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Average Rent in San Francisco Has Dropped $1k This Year

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Re: Average Rent in San Francisco Has Dropped $1k This Year

#421

Post by ChuckNorris89 »

sofixa wrote: post #371
ChuckNorris89 wrote: post #244

Earlier quoted context omitted.

Do you have any more details on that? I'd like to know more. Either apartments outside of Paris are dirt cheap or minimum wage in France is really high. A dev from Paris I met in Germany said he left due to how unaffordable housing was so something doesn't add up.

Housing is expensive in the city and some nearby suburbs ( mostly to the west and southwest), but less so the further away you are. Thanks to the RER train system even far away suburbs, with cheap or cheapish housing aren't that far away - e.g. i have colleagues with houses ( with big yards and two stories) in the 200k euros range south of Paris, in fancy-ish suburbs, and are 40-50 minutes from the office ( i live in…

Thanks for the input. Can you please tell me which are those suburbs with 200k homes outside of Paris? I'd definitely move there at that price, sounds like a steal.

Though I'm a bit skeptical as 200k is enough for a house in Eastern Europe on the outskirts of Bucharest, but in Austria where I am now and average house outside of Vienna is way over 600K so the Paris suburbs you describe seem suspiciously cheap to me at only 200k since Paris is more expensive than Vienna.

What's the catch?

Re: Average Rent in San Francisco Has Dropped $1k This Year

#422

Post by aaronblohowiak »

jjeaff wrote: post #336
bfirsh wrote: post #88

Earlier quoted context omitted.

As a data point: I asked for 25% off my 1 bedroom rent (which seemed like roughly market rate). They said something along the lines of "we're not lowering any rents because we're struggling due to the economy". So, I left and they got nothing. I doubt they're going to rent it out again for a while.

This behavior is very common and just baffling to me. In many markets right now, there is just no way they are going to rent that out. The only explanation I have heard is that lenders allow a certain amount of vacancy increases in the terms without triggering a reevaluation of the property value. Whereas lowering the rent will more quickly trigger that new valuation. And the way many commercial loans are setup, they…

SFHs are assessed by looking at comparable properties because there isn’t a liquid market continually providing feedback of the current value of the asset. With rental property you get a pretty good signal on an ongoing basis - the rent! So investment real estate is based quite strongly on the Net Operating Income, and the value is the net operating income divided by the sale price which gives you what is called a capitalization rate (how much money you get coming in for how much you had to come up with to buy the place.) cap rate is impacted a bit by market and a bit by segment (upscale property vs housing for lower income folks) but it is mostly impacted by current interest rates. Cap rates can be like 4%, or where the sales price is like 25x NOI. So, at a 4% cap rate, differences in rent have a 25x impact on the value of the property (big expenses like property management costs tend to be proportional to rent, etc.)

So now that you know about how NOI is the thing that drives property value, some other practices make sense — “concessions” (free months of rent) are only sometimes valued as part of the rent roll, but usually ignored unless the property has a pattern of excessive turnover. This is why landlords are more likely to give you free months rent instead of lowering your rent!

Anyway, it’s all a game that serves to transfer wealth from workers to capital holders and our tax system incentivizes this in many ways. Used to be that people spent way less a portion of their income on housing, but the move to create an “ownership society” actually made it way more expensive relative to wages, to the benefit of land owners. This also explains a large part of the wealth gap between white people and Black people with redlining and refusal to loan for black neighborhoods, etc.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#423

Post by dschuler »

whimsicalism wrote: post #172
wilde wrote: post #35

Earlier quoted context omitted.

If you’re in CA, you can probably break the lease if you really want to. You might be able to negotiate a rent reduction at least to save you both some hassle. https://www.nolo.com/legal-encyclopedia/tenants-right-break-...

I can imagine the unit remaining empty for months and then re-renting for $600-$1000 less. I would be on the hook for the empty months as well as the difference between the current rent I'm paying and the rent the new tenant is paying. So, no, I can't really just "break the lease" and I can't imagine why they would reduce my rent.

How does it work with the eviction moratorium now? I mean, what would happen if you just stopped paying rent?

I suppose worst case the landlord would get a judgement for the rent, which they’d have a very hard time collecting on. Civil judgements don’t affect credit scores anymore.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#424

Post by epistasis »

fortran77 wrote: post #388
pound wrote: post #384

Earlier quoted context omitted.

not enough housing to meet demand means raising property values, which is beneficial for property owners without having to pay more taxes

I don't think every California home owner is some evil beast trying to keep others out. I support building more homes, and would love it if every single family detached home were automatically rezoned for two units on the parcel. But if it weren't for Prop 13, my home and my business would have been forced out by people moving in and paying too much money for homes next door to me. And "raising property values" only…

Prop 13 causers real estate values to rise much faster than they would have otherwise , by restricting the productive use of the land. It incentivizes land owners to not build and to not transfer land to someone who could make better use of it.

When it's a broad, general effect that covers an entire stateC that causes prices to rise much faster than they would have risen without Prop 13.

Prop 13 is one of the major causes of people "paying too much money," whatever that means. No purchaser wants to pay too much. The seller is the one setting the price when it is high, and Prop 13's incentives for speculation are what gives sellers so much market power to extort purchasers.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#425

Post by randompwd »

nostrademons wrote: post #308
Apocryphon wrote: post #267

Earlier quoted context omitted.

