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Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

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Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#241

Post by rootusrootus »

estearum wrote: post #54
cpburns2009 wrote: post #46

Earlier quoted context omitted.

I guess it's time to abolish apartment buildings then. And how dare someone want to rent a house/condo/apartment when they only expect to live in a city for a couple years.

Landlords do not create apartment buildings. Developers do that. Developers should get more reward for developing things and landlords should get less. Landlords do not manage properties. Property managers do that. Property managers should get more reward for managing properties and landlords should get less. Sometimes these are the same individuals and they lump their fees into a single check, but these are not the…

> Developers should get more reward

From who? Someone has to pay them to do the development, right?

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#242

Post by runako »

lifestyleguru wrote: post #202
amazingamazing wrote: post #174

Earlier quoted context omitted.

It is very simple. Housing is not built.

Every amount of new housing will be purchased by competitive investors. You are heavily underestimating the amount of money unsophisticated investors have, and the psychological effect of owning more and more of territory. Most people will never say no to owning more money and territory.

In the context of rentals, wouldn't we expect ~100% of private sector rental units to be purchased, owned, and operated by investors?

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#243

Post by amazingamazing »

wmwragg wrote: post #238
amazingamazing wrote: post #174

Earlier quoted context omitted.

It is very simple. Housing is not built.

I think there is another element, private equity (PE) has got involved in the housing market, and like anything that PE gets involved with it burns it to the ground and then exits with it's profit leaving behind a wasteland. PE equity will do anything to get their profit no matter who it hurts

This would not matter if housing could be built.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#244

Post by smallmancontrov »

cpburns2009 wrote: post #137
rootusrootus wrote: post #74

Earlier quoted context omitted.

> If you remove landlords (but keep property managers, developers, etc In this scenario, who owns the property? And if you are advocating that everyone should own their home, what is the point of a property manager? What about the people who do not actually want to own their home?

This is exactly my problem with these arguments that demonize landlords. I've lived in multiple cities where I knew I'd only live there for a couple years, and I'm only interested in renting. How do you live somewhere short term without someone owning the rented property?

Swapping the base layer of the capital stack has zero visible change to the person renting. In fact, I'm pretty sure it's common in asia.

Instead of:

    Investor owns the land
    Investor pays for construction, finance, maintenance
    Investor receivers rent
They do:

    Government owns the land
    Investor pays to lease the land for 30 years or whatever
    Investor pays for construction, finance, maintenance
    Investor receives rent
The active roles don't change, the market that keeps them dynamic and competitive doesn't change, but the firehose of passive money goes into tax revenue instead of some rich guy's pocket.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#245

Post by chadgpt3 »

newaccount670 wrote: post #115
whoknowsidont wrote: post #20

Landlords are the least productive class in society, and it's not even close in terms of ranking.

If it's so easy to make money without doing anything as a landlord, what's stopping you from doing it and donating the profits to charity?

Only the rich get richer. You have to be rich to acquire the free money rights. The poor don't get richer, or the system wouldn't work.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#246

Post by fooker »

smallmancontrov wrote: post #192
fooker wrote: post #116

Earlier quoted context omitted.

I'm going to assume ignorance and try to explain why landlords exist. Of course you could already understand this and have this as an ideological stance, in which case my effort is likely wasted. Landlords assume a similar role in economy that banks do, they assume risk on your belalf. We have quantified this to an extent that you can reliably put a dollar amount on how much risk there is. When you are renting and th…

When ownership shows up at zoning meetings, the main risk they seem to be concerned about is accidentally letting someone build enough housing. Heaven forbid!

Are you perhaps too privileged to have seen situations where owning land is a liability?

As we speak, close to a billion people are in the middle of ongoing wars. There are entire countries where land is worthless. Ukraine has several hundred square kilometers of land with a thick covering of fiber optic cables from drones.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#247

Post by dgellow »

holistio wrote: post #142

Yet if I open X, I'm being told constantly that my European mind can't comprehend how poor we are and the richest European country is poorer than the poorest US state.

The US has an insane K-shaped economy[0]. People in the upper part of the K arm live in a completely different country than the rest of the population

0: https://en.wikipedia.org/wiki/Recession_shapes#K-shaped

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#248

Post by chadgpt3 »

darioush wrote: post #101
whoknowsidont wrote: post #20

Landlords are the least productive class in society, and it's not even close in terms of ranking.

I don't understand this school of thought? Without renting everyone would have to buy a house / apartment on each move.

without renting though it would probably be more like buying a fridge. You could just buy it when you needed it and sell it when you no longer needed it.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#249

Post by jermaustin1 »

pc86 wrote: post #189
amazingamazing wrote: post #174

Earlier quoted context omitted.

It is very simple. Housing is not built.

This is at least 80% of the problem. The system is behaving exactly as you'd expect it to with even an Econ 102-level understanding. New supply isn't being built, or is being severely hamstrung, and more people want the supply and are willing to sacrifice (often too much) to get it. Add in rent-seeking behavior, both figuratively and literally, and prices quickly double in even mediocre areas with minimal long-term p…

Even if new stock were built, new homes in Houston start around $300k for a 3/2 configuration, but those are bought up nearly instantly because not many are built, and the remaining stock are $400-700k.

I grew up with 6 family members in a 3/2 house that was 1250sqft. Houses today start at 2000+ square feet in the USA. We DON'T need that. On top of that, there is very limited stock of homes for people who no longer have kids.

Every type of manufacturing in the US has gone toward lower throughput, higher price. Luxury apartments, 2500 square foot houses with no yard, $50k for a car. And it is because we are all comparing ourselves to each other and wanting to appear like we can afford this lifestyle, and its finally breaking. But it was allowed to go this way, because it was working. Pricing out the bottom 25% didn't negatively affect the profitability of the companies making these items, in fact, it made them more profit.

Re: Wages in America Are Too Low for the 30% Rule to Work for Renters Anymore

#250

Post by vovavili »

throwaway041207 wrote: post #158
WarmWash wrote: post #67

The problem is absolutley that housing is too expensive, which of course a bunch of realtors are not going to point out. Increasing wages will not fix the housing crisis, and will just drive prices higher. How convenient for a bunch of realtors...

In my neck of the woods (New England), home prices have doubled since March of 2020. I have yet to read a comprehensive overview of how this happened and how we get out of it. Of course, people went nuts offering over the asking price when interest rates were super low so I understand, to some degree, that baselines were reset. But the current housing market doesn't feel sustainable. I don't understand how a proper m…

>I have yet to read a comprehensive overview of how this happened and how we get out of it

Allow me to introduce you to Bryan Caplan - https://www.amazon.com/dp/1952223415

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