Oregon passed sweeping housing crisis laws • Hacker News Board

Re: Oregon passed sweeping housing crisis laws

#151

Post by BeetleB » Sat, Jul 20, 2019, 4:31 PM UTC

Retric wrote: post #150

BeetleB wrote: post #136

Earlier quoted context omitted.

>If a month of foregone rent was such a huge burden to landlords then it wouldn't be so common for them to keep their properties vacant. Landlords estimate a vacancy rate and keep that amount in reserves. However, they all earn more money if it's not vacant. It's almost never the case that they can make more money by keeping the rent high and units vacant. Also, is they are using a property management company (which…

This greatly depends on the number of units. If you’re managing 1,000 units renting them all is a sign you have left money on the table. The safest approach to maximize profit is to increase prices as your vacancy rates drop. The ideal situation is to effectively always have 1 vacancy of each size not 0.

>If you’re managing 1,000 units renting them all is a sign you have left money on the table.

That is the very definition of an outlier. Most landlords (easily over 90%) don't even have a 100 units. In fact, most landlords have a target number of units they need to "retire", and that number is usually less than 100.

Re: Oregon passed sweeping housing crisis laws

#152

Post by kspaans » Sat, Jul 20, 2019, 4:33 PM UTC

refurb wrote: post #147

jdavis703 wrote: post #132

Earlier quoted context omitted.

Maintenance can be passed through to renters in California. The landlord just needs to ensure the maintenance is actually legitimate (i.e. they can't put in a gold toilet and charge for it), otherwise the rent board could rule the costs can't be passed through.

At least in SF, there is a cap on maintenance pass through, something like $60 per month. If you’re maintaining a 100 year old building, it would be very easy for costs to exceed that cap.

Older buildings should sell for less, to compensate for this risk. If the mortgage payments eat up too much of the rental income then the owner overpaid, and should sell at a price that's more appropriate for the risk associated with the building.

Re: Oregon passed sweeping housing crisis laws

#153

Post by world32 » Sat, Jul 20, 2019, 4:33 PM UTC

Hitton wrote: post #87

world32 wrote: post #56

Earlier quoted context omitted.

Ok fair enough, but then why is Romania such a sh*t-hole? (Sorry Romanians). Surely the racial homogeneity there should mean that things are better over there?

I'm form different Eastern European country so I can explain it to you pretty easily. Communism. It's pretty much same reason in whole Eastern Europe. Some countries managed to recover faster for various reasons whether it was more useful industry which was pretty much centrally planned in whole Soviet block from Moscow, so some countries where more industrially orientated and other remained pretty much agriculture o…

Absolutely, you are right about that. My point was more to argue against the idea that in eastern europe, kids can run free on the streets because its a mostly white society. More likely is that the kids run free because the parents are not infected with american-style parenting and media-induced fear of everything. Literally nothing to do with race at all.

Re: Oregon passed sweeping housing crisis laws

#154

Post by raldi » Sat, Jul 20, 2019, 4:37 PM UTC

baggy_trough wrote: post #4

TulliusCicero wrote: post #3

Good. Mandatory single family home zoning should not exist, anywhere. It is exclusionary by nature; economic segregation is often the intent, and in most cases the impact. It's one thing to accept the free market causing this sort of segregation as the collective result of individual choices, quite another to suggest that the government ought to be using regulatory power to help enforce the creation of invisibly gate…

Really an appalling point of view. There is absolutely nothing wrong with single family neighborhoods; in fact, they are greatly desirable to most.

In the same way as taking more than one's fair share of pie is desirable to most.

Re: Oregon passed sweeping housing crisis laws

#155

Post by BeetleB » Sat, Jul 20, 2019, 4:38 PM UTC

pmoriarty wrote: post #144

BeetleB wrote: post #136

Earlier quoted context omitted.

>If a month of foregone rent was such a huge burden to landlords then it wouldn't be so common for them to keep their properties vacant. Landlords estimate a vacancy rate and keep that amount in reserves. However, they all earn more money if it's not vacant. It's almost never the case that they can make more money by keeping the rent high and units vacant. Also, is they are using a property management company (which…

"It's almost never the case that they can make more money by keeping the rent high and units vacant." Unless they can hold out until property values rise and they can sell for a profit.

>Unless they can hold out until property values rise and they can sell for a profit.

Sure, if they've got piles of cash sitting around to pay for the loan, insurance and real estate taxes.

Here's another tidbit people don't understand. If the property has more than 4 units, the value of the property is determined almost entirely by the revenue it generates.[1][2] The bank who will provide the loan to the buyer will look at those numbers, and the buyer will look at those numbers. In particular, what people will not look at are the comps (the value of nearby properties). So a "Let's lose money until the property values go up" strategy won't work there.

[1] https://theresabradleybanta.com/value-a-multi-unit-property/ [2] https://www.biggerpockets.com/blog/2016-07-06-multifamily-re...

Re: Oregon passed sweeping housing crisis laws

#156

Post by Retric » Sat, Jul 20, 2019, 4:40 PM UTC

BeetleB wrote: post #151

Retric wrote: post #150

Earlier quoted context omitted.

