Great article. One suggestion for clarity: in the second-to-last paragraph you use "home market" twice, and it is ambiguous in this context.

Thank you, Charles. Always interesting to read your take on this particular aspect of this issue.

I think you're saying Greece is more politically stable than Germany and therefore an attractive market for German surplus money, but that's confusing to me. I thought Greece was more unstable...

@3

Nah, he's just forgotten how to use the words "former" and "latter."

Keep stoking that Xenophobia, Charles. I'm sure you've got a plan to deal with the fallout from that, but only after you've scared the rubes into carrying out your revolution for you.

Charles, how about you change your language from "foreign capital" to "global capital"? Really more relevant, and anti-globalism gets clicks, you like clicks.

@5

As we learned in his debate with Cliff Mass, Charles believes that it is more important to stoke people's fears and hatreds for political ends than it is to report events accurately or even factually.

Foreign capital is emphasized in this piece not because it is the cause or even a significant component of rising home prices (there is far, far more excess domestic capital invested in local real estate) but because Charles finds it politically expedient to agitate readers who fear or resent foreigners.

Charles, it's sort of unclear whether you actually acknowledge this in your piece, but pretty much all of the recent reporting out of Vancouver indicates that their tax hasn't had any meaningful long-term impact on affordability.

Why should we do the same thing here? You've repeatedly contended there is a great deal of similarity between the Vancouver residential real estate market and the Seattle market. If the Vancouver tax didn't work there, then why in the world would it work here?

Use the foreign buyers tax as a de-facto impact fee of sorts to take care of our infrastructure and social needs---metro transit, road repair, adding more cops, school supplies and teacher raises.

Why foreign anything? What's wrong with simply taxing non-resident occupied housing at a higher rate? The City Attorney shut down the argument as well, citing "discrimination," but it's not clear which legal bases he's referring too. Maybe that part of the State constitution that threatens to throw out the City income tax?

#10--hear, hear! I think creative fee structures that de-incentivize speculative and non-local ownership/development are appropriate and long overdue. "Locals discount" is a tried and true standard in the resort towns of my youth. I found it a great equalizer.

10, 11, I agree
8, I think his point was that it would've helped 10 years ago. Now it's too late. His point is don't wait until it's too late.

@10

The problem with that idea is that the non-resident owners will just pass the costs of the tax hike through to the people who do reside in most of these properties: renters.

It would be de facto regressive taxation.

Ah, yes. Don't tax the wealthy. They'll just take it out of their (already generous) largesse to the poors.

In fact! Let's CUT taxes for the rich. Think about it. All those higher tax brackets and corporate taxes and capital gains taxes. Rich people don't want to pay that. They make everyone else pay it with higher prices. Not to mention lack of investment. Lower wages. Jobs not created. Let the rich KEEP more of their money and the benefits will accrue to the rest of us. It's an accrual process.

I call it Accrue Down Economics. Catchy, eh?

See, money accrues down. Naturally. This isn't voodoo, this is the natural order. The more money at the top, the more it can ooze down. Or dribble down. See the concept? It sort of trills down from top to bottom. Like in a dribble? It dribbles down. Percolates, as it were.

Well, Accrue Down Economics is obviously the best term for it. At any rate, I think it's obvious that this is the answer we've all been searching for. What could go wrong?

@14

I'm all for taxing wealth, but I'm opposed to taxing renters and pretending it's a tax on wealth.

Graduated per-unit residential real-estate taxes would be progressive. A tax premium for rental property would be regressive.

@13 Yes - my god, won't someone think of the luxury apartment renters? Why, I'd rather just die than leave The Olivian for some faux-chic place like, god forbid, Astro Apartments.

Say, robotslave, do you ever wait for the longest day of the year and then miss it? I always wait for the longest day and then miss it!

Why not tack on an out-of-towners tax? I don't see how this is necessarily discriminatory against any race, religion, or protected class. I think NYC has an out of towners tas. I'd be curious to see what the actual figures are for non-residents purchasing homes or condos in Seattle proper. I'm not sure its that high.... and I question if it would really impact Seattle's home price appreciation. The Eastside, though, is probably a different story.

@16

Read @15 again, you don't get it. I'd be in favor of a graduated per-unit tax, which would mean a higher tax burden passed on to renters of more expensive units, and owners of more expensive homes.

Yes, we should tax the rich. And we should not advocate policy that doesn't actually do that. It's not good policy just because the idea of sticking it to Outsiders makes you feel good and you can't be bothered to think for a minute about who it would hurt the most.

@17

It's trivial to register an LLC in the city of Seattle to serve as the legal owner of any property a nonresident might want to buy and manage. An "out-of-towners" property tax would generate a few bucks in license fees, at best. The NY tax you're thinking of is probably the one on hotel rooms-- which lots of other cities have, too, and don't have any impact on home prices.

