Building more houses is generally good too, but it's a bit of a cop-out to blame the whole situation on that. Totally independent of supply concerns, I would argue that it's not great that in so many areas the value of homes seems to be almost entirely divorced from the fact that people need homes to live in.
Imagine if a bunch of very wealthy people just decided to start collecting medicine, not to use as medicine, but to just collect and perhaps sell later at a higher price. Is that within their legal rights? Sure, it seems like it. Would producing more medicine be a good thing? Yeah, sure, more medicine is probably generally a good thing. But is it still really crappy that people's habits for collecting medicine are driving up the cost of medicine for people who want to take the darn medicine? Yeah, it's crappy.
The fact that this is very likely prevents most of the speculation in the first place.
The difference with real estate is that the owners get to determine production levels, via local zoning laws.
Sure, there is some natural scarcity: Land cannot be created, but in most cases artificial scarcity is the issue.
I'm part of a local YIMBY group, and show up to hearings to try and get housing built, write letters, etc...
I have never, ever seen 'investors' write in or speak at these things. It's all our neighbors who show up and scream about not building homes.
The patent system does this in medicine.
Hoarding medicine isn't a trend and even so, this market correction doesn't happen. Look at all the medicines with insanely high prices because there won't be any competition.
How come aspirin or penicillin isn't expensive? They are more commonly used, and so if the hoarding method works, it would've been even more profitable!
Maybe its inevitable and necessary to force more people into condensed housing, maybe the societal benefits really outweigh the tradeoffs.
and that's why single family homes should be more expensive, because it is better. People continue to bid it up, because they still believe that the price is worth and hasn't reached a ceiling yet.
In asian hubs like hong kong or shanghai, they've reached a certain ceiling on land, and so building up is now what most people could buy and so they do that. The cities in countries like canada, australia and the west coast of the US, it hasn't reached that point due to large available land mass, and people prefer commute (or WFH now!) over living densely.
Of course, regulation plays a part - i think there's unnecessarily large amount of red tape in making taller denser buildings, as well as a lobby of existing owners who don't want it near themselves.
There’s a lot that can be done to add autonomy and privacy to the condo living. And then more to make it cheaper and accessible. It’s mostly a technical problem.
I live in an apartment block and so does everybody else for miles around. Our building, like almost every other around here, tops out at seven storeys. It's very solidly constructed, so there's little to no noise from neighbours, not that they make much noise to begin with as they're a pretty considerate bunch.
The downside to this way of living is almost nonexistent, but the upside is massive. Instead of everybody having their own plot of land that's too small to do anything really interesting with, and which they have to maintain themselves, we have a communal garden. When that's not enough, there are no less than four parks within two minutes' walk.
Because this higher density of living is able to sustain more amenities, everything you could possibly ever need is, at most, a short bike ride away. And I do mean everything. Bars, restaurants, shops, medical facilities, swimming pools, a velodrome, a planetarium...
I've no need of a car because it's all on my doorstep. If I do need to travel, public transport's great.
You can keep your "autonomy", I'll be too busy reaping the benefits of living among other people to worry about that.
Neither of these things have been even remotely true in any apartment I've lived in the US, even ones billed "luxury". It's always been thin-walled garbage where I can hear every word of every conversation of my neighbors, who have typically felt that listening to music 24 hours a day and slamming down their boots while walking between rooms is the right thing to do.
I feel this is mostly a US problem.
In most of Europe, apartment blocks are solidly built, especially the older ones, even in Eastern Europe.
Now we just need to build condos that are appropriate for all stages of life -- not just young singlehood and coupledom.
Building up will not solve the "not enough SFH/townhomes" problem, but it will fix the homeownership problem. And it may help with the former, if there are enough current SFH/townhome owners who would prefer a really nice condo close to work/downtown/parks/amenities/etc.
But one issue there is that we currently build condos but don't build the public spaces that serve to supplement them and make them comfortable for, e.g., families with kids. As a result, they're full of a certain demographic, and less appealing to others, reinforcing the issue.
Can you share some ideas about what this would look like?
If we could only scale and therefore make this cheaper.
> we currently build condos but don't build the public spaces that serve to supplement them and make them comfortable for, e.g., families with kids.
you need
* several bedrooms
* some utility space (for things one would have otherwise done in the garage)
* nearby [safe] parks and playgrounds
* nearby recreation centers
* good schools
etc
I grew up in an apartment building that absolutely felt like a neighborhood in itself. There were at least 10 other kids in the 400-unit building my own age. In the local neighborhood (consisting of other apartment buildings) there were easily another 30 kids my age, any of whom I could see in a 5-10 minute walk. Few people owned cars (it was NYC after all!) and the area was quite safe traffic-wise.
I spent countless evenings outside walking or biking along promenades, or just hanging out in parks, playgrounds — all literally steps from my apartment building — and as I got older, in libraries, cafes, restaurants, shops, etc. The building I lived in also had a pool and multiple community “rooms” that were several thousand sqft large, which we reserved for birthday parties and other events.
It was fantastic. There were kids there because the spaces were designed to support families, and the “must have SFH with yard before having kids” attitude among the middle and upper-middle class is pretty weak in NYC, so my neighbors could be similarly-high SES because not all parents immediately flee apartment living for the suburbs.
Today, I live in a Bay Area inner suburb. There are, again, 10 kids my preschooler’s age in the local (couple blocks) neighborhood. But they can’t bike alone (or even walk alone, really) because drivers often hit 50mph and don’t look where they’re going. Each of our back yards — though we have one! — is tiny, much smaller than the community rooms I had growing up, so for any serious physical activity we have to get in the car to drive somewhere, contributing to the “traffic is a problem” problem.
The closest public park is a 4000-square-foot grass triangle in a quiet almost-cul-de-sac that takes 10 minutes to walk to and 30 seconds to walk across. There is a library 5 minutes’ walk away, and it is a saving grace.
If I could transplant the apartment building I grew up in to my local neighborhood, which is about 2 miles square — 100 million sqft — its 16000 residents could be housed in about 16 buildings, each of which would have a 25,000 sqft footprint, totaling 400,000 sqft and leaving 99.6 million square feet for fantastic parks, promenades, playgrounds, schools, trails, open space, basically any use you could imagine. Each apartment could be owned, 2000+ sqft, with private decks/patios/balconies and wonderful views.
If that were available in the Bay Area…we could build them at 2x the density described above and house the next 20 years of newcomers…
I have a single-family house with a garage, and things like woodworking, painting, or even having a 3-D printer are not necessarily things I want in my utility room or garage. They require special fittings or space levels not available when you're trying to fit around a car.
It would also provide a great central hub for people to meet, because projects are a natural thing to socialize about.
The degrowth movements garden variety neo-pastoralist misanthropy makes it blind to the fact that more humans (given a good system of governance and rules) is actually an amazing thing.
