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The Rise of Renting in the U.S

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Re: The Rise of Renting in the U.S

#211

Post by themagician »

Grishnakh wrote: post #198
themagician wrote: post #41

Earlier quoted context omitted.

Because in the US we like to sell people on the idea of "ownership", when the reality is that the bank retains all the real value. Only a fraction of so-called "homeowners" actually own more than 50% of their home. Most homeowners just rent from the bank. Many will rent from the bank for life. The way homeownership is sold in the US is nothing more than a way to get people to give up hundreds of thousands of dollars…

The problem with your analysis is that you're forgetting that renters have no control over the amount they pay in rent. You can only control your rent price for the first year; after that the landlord is able to jack up your price almost any amount they want (subject to local laws), and you can either pay the jacked-up rent or move out (which is expensive) and find a new place. When you buy a house (err, rent from a…

Your monthly "rent" isn't fixed though. Most people have both HOA and propter taxes, both which increase year over year. Not only do these rates increase over time, but as the value of your home (which you often don't own in any significant way) rises, so too does the assessed value. Do they increase as dramatically as rent? No, but they do still increase.

Then you've got the 10% or so of "homeowners" with variable rate mortgages.

Even if you own a home in a major city you can easily end up paying $1,500/mo in "rents".

Buying a home makes sense for a lot of reasons, but general finances usually aren't among them for most people today. What it DOES do is force people to save who might not save otherwise because they lack the discipline to do so.

Re: The Rise of Renting in the U.S

#212

Post by onlyrealcuzzo »

eldavido wrote: post #146
alexchantavy wrote: post #53

Earlier quoted context omitted.

The lower burden might also be because SF incomes are a lot higher than in the Midwest.

This is true, but I wonder why. Are SF employees simply that much more productive than elsewhere? (Serious question, it might be that for certain types of work, you really do need the talent base here, but a company is certainly paying a premium for it these days.)

Yes, they're some of the most educated people in the world.

Re: The Rise of Renting in the U.S

#213

Post by dragonwriter »

themagician wrote: post #211
Grishnakh wrote: post #198

Earlier quoted context omitted.

The problem with your analysis is that you're forgetting that renters have no control over the amount they pay in rent. You can only control your rent price for the first year; after that the landlord is able to jack up your price almost any amount they want (subject to local laws), and you can either pay the jacked-up rent or move out (which is expensive) and find a new place. When you buy a house (err, rent from a…

Your monthly "rent" isn't fixed though. Most people have both HOA and propter taxes, both which increase year over year. Not only do these rates increase over time, but as the value of your home (which you often don't own in any significant way) rises, so too does the assessed value. Do they increase as dramatically as rent? No, but they do still increase. Then you've got the 10% or so of "homeowners" with variable r…

> Most people have both HOA and propter taxes,

Most people may have property taxes, but while most new-built homes are saddled with HOAs, I don't think most homes are.

> both which increase year over year. Not only do these rates increase over time, but as the value of your home (which you often don't own in any significant way) rises, so too does the assessed value.

Property tax rates often don't increase year over year (in a number of jurisdictions, including California, the rates are capped, and usually at exactly the cap, so the rates do not rise at all.) Assessed value does increase with value increases (though may jurisdictions, including California, limit this as well -- e.g., in California, this is limited to 2% per year, regardless of how much the actual value increases -- making property taxes far more predictable in worst-case behavior than rents.)

> Then you've got the 10% or so of "homeowners" with variable rate mortgages.

These are easily avoidable.

Re: The Rise of Renting in the U.S

#214

Post by parennoob »

Animats wrote: post #117

Cheerleading for higher house prices used to be widespread, and was a big part of the problem. It's inflation, people. It's still the same house, for more money. The median house historically costs about 2.2x the median income. That number hit 4x nationally in 2007, and 10x in California. It's not that high this time, but it's still very high by historical standards.[1] San Francisco hit 10.5x in 2007, and now it's a…

> It may be time to look at applying antitrust laws to rental real estate.

My town sorely needs this. Virtually all of the non-college rentals there are owned by a single large company, so they can basically set whatever rent they want.

Re: The Rise of Renting in the U.S

#215

Post by jimbokun »

ahh wrote: post #195
toomuchtodo wrote: post #140

Earlier quoted context omitted.

