A rent-stabilized 1 bedroom apartment for $1,100 In NYC? broker's fee is $15K
gothamist.com
gothamist.com
In my section of Germany, housing is even worse with rent caps and tenant rights, plus a lack of housing. Tenants are hard to move on, so landlords are painfully cautious about getting the right tenants - and there isn't a lot of money to maintain properties either, it seems. Our place has the worst decor and electrics, terrible ventilation and mould. And I think we're at the high end.
Systems geared up for incumbents, like "council houses for life" in London, ought to be sunset, just to get housing moving again. I don't think rent control works well, but I don't think open market rent works either. Anything critical with a limited supply needs to be externally regulated in ways that keep the wheels moving.
I personally think it's awful to see elderly people getting priced out of a house they've owned for decades, young families have to move their kids in their high school years because the taxes have become unmanageable, how it disproportionately impacts POC as gentrification occurs, and all the other ways it impacts people's lives who just thought they were buying a house to set roots for their lives/families but then externalities cause it to suddenly become unaffordable.
It's extremely perverse when you consider that these people's tax dollars are often used by politicians to encourage the very "growth" that contributes to their affordability problem. They court corporations and give huge tax breaks to move their offices/factories to Texas, which drives up the demand for housing, etc.
The exact situation you're referring to caused Prop 13 in CA, and something has to be done before something like that gets enacted.
Prop 13 wasn't passed as a law to help the unfortunate. It was anti tax hatred of the government. Jarvis wanted a "tax revolt" which is why all property in the state, even oil fields and golf courses, gets the tax break.
If so I wonder if that can create the opposite of the problem of elderly people being forced out by rising taxes. Namely someone who wants to move out but can't afford to because after all the deferred taxes are paid from the proceeds of a sale they won't have enough left for another place.
Do you have any more information? At first blush I can see how inheritance schemes would create massive loopholes in this for example.
Meanwhile, I'm pretty sore about the 10% year over year thing, particularly when I hear about how Republicans run a low-tax state or that a wealth tax is unconstitutional/infeasible. I pay my wealth tax every year, but I suspect I'm too poor for the kind of wealth tax they mean. I can at least enjoy the irony.
True but if you're turning 65 after you're tax bill has grown 10% for over a decade as your transitioning to your fixed income years; it's not a good thing just to freeze the tax bill. You might not have time to earn and save enough to cover the value it gets frozen at. It does help soften the blow for many though.
> But honestly it might be better for them to downsize into something more appropriate and perhaps free up the larger houses for families.
I wholeheartedly despise this line of thought, unless it's coming from their individual decision to downsize. You're basically treating the house like a commodity. It's a Home this person lived in, raised family in, hopes to continue hosting holidays in, where grandchildren can go to visit, etc. They should be able to use it until they decide to leave. On average, they only have another decade or so of life left anyway after their taxes get frozen at 65, let them enjoy their home.
If grandpa and grandma are just living in their house in Texas and surviving on the last of the pension, they're not even vaguely in the same category as a property owner deciding which of the next condo buildings to buy.
I’m glad we cap ours at 3%. And our community hasn’t collapsed for lack of property tax revenue yet.
And we are a progressive state, while Texas is conservative. Would have thought it would work out the other way around but I guess not.
What, their retirement savings? How much is recommended to be saved by 65 now - 2 million dollars or something?
Alternatives exist (eg taxable value set by what you paid not marked to market)
LVT would actually negate the parent posters complaints, as only the underlying land would be assessed and the penalties only really kick in if the land is unoccupied or is not utilized (sitting vacant is the most common of this, followed by lack of utilization, for instance under many LVT implementations large lot owners with single homes also get hit with underutilization penalties to encourage subdividing and utilization of the land which is a net win for society And often the immediate land owner. Objections tend to philosophical on this point)
It disincentives empty / under-utilized land holdings like vacant lots or lots that could support more utilization (usually via an activities like building homes on top and selling / renting them or farming)
There is nuance in implementation details but in broad strokes that covers it in tl;dr fashion
https://www.nbcdfw.com/news/local/frisco-soldier-gets-home-b...
The amount was in the low hundreds (maybe $300).
HOA liened her house, then forced sale.