You can go out into the middle of nowhere in CA and find houses huddled together 2 feet from another behind a giant wall, like some kind of nazi concentration camp for houses. And the sadest part is that there’s tons of land in every direction you look and people are forced to commute vast distances.
Oh, well then, we'll just assign each person an acre, problem solved.
Which one do you want? Apparently you'll be fine with one -- maybe even two -- in the middle of nowhere, as your comment seems to assume that each has equal value, independent of either natural or social geography.
The "nobody wants to live where no jobs are/nobody wants to build where there's no employees" deadlock can be solved by ensuring new economic engines are deliberately sited in areas that needs a boost. Sorry, Amazon, HQ2 is going in Gary, Indiana.
Eliminating private land ownership would remove many of the worst NIMBY objections. How many people are really "we don't want higher density homes near us" and not "It MiGhT hUrT oUr ReSaLe VaLuE tO bE nEaR pOoRs?!" It might also make it easier to remove some of the worst planning blights-- dead malls and abandoned facilities.
A central planning dictate also makes it that much easier to get commercial/industrial development, housing, and transit all on one page. I'm picturing a proactive model almost like the Chinese "Ghost City" phenomenon, where you're cutting ribbons on subway stations in the middle of swamps today, knowing that Phase III-k of the development plan means in five years the station will be servicing 8,000 commuters per day.
That's not how the market works. That's not how patents work. That's not how medicine works. That's not how any of this works.
This is the sort of gospel/dogma that free market absolutists like to propagate, but plainly reality proves this wrong. Markets are a tool, but not a universally useful one.
You should also mention that this medicine rich people are collecting also has dozens of other alternative medicines with hundreds of thousands in volume because other cities exist.
Also you should mention that some of these rich people are not rich people at all, but working class people who's lived in a location for decades which has become a desirable location in recent years thanks to some other people who generated wealth in the area.
Also you forgot to bring up the local government ran by some of these rich people who are blocking any measure to increase the supply of the medicine in the area. This certainly can crash the entrenched medicine cartel in the city, but some of these cities are North Korean style de facto one party system where no other opposition may challenge the status quo.
Now you can dismiss these things as inherently less meaningful than, and therefore rightly subjected to, the economic desires of asset holders. That's a much more radical position than I think you're wanting to take here though. When you say or imply people facing unaffordable housing can just move somewhere else, this is a position you're endorsing.
The analogy doesn't have to cover every nuance of the situation to be valuable. A necessity of life has become a competitive investment vehicle, and the people most hurt by this are told that it is good and correct and they should accept it by wildly upending their lives for no personal benefit.
My perspective is that a necessity of life (land) has started bumping up against the limits of nature. Population has drastically increased, and for various reasons such as increased access to information, economic agglomeration, etc, certain areas of land are in far more demand than others relative to supply.
Allocating scarce resources (sufficient land to have a detached single family home and a driveway) in such a scenario will always lead to some people getting what they want, while others do not.
Some options are (not exclusive to these)
-letting certain classes of people have higher priority than others (such as California’s law that keeps property taxes artificially low for those who were there before others)
-letting the amount of money determine who gets to live where, due to increasing house prices and commensurate increases in property taxes.
-changing zoning laws so that areas are modified from low density to high density housing, increasing the supply. This one causes various knock on effects, hence it is fought against in popular places that have reached its limits under the existing scheme (such as Bay Area and SFH)
There are no options where no one has to sacrifice. The investment vehicle aspect of land is negligible and more of a consequence of the extreme variations in demand of land in different regions.
I think this is another all-too-convenient scapegoat, similar to "we just need more houses." I would again suggest that perhaps the problem really truly is that people are using houses as collectibles rather than as places to live.
https://www.redfin.com/news/?p=73975
All the data I see does not indicate that people are buying regular houses as collectibles in hot markets. There is simply that much demand and basically no supply, especially in western cities. I do not have hard data on how many of these sales are owner occupied or not, but from personal experience over the past 10+ years, none of these neighborhoods seem empty for part or all of the year.
Yep. Why should we tell people "cities are fungible, just go live somewhere else so we can buy all the collectible homes here" instead of "cities are fungible, just go buy collectible homes somewhere else so we can live here"?
This is the reason for things like California Prop 13. It gives a benefit to long-time locals to continue living in the same place. Which on the whole seems like a good thing. People can set down roots and become "locals" instead of having a city of ever-changing population who then don't really care so much about the area because they are transient and will be moving away soon.
But most housing threads on HN favor the idea that incoming outsiders should be able to efficiently displace locals as long as they have more money to do so, and thus oppose prop 13.
> A necessity of life has become a competitive investment vehicle, and the people most hurt by this are told that it is good and correct and they should accept it by wildly upending their lives for no personal benefit.
I agree also with your other comments that this view is fundamentally inhuman. So many people in this thread are responding with, “Don’t like it? Move!” To the extent that is a humane viewpoint it is either privileged or defeatist. Society is us. We have chosen social policy which turns the fundaments of life into investment strategies for the over-propertied. We can choose differently.
no we cannot, because it's not a choice. It's an effect. A different "choice" to have a desirable effect of your choosing is both hard, and can (and will, i bet) have undesirable consequences. A choice for example, could be to switch to a command economy instead, but i bet that would create housing projects that noone wants to live in.
When african nations import manufactured products from europe that money leaves the local community. This means african countries must export their resources to the countries they are selling to.
Alternatively they can move to europe to work there so they can manufacture products to export to africa. Except in europe they will get insulted that they are economic refugees and should get lost. As if europeans ren't running an economy that benefits from this arrangement.
This comes up a lot when people argue in favor reforming how real estate is taxed.
When real estate isn’t for sale, it’s “value” is synthetic.
I wouldn’t actually sell my house for less than 400% what similar homes are worth.
For some people that means the value is 400% that of similar homes.
Thankfully the real estate tax folks don’t see it that way.
if you value your house too high, you'd pay more tax than you'd need of course, but guarantee that it isn't going to be immediately bought up by the tax man. If you value it too low, you're risking a sale. So the ideal is to value it at market price - where the tax man will have no incentive to actually buy it out.
>
> if you value your house too high, you'd pay more tax than you'd need of course, but guarantee that it isn't going to be immediately bought up by the tax man. If you value it too low, you're risking a sale. So the ideal is to value it at market price - where the tax man will have no incentive to actually buy it out.
I use to think this too, but it looks too easily gamed, and over many iterations the taxman would be left selling a bunch of properties lower than the price they paid for it.
In effect, this would be passed off onto the taxpayers, so the net effect is going to be that the taxpayers are paying for the profits of private speculators who purchase from the taxman and sell or rent the property for a profit.
Say, I live next door to my child’s school, and an elderly parent I care for.