Right, I understand that property improvements aren’t considered in LVT, and are naturally incentivized through the application of the tax. I’m just speculating if specific development-adverse markets could use both LVT, and credits against LVT to really get the pro-development ball rolling. Based on the one prior attempt at LVT in the U.S., landowners don’t seem to understand its intent: https://www.washingtonexamin…

There's a pretty big risk of market distortions then. I could easily see landowners adding whatever "improvements" the tax credit incentivizes, regardless of whether it benefits the tenant or increases the potential rent charged, and then passing the cost along to the tenant. Also see a booming cottage industry of contractors & paper-pushers to get the tax credit. I do agree that an LVT has psychological issues when…

> Much like how the U.S. became the pre-eminent global power through an innovative politico-economic system + immigration friendly policies + near complete genocide of the native population

It's also invaded a crap-load of countries and defacto taken their natural resources And slavery.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#426

Post by epistasis »

fortran77 wrote: post #405
zapita wrote: post #403

Earlier quoted context omitted.

> But if it weren't for Prop 13, my home and my business would have been forced out by people moving in and paying too much money for homes next door to me. Prop 13 does not solve this problem. It merely shields historical homeowners from it, while amplifying it for everyone else. Many people and businesses were forced out by speculation because of prop 13, but you and a small group of people were exempted so you don…

How dare you say "I don't care." Who are you to speculate about what I think about?

People are forced out of their home all the time, without the gigantic windfall of money that a property sale entails.

Evictions happen all the time, and these poor folks do not get the windfall of a $1M investment paying out. They get the trouble of trying to find a place to rent with an eviction on their record, which means they will be paying higher rents with less ability to pay.

Nobody should be forced from their home, homeowner or renter. But in California we only privilege the already privileged with that sympathy.

Prop 13 has forced far more people out of their home than property taxes have forced people in NY State out of their home. And NY has high property taxes and lots of people. So does NJ.

The idea that Prop 13 protects people from being taxed out of their hugely inflating financial asset is somewhat preposterous on its face. It mostly protects large landholders, and gives a tiny tiny benefit to the people that we are concerned about.

Focusing on the ineffective application of protection to a tiny number of millionaire homeowners, while ignoring the wealth inequality that funnels money to the people with tens and hundreds of millions of property, is extremely short sighted. It's time to stop pretending that Prop 13 is about the minor side effect of protecting a homestead, and pay attention to its primary effects, which is to encourage financial speculation with land and to give away tons of tax subsidies to those with the most land wealth that are hoarding it the most from better uses.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#427

Post by gota »

lumost wrote: post #301
klipt wrote: post #295

Earlier quoted context omitted.

I think SF has already taken the hint that they can outsource their residents to Oakland. Residents strain the city budget via things like public schools. Businesses put money into the city budget via gross receipts taxes. SF wants the businesses but is very happy for residents to live elsewhere.

CT went this way as well, eventually the businesses look to follow residents - particularly younger residents who can't afford the inflated rent or down payments.

What is CT? Pardon my ignorance

Re: Average Rent in San Francisco Has Dropped $1k This Year

#428

Post by chub500 »

gota wrote: post #427
lumost wrote: post #301

Earlier quoted context omitted.

CT went this way as well, eventually the businesses look to follow residents - particularly younger residents who can't afford the inflated rent or down payments.

What is CT? Pardon my ignorance

Connecticut

Re: Average Rent in San Francisco Has Dropped $1k This Year

#429

Post by onecommentman »

gota wrote: post #427
lumost wrote: post #301

Earlier quoted context omitted.

CT went this way as well, eventually the businesses look to follow residents - particularly younger residents who can't afford the inflated rent or down payments.

What is CT? Pardon my ignorance

Connecticut (CT)

https://en.wikipedia.org/wiki/List_of_U.S._state_and_territo...

You can’t follow the game if you don’t have a program.

And it’s even an ANSI standard...

Re: Average Rent in San Francisco Has Dropped $1k This Year

#430

Post by 0xffff2 »

randomdata wrote: post #396
sofixa wrote: post #382

Earlier quoted context omitted.

> It seems the average Big Mac meal is $6 these days. It provides approximately 1,000 calories, and the average person needs approximately 2,000 per day, so we'll assume you'll need to order two. That puts the food costs at $12 per person Yeah, i assumed so. Eating Big Macs is... let's say suboptimal. If you eat only that, you'll probably have all sorts of health issues. When counting actual food, fresh and with vege…

> Around here, cheapest option for a decent actual meal is ~8-10/eur/person. Same here, but always coupled with a value of entertainment at that price point. You cannot directly compare the entertainment experience to your home kitchen, as already mentioned. You, at least, would have to include some of the cost of your living room, TV, Netflix account, etc. or whatever analogs of entertainment you have in your home.…

What exactly are you including in the cost of your kitchen? A cheap stove and refrigerator are about $500 each. Cabinets for the small but fully functional kitchen in my small bay area apartment could be had for as little as $1000 based on a quick look at Home Depot. Countertops can vary widely, but lets throw in another $2000. That could be enough for granite if you don't have too much counter space.

For quick and dirty estimates, it's reasonable to double your cost of materials to get a total job cost. Framing is going to be less than $1000 in lumber (probably a lot less) for an apartment kitchen and that's at today's historically rather high lumber prices. Electrical is going to be maybe $500 at most. I'm a lot less versed in plumbing so I can't estimate that off the top of my head, but lets say that it somehow comes out to as much as the framing and electrical combined. Adding all that up and doubling it brings us to $6000 in construction costs.

All in that's ~$10,000.

$2000 isn't realistic if you're counting all materials from the ground up, but $60,000 is a comical number. That might be the average cost of your typical McMansion kitchen with high end appliances, but it's not representative of what it's going to cost to build a kitchen in a small to medium sized rental apartment.

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