A local landlord put a bid that was found later to be about 70% under market (like $125,000 offered for a $400,000 home). The HOA Board voted to accept the offer and sold the house to this landlord.
In the drama that unfollowed there was also this little nugget: the landlord was on the HOA Board, and was one of the ones who pushed for the forced sale, and then voted in favor of the Board accepting his short offer on the house.
I don't recall the details of the outcome, although I believe some compensation was paid out to her.
Housing being seen as this generational I own it forever thing that Americans have doesn’t also square with the American narrative of housing as an investment.
It’s one or the other. If you want housing to be seen as something that more or less “always goes up” but you can’t be taxed in the increased value then you are by nature distorting market dynamics you don’t see elsewhere.
We need a land value tax instead it’s more fair and less volatile
It's not a premium. It's what housing costs. If they take their "premium" and buy the next house, their tax bill is unchanged (more or less). They have to actually go find a house that is much cheaper so they can afford the tax bill.
More often than not, it causes them to move out of an area that has seen growth to an area that has not seen as much. This might be moving from Houston to a suburb of Houston, or moving from a suburb of Houston, to a small town 100 miles outside Houston.
The correct "Other way to think about it" is like telling someone this;
You bought this property when the neighborhood was worth nothing. You lived here for years when it was nothing. That might mean it was rural or crime ridden or whatever; but it was cheap and you could afford it. Good job sticking it out all those years and then letting "us" build it up around you. However, now that we've done that, we feel you are still a nothing if you can't afford the tax bill, so go find another rural/crime ridden area to live in. That's where you belong.
Not necessarily. The fact that they're getting priced out right now via taxes on the estimated value of the house doesn't mean they can sell the house at that value (being forced to sell) and that they can find a cheaper alternative that works as well for them. So they can be in for a net loss, all things considered.
I agree with this part. Viewing it as investment is the wrong choice.
If you are at least 61, and your disposable income is less than 70% of the median income for your county you get two forms of property tax relief:
1. The assessed value of your property is frozen at the value of the first year you signed up for the tax relief. If your disposable income goes about the threshold for a year but comes back down the next you won't lose your frozen assessment. If you go above the threshold for two consecutive years you do lose the freeze. When it comes back down again you get a new freeze at whatever the current assessment is.
2. You are exempt from all "excess property taxes" and part of the state property tax that is for schools. An "excess property tax" generally means voter-approved levies, such as local school taxes.
If your disposable income is under 60% of the median income for your county but above 50% in addition to #1 and #2, you get:
3. You are exempt from regular property taxes on the maximum of $50k or 35% of the property value, but not more than $70k. For example for a $400k property you'd be exempt for $70k, so your regular property taxes would be computed as if your property was assessed at $330k.
If your disposable is under 50% of the median income for your county, in addition to #1 and #2, instead of #3 you get:
#4. You are exempt from regular property taxes on the maximum of $60k or 60% of the property value. For a $400k property this would mean regular property taxes would be based on a value of $160k.
In my county the 70/60/50% thresholds are $65k/$56k/$46k.
In my county a $400k assessed value home for someone below the $46k threshold would have an annual tax of $900, compared to around $3400 for someone not in the tax relief program. Here is a breakdown of the two (with some rounding):
$300 $ 760 fire
$240 $1000 state general
$ 930 local school
$140 $ 360 county road
$100 $ 260 county
$ 50 $ 130 stormwater management
$ 40 $ 111 regional library
$ 7 $ 18 PUD
$ 2 $ 2 noxious weed
Our rates are 23 mil.
I think this is outside the realm of what most people run into affordability wise and frankly at that level of income I’m willing to bet affording the property tax is much less of a concern
If I were 5x leveraged my net worth on a jackpot like that I'd probably cash out and move to an island to.
Depending on the structure of TX property taxes, it is certainly possible to have your tax bill increasing rapidly while property values are stagnant or even falling.
Do you actually have numbers on this? It's a huge talking point for the anti tax crowd but as far as I can tell there's no epidemic of house rich boomers being forced out of their homes.
Why punish people who helped build the place? Why would you want to steal value from people who simply want to be left alone?
