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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

#201

Post by rsync »

SandersAK wrote: post #192
rsync wrote: post #180

Earlier quoted context omitted.

"To me, this is absurd. This is a human rights issue (homelessness is growing by a large amount)." Homelessness is a mental health issue. Nobody is homeless because of foreign speculators. Yes, people are indeed incentivized to relocate to housing markets that Chinese people have never heard of like, for instance, Tacoma . If those people spent half their time working and saving (like their parents did) as they spent…

Mental health is one reason why people are homeless but it's not the only one. The reasons you're bringing up are strawmen at best. The people who are homeless or on the brink of homelessness are not complaining about artisanal food stuffs. In Oakland, a family of 4 has been living in a single family home for 15 years. This year, after new owners purchased the property, the rent went up 100% in one year. Needless to…

"If you want to understand the severity of the situation, I suggest just literally googling "homelessness housing crisis bay area" and read all the both qualitative and quantitive reporting done on the issue."

As a resident of the bay area I assure you that I read about this topic every single day - and consume a wide range of reporting and editorial.[1]

"... the rent went up 100% in one year. Needless to say, they are facing a housing crisis where they will be homeless."

That's not obvious at all. Certainly that's a very difficult situation and I suppose it is technically true that they will indeed be homeless as they physically move their bodies to their new home ... but there is nothing at all new or noteworthy about people making rational economic decisions about what they can and cannot afford - and voting with their feet for new locales.

The only thing that's new (and this is something I encounter more and more frequently, especially in the bay area) is the idea that not only is housing a basic human right but housing in an arbitrary location without any consideration of ones actual economic status is a basic human right. This is, I am afraid, absurd.

I am open-minded about the notion of housing as a human right. I completely reject the notion of housing wherever one most prefers[2] as a basic human right (or any kind of right whatsoever).

[1] 48 Hills, for example.

[2] Where you grew up, where you raised your kids, where the cool restaurants are, where the artists are at ... etc.

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

#202

Post by kqr2 »

seanmcdirmid wrote: post #73
beebmam wrote: post #36

In large cities across the US (and probably most of the world), there is some very large scale foreign speculation in the housing market going on. This is leading to rising rents and rising home prices. In Seattle, for example, many (newly) wealthy Chinese people are buying houses purely for investment purposes. I know some of them. One of them has purchased 10 houses, and lives in only one of them (when they are in…

We saw this before with Japan, it didn't end well. If you think the states property markets are crazy, well, the Chinese ones are crazier by an order of magnitude. It's no wonder that many wealthy Chinese see the states (or other countries) as a safer bet. The upside is that rents in china are still reasonable (so that 7 million yuan apartment is only renting for 10k RMB/month). However, the same was true with Japan,…

I think a similar thing would have happened in the US during the Great Recession of 2007, however, the US government was willing to back all of the banks who were holding underwater mortgages. Had the government not done this, the banks would have been forced to unload property at fire-sale prices.

10 years later in major metropolitan areas, property prices are even higher than they were in 2007. Most likely the Federal government would pursue another bailout during a housing "collapse".

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

#203

Post by rsync »

jdavis703 wrote: post #189
rsync wrote: post #184

Earlier quoted context omitted.

"Always enjoyed this Churchill quote - from 1909!" (long quotation from 4 years prior to the 16th amendment[1]) This is not an accurate assessment of the present state of affairs. Rental income in the United States is taxed at the federal and state level and rental licenses (as well as other licensing) is levied at the local level. This is not to mention the property taxes that are paid by the landlord - which can be…

The renter actually pays the property tax, it's included in the rent that is charged. There are very few landlords who rent out their property for less than the cost of property tax. Further many residential properties are owned by LLCs and other corporations that allow them to lock in low taxes by never selling the actual property, but merely the holding company of the property.

"Further many residential properties are owned by LLCs and other corporations that allow them to lock in low taxes by never selling the actual property ..."

I think you are talking about prop 13 and the ability of corporate entities to benefit from the provisions of prop 13 which I agree, is completely insane.

But prop 13 is limited to California and I know of no other states that have anything comparable.

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

#204

Post by jeffwilcox »

chimeracoder wrote: post #62
vkou wrote: post #48

Earlier quoted context omitted.

> 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. In hot housing markets, the value they provide is having access to the capital necessary to own property. A 30 year old hairdresser in Seattle isn't renting because they don't want to deal with risk - they are renting because they can't save up a $XY,000 downpayment, and…

> A 30 year old hairdresser in Seattle isn't renting because they don't want to deal with risk - they are renting because they can't save up a $XY,000 downpayment, and tie their entire salary into interest payments. If you're talking about cities like Seattle, the reason that a 30-year-old hairdresser would have a difficult time purchasing a place is because prices have been pushed absurdly high due to two factors: a…

I'm starting to think it is less about foreign investments, like a few other comments have noted, and more about changes at the top end of the middle class.