I might not sell for anything.
The “market price” has to include what people are willing to pay for the item, not just what they’re willing to sell for.
Imagine a homeowner who uses public transportation, sends their children to public schools, and and supplements their income with public assistance.
They need to create a price for their home. They live in an area with good public transit and good public schools. These public services figure heavily into the price of the house, pushing it up for tax purposes.
Imagine the same house being owned by someone who sends their kids to private schools and drives everywhere. The quality of public schools and transportation doesn’t affect the value of the house.
In practice, people who are poor are less mobile than people who are wealthy. This tax system favors people who are mobile (and don’t consume public services).
How important is it that you stay at your current residence? The more you make, the easier the move (moving costs money too).
Also, because public assistance doesn’t change with the value of the home, the larger the tax payment, the greater the fraction of the tax bill it is.
This sounds nice, but is ultimately a tax on people who aren’t mobile.
Additionally it kind of strains belief that people are buying homes, paying property tax, etc. just because they like collecting them the way a kid likes collecting pokemon cards. More likely they'd buy a home because they expect home prices to rise and they'll be able to sell the home for more in the future. It may be unintuitive, but if your market is not incredibly supply-constrained this is actually a good thing.
Here's why. Let's say there's an up-and-coming college town, and speculators think that in a few years the town will become trendy and many people will want to move there. If they're right, demand will go up and home prices will rise. That means you can buy a home now on the cheap and sell it in a couple years when houses are more expensive to make a profit. But of course, when you buy a house now, you're contributing to demand for houses, so you're making the price rise in the present in response to a change in demand you anticipate happening years from now. Since home prices are rising, it now becomes more profitable for people to build new homes. (Their costs haven't changed, but now they can sell the homes to speculators who are willing to pay a lot because they expect to sell the homes to the people who'll move in as the town becomes trendier.) So what you get is people building homes now in preparation for people wanting to move here years from now. Making homes available will cause home prices to go down, until the market is at equilibrium and homebuilders are no longer willing to build homes for the price that homebuyers are expected to be willing to pay.
So in theory it all works out quite nicely. In practice, people who own the homes hate this because they like that the home they bought for $200k in the 90s is worth $2M now, so the lobby to get local governments to ban people from building homes. If there were enough homes that everyone who wanted to live there could, the prices of housing would come crashing down and homeowners would lose the bag they worked so hard to get (not).
> Additionally it kind of strains belief that people are buying homes, paying property tax, etc. just because they like collecting them the way a kid likes collecting pokemon cards. More likely they'd buy a home because they expect home prices to rise and they'll be able to sell the home for more in the future.
That second sentence is, of course, precisely what I'm talking about. Although that is also the same motivation, at least in my experience, of a lot of Pokemon card collecting. When I was in middle school, you could buy a Charizard for $100, and it wasn't because you could win back that $100 by playing that Charizard in a tournament, and it wasn't because you got $100 of value admiring the aesthetics of the card. Also of note, those Charizards now sell for tens of thousands of dollars, and it's still not being of their value in competitive play or their aesthetic value.
When the very rich park wealth in real estate, it is precisely in the ares where prices are highest. Not much point in parking wealth in a cheap house in the midwest.
https://nypost.com/2021/08/05/nearly-half-of-luxury-units-em...
So even if 5 buildings out of 300 skyscrapers are at 50% occupancy on their own don’t matter much they still impact the market when combined with similar investments. Worse they prime the bubble by convincing more people to invest without putting them up for rent.
People love the "investors and billionaires are buying up the market" story because it suggests a convenient villain, when the truth is that the millions of ordinary Americans who oppose new housing in their neighborhoods are a much bigger factor. Of course, that's not as satisfying as blaming a Disney villain.
We've been under-building for decades. We have a massive shortfall of new units, far beyond the number of empty luxury apartments. Frankly, at this point I'd support a meaningless vacancy tax just so we could put this objection to bed and focus on things that matter.
https://www.cnbc.com/2021/12/09/new-york-city-rents-jump-22p...
One clear the example of the outsized impact is these buildings bought up air rights from multiple properties. So, they reduced the legally available space. When the city makes space for ~100,000 apartments and actually gets less than 1/10th that it’s a problem.
Another is the extreme cost of the associated tax breaks for affordable housing for minimal gain. The city set the tax break based on price while the number of affordable houses was based on the number of apartments. A seemingly obvious problem looking back, but still a problem for city residents.
See: https://www.millersamuel.com/files/2022/02/Feb22QNSrent-nyVA...
Another way of looking at 2% vacancy is over 20 years an apartment is vacant less than 5 months. People move, die, go to prison etc, so there is some inherent friction represented in a 98% occupancy rate. Dropping to 1% long term takes more than just higher demand it would require increases in transaction efficiency.
And a couple of tall buildings in manhattan isn't gonna be making any difference. The difference would come from building denser everywhere.
Of the NYC housing stock, close to 63% are rentals. Of the rentals, more than half are regulated (stabilized mostly). Of the owned homes, you have houses, condos and co-ops. Co-ops predominate in Manhattan (where you'd expect the rich to want to live), but condos only make up the smallest fraction of the for-sale home types (115K according to 2017 statistics).
Of the condos, if you're an international rich you want low carry and maintenance costs. So typically they buy the "tax abated" new luxury condos, and sure they accept to eat the maintenance costs. But if they want to eat the taxes, those can be ginormous, a quick streeteasy search will confirm.
NYC is just a pain to do that in unless you want to be there part of the time. Paris is like that - you buy for your trips every few months to go shopping, or whatever rich people do.
London is better, the carry costs are lower, being instead of property taxes they rely on council taxes, which first of all are WAY lower than anything property tax in the U.S. (not the least of which NY State), but secondly they capture more tax from the exchange (stamp duty).
As always it's fine to explore injustice and sources of inequality, but we have to be nuanced and analytical before we repeat the slogans.
P.S. - the link above is from 2021. Yes, in summer of 2021 the luxury units were empty because NYC was a shitty place to live in 2021, not the least of which because of how much had closed up, how much was still not opening, and how unpleasant the sidewalks were. So if you're a luxury rich person, you're going to spend the summer where there are mountains or beaches.
Sources: https://rentguidelinesboard.cityofnewyork.us/wp-content/uplo...
> the value of homes seems to be almost entirely divorced from the fact that people need homes to live in.
The value of homes is so high precisely because people need somewhere to live, desperately. The price is not disconnected from need, it's entirely because of need.
And it's not that wealthy people are buying and hoarding homes. There's not some magic supply of 20-30% vacant unoccupied housing, there's desperately low vacancies, absolutely criminally low amounts of vacancies.