If you want to buuld you dont need to kick people out that have less than you. Instead, you have to make it easier for others to build. If the state makes that impossible via state taxes and regulation, blame the state not the citizen that simply wants to live happy.
You can own two housing units untaxed, as long as you can produce evidence you spent at least 30 days a year in each of them. This doesn't disrupt non-speculators-- even the modest rich with a single vacation home, or the snowbirds who have a home in Minnesota and a winter place in Arizona don't see an impact.
Anything beyond that? Annual tax of 70% of its appraised value.
Nothing appreciates fast enough to justify holding it at that cost, so you'd see a fire-sale on housing. Add some cheap state-backed credit to lubricate the transition period, and unoccupied units glut the market while renters become owners.
Multi-family structures might create some interesting situations. With the landlord effectively forced to divest himself of properties, he has to reinvent himself as a service contractor, bidding for the maintenance contract on the buildings he once owned. This would be a great moment for karmic feedback against the ones who had neglected quality and safety-- who'd contract for $200/month maintenance from the same firm that never fixed anything when you paid $1500/month for maintenance-plus-land-access?
LVT only works if it is applied uniformly and with zoning reform. It will actually be a tax break for landlords because they are utilizing their property near the limit of its value.
* Land ownership is generally public record, or at least orchestrated at local government levels for property tax assessment, school enrollment eligiblity, and other similar local services.
* Some states already have concepts of presence-- different tax regimes for part-year residents versus full-year.
I'd expect that this would end up being relevant in only a very narrow set of cases. Most cases are slam-dunk clearly "owner occupier" versus "investor-owned", and hopefully they'd put more than a HN post worth of effort trying to define rules that handle the ambiguous cases.
I tend to be a bit suspicious of the LVT, because it can create toxic consequences for individual landowners.
Sure, if I have an empty lot and a new Job Factory opens next door, a rising LVT creates incentive for me to build. But if I already had a house there, my LVT has tripled and my house is no longer affordable.
Locking the LVT to the current owner might prevent that toxicity, but it also encourage all sorts of evasion strategies.
Where this love for arbitrary taxation comes from? How much have you donated to your mayor's electoral campaign? Do you golf with aldermen?
Landlords basically have no other option, we don't really have a credit score system like the US does, so it's much harder to verify how trustworthy you are. There are agencies that can tell you if somebody's currently in debt or not, but as far as I'm aware, somebody with no credit history is basically indistinguishable from somebody with "good" history.
Some may consider it the end-goal, to be fair - as eventually you'd drive landlords completely out of business. The problem is that this is antithetical to higher density, because you need landlords of some form if you have anything denser than a duplex. You can have condos perhaps, but not everyone can afford to get into one, or even wants to.
And if there's a lack of landlords willing to rent, there will be a lack of landlords willing to build to rent, and so the housing stock will continue to increase at a glacial pace.
The laws of unintended consequences can strike in weird ways - making it easier to evict may result in more housing in total ...
Most of Europe somehow manages to live in individually-owned private apartments. Even if you rent, the landlord will rarely own the entire building.
As it is though, the social housing sector is woefully underfunded, leading to sometimes decades-long waiting lists (at least where I live, in the Netherlands).
In countries where housing was socialized they had a system of residency. You couldn't move to another city, without a permit. If you live in Tholen, you shouldn't be able to move to Amsterdam, unless you mary someone from there or if society determines there's a social need for more workers in the capital.
After all, you can't socialize things while maintaining bourgeois concepts like "freedom of movement". You can't eat the cake and have it too, right?
Great! Housing should never have been allowed to become a commodity.
It may produce more bespoke, custom houses though. But they'll only go to those who can afford to do a LOT more to get it.
The reason why that listing has a $15k broker fee is exactly BECAUSE of the weird and hard to deal with reality that is a rent controlled apartment in NYC.
There are probably other off the books type things going on too, IMO.
If you want something transparent and easy to get for the average person, making it a commodity with clear rules is exactly what you want! If you want to incentivize gaming the system, the other direction encourages that.
Regardless of if it is a commodity or not, there needs to be constant vigilance regarding manipulation, scams, etc. Scams and manipulations are easier to hide when goods AREN'T commodities. There are some amazing horror stories (on both 'sides' of the economy) behind NYC rent controlled apartments and living in NYC in general.
