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19% of California houses are owned by investors

ocregister.com

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Re: 19% of California houses are owned by investors

#101

Post by lo_zamoyski »

koolba wrote: post #32
nikanj wrote: post #17

California real estate is such a tragedy, as huge portions of the population are suffering from a housing shortage caused almost exclusively by not building enough homes. A majority of people own real estate, so they're happy with the status quo. Why would you put up with even the slightest personal inconvenience from added housing, if all it got you was a reduced value of your property?

> California real estate is such a tragedy, as huge portions of the population are suffering from a housing shortage caused almost exclusively by not building enough homes. The real issue with CA real estate is prop 13. It directly disincentivizes selling your home as you would be paying significantly higher taxes on the same house (same value etc) somewhere else. So if you do own a home, you’re much better off keepi…

> If you want to fix CA real estate, scrap prop 13, force granny to sell and move to the boonies (to avoid the massively ratcheted property tax she will now be paying), and you’ll have a massive supply of homes for sale.

Sounds callous.

I would focus first on banning the use of homes as investment and permitting mixed-use, medium- to high- density construction (with something like 15 min city as a point of reference) before we reach for the big hammer and start coercing the poors out of their homes.

Re: 19% of California houses are owned by investors

#102

Post by ashdksnndck »

ianferrel wrote: post #51
ashdksnndck wrote: post #14

I’m interested in the methodology they use to identify investor-owned homes. Are they comparing known resident addresses to the names on property tax records? How does it work when multiple members of the same family have different last names? It seems fairly common for members of different generations of family (including in-laws) to live in a house that one person owns. How are you distinguishing an investment from…

California has a homeowner-occupied tax exemption, and it is listed on the county assessor's website whether a given property is taking it (at least it is for a relative's property in CA I just checked). So I expect they're using that. This might undercount (if owners don't file the form) or overcount (tax fraud or error), but there's financial incentives to get it right on both sides, so it's probably fairly accurat…

The article shows numbers for all 50 states, which makes me wonder if they are using a blanket methodology that works everywhere.

The link to the original source is paywalled.

Re: 19% of California houses are owned by investors

#103

Post by tristan957 »

klipt wrote: post #74
rconti wrote: post #63

Earlier quoted context omitted.

That's surprising to me, given the lag time between authorization and completion, and the dynamic of people moving into a given area vs moving out.

Hypothesis: investors rent out their investment housing (to make a profit) so it doesn't really reduce housing supply, it just shifts supply from owned to rented.

It reduces supply for people who exclusively want to own. I'm not going to tell people what is the better financial decision for them, but there is a segment of society that wants to own a home regardless of whether renting is more financially beneficial.

Re: 19% of California houses are owned by investors

#104

Post by bpt3 »

mystraline wrote: post #96
yojo wrote: post #72

Earlier quoted context omitted.

I’m one of those mom and pop owners. The decent ROI on renting out my starter home financed me adding an ADU to the lot, which I also rent out. I’ve owned the house long enough that I’ve had several tenants churn out when they buy their own houses. This doesn’t feel like a policy failure, IMO. Renters have the option to live in a free standing home while they save for a down payment, and “investors” have an incentive…

You're completely off the mark on this, and speaking like a landlord. > This doesn’t feel like a policy failure, IMO. Renters have the option to live in a free standing home while they save for a down payment, and “investors” have an incentive to increase density/add to the housing stock. First, when you have a renter, your payment is the "mortgage + tax liability + chunk of profit usually 25-50%" Nobody, except for…

> First, when you have a renter, your payment is the "mortgage + tax liability + chunk of profit usually 25-50%"

You think landlords make 25 - 50% profit on a SFH rental unit? You're so comically wrong that there's no point in discussing the rest of this post (which is basically a list of every failed housing policy in existence).

Allow builders to build more units. It's that simple, which is part of the problem for some people.

Re: 19% of California houses are owned by investors

#105

Post by twiceaday »

breakyerself wrote: post #42

People don't like being told that the problem is a housing shortage.

This is naive. The problem is that there are enough people with enough power who want house prices to keep going up. The solution must involve making them upset that they cannot get their way. Anything that doesn't have this shape is a stalling tactic in their favor.