But refusing to acknowledge the panacea of building new homes does serve the purpose of wealthy people who currently own home. Because they are not hoarding homes, they are hoarding land. They are hoarding access to the ability to build more homes, the homes that are desperately needed. And in high demand areas, every person that goes and opposes new homes, that opposes upzoning, is directly responsible for displacing however many people those new homes would have built.
There is only one solution to high home prices, and that's building more. (Well, we could also institute strict border controls and price controls and completely destroy freedom of movement and access to jobs.)
Downplaying the primacy and necessity of building enough homes for people that want to live in an area only fuels higher prices, more hoarding of land, and more exclusion. There's zero upside to saying "we don't need to build" except to enable further financialization of housing and concentration of wealth in homeowners.
This is exactly what buy to let landlords are doing.
The real problem isn't a problem of vacant units, it's a problem of unbuilt units.
When you say "This results in a transient population," I'm not sure exactly what you mean by "this" but perhaps it's renting at all? If so, the only reason renting leads to "transient" population is the rising rents and displacement caused by lack of building.
> There is no lack of building
Putting something in italics doesn't make it true. In the vast majority of high demand areas, there's a smal smattering of new construction, far far less than comes close to meeting population demand, and locals freak out about the construction and vastly overestimate the amount. If your particular location is building 3%-5% more units per year, great, but most of the country is not and that means that every other place that's under building is displacing it's residents to where you live, easily swamping whatever you call "more than natural population growth"
The problem in the market is that buying real estate is the economically rational thing to do, because you get great returns on that capital, just like owning some amount of stock.
The problem is primarily the structure of the market, and not the actions of individuals within it. We need a land value tax, and we need to make it easy to build new homes.
This is one of those things that really just confuses me. It's like no one could agree on happy medium between "landlord can eject you whenever they want for whatever reason" and "no one can make you leave, ever, for any reason".
And to whoever downvoted you, there are some places in the bay that are demanding 6 months rent up front in order to move in because they can't do much if you stop paying rent.
I agree there are places in the world that are so biased against landlords that they don't even try to get this problem correct but I think for many cases the problem isn't bad laws but rather the delays to being able to execute reasonable actions to limit damages. I'm not sure what a good solution is for many cases because I think it would take fairly extreme evidence to kick someone out without their day in court if they decided to fight it. I do agree with landlords it should be easier to kick someone out if they stop paying rent and that fact is adequately documented. I mean stop paying rent in the sense of an appropriate pattern not a single late payment.
In SF, there have been six-figure buyouts to remove tenants from rent-controlled properties.
Call the buyout $100k -- best case scenario, it's taxed as capital gains so you'd take home $85k. At $3k/month increase in rent, you'd be looking at a little over two years before you're below water.
Housing in California is broken in 1,000 different ways but the tenant buyouts seem to be pretty minor in the grand scheme of things.
It was disgusting. Glass and other obstructions flushed down the pipes, literal feces on the walls, holes everywhere, missing parts of the ceiling, fixtures ripped out, etc.
Move-in process was essentially move all our stuff to a storage area, continue renting until we'd made the place no longer a biohazard, then we moved in slowly as we fixed up rooms.
But hey, a few hours of work a day for a year essentially saved a year of a FAANG salary on the place.
cook lots of greasy ass food and drain that oil straight down the sink. toss condoms, paper towels, hell, ANYTHING, down the toilet, since it's basically a trash dispenser, right?
once you're done having the cats pee their way through the foundation (cat urine DESTROYS houses) and destroying the plumbing, steal some copper on your way out with some friends.
oh, and this is a pre-war establishment where everything is absolutely not up to code.
Ultimately this is creating a class of people who can't rent. Their track record is poor - or if not them specifically they are in a group with a poor track record.
Not surprisingly this mostly affects the poorest and most vulnerable - those with the least job security - those with health/work issues and so on.
This overlaps with the group least likely to actually be able to purchase a home to begin with.
This issue will not be solved with free-market economics. Either one accepts the need for some layer of free social housing, or one accepts that a decent chunk of society will be homeless.
I'm aware of specific stories where bad-faith tenants have made enforcement difficult, but I'm also aware of enough specific stories from the other side where tenants -- even some who have committed no violations -- have found themselves without housing to know that as a total generalization, these statements are false.
And you don't get to a resident-sourced homelessness crisis if landlords are truly powerless (and sure, coastal homelessness numbers are driven by bus-ticket policies elsewhere, but it's not the whole story).
AFAICT there is in fact a medium between "landlord can eject you whenever they want for whatever reason" and "no one can make you leave, ever, for any reason". Whether or not it's a happy one probably depends more on court outcomes than any apparent shortcomings in statutes, but if anyone has specific complaints about the law, perhaps they should point them out.
I'm aware of hundreds of stories about homicidal cardiologists, but I wouldn't try to make a judgement about cardiologists based on that because I have no reason to think the stories I'm exposed are a representative sample of cardiologists. In your case, tenants who have committed no violations finding themselves evicted make a much more sympathetic story than landlords who want to evict an annoying tenant, so I'd expect the former to be very overrepresented in what you hear.
How would we find out what the systemic pattern is? Maybe we'd compile relevant court records and outcomes. Maybe we'd collect information from tax filings.
Or maybe we'd make bare assertions on HN.
Being a landlord is a hard way at making money.
No place in the US actually has the latter unless you've been letting them squat for half a decade or something, the issue is court delays and landlord's wanting to make their lot out to be worse than it is.
I think most landlords are pro tenant until they find someone who knows how to work the system. It costs them so much that they are skiddish to all renters.
It seems like it'd be obvious, but landlords don't actually produce land or provide housing. They roll in and take housing using their superior resources, then charge rent to access it.
In an ideal market, every renter would have the option of being a landlord just like every car lessor has the option of being a car owner. We just need enough housing supply to make investing in housing a risky venture instead of a government-guaranteed winner
https://www.worksinprogress.co/issue/the-housing-theory-of-e...
of course they do - they provide it by being part of the capital flow, which starts at construction. It might not be the same person, but it's a chain of financing that lead to the landlord purchasing the property.
Superior resources is just another name for capital. And you need capital to fund the construction. The landlord is just the last chain on this funding, and without them, the builders would not build (for who would be buying?).
Shelter is a cost. Everybody pays it, whether you own your own building or renting.
> every renter would have the option of being a landlord
they do if they had the capital. No one is stopping anyone from making a bid for a property - unlike back in the old days where people who were slaves were not entitled to own property as a right. The fact that some people have more capital and is willing to bid higher is how the current free market system works to allocate capital.
I bought a few shares of Pfizer, does that make me a healthcare provider?
I'm just trying to correct the mistaken view that providing capital is tantamount to doing nothing.
People are willing to take much more extreme action around housing (and food, medicine, ) than they are most other goods. They're also less likely to agree there is moral justification in profiting from these things. So even when entering these transactions (they must, after all), they may not respect the other party's profit goals.
