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Rising Rents Are Pushing More Tenants Past the Breaking Point

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Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#91

Post by oconnor663 »

_wc0m wrote: post #9

Rent is an amazingly effective means of redistributing wealth upwards. I have easily paid over £100k rent in my life, always to people substantially richer than I am. Always enjoyed this Churchill quote - from 1909! Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits s…

Do you not also buy food and clothing from companies owned by people richer than you? I feel like the main difference with rent is that the owners aren't that much richer than we are, and sometimes we meet them face-to-face, so the relationship is more comprehensible.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#92

Post by mcbruiser3 »

underwoodley wrote: post #58
mcbruiser3 wrote: post #24

Earlier quoted context omitted.

I love how some folks complain about paying rent as if they have no choices, as if they're somehow indentured servants or serfs beholden to the landed gentry or something. The truth is you do have choices, even in tough times. Find a way to save money for a down payment and buy some property. Maybe even become a landlord yourself.

Sorry, the truth is that many people simply don't earn enough to save money for a down payment.

sorry, the truth is that not everyone has a right to own a home. life choices, man, they make a difference.

edit: who is downvoting this? does someone out there actually believe everyone has a right to own a home? like as in, the government should give everyone homes? wtf?

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#93

Post by yonran »

jpao79 wrote: post #80
moultano wrote: post #44

Earlier quoted context omitted.

Land Value Tax. https://en.wikipedia.org/wiki/Land_value_tax This is distinct from a property tax in that it only measures the value of the soil it sits on, so doesn't punish the landlord for improvements. The value of the land itself is almost entirely outside of the landlord's control, it's determined by the community around it. As a result, this is one of the least distortive taxes.

In California at least , the property tax bill is already split into two components: 1.) Tax on land value 2.) Tax on improvements (building, landscaping) http://www.lao.ca.gov/reports/2012/tax/property-tax-primer-1... Here's a brief description of how the increase in land value is calculated: "Under this system, when real property is purchased, the county assessor assigns it an assessed value that is equal to its pu…

What you describe is California’s Proposition 13. It does essentially the opposite of the Land Value Tax that the parent is advocating. The acquisition value system and 1% cap ensure that land investors (rather than local governments) capture the windfalls from the appreciation while they own the property. The split roll for land vs. new construction taxes new construction at a higher rate (rather than the lower 0% under the Land Value Tax) so Proposition 13 discourages (rather than encourages) investing in improvements.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#94

Post by DougWebb »

moultano wrote: post #44
mindcrime wrote: post #20

Earlier quoted context omitted.

So what's your point? Do you want to eliminate rent? Should people who either can't afford to purchase a house, or who simply don't want to, be forced into homelessness? Personally I've paid over $115,000 in rent over the past 12 years, but I don't begrudge my landlord their money. I attained utility in exchange for the rent I paid, and have no problem with the arrangement. Not, of course, to say that I'm happy when…

Land Value Tax. https://en.wikipedia.org/wiki/Land_value_tax This is distinct from a property tax in that it only measures the value of the soil it sits on, so doesn't punish the landlord for improvements. The value of the land itself is almost entirely outside of the landlord's control, it's determined by the community around it. As a result, this is one of the least distortive taxes.

So, where exactly does the wealthy landlord get the money to pay the land-value tax? From their own labor? From their savings? From after-tax interest earned on their other investments? Of course not! They're going to raise the rent to cover the additional tax, and if the renter can't afford it screw them; they'll be kicked out and replaced with someone who can.

This comes up a lot in discussions involving income inequality. If the proposed solution is "tax the rich", you have to be really careful to tax them in a way that's not trivially easy to pass back onto the less-rich.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#95

Post by Symmetry »

maxxxxx wrote: post #6

Seems the economy is finding the sweet spot where education, housing and health extract the maximum amount of money from people right before they break. Finding that spot while a avoiding a revolution has been the biggest challenge for ruling classes throughout all of history.

For positional goods where there is a fixed supply people will tend to bid up the cost until it can't go any higher. I mean, in theory we could just build giant apartment towers all over SF but nobody wants to make that legal. And the number of medical residency slots, the construction of new hospitals, etc are very restricted. But fundamentally with higher education the number of slots of prestigious institutions has to be limited or they wouldn't be prestigious any more.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#96

Post by xtacy »

oconnor663 wrote: post #91
_wc0m wrote: post #9

Rent is an amazingly effective means of redistributing wealth upwards. I have easily paid over £100k rent in my life, always to people substantially richer than I am. Always enjoyed this Churchill quote - from 1909! Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits s…

Do you not also buy food and clothing from companies owned by people richer than you? I feel like the main difference with rent is that the owners aren't that much richer than we are, and sometimes we meet them face-to-face, so the relationship is more comprehensible.

While that's technically correct, rent is often at least one order of magnitude more than the cost for food and clothes.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#98

Post by away2017throw »

asdfasdfasd333 wrote: post #55
hackermailman wrote: post #10

Rising rents doesn't seem to effect the number of applicants though, every time I've viewed a place here there was a lineup of 20+ other renters there waiting as well. They pushed us through in under 10 minutes then another 20+ people showed up for the second appointment already gathering outside. There was no time to dispute the lease they dangled which stipulated you had to vacate the day the lease expired in order…

it's called the free market.

Free person such as yourself can buy freehold land and freely build a skyscraper and then freely rent out apartments and become a free billionaire.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#99

Post by savanaly »

sp332 wrote: post #41
savanaly wrote: post #21

Earlier quoted context omitted.

If this is true, why is the return on owning land not better than the return on the stock market, at least in the estimation of most economists? Unless you have some comparative advantage in owning/administering to land, it's not actually such a sweet deal relative to normal investing. Owning land is "free money" in that you tie up your wealth and in exchange get interest. Same deal with owning stocks. Land isn't spe…

http://www.investopedia.com/ask/answers/060415/what-average-... "By any measurement, the real estate sector has outperformed the overall market, even factoring in the drastic collapse in housing prices during the 2008 financial crisis." (I'm not an expert but I recall hearing that much of the recovery from the recession went to real estate owners.)

Granted, every investment vehicle under the sun will have its ups and downs. It's a plausible case that real estate is worth having for its purported counter cyclical properties in some sort of advanced and complicated investment portfolio. From none of that does it follow that owning real estate is some sort of reverse scam where the owners are reaping incredible and reliable riches off the backs of the poor renters as the person I was replying to implied.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#100

Post by marcell »

mrow84 wrote: post #83
billmalarky wrote: post #40

Earlier quoted context omitted.

> He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived. The value landlords provide is the assumption of risk. The premium you pay to rent is in exchange for vastly limiting your exposure to said risk. This is why offloading the risk onto creditors (ie purchasing real estate with borrowed money under an LL…

> The value landlords provide is the assumption of risk. The premium you pay to rent is in exchange for vastly limiting your exposure to said risk. Are there any risks that affect only the landlord, and not the renter, other than the possibility of losing ownership? For example, if you rent a plot of land for farming, what risks does the owner of that land face that you do not?

You risk negative returns on the property, or losses compared to your opportunity cost.

If you had $1 million in 2007, it would have been more profitable to invest it in Google than to buy a two houses in Mt View and rent them out. That is the risk the landlord is assuming. There are examples where you have a negative return as well.

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