Mudede spends 3-5 hours of his day "commuting" to his job, so let's all gather round and listen to his perspective is on global capital flows.

wanna see what happens when you don't tax foreign buyers? just go to hongcouver, and you'll see. the buying has now slowed since they enacted a foreign buyer taxation, but it's too little too late. oh, and did you know it's not reciprocal? we sell ourselves off like whores to china, but the chinese do NOT allow us to buy real estate in china at all.

@21 Any tax like this will be immediately challenged as unconstitutional, and likely enjoined for a year or two while the case makes its way through the appellate system.

In light of that reality, aren't you advocating for tilting at a windmill? If we only have two years max, and, realistically, no tax would take effect for about two years (if ever), it's totally pointless to pursue this issue any further.

This is not to be a tax on foreigners. It never was. That's the strawman being used to shoot it down. I swear, is this the new normal? Anybody tries to fix anything and the reactionaries and the rich trot out the exact same alt-right tactics for every situation. Whatabout baby seals? Whatabout skin cancer? Whatabout my butt? Whatabout the fact that some of those parking money are foreigners? You're anti-Chinese!

Turn a question of whether to discourage leaving housing empty into a debate over discriminating against foreign investors, and win by sowing chaos! Now everybody is confused, nobody knows what this was about to begin with, and we're all afraid to speak because the trolls will leave your reputation in tatters with false accusations.

Steve Bannon should get a royalty every time you run one of his plays.

The reason buying but not occupying housing in Seattle causes unsustainable inflationary pressure is that there's no limit to it. Every home and apartment in the city could be bought and left empty. We could never build enough additional housing fast enough for the actual population to live in. It does't matter where the investor is from. What matters is they leave the unit empty. It may be that many of these investors happen to be foreign, maybe from China. But it's not like the American ones are doing us any favors. The harm is that they leave it unoccupied, not who they are.

There's a limit to how many units can be occupied. A finite number of people need to live in the city. As they become adequately housed, prices tend to stabilize. The city will never be affordable for everyone who works here if there is a pool of super-rich buyers with unlimited money who take open units off the market without meeting any demand.

Read Lisa Herbold's letter. She never said target "foreign" investors. She explicitly said targeting anyone by race or nationality was exactly what we didn't want to do. She specifically asked our dickhead County Tax Assessor for help in NOT doing that. Instead of helping, he stonewalled. Dick.

Herbold said she wanted to explore taxing "homes purchased by speculative investors" that are "being left vacant", "luxury homes as non-residential investment vehicles". She called it "speculative investment that does not result in occupancy". The language is a little stilted, but if you don't get what she's saying, it's because you don't want to get it. You have to deliberately twist the meaning to make it seem xenophobic, so you can fall on the fainting couch and pretend to be scandalized that anyone would propose such a thing. Classic Milo Yiannopoulos. Classic Donald Trump.

A tax on an owner who doesn't rent the unit can't be passed on to a renter. WHAT renter? There isn't one. That's the definition of what would be taxed.

If you're a landlord, meaning you have a renter in your unit, what reason would this give you to to hike the rent? Because the owner of the empty house next door has to pay higher taxes? Why? Your tax bill hasn't gone up. The units your competitors are offering to your potential renters aren't going to be priced hither. You have no competitive incentive to raise your rents, and your costs haven't changed. But if that empty unit is less valuable as a pure investment vehicle, the speculator will either sell it to a non-speculator, or rent it out themselves. Now your tenant has another option next door. Not only do you have no reason to raise the rent, you have pressure to sweeten the deal if you want to attract tenants who might otherwise move into that once-empty property.

The tax makes demand for unoccupied investment property go down. Leaving it empty would have higher costs than either selling it to an owner-occupant, or finding a tenant to rent it.

I would be happy to see a higher property tax on properties that are unoccupied (have someone living in them less than 60% of nights and a smaller extra tax for under-occupied properties (which I would define as having more than one bedroom per resident.) This would seem to serve the purpose of encouraging all living units in the City to be made available to renters and would seem to be naturally progressive since it would strike largely those who could afford second homes and homes larger than necessary for their family. I don't support targeting foreign buyers because I don't think that will have any significant impact and I don't see that foreign buyers of empty homes are doing any more damage than US buyers of empty houses. And I don't think we can reasonably consider proposals to restrict or discourage the purchase of real estate by Chinese non-resident immigrants and investors proposed in the Pacific Northwest with a Vancouver based model outside the context of this region's history anti-Chinese racism, frequently manifested as blaming "scheming" Chinese for the impacts of unregulated capitalism and attempting to prevent them from owning land. Proposals that smack of the historic racism ought to held up to heightened scrutiny and this doesn't pass muster.