[https://www.merriam-webster.com/dictionary/commodity]
From the link:
"1 : an economic good: such as a : a product of agriculture or mining agricultural commodities like grain and corn b : an article of commerce especially when delivered for shipment reported the damaged commodities to officials c : a mass-produced unspecialized product commodity chemicals commodity memory chips 2 a : something useful or valued that valuable commodity, patience also : THING, ENTITY b : CONVENIENCE, ADVANTAGE … the many commodities incidental to the life of a public office … —Charles Lamb 3 : a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (such as brand name) other than price 4 : one that is subject to ready exchange or exploitation within a market … stars as individuals and as commodities of the film industry. —Film Quarterly 5 obsolete : QUANTITY, LOT"
How do you solve the problem of condo owners not maintaining a property and letting problems fester for a couple decades after which they might be dead or move out?
Why? What value do they provide, other than having a bunch of money upfront? I’d argue there are many, many ways to fund building construction other than for-profit ownership
Providing capital is useful! You can't just ignore that.
As it should be. Why would you want to allow someone to be judged for _not_ having been in debt in the past?
You can always ask for references if they rented before, that might help somewhat.
> we don't really have a credit score system like the US does
Shady predatory credit rating agencies like in US or even Germany are abomination, it's a thing to avoid not to follow.
And that's actually good. What more could you possibly need to know other than a person's revenues and their debt to be able to decide if they're capable of paying rent? Why would you care if they've had or had not had debt previously? The American credit score system is dystopian (it can literally make or break your life because it's being abused by prospective landlords or employers) and broken (made by private entities who suffer no consequences in case of mistakes, be they leaking your data or mistaking identities).
Classmates with income only from the job centre are unable to find a place to live, although that’s hardly better anywhere. In London the rents are astronomical and competitive but the cycle of finding, viewing, renting and moving is still running fine. In Hamburg people can’t even find apartments for rent.
"Apartments don’t come with kitchens in Germany" - https://alisajordanwrites.com/2018/08/06/apartments-dont-com...
This is so fucking stupid it deserves a dedicated room in the Museum of The Stupid. Kitchens are so fitted to the physical rooms they are in, they are basically part of the house like walls, floors, ceilings and doors.
It's totally mad, isn't it!
Whatever people think about migrants we can at least agree that everyone living in an area (town/city/country) all should have a roof over their head.
The real problem seems the disconnect between people, companies, processes and regulations getting in the way of building and the people, companies, processes and regulations wanting to move there or expand the population.
German rental market is one of the things I decided I will never again deal with in my lifetime. There is finite number of refrigerators and washing machines one can buy, finite number of deposit disputes one wants to experience.
I have a strong feeling that "worst decor and electrics, terrible ventilation and mould" is indeed an actual high-end housing in Berlin. A modern bright renovated house with brand new appliances would definitely be frowned upon by a typical german landlord.
A lot of social housing is currently reaching that 30 year mark, and it's barely being replaced. And costs for new constructions simply don't make a lot of sense right now, also affected by increasing building standards - which also prevent conversion of much vacant commercial space.
This system isn't always managed as well as it could be — subsidized unit requirements are layered on top of that, and in St. Paul the payoff period is only thirty years, which has made some developers balk. The political factions often imagine all investors as good or bad instead of as a force that can be managed to achieve desired social outcomes.
It’s a way to get around some of the issues that rent control causes, such as reducing construction.
Unfortunately, due to how our rental market works, it’s largely young people living in those more expensive apartments, which is terrible for birth rates and inter-generational equality.
Recently, the current government decided this game was unfair, and tightened taxes and housing regulations to the point where it only really makes sense now for large corporate landlords. Unsurprisingly this led to landlords exiting the market, and now there are too few rentals, leading to insane rents.
https://youtu.be/mav_Y0ZcVpw showing a random purchasable apartment in Russia.
Ownership is nice for the long term, but sometimes people just aren't ready for that. Some careers nowadays involve several training periods which happen in multiple different cities and stretch out for 8-12 years. Sometimes to get a good job in a less dynamic city you are better off working in SF/NY for a few years after school even if that's not where you want to end up. Maybe people learn faster that way. Retirees may be better off renting if they don't want to do maintenance and may only live there for a decade before moving into assisted living.
