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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

#241

Post by jdale27 »

shmerl wrote: post #237

> The share of households considered rent-burdened--meaning they spend more than 30 percent of their income on debt--ticked down in 2015 Do they mean more than 30% of income on rent? And does it mean income minus taxes?

Most likely before taxes. In my experience (in the US) the usual rule of thumb has been to spend about 25% of your before-tax income on rent. But in the San Francisco Bay Area today, it's not uncommon for people to be spending 30-35% or more. I've seen apartment listings recently asking for an income of only 2.3x the rent.

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

#242

Post by kilovoltaire »

shmerl wrote: post #237

> The share of households considered rent-burdened--meaning they spend more than 30 percent of their income on debt--ticked down in 2015 Do they mean more than 30% of income on rent? And does it mean income minus taxes?

It looks like it's defined based on pre-tax gross income. (Here's one reference that mentions it[1] and I saw a few others as well)

So it would be an even higher percentage of after-tax income.

[1] https://www.nytimes.com/2016/10/23/realestate/how-much-of-my...

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

#243

Post by linkregister »

seltzered_ wrote: post #191
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…

Are you sure that it's foreign buyers? While it has been true in the Vancouver market, I read an article recently mentioning otherwise for Seattle: http://www.sightline.org/2017/07/05/stop-blaming-foreign-hom...

This is an excellent article. It does an excellent job of analyzing the problem.

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

#244

Post by setr »

brailsafe wrote: post #219
ryuker16 wrote: post #209

Earlier quoted context omitted.

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 loc…

Do you have a reference for "reasonable" rents in Chicago or can you break that down at all? I'm genuinely curious. Coming from Vancouver where rents compared to salaries are considered beyond insane, what I found on Chicago's craigslist seem to be comparable. That is, accounting for exchange rate but not salaries.

I had found 1 room shared by bunkbed airbnb's for ~$1500/mo in SF, in a shitty location but forget where specifically about a year ago; and that was pretty cheap for near the heart, afaict

$1900/mo got me a 2-story townhouse in chicago just south of the south loop; maybe 15 min by train to the heart of the city, 20 min walk to chinatown

Had 3 proper bedrooms and an attic, so with 3 roomates it was more like $450/mo

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

#245

Post by s73ver_ »

rsync wrote: post #180
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…

"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…

Yup. Totally because people aren't hard workers. Nothing at all to do with the fact that wages have been stagnant at best over the last 30 years, and housing prices have ballooned.

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

#246

Post by dba7dba »

bmmayer1 wrote: post #140
bko wrote: post #49

Earlier quoted context omitted.

I don’t think many landlords get rich from rent but housing appreciation. Real estate cap rates are generally very low, especially in places where rents are high. Take nyc for example. If you look at what someone pays for rent and take an estimate as to what the apartment is worth and estimate mortgage and taxes you’ll see that the rent often doesn’t even cover the mortgage. For instance in manhattan you can get a ch…

Sure, but to make money on housing appreciation you also run the risk of losing money on housing depreciation. Given that owning property is a risk, it's not a fair characterization to look at landlords as some sort of leech on society that just get rich at the expense of everyone else. That's survivorship bias looking at only the successful landlords and ignoring the real risk involved in owning property.

> Given that owning property is a risk, it's not a fair characterization to look at landlords as some sort of leech on society that just get rich at the expense of everyone else.

Every landlord I've paid rent to or some acquaintances of mine who own rental properties seem to all have more than a few rental properties. And I've never seen/heard of rental property owners going bankrupt. Yes some do, but they do so because they stretched themselves way too thin.

It's an anecdote but pretty much any family that seems to live well without the breadwinner working 70-80 work week as a doctor/lawyer seem to have rental properties. It is the most stable/lucrative use of one's wealth. It's been that way for a long time.

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

#247

Post by ryuker16 »

setr wrote: post #244
brailsafe wrote: post #219

Earlier quoted context omitted.

Do you have a reference for "reasonable" rents in Chicago or can you break that down at all? I'm genuinely curious. Coming from Vancouver where rents compared to salaries are considered beyond insane, what I found on Chicago's craigslist seem to be comparable. That is, accounting for exchange rate but not salaries.

I had found 1 room shared by bunkbed airbnb's for ~$1500/mo in SF, in a shitty location but forget where specifically about a year ago; and that was pretty cheap for near the heart, afaict $1900/mo got me a 2-story townhouse in chicago just south of the south loop; maybe 15 min by train to the heart of the city, 20 min walk to chinatown Had 3 proper bedrooms and an attic, so with 3 roomates it was more like $450/mo

Funny, I had an airbnb(I hosted) in nashville's downtown that made that rate look dirt cheap.

Reason?

Outdated zoning laws and hotels were slow to catch up with the tourist industry.

It was crazy watching my nearby competitors(the major hotels) adjust prices like the stock market.....

$1800 a night for the last suite at the sheraton up from $250-500 normally. Bonoroo and Country Music festival held the same week is what I called "Second christmas".

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

#248

Post by bitxbitxbitcoin »

lend000 wrote: post #183
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…

Foreign investment is not the root cause of a growing population being drawn to city centers with limited land.

Exactly - it is a symptom of the different regulations in the different city centers.

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

#249

Post by m0llusk »

ryuker16 wrote: post #209
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 loc…

These are the same issue. If housing is regulated as a commodity then there will be plenty for consumers and prices will tend to be low and stable. If housing is regulated as a premium product with limited supplies and implicit links to schools and other critical resources then available units will dwindle, prices will rise without rational bounds, and we see the rise of people without homes along with homes without people.

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

#250

Post by lend000 »

bitxbitxbitcoin wrote: post #248
lend000 wrote: post #183

Earlier quoted context omitted.

Foreign investment is not the root cause of a growing population being drawn to city centers with limited land.

Exactly - it is a symptom of the different regulations in the different city centers.

Eh.. I saw it more as a symptom of humans breeding. Human population has always been bound by some constraint, and now it seems that shelter is more of a limiting factor than food supply, in western countries at least.

That, and a cultural shift toward wanting to live in cities, even though many of these financially struggling millennials would do just fine financially in more distant suburbs.

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