_I_ take care of the house in this situation. The landlord doesn't shovel snow or mow grass, I do.
They do carry some of the burden specifically in taxes and liability, yes I know. I also know the maintenance responsibilities aren't inherently and legally mine, and so I can be blamed for entering a contract that requires me to do this.
Anyway though it even more shows that landlords don't inherently do anything. If they stopped maintaining it, the tenant is the one who has to live in the shitty house and will wind up fixing it.
What the landlord does is control access to housing. I don't respect or value that and you're not going to change my mind about it today.
Probably not worth asking the question in the first place, then.
There are landlords who absolutely take care of all of the maintenance - and of course there are landlords who are absentee landlords as well.
To say a landlord inherently doesn't do anything is the most ridiculous thing I've read today. Thanks for the laugh. As for your situation, stop doing work the landlord should be doing.
I'm sorry, but I am not sociopathic enough to profit from other people misfortune (not being able to to buy a roof over their heads). Not everything is about making as much money as you can squeeze from other people.
I also disagree with the silly assertion that landlords are sociopaths would you rather people be homeless? If someone is unable to afford to buy a house what should they do?
Also - are business owners sociopaths? Doctors? Farmers? Medical device makers?
I have seen some articles that it starts happening there too. For example buying houses in Detroit, through web of shell firms and sitting on them like some kind of slumlord dragon.
>I also disagree with the silly assertion that landlords are sociopaths would you rather people be homeless? If someone is unable to afford to buy a house what should they do?
I'm sorry, if you are using your economical advantage to outbid people in house market and then propose this people a rent that is higher than mortage on same house? With bonus points for squeezing them on rent so they can't save money to buy their own house(with or without mortage). Then use all that money to buy even more houses? So even more people can't afford them? Yes that a sociopathic behavior. Also word slumlord exists for a reason.
>Also - are business owners sociopaths? Doctors? Farmers? Medical device makers? Are you trying to make argument for me?
Because under capitalism only function of business is to make money for shareholders(aka. owners, this include companies not publicly traded). It's as sociopathic as it can be. If your only goal is to make more money, you are not a good person. There are owners that don't do that, but in the end they will have more disadvantages when competing with ones that do. It involves breaking the law/shady behavior if you think you can get away with that. Leaving money on the table is a sure way to get yourself a competitor that will take it and use it against you.
Farmers: there are decent ones, but if they want to squeez as much money they can from animals/crops they have, they will do some horrific stuff. Just ask yourself why there are laws popping all over the US that make it illegal to film whats going on farms(including factory ones)
Doctors: there are decent ones, as always. But there are doctors that will just come by during medical procedures in, in-network hospitals as out of the network doctor and then slam patient with horrendous bill, just for being there(or helping in some small way). Shilling to pharma companies by prescribing/overprescribing their drugs? To have a fun trip to Hawaii/other perks? Dr. Wakefield, crooks that sell bleach as cure all drug, other scam artist in white gowns? Selling dewormer as a cure for anything but worms? As I said before there are decent doctors, but also a bad ones. It's only a problem if we allow them to do this stuff and don't take any actions to stop them.
Medical device makers: Have you read anything about EpiPen? P-value hacking? Pushing your do nothing failed drug as hope for sick people through FDA/etc.? This entities are businesses, their goal is to make money. Accidentally they can save some people, but it's not their goal. It's money. I have wrote some words about it earlier.
So sociopathy isn't who you are, it's what you do.
I'm not saying I'm a good person, I'm definitely not, but even I sometimes raise an eyebrow seeing things some people do.
Yes, that's right, they are legally the landlord's. And if they stopped maintaining it, they are breaking the law, and you can sue them. If, instead, you choose to live with it, or deal with it yourself and pay for everything, then that's a horrible mistake.
It's fine for that comment to make you see red, but it should be the slumlord you are angry at, not the guy who pointed out that you're being a doormat.
Landlords are one option for people who cannot afford to buy a home. Some of them are bad, some are good. They offer a service for a price, and if the price is too high or the service is too poor, then they are taking advantage. Plenty of them aren't like that. Your anger seems a little irrational.
I've rented places where that was my responsibility, enumerated in the lease. Also taking out the trash, keeping porches and exterior areas clean, etc.
These are common expectations when you're renting a full single-family house. I've also seen arrangements where a single tenant of a multi-unit property will accept grass & snow responsibilities in exchange for reduced rent.
I understand that you don't want those jobs though. If they are not in your lease, you are not required to perform them. (Don't take legal advice from me, but that's true everywhere I've lived). You might have trouble finding a SFH lease that doesn't include them, but multi-unit buildings will be easier.
The law will require that grass mowing and snow removal happens. The property owner will be fined if they do not happen. These services cost money, so if the tenant is unable or unwilling to do them as part of the lease contract, the owner will purchase these services and increase the rent correspondingly.
As someone who's moved around a lot (to London, then to Zürich) I definitely appreciate being able to rent, and hence landowners. Without them, I'd have to live 2-3 year homeless until I saved enough for a downpayment, then be saddled with 30 year monthly commitment (i.e. mortgage) and unable to move anywhere else.
Ofc, it might be better if everyone build their own houses like some slums around the world.
Yes they absolutely do. Sometimes quite a lot, and often invisibly to tenants.
But other landlords suck, yes definitely. Just like some business owners neglect their customers, and some parents neglect their children.
The problem is that the RE market is so distorted right now that it's difficult to select a new equivalent housing provider at a reasonable price. This is also what enables the bad landlords in the first place.
The blame for that situation is very well-distributed. The best response as a buyer might be to seek out other markets.
There isn't any reason for it to be adversarial, it's certainly not inherently so. Only if one or both sides want to make it adversarial.
It is supposed to be a win-win scenario. Some people prefer to rent instead of buying, so they need a supply of rentals and the owner needs someone to live there so it doesn't sit empty costing them money.
Fortunately I've never had one of the adversarial landlords. I paid them on time and took good care of the property and in exchange they have been super flexible and let me do whatever I want. That's a win-win.
> There isn't any reason for it to be adversarial, it's certainly not inherently so. Only if one or both sides want to make it adversarial.
Landlords compete with their potential tenants for houses to buy. When landlord driven price increase, it prices out people from buying a home/flat, but they still need a roof over their heads. So they rent. This gives landlords cash needed to buy more houses/flats. This also keep rents up as landlords pay more for buildings. So tenants are less likely to accumulate cash for loans/something else. From small owners to big corporations it is a vicious cycle.
The landlord also takes on risk and responsibility here. Like any business, if they do a shitty job they go broke. If they do a good job, they make bank and expand their business.
> No place in the US actually has the latter
Not technically, no. But there are areas (e.g. San Francisco) where getting a non-paying tenant out is close enough to impossible that it might as well be.
