A Patron of Democracy at Work asks: "Based on the content that I consume, my expectation is that factions of the 1% like BlackRock intend to own all family housing in America and rent it to us. The prices of homes going down paired with higher interest rates makes the game even more favorable for those who can buy these properties in one payment. My question is, how will these parasites intercept houses from young people who are expecting to inherit their parent's home? Is there a mechanism for them to do that?"
This is Professor Richard Wolff's video response.
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Middle and even higher middle income households whose children were now young adults found it necessary to take out a second mortgage loan or refinance after paying off their mortgage debt. The cash taken out of their property equity provided the down payment monies for their adult children purchasing their own home. In this way, the estate of the parents was partially passed on to their children while they were still living.
One of the circumstances causing senior adults to take out a reverse mortgage loan is when they are property rich but income poor. A major living cost for seniors who own a residential property can be property taxes, the annual school tax often being the highest of the property taxes imposed by the town, city, borough, county, township and school district. Some communities have adopted one form of “circuit breaker” or another to cap or rebate a portion of property taxes back to seniors, generally, or to senior-headed households who are income eligible.
The systemic remedy for all of the above issues is simple. Exempt all property improvements up to some value from the tax base. Impose an annual tax on whatever land is owned equal to the potential annual rental value thereof. This will bring down land prices, which will bring down asessed values. And, the burden of the property tax will shift to those who own the most valuable locations in the community. Owners of vacant or under-improved locations will then have a real financial incentive to being the land they hold to its highest, best use — or sell to someone who will.