Along with the large amounts of growth, wages in the upper middle class have really increased a lot. If you look at tech workers, it was pretty common to see average tech employees pulling in $75k-$150k a decade ago; today employees at a similar level and set of skills are pulling $200-350k. As a result, there's a ton of money in the high end available to purchase housing in the area.

Saving for a down payment is a challenge, but less so if it's relatively easy to tuck away an extra $100k a year. This is likely available to a tech earner but not the Seattle hair dresser, unless they have also increased their asking rates for a haircut the last few years.

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

#205

Post by nerfhammer »

wan23 wrote: post #198
akanet wrote: post #179

Earlier quoted context omitted.

I sincerely doubt foreign purchases are the main driver of rent increase, and no study has ever demonstrated as much. The anti-foreigner mindset is extremely dangerous. Rising rents are almost entirely because of local restrictions on creating more housing. The beneficiaries of restricted supply are existing owners and landlords.

It's not anti-foreigner, it's anti-speculation. It's easy to see that home purchase prices are well beyond what any reasonable family would want to pay, and yet the prices keep rising. The problem isn't that it's foreign money coming in, it's that there's so much of it.

Well it's either greedy, scheming tech workers or greedy, scheming Chinese speculators. Isn't there a pattern here? The problem simply must be caused by powerful, scheming outsiders. Despite lack of evidence, as this comment is a great example, defying the claim of lack of such by GP as if it simply hadn't been heard.

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

#206

Post by rednerrus »

It should come as no surprise that housing is appreciating as rapidly as it is. If someone is going to loan you $500,000 at 3% and that property is going to appreciate at 8% a year, you'd be a fool not to take that deal.

We really need interest rates to get back in line with what it costs to loan people money.

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

#207

Post by jeffwilcox »

downrightmike wrote: post #137
sampo wrote: post #97

Earlier quoted context omitted.

> What can be done I wonder? The best option would be to build more. Unfortunately, this also seems to be the least popular option.

Building expensive housing is the game right now and they go unpopulated. There is no desire to build affordable housing.

Yeah... it's also tough, many real estate investment trusts and companies have a fiduciary responsibility to their shareholders to seek a great return on investment. If there's no margin in the affordable housing game, it's not going to fulfill that obligation. :/

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

#208

Post by y_u_no_rust »

cc439 wrote: post #125
vkou wrote: post #48

Earlier quoted context omitted.

> 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. In hot housing markets, the value they provide is having access to the capital necessary to own property. A 30 year old hairdresser in Seattle isn't renting because they don't want to deal with risk - they are renting because they can't save up a $XY,000 downpayment, and…

Were 30 year old hairdressers ever able to afford a home inside a major metro area? I'm sure one could have afforded a home in Seattle 40 years ago, but the Seattle metro area wasn't even among America's top 20 largest metros until the 70's . The problem with the assumption that something is wrong with Seattle's housing market is that people's perceptions of what Seattle "is" haven't changed to reflect the fact that…

I know a few hair dressers who decent middle class salaries should they not own houses or something because they aren't stack overflowing their way to crappy apps?

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

#209

Post by ryuker16 »

beebmam wrote: post #36

In large cities across the US (and probably most of the world), there is some very large scale foreign speculation in the housing market going on. This is leading to rising rents and rising home prices. In Seattle, for example, many (newly) wealthy Chinese people are buying houses purely for investment purposes. I know some of them. One of them has purchased 10 houses, and lives in only one of them (when they are in…

This is bad but much more significant is restrictive zoning laws.

I live in downtown chicago where rents are reasonable and skyscrapers for living at everywhere.

Meanwhile, you gotta move heaven and earth to build high density housing in some cities like SF. Even suburbs will fight 4 story apartment buildings. It's not rocket science.

Let the foreigners invest in building more of them. When the crash happens, the locals get to buy them back on the cheap.

What shouldn't happen is foreigners investing in sitting stock as a bank to store funds....zoning laws are like NIMBY on steroids with a long history of racism and classicism.

That's what really is what we should be angry about.

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

#210

Post by dba7dba »

Govt should adopt a policy of gradually increased property tax based on the number of housing units (or total assessed value of all housing property) one person/business owns.

It should be to the point where one cannot use buying/selling/holding housing property as a way to amass wealth infinitely. Maybe to a certain point, but not to the extent allowed now.

To me, holding a vast number of rental units and amassing a huge income (not for one's living expense but for increasing wealth) is not much different from extracting oil from the ground. Maybe even worse, because high rent/housing is negatively affecting a regular citizen even more directly than dirty oil.

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