You absolutely can evict people in SF, unless you are discussing the recent eviction moratorium, which is not ongoing.
So a tenant might stop paying rent, a few months later you get an eviction hearing, but then the tenant pays the rent this month and promises to pay the back rent. Your eviction has just been denied.
Tenant falls back on rent again, but made a good faith effort to pay some of the back rent. Eviction denied.
Finally, tenant stops paying entirely and doesn't respond to you. You stand a pretty good chance of getting an eviction then.
Meanwhile, over the past 12 months the tenant made 2 full rent payments and a couple thousand on the $18,000 in back rent owed. They get evicted and you get to clean up the mess.
So yes, it's not impossible to evict a tenant, but it's really damn hard (unless it's for something like violence or failure to pay and no response when rent is demanded).
You're saying that it's totally fine for a renter to pay like one month out of every six months and keep doing that forever, just enough to defer evictions each time?
> The risk of being a rentier should be higher than the risk of an index tracker.
Risk and return should roughly correlate, or people will not do it. There is already very little return in renting out a house, so the risk needs to be fairly low, if society cares to have rental properties available.
> change the risk profile of being a landlord by increasing tenants' rights
What would you expect to happen as a result?
If the risk is too high to compared to the return, these rental units are simply removed from the market. Are you convinced that less available units make renters better off?
Yes. We'll need an LVT too. Adjust the market so selling is the rational choice, not hoarding.
Markets are just tools, and right now the market for property isn't serving the needs of society. So we stick our collective thumb on the scales until it does.
I don't understand. Why aren't landlords able to do this? Isn't it seen as immoral to steal property from an owner?
Well, for one, the government should enforce contract neutrally - so if you sign a contract leasing your property, you can't unilaterally break this without cause.
Second, we as a society have an interest in giving people time to move their stuff out and find a new place to live.
I guess I see your point. I tend to side a bit harder with the landlords, but I don't want people tossed out on the streets without any sort of warning either.
I expect that that hardly ever happens. Landlords aren't in the business to make life unnecessarily bad for renters, they're there to make money.
A tenant who stayed in the same place for 3 years, always pays on time and never damages the property is preferably to an unknown. Landlords know that starting an eviction can cost them up to a year of income, plus there is always the risk that the new tenant is going to be even costlier.
Why on earth would a landlord roll the dice on someone new? My guess is that many of those sob stories you are hearing from tenants are their side of the story.
They aren't going to tell you that the miss rent sometimes (and they'd have to miss a lot of months before a landlord will start the eviction process).
They aren't going to tell you that the landlord had to make substantial repairs to damages that they caused.
They aren't going to tell you that they sublet to "their cousins", and have 4 people to a room in a 3 room house.
When you listen to a landlord's side of the eviction story, it always comes down to money: "that house is my income and I wasn't getting it anymore".
No landlord is cutting off their income stream for several months just because they want to throw tenants onto the street.
Your take is naive. Historically there was a lot of money to be made being a "slum lord" and renting in poorer communities where people have bad credit so can't get mortgages , there's a reason the term exists.
Oh really? What is my "take"?
> Historically there was a lot of money to be made being a "slum lord" and renting in poorer communities where people have bad credit so can't get mortgages , there's a reason the term exists.
Yeah, but that's not under discussion.
The point I made was that because evictions are so expensive (wiping out years of profit) and long for landlords, they are only ever a last resort.
When you hear right now, as in today, under current laws, sob stories from people who've been evicted successfully, it's highly probable that they're leaving out the actual reason that the landlord just wiped out up to a year of profit just to get them out the door.
No one is wiping out years of income and going into the red just because they want to be mean.
I guess you wrote something intended to have nothing to do with that. While I see that wasn't your intent in context I read you as saying tenant protections don't matter.
> they'd have to miss a lot of months before a landlord will start the eviction process
And you replied with:
> Doesn't matter if they have missed rent, they still need 30 days notice.
I can't tell if you are attempting to disagree with that statement of mine or not.
In a tenant protection environment, the tenant has the option to cancel when the lease ends, but the landlord does not. Regardless of where you are in the contract cycle, the landlord's only way to end the contract is through an eviction, and he will have to prove in court that the situation meets one of the lawful bases for eviction.
Unless we're talking about some rent controlled context, where in the US is this law?
https://sfrb.org/article/summary-ab-1482-california-tenant-p...
This is both rent control and eviction protection. You cant be evicted without “just cause” - all leases automatically roll over to "month to month".
Any multi-family older than 15 years falls under rent control and eviction control. Considering how little housing is built in CA, that's a huge number of housing units.
When it comes to single family homes, you are correct that they are eligible to be exempt if they aren't owned by a corporation. However, landlords had to give notice back in 2020 to current tenants for that property to be exempt. Notice can't be retro-active, so a wide swath of single family homes that were rented at the time are under rent and eviction control now.
Of course if the tenant leaves, there is an opportunity for the property to be exempt again.
That said, if you don't think the screws will slowly be tightened on AB1482, you're out of your mind. Just like in the major cities they'll be a bunch of "updates" to the law to the point San Francisco style rent control is state wide.
Nope, only if it is owned by a corporation. AB1482 exemption is standard in leases.
You have to keep in mind the vast majority of tenancies are in good faith.
Having grown up in rentals, and having had close family member kicked out of a rental with something like 1 weeks notice, I am very conflicted over the issue. Thank you for not responding in kind to the way my question was worded.
Perhaps there needs to be a higher tax rate for vacant property that is not a primary residence.
They also never make any distinction between letting a basement or a room in a home, a private landlord letting a detached home, and a corporate landlord letting hundreds of units.
My (female) friend HAD TO MOVE OUT of the house she was renting, the landlord required she still pay rent on the lease. "self-help" (changing locks) was totally out.
All this would have been fine I think if she could have gone to court in a week or two (the person literally hadn't paid anyone anything).
Instead it was 18 months to the FIRST court date, plenty of drama between A and B, and at that court date it was clear it was going to take a LONG time longer (in fairness COVID came into picture but still).
It turned out of course this person had done this repeatedly. In my friends case the landlord just demanded she keep on paying rent and so was no help on eviction. So she was paying rent on a new place, paying rent on the old place AND paying legal bills vs a tenant getting free community legal help and who was an absolute expert in the rules.
Luckily for her for some reason tenant DID want to move eventually, and they basically arranged a settlement. She paid landlord for some damages, she paid tenant a cash for keys amount (substantial) and was allowed to go on with her life.
You could only afford this on a bay area tech level salary. For normal landlords and people this is insane.
When someone says the eviction has to be "for" a reason, and a court has to review that reason and approve it, in the bay area that easily 1-2 years if someone wants to stretch it out.
Did she even bother to draft a contract with the subletter? Or was this all just, "sure, stranger, move right on in to the property for which I am legally obligated? I'm sure this will all work out fine."
