Many consider the &quot;1% Rule&quot; as the minimum bar. You&#x27;re probably right that there are a lot rentals around that level, but those are the marginal rentals that I mentioned would likely become for-sale housing.<p>Also, since you define the tax increase as 1% of property value, then your math is correct. But I believe the proposition is to charge it on the value of the <i>land</i>, not including the value of the improvements, which is typically a much lower number. For single family homes it would still be a hit, but not as severe as your math indicates. For higher density developments it would be even less onerous - which is pretty much the point.<p>Tangentially, I believe your estimate on ROI from rentals is inaccurate. Long term average stock returns are in the range of 7%, it&#x27;s not uncommon to find rentals about 10%. As they should be, given the illiquidity, lack of diversification, various extra risks, and the work involved. All of which explains why stocks are more popular.