive apartments, rather than affordable ones. But as we mentioned before, "capitalism at work" is quite obviously not serving the needs of humanity, which do skew towards affordable housing and absolutely do not include people having spacious second or third or fourth homes that sit empty for ten months of the year as 54,000 fellow citizens huddle in homeless shelters.
So what to do? Besides just confiscating rich people's property for the public good (a policy we are not opposed to, but which is hard to get passed through the City Council), here is a very simple idea: just pass a rule that acknowledges the reality that housing is a precious commodity that we just can't afford to waste. One such rule could be "It is illegal to own an apartment in [high-demand area demarcated on a map of New York City] that you do not occupy for more than six months per year." Another, more politically palatable such rule would be, "We are going to tax the fuck out of any apartments that you possess but do not actually live in."
Right now, it is financially advantageous for, say, a Russian billionaire to spend $100 million buying a bunch of apartments in Manhattan that he will rarely occupy. But it doesn't have to be that way. Let's say we passed an annual tax of, oh, 20% of the market value of any apartment that is not occupied or rented by its owner. Ta-da, fancy real estate is no longer such a good investment. The oligarchs can find somewhere else to park their money, where it will not distort the social fabric of our city quite so much.
It is hard enough to find a decent apartment in New York City without all the prices being pulled up by decadent jet-setters who don't even live here. If zillionaires are willing to pay exorbitant taxes to own extra apartments, fine—take their money and put it towards housing for the poor and middle class. If they're not, fine—"one apartment per family" is not a bad rule in a city where plenty of families can't find one at all.