A legal contract is only as strong as the incentives to litigate it. Doesn't seem likely a contract would've helped, it may even have existed.
Yes, landlord reasonably checked out. They agreed on terms in terms of the monthly amount, utilities etc. New roommate gave some reason to want to get going on getting their stuff moved in or measuring things or something, she gave them a copy of the key for that.
That's all it took.
Regardless, tough lesson to learn on not handing out a key to someone without a contract. I mean, that's a level of trust that I don't even have with my friends, much less someone I'm potentially going to room with. No contract, no keys.
I had a feeling there was more to the story. There probably still is, but I'm satisfied now on how this managed to "just happen". I still don't understand how, after the restraining order, this person then claimed legal residence in order to get your friend removed from her legal residence. I also don't understand why this wasn't immediately a phone call to the police to get this person removed from the property.
Renters vote. Prospective renters don't vote, because they don't live there.
Landlords vote too, but there aren't enough of them to counteract the renters.
The middle ground is to investigate the situation and establish facts. And do it quickly.
That costs money, and poor tenants can’t afford it.
So many courts adopt the position of believing one side over the other.
This isn’t limited to liars … it applies to all bad faith actors. For example, in parts of the Midwest, it’s really hard to evict someone in winter.
So bad faith tenants will sign a lease in September, pay for a month or two, then stop. Can’t be evicted until spring.
And by “can’t be evicted” I mean can’t begin eviction proceedings. If the proceedings can be stretched out (“I’m in the hospital and can’t appear in court”) you can get to the next winter.
No, they are watching their assets shoot up in value every day without any operational burden.
> and implying that they obviously don’t know how to operate in this market
When did I say that? In fact what they are doing the most logical thing.
> No, they are watching their assets shoot up in value every day without any operational burden.
It's not either/or. They might be watching the property value go up every year, but they are simultaneously throwing money away by leaving it empty. They could have been profiting from both sources but chose to profit only from one.
(Often rationally, since a bad tenant can destroy the property and never pay, but still.)
I always assumed their financial calculus was such that the appreciation alone, on an empty home, was a better prospect to them than what they could've gotten in rent in those earlier years (weighted against upkeep/maintenance vs. leaving the place empty and coming by every 6 weeks to inspect the place -- which is what they were doing). Now that these homes are renting out for nearly 2x the mortgage price they have a tenant. I'm unsurprised to hear that it's commonplace. It's just... upsetting.
I personally know a case of a misbehaving tenant not paying rent beyond the first two months pre-payment, submitted a fraudulent check for the first actual payment, had neighbor complaints endlessly with repeat HoA fines (fines given to owner, of course) — and 1.5 years to evict..
It also turned out he had started subletting it out for the same rent that he himself wasn’t paying.
That kind of thing can get you into a deep hole pretty quickly, and there’s not even much filtering you can do ahead of time, even with third party verification
Law of unintended consequences.
Make it almost so expensive to evict that an eviction can wipe away years of profit, and landlords will rather have the place empty while it appreciates.
Interestingly, she is very YIMBY and liberal, and even has a PhD in urban planning. But no one wants a forever tenant!
Everyone wants to call themselves a liberal or progressive nowadays, it's bizarre. These things are about actions, not self-assigned labels.
A duplex by definition is a building with two separate dwelling units.
> Yes. The first-in-time requirement applies to duplexes and triplexes even if the owner resides in one of the units. The non-owner occupied units are considered separate dwellings, and therefore are subject to the Seattle Open Housing Ordinance, which includes the first-in-time provisions.
The other two points where exceptions exists are for accessory dwelling units and (as I stated previously) when the owner lives in the same spaces being rented out, see http://www.seattle.gov/documents/Departments/CivilRights/Fai...
Now if the lady in question was renting out the basement, that might count as an accessory dwelling unit, and she would be exempt under Seattle rules (but this is in SF, so the rules would be different).
My guess is that as long as she doesn't advertise the unit (in the sense that she put it up for application), she can simply mention its availability to a small network that conveys it by word of mouth. It is impossible to legislate that kind of discrimination, there are tons of units that don't officially go on the market (via advertising on zillow, for example) but still get rented out.
As a former lawyer, I realize it's possible to make the argument, but it's probably clear from the legislative history of the law that it's meant to protect people who are on visas, not people who aren't.
Also, she would probably say that her rule is that she only rents to people who have an extremely compelling reason to leave after 1-2 years. Compelling reasons include time-limited positions (postdocs) or visa restrictions.
Renting only to international university affiliates on particular kinds of visas is directly discrimination on the basis of all of citizenship, national origin, immigration status, and source of income, and might also constitute disparate impact discrimination (which California FEHA also covers as well as direct discrimination) on other protected grounds if the direct discrimination wasn't enough.
But ongoing intent to break certain categories of law will also mean that certain political labels are incorrect.
Thats just the scam the corporate left likes to play. They love to be super "progressive" while actually performing nothing progressive other than performance art.
It costs nothing to call yourself "progressive". Hell I bet Trump has probably called himself "progressive" ha ha.
Like you said, its actions that matter. If you look at that, essentially the elected progressives in this country trend towards 0.
This thing does not exist.
Do you mean “liberal” the way progressives use it (i.e., center-right pro-corporate capitalist) or “liberal” the way conservatives use it (i.e., left of the Republican Party, with more liberal = more left)?
Why? Because she is retiring and an empty building will sell for several hundred thousand more than one with tenants - giving up $300k in rent over a few years is an easy trade off when she can sell the whole building for $600k more.
I'm in this situation right now. The only way I'll rent it out is if I personally know the tenant and their personal character. Otherwise, I'd rather leave the property empty. I didn't buy it as a rental, rather I paid off my primary residence and then had to move, so just kept it. I don't want to go outside the law, but that would be my only option as a landlord if someone tried to abuse me/my property, since the law offers me no meaningful protection. To avoid that liability, I simply don't rent.
Selling might trigger a very large tax liability, depending on original cost vs. current price. When that is the case, it's better to keep it in case you might want to return to the area in the future.
lies, damn lies, and landlord lies..
With regards to your example, if you’re rich enough to be able to afford leaving a property you own empty, then I have little sympathy. It seems like their cities and states should introduce a sizeable vacancy tax. Or, as they did in Amsterdam in the 1980ies, tolerate squatting. And yes, maybe see if there’s something that can be done about backlogs in eviction court, but the baseline for me is that it should never be feasible for an owner to leave their house empty.
What? Where is that? It sounds insane and extreme overreach. How can somebody regulate with whom consenting adults choose to live?
Usually you need to get a special license, have home inspections annually, pay various fees, etc. if you want to do so.
The entire aim seems to be to make running such a house not illegal, but very difficult and very expensive.