Every reluctant landlord capitulates and sells... eventually.
It's the same intention: Increase the short term return on capital
Sometimes, especially in peak season when they do open houses for a whole afternoon. Many times the broker told me to pick up a key from the doorman and let myself in and let them know if I was interested.
I guess I can see charging some money, but pre-vetting renters is probably just a matter of submitting their application to some service, and maybe doing a Google search, right? How much would you pay someone for that? About $7500?
And I imagine that in an $1100 rent-controlled building, you don't have to do too many showings before someone bites, so how much of a burden is that? A few hours? Would you pay me $7500 for that?
I guess I could see $1000 being a generous amount of money for brokers fees in this situation, if everything was being fairly run. So, in my view, the difference between the asked-for $15000 and the generous $1000 is the amount of inefficiency in this process introduced by what amounts to greed. Greed is to be expected, but when it starts to look predatory, regulators sometimes step in—which means it may be short-sighted and ultimately self-destructive greed.
To be fair, probably nothing will come of it, and the market will just dictate these costs. But, it's still a shitty thing to do.
Equifax, check. Ten minutes and done.
Maybe also all those things you did in high school that went on your "permanent record" ?
When I rented a place in Cambridge in 2019, the rent was $3200/month. To get the lease signed I had to write a check for 4x that amount (first+last+security deposit+broker fee). $12,800 before even dealing with any moving costs.
The worst thing about it is that it increases the cost of moving very significantly. So people are coerced into accepting large rent increases as long as the increase is less than forking out another broker fee to move to a cheaper apartment.
In the end, I'm not sure it's that bad. I moved to NYC in early 2012. I found a rent-stabilized apartment with the help of a broker, and paid about $600 less per month than a market rate apartment. I paid $3000 to my broker, and conservatively saved about $79,200 over the lifetime of the apartment lease relative to equivalent market-rate apartments.
There was supposed to be a crackdown on the practice in NYC in 2020, but the brokers lobby was too powerful.[0]
One can only hope that such legislation eventually passes -- and has teeth.
[0]: https://www.nytimes.com/2021/05/27/nyregion/broker-fees-real...
For instance, I'm a single man. I could get numerous remote jobs. This wouldn't help my chances of dating a young professional woman though if I moved out to BFE. Thus, why I'm in NYC. They just need to make more housing. A ton of the projects here in the city are completely frozen.
The situation seems to be much, much worse now 12 years later from what I have read.
$1,100 is considered "well below market rates" for a 1 bedroom apartment in NYC? That's _nuts_ to me.
I'm paying $1,600 for a 3 bed, 2 bath 1800 sq ft house with a 2 car garage. Vaulted ceilings, my neighbor is a police officer and I'm on a corner lot across from a park. fire department is literally 3 blocks away. IOW, I pay more because of the neighborhood.
Granted, I live in a LCOL area, but that's kind of the point. If you feel you don't have the buying power, move. Hell, I know a woman who has a mortgage that she pays off of a fixed income and a bit of side work (600/month I think? in that ballpark) and she's buying more house than that.
I want to walk, not drive, out my front door, and be within 15 minutes, on foot, from entertainment and dining and friends and shopping and groceries and pharmacies and salons and cafes. And I want those things because I have social/communal living desires, not antisocial/isolated ones, and because I've lived in many different kinds of environments and seen just how much nicer it is to live in a walking city.
The problem is that many walkable cities continue to refuse to build upwards. NYC, Philadelphia, Boston...they're all vastly 2-4 story construction from 100 years ago. Paris generally goes up to 7 or 8, but has restrictions preventing much more. So they get more and more expensive. But they only get more and more expensive because they continue to be more desirable places to live despite the expense.
The GP has a different point of view; there's nothing special about yours or about NYC that makes yours better. The two of you deserve each other.
Well there is something special about the higher cost places.
That thing special, is that they are more desirable by a much larger amount of people.
Otherwise prices wouldn't be so high.
So yes, the more in demand places are better to a much larger amount of people.
The quality of something and validity of people's preferences doesn't depend on popularity.