This greatly depends on the number of units. If you’re managing 1,000 units renting them all is a sign you have left money on the table. The safest approach to maximize profit is to increase prices as your vacancy rates drop. The ideal situation is to effectively always have 1 vacancy of each size not 0.

>If you’re managing 1,000 units renting them all is a sign you have left money on the table. That is the very definition of an outlier. Most landlords (easily over 90%) don't even have a 100 units. In fact, most landlords have a target number of units they need to "retire", and that number is usually less than 100.

From the market’s perspective it’s the ratio of units managed by each type that matters.

Hypothetically, if 1 company managed 1,000 units and 1,000 people managed 1 unit then that outlier owns 50% of the market while representing 0.1% of the land lords.

Re: Oregon passed sweeping housing crisis laws

#157

Post by jiminy_john » Sat, Jul 20, 2019, 4:42 PM UTC

sdenton4 wrote: post #123

LargeWu wrote: post #100

Earlier quoted context omitted.

We had to rent our former home for 4 years after we moved, but couldn't sell because the market value was too low after the real estate crash. It's really hard to find tenants that aren't total deadbeats. Raise your rent and it's almost impossible to fill the vacancy. Lower the rent and get nothing but unqualified applicants with terrible credit and criminal records. So sure, maybe I could lower the rent to get someo…

Great! If you can't fill the spot to your liking, you should get out of the game. Sell to someone who needs a place to live, or is comfortable lowering rents and dealing with the work load.

spoken like a real champ! You show'em! to those fat cats!!!

Re: Oregon passed sweeping housing crisis laws

#158

Post by bassman9000 » Sat, Jul 20, 2019, 4:50 PM UTC

jbay808 wrote: post #130

bassman9000 wrote: post #92

Earlier quoted context omitted.

That means a landlord can extract money well above a true market rate. The market rate IS what the landlord extracts from it, which is what the market, you, is willing to pay.

I assume the GP is referring to something like this: https://equilibriabook.com/an-equilibrium-of-no-free-energy/ > What about houses? Millions of residential houses change hands every year, and they cost more than stock shares. If we expect the stock market to be well-priced, shouldn’t we expect the same of houses? > The answer is “no,” because you can’t short-sell a house. Sure, there are some ways to bet against a…

* the only members of the market are you and the landlord*

But that's not true. The landlord can increase the price of the rent, knowing that, as some point, you'll leave, because you, the buyer, consider it too high. The market around you, other possible renters, may not, and so the price the landlord sets will still be the market price.

Now, the landlord knows you're a good customer: no pets, no parties, always clean. He has an incentive to keep you as such: you're predictable, no unforeseen costs, and knowing that, there may not be many possible renters willing to pay more, according to his estimations, and so it keeps the price stable (+CPI). That's still the market price.

I can't understand why in HN, out of all places, people dismiss the superiority of a fully decentralized, uncoordinated, resilient information distribution system (free market prices), in favor of a centralized, brittle, obscure, arbitrary ruled one.

Re: Oregon passed sweeping housing crisis laws

#159

Post by roenxi » Sat, Jul 20, 2019, 4:51 PM UTC

jdavis703 wrote: post #138

briandear wrote: post #115

Earlier quoted context omitted.

So a landlord should be subject to the free market, but tenants shouldn’t be? Tenants should be protected from rent increases, but property owners shouldn’t be protected against cost increases? That isn’t the free market.

One way to look at this is, land owners are generally wealthier than renters. According to the Federal Reserve Survey of Consumer Finances landowners are 44 times wealthier. It makes sense that the government protects people who are less able to deal with financial instability.

It makes sense, but it is also a bad idea. If someone can't afford the cost of living, they should relocate to somewhere else where they can.

Western civilisation has had phenomenal results with the principle that when there isn't enough of something then the owner of that thing gets to decide who goes without. Housing is not so special that it deserves an exemption. Squeezing landlords is one of several ways to lock a housing shortage in for the long term. It has been established that letting people make big profits doing something is a great way to get more of the something - and that applies to renting out houses too. The only role for the government in making sure it is easy to build more houses and that everyone sticks to what they signed when it comes to contracts.

Re: Oregon passed sweeping housing crisis laws

#160

Post by spoonie » Sat, Jul 20, 2019, 4:55 PM UTC

roenxi wrote: post #159

jdavis703 wrote: post #138

Earlier quoted context omitted.

One way to look at this is, land owners are generally wealthier than renters. According to the Federal Reserve Survey of Consumer Finances landowners are 44 times wealthier. It makes sense that the government protects people who are less able to deal with financial instability.

It makes sense, but it is also a bad idea. If someone can't afford the cost of living, they should relocate to somewhere else where they can. Western civilisation has had phenomenal results with the principle that when there isn't enough of something then the owner of that thing gets to decide who goes without. Housing is not so special that it deserves an exemption. Squeezing landlords is one of several ways to lock…

I agree, except that housing right now isn’t a free market precisely because of zoning rules that artificially limit what can be built and where. Until existing land owners lose the right to rig the market, markets should be rigged in favour of tenants who have less power.

Where it’s easy to build new housing supply I’m in favour of looser rent control or removing rent control because it’ll be redundant.