Besides, such specificity is usually drawn from building code best practices, which advocate for standardization. Which means that manufacturers don't bother creating radiators with less than six heat settings.
Just searching "occupancy limits city" popped up the limits for Boulder, CO: https://bouldercolorado.gov/occupancy-limits
A problem as defined by your nosiest, most uptight, or most xenophobic neighbor.
I'd like for people expressing these political preferences to not be allowed to live in my neighbourhood either, but unlike you, I also recognize that you have as much right to live there as those 8 college students.
If foreigners could vote in San Francisco, the majority of which are renters, it would overwhelmingly crush this position.
But if they did, they would probably come here and reply that they don't want 8 drunken college bros constantly partying next to their house either.
Personal I live in a SFH, and I have a family. Even though I don't want 8 drunken bros living next to me, they have as much right to exist as my rather loud and surely annoying toddler has.
Why do you understand? Why would you care how many people live next door?
There are potential negatives, sure. Like noise or making a mess outside. But those are already covered by other ordinances, so just enforce those.
As a homeowner with a family, I wouldn't care if there are 50 people stuffed living in the house next door. As long as they're quiet and don't make a mess, it's none of my business.
3 college students could just about as easily be bad neighbors as 8.
Unless the idea is that 3 students would be too poor to live in that neighborhood, in which case a rule like that is even worse than I thought.
I’ve seen houses where every room (including the living room) is occupied by a foreign student and the ‘landlord’ is running a slum rooming house. Thats what you’re not supposed to be able to do without getting approval. It impacts you negatively to avoid impacting your neighbours without consulting with them.
It sounds like you're annoyed that you can't turn a profit on your 3 bedrooms and the housing problem is really a tangential concern.
Not at all! Look into what it would take to lease them out to a self-storage facility. :-P
It's often bemoaned that personal cars are a waste of money and space: they sit idle most of the time, we have to build parking lots to accommodate them and that takes space. It would be so much better if we could just hire cars on demand! But this doesn't scale because the demand is not spread out during the day -- absent carpooling, you still need one car per person twice a day, meaning the supposed savings don't exist.
The same could be said for housing. If I'm at work all day, then my house is sitting idle (it's not housing anyone) and it takes up space. Why not let someone live in my house while I'm at work? This also doesn't scale but for a different reason: we all work during the day (excluding night-shift workers) so at night we still need one house per person (ignoring families, stretching the metaphor a bit).
Now add "vacation homes" into the mix, now you're looking at ~20% of housing (calculated from empirical analysis) in any vacation hot-spots being rental properties. This means that 20% of the existing housing that could be available for permanent residents is missing.
Saying "just build more housing" is just not realistic. 20% more housing is a ludicrous amount of housing!
Hotels, on the whole, are much more economical in space utilization because people who are going on vacation do not vacation to _visit a home_. They go to do things in the place they are visiting and are thus _not at home_.
Very rare for my neighbour to be using her car at the same time I use my car. Not every car driver commutes 5 days a week 9-5.
I work from home, have done for years, my neighbour is retired.
I guarantee in my village there will be at least 10 unused cars at any point during the year, probably nearer 50. There certainly aren't that many empty houses
For the second category usually it is the beach, but sometimes in the mountains or other area. We tend to get 10-15 members of our extended family and friends and the activities often include making food communally, playing games, moving between the house and walking distance activity like the shore, even napping. The house very much gets used and isn't just a place to sleep.
We can't have housing be both affordable and a good long-term investment. We need to pick. And given increasing prices and how 65% of Americans are howmeowners, I think we already did.
In vacation towns, the issue is that tourists are flooding out of hotels, and into livable dwellings.
Our hotel vacancy rates are rising just as fast as our home prices.
Perhaps the solution is tearing down hotels and building high-rise apartments in their stead, but it seems a bit wasteful compared to the alternative (regulating and taxing Airbnbs to nudge tourists back into the hotels designed for them).
Given the same nightly price, who would choose a minimal pared-down hotel room over an entire furnished condominium?
I'm really trying to think of reasons why a PE market maker that just bought a sub-division would want to build more and depress their future rents (unless the area has massive population growth).
Jesus, man, slow down. It's a little early to start suggesting cannibalism as a solution to the housing crisis.
So the undersupply story is a myth. There has been a recent pull forward in demand that ate through all active listings though.
https://fred.stlouisfed.org/series/TTLHH
https://fred.stlouisfed.org/series/ETOTALUSQ176N
https://fred.stlouisfed.org/series/UNDCONTSA
Homes actively under construction is about to hit an all time high, higher than the 70s peak
Plus consider demographics. Millennial hump has passed avg home buying age, and there are demographic headwinds going forward, unless immigration policy becomes more permissive. Of course demographic impact will take decade or more to play out.
By demographic headwinds, I mean fewer young people, e.g. Inverted population pyramid. See Japan or China for how this will play out
If 1m people decided to sell tomorrow, suddenly inventory would be normal. At the end of the day what matters is how many housing units are there and how many households. To say there's a shortage is simply wrong, given that the ratio is well in line with historical norms.
The number of active listings is low because a surge of demand due to low interest rates and then later FOMO ate through active inventory. If rates hit 5% within the month, you'll be surprised how quickly inventory returns to normal.
Way too much statistics crimes when talking about housing
I use logic and accurate interpretation of the data in my assessment, all these counter arguments use statistic butchering and hopium. Yet people cling to the narrative for whatever reason. Bias is a hell of a drug.
If inflation persists at 4-5% we will see 6% mortgages within the year. Many are blinded by the last decade of low inflation. If inflation suddenly dissipates, due to a shock etc, then housing prices can preserve at these levels.
Now what we have is listings that are easily found via google and a much broader set of visitors whose faces change every week. Our limited brains interpret that as a much bigger shift than it may actually be.
Eh, in the US, it was limited by the Glass-Steagal protections enacted after the speculators ruined the world economy almost 100 years ago. We can thank the 'Modernisation Acts' of 1999/2000 and QE for the economic rollercoaster in the US(so goes the world?) for the last 20 years in housing, energy & metals.
https://en.wikipedia.org/wiki/Glass_Steagal
https://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bl...
https://en.wikipedia.org/wiki/Commodity_Futures_Modernizatio...
https://hostagenews.com/report-10-of-san-franciscos-housing-...
Could not agree more, just so we're all on the same page it is:
https://en.wikipedia.org/wiki/Human_population_planning
Oh, sorry, were you referring to something else? :-)
Mix in low interest rates and you get a major property bubble. Population growth and low interest rates are the two major predictors of housing price increases.
The reason why lots of boomers are sitting on large amounts of housing equity is that they bought before the transition to low rates. The reverse will also hold - anyone buying now before the transition to higher rates will get clobbered (in terms of loan to equity - probably they'll be ok repayment wise so long as they have a fixed mortgage)