That's a very bold statement and a total oversimplification. Like the rest of your comment too IMHO. Do you think people in the countriside don't have "social loving desires"? I know lot of people living on the countryside and friendship is much more better than in an anonymous city (IMHO).
The problem is that people who can't afford that think it is a hate crime if they can't afford to live in Brooklyn with the rest of the hipsters.
City planning is hard, but it's absolutely the case that cities just do it very stupidly and poorly and myopically and to preserve the wealth of the wealthy at the expense of the everyone else. There are not any good reasons for Cambridge, MA to have a 35 foot maximum height limit, only shitty ones. It's not a hate crime, but it is both hateful and a crime against society.
I think it would do you good to work out the difference between things that make you angry and things that are unjust.
I agree with you, transportation and planning is intentionally manipulated by wealthy landlords to maintain their high rents. Absolutely. So don't live there? Don't base your self worth on how impressive the resume's of your neighbors are? Find other neighborhoods that aren't based on inherited multi-generational snobbery and artificially restricting access to education to elite morons?
I don't think this word means what you think it means.
I live in a city, you can have all of those things here. In fact, we have an entire stretch down the side of a river that has restaurants and other things down the side of it. The housing in that area is some of the most expensive but still doesn't touch NYC.
One way of thinking about this is that everyone in NYC is wrong. Another way of thinking about this is that NYC might have more of those things and then some. Does your city have a dozen museums, dozens of museums, or hundreds of museums? Does your city have a 24/365 public transit system? Bodega cats? Offices of all of the top companies worldwide? Something equivalent to the high line? Broadway? If not, why not? Some places have some of these things. How many places have all of them?
apply whatever the hell you want to rationalize that existence, I don't personally care.
When you're done screaming about how terrible it is that you'll never own a home, come join sanity.
or don't. I don't give a shit about your rationalization.
That’s basically your argument. Living in a LCOL area is not comparable to living in NYC.
There is a reason millions want to live in NYC and almost no one actually wants to live in, say, Iowa.
FYI, the trains in Tokyo are privately run by corporations.
People generally care where they live more than they care about the things you describe. Location is the most important factor for most people in real estate purchases - so much so, that it's a cliche.
You are free to have your own preferences, and I'm glad it has worked out well for you. But let's not be incredulous that others have different priorities - that's the human interaction baseline.
what I'm incredulous about is the constant complaints followed by an obvious solution but no action towards it.
And while they make the best choice they can, they can still have problems with it - what in the world works out otherwise? Jobs? Elections? Anything?
no one gives a shit, seriously. This is the worlds tiniest violent playing for those who refuse to adjust to not having as much resources as they'd like to have.
oh man, I'm so turrble, telling them they should probably live as if they're only half-millionaries.
offly enough, reality doesn't give a shit.
As I mentioned, I know a woman who is buying more house than that and her income is technically below the poverty line.
In addition, I work remote in tech and looking up the average salary in NYC, I'm making more and it's not close. Not everyone can do that and I understand that, but my point is that people around here don't feel as though house ownership is out of their power.
What i do not care is a 2 car garage. That already implies a lifestyle i really do not want. So where wpuld i move to in the US?
if you don't want a 2 car garage then fine, move downtown.
You can get _anywhere_ in this town in 20 minutes or less. We flat don't have the traffic that places like NYC does. rush hour might be a bit slower depending on where you go, but not appreciably slow.
I feel like people who don't live in these areas have a lot of misconceptions.
Not sure how your proposed solution works while also defying basic economics.
"oh, but market forces so I'm just going to stay here and continue posting online about how horrible it is that I'll never be able to afford a house!".
You do you I guess.
I think you should start visiting these areas before you say that.
It takes me less than 5 minutes to get to 2 different grocery stores, a theater, a market dedicated to fish, a greek restaurant, a Mediterranean bar, a mexican restaurant (very good btw), Target supercenter, Lowes, various stores dedicated to clothes, one dedicated to hobbies (not hobby lobby), and more I could go on about. In 20 minutes I can be sitting on a dock by the side of the river enjoying the breeze and fishing. In 30 minutes I can be standing at an orchard purchasing peaches, in 45 minutes I can be standing at a lake enjoying the fishing there. In the summer