It's simple the same way exercise is simple: knowing what to do is easy, having willpower to do it is hard. Being financially independent can be done on a median wage, full stop. https://www.reddit.com/r/financialindependence http://www.mrmoneymustache.com/ "Is that all too fluffy and philosophical? OK, fine. Here’s how to cut your life costs in half. Start by getting rid of your Debt Emergency if you have one. Live…

This works once you have a (supportive) partner. It requires living in nice rural communities where you will never, ever meet a new person, though, so if you start it single you'll stay that way forever. So I'm in a major metropolitan center, burning cash at a way higher rate, so I can hopefully find a wife. If I'm very, very lucky, that wife will want to move with me to rural Colorado. Sadly, this insane plan is abo…

"It requires living in nice rural communities where you will never, ever meet a new person, though..."

Or Pittsburgh. Note where it ranks in the list of highest home ownership and cheapest rents.

(I live here, and there aren't as many tech jobs as SF or NYC, but maybe more than you would expect.)

Re: The Rise of Renting in the U.S

#216

Post by enjo »

billions wrote: post #180
rhapsodic wrote: post #121

Earlier quoted context omitted.

> It may be time to look at applying antitrust laws to rental real estate. Or better yet, look at repealing or modifying the laws that keep the supply of housing from rising along with the demand.

This is the better solution. California charges $160,000 in taxes per home before it's built. Not to mention extremely restrictive zoning laws.

Zoning laws are actually by and large a relatively modern idea, with the oldest zoning regulations in America in place for only 100 years, with the aggressive zoning codes we have in place today generally only stretching back to the 70's and 80's.

Aggressive zoning, by my estimation, is a bad influence on housing costs. It's restrictive (by it's nature) and generally serves one and only one purpose : keeping neighborhoods from becoming more dense. As our population continues to grow people have to live somewhere, and we have to recognize that the only way to organize our cities for that growth involves density levels that are in many cases double or even triple what they are today.

Until then housing costs will continue to soar.

Re: The Rise of Renting in the U.S

#217

Post by switch007 »

jseliger wrote: post #91
mwsherman wrote: post #78

Earlier quoted context omitted.

Yes. It’s opposite of what one would do to make housing affordable. Unaffordable housing, especially in cities, is a huge and regressive drag on the economy.

Unaffordable housing, especially in cities, is a huge and regressive drag on the economy. Housing is unaffordable primarily due to parochial land-use restrictions, as Matt Yglesias explains in The Rent Is Too Damn High ( http://www.amazon.com/TheRent-Too-Damn-High-Matters-ebook/dp... ) and I explain here: http://jakeseliger.com/2015/09/24/do-millennials-have-a-futu... . If we want cheaper housing, all we have to do i…

Sorry, my eyes are tired so I didn't read your post, but there's a 3,000+ house development happening in my town — a HUGE development for the area — and the starting prices are $600,000, in a country where the average salary is $39,750 (the region's average is $43,000).

There are similar developments of 100s of houses, which equally ridiculous prices. I only see the existing house prices going up, not down.

Re: The Rise of Renting in the U.S

#218

Post by leetNightshade »

cpursley wrote: post #58
bluedino wrote: post #48

I'd have to save up almost a years pre-tax salary to buy a home. Well, one that I would want . I could save up half a years pre-tax salary and buy my not-ideal house. Nice/modern home, good location/schools, or large size. It seems like you can only pick 2 without spending a ton of $. Until then, I rent.

Wow, in my area you can almost buy a (albeit - modest) home outright on a years mid+ level tech salary.

Where do you live and what kind of salary are you talking about?

Re: The Rise of Renting in the U.S

#219

Post by jes »

ahh wrote: post #204
toomuchtodo wrote: post #197

Earlier quoted context omitted.

Have you tried online dating? I know that sounds silly, but it might help optimize your search for a partner who shares your interests. > It requires living in nice rural communities where you will never, ever meet a new person, though, so if you start it single you'll stay that way forever. I live 15 minutes from the beach in the Tampa area. Low cost of living area.

Online dating still requires you to be in a location with an extremely large population of single women. It doesn't matter if you visit the one bar or OKCupid if you've already asked out and been rejected by the only three eligible people in your zip code. You need a large enough population to successfully find a match, and the only place to find large populations of single women are major cities. (And a tiny fractio…

With respect, I'm struggling a bit with your last paragraph.

I live in Kirkland and I'm dating a woman who lives in West Seattle. We're older, but it's not like we're people who couldn't easily date other people who lived closer if we wished to do so.

I wish you success.

Re: The Rise of Renting in the U.S

#220

Post by AjithAntony »

ap3 wrote: post #160
awakeasleep wrote: post #154

Earlier quoted context omitted.

Property taxes should basically kill the dream of "and don't pay a fucking thing to anyone" for anyone that lives in the US. Especially city dwellers. I was surprised to see tax for properties I could technically afford cost more per year than I had been paying in rent.

Yes. Because renters don't pay property taxes /s

Of course they do. It's part of the rent.

edit: oh that was saarcasm

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