Re: 19% of California houses are owned by investors

#106

Post by rconti »

klipt wrote: post #74
rconti wrote: post #63

Earlier quoted context omitted.

That's surprising to me, given the lag time between authorization and completion, and the dynamic of people moving into a given area vs moving out.

Hypothesis: investors rent out their investment housing (to make a profit) so it doesn't really reduce housing supply, it just shifts supply from owned to rented.

Yeah, and it will depend a lot on the regulatory structure in the local environment, plus national things like interest rates. With prop 13 locking in below-market taxes, you'd have to be crazy to sell property in CA. With a different structure, you'd have to be crazy to keep it!

Re: 19% of California houses are owned by investors

#107

Post by blitzar »

mystraline wrote: post #96
yojo wrote: post #72

Earlier quoted context omitted.

I’m one of those mom and pop owners. The decent ROI on renting out my starter home financed me adding an ADU to the lot, which I also rent out. I’ve owned the house long enough that I’ve had several tenants churn out when they buy their own houses. This doesn’t feel like a policy failure, IMO. Renters have the option to live in a free standing home while they save for a down payment, and “investors” have an incentive…

You're completely off the mark on this, and speaking like a landlord. > This doesn’t feel like a policy failure, IMO. Renters have the option to live in a free standing home while they save for a down payment, and “investors” have an incentive to increase density/add to the housing stock. First, when you have a renter, your payment is the "mortgage + tax liability + chunk of profit usually 25-50%" Nobody, except for…

> your payment is the "mortgage + tax liability + chunk of profit usually 25-50%"

You would have to be yielding 10%+ on your rental to get anything near that. In my part of the world - rent is cheaper than the interest the mortgage would bear.

Re: 19% of California houses are owned by investors

#108

Post by bpt3 »

lo_zamoyski wrote: post #101
koolba wrote: post #32

Earlier quoted context omitted.

> California real estate is such a tragedy, as huge portions of the population are suffering from a housing shortage caused almost exclusively by not building enough homes. The real issue with CA real estate is prop 13. It directly disincentivizes selling your home as you would be paying significantly higher taxes on the same house (same value etc) somewhere else. So if you do own a home, you’re much better off keepi…

> If you want to fix CA real estate, scrap prop 13, force granny to sell and move to the boonies (to avoid the massively ratcheted property tax she will now be paying), and you’ll have a massive supply of homes for sale. Sounds callous. I would focus first on banning the use of homes as investment and permitting mixed-use, medium- to high- density construction (with something like 15 min city as a point of reference)…

By "banning the use of homes as investment" I assume you mean renting them out.

You realize people live in those rental homes, correct?

Also, why is it desirable to force all renters to live in an apartment (assuming those are not banned, and people who are unwilling or unable to own their residence are not forced to wander the streets)?

Re: 19% of California houses are owned by investors

#109

Post by dgrcode »

taeric wrote: post #35
xoqem wrote: post #10

For anyone who didn't click into the article, the headline may be misleading without the sub headline, which currently is "Relatively speaking, California is not a hot spot for housing investors". The map graphic shows that 19% is lower than other large states (e.g. 22% in Texas, 21% in Florida, 20% in New York). And lower than other west coast states generally (22% in Washington and Oregon, 25% in Nevada, and 23% in…

It would probably be easier to understand if worded the other way? 81% of California houses are owner occupied.

I think the 81% group would also include unocuppied houses, right?

Re: 19% of California houses are owned by investors

#110

Post by bpt3 »

grafmax wrote: post #58
xoqem wrote: post #10

For anyone who didn't click into the article, the headline may be misleading without the sub headline, which currently is "Relatively speaking, California is not a hot spot for housing investors". The map graphic shows that 19% is lower than other large states (e.g. 22% in Texas, 21% in Florida, 20% in New York). And lower than other west coast states generally (22% in Washington and Oregon, 25% in Nevada, and 23% in…

And yet 20% of the market being captured by those who already have a home, while so many go without one, indicates a shortcoming in our society’s ability to distribute resources from those who don’t need them to those who do.

20% of CA residents are homeless? Citation please!
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