1 for Live-in Owners and 1 for Landlord Owners – And that Distorts the Market for Single-Family Houses

The obvious and free way to increase home ownership that no one talks about.

Tax breaks for landlords don’t distort the market for apartments because all apartments are owned by landlords and most all apartment owners face the same tax code.

The problem with single-family houses is landlord owners face a completely different tax system than live-in owners, but live-in owners have to compete directly with landlord owners – and all their tax breaks – when live-in owners buy single-family houses for their families to live in. 

Every tax break given to landlord owners but not to primary-home owners, reduces primary-home ownership in at least 2 different ways – landlords buy more houses and landlord purchases drive up house prices for primary-home buyers.

1) Because of all their tax breaks, landlord buyers can afford to pay more when buying rental houses which drives up house prices for primary-home buyers. Those higher prices mean primary-home buyers buy fewer houses and home ownership is less. (In addition, primary-home buyers have less money to spend on other things in the economy which slows economic and income growth.) 

2) Because of all their tax breaks, landlord buyers buy MORE rental houses than they would without all their tax breaks. Some primary-home buyers get outbid and pushed out of home ownership by landlord buyers who can pay more because of all their landlord tax breaks. Home ownership is less.

Remember, the supply of houses is EXTREMELY inelastic which make house prices EXTREMELY sensitive to changes in demand. The supply of single-family houses in the U.S. increases more slowly than the supply of gold globally.

Small increases in the demand for houses become larger increases in demand because of all the landlord tax breaks. House price booms are a lot larger than they would be without all the landlord tax breaks. And then the house price busts are a lot larger, too. 

Landlord owners are not only displacing live-in owners, but they’re also destabilizing live-in owners financially. The result is more unstable family wealth for the Americans that do own their own houses. 

The home ownership rate isn’t much higher today than in the 1960s despite real median family income being about 50% higher. That’s because landlord income has increased as well, due in large part, to the landlord tax breaks. 

Without the landlord tax incentives on single-family houses, and all the additional tax-driven purchases by landlords they cause, the U.S. home ownership rate would be much higher today. 

In addition, without as many landlord purchases, house prices would increase less and that would also increase the U.S. home ownership rate. 

It’s gotten so bad now that some large landlords are actually buying up entire subdivisions of brand new, single-family houses and turning them into rentals. That’s how big the government tax giveaways are to landlords.

If landlords want all those landlord tax breaks, they should buy apartments where all owners face the same tax system.

Let’s have no tax breaks for single-family houses unless all single-family home owners get the same tax breaks, not just landlords.

Every tax break landlord-owners get that live-in-owners don’t get, lowers the home ownership rate.

One Tax Code for Homes – Single-Family Houses and Condos. Unlike the rest of the economy, we don’t need investors to drive single-family housing construction and the housing economy. Live-in home owners can drive all the investment needed in single-family housing.

YouTube has a ton of videos explaining all the landlord tax breaks.

76 Secrets of U.S. Home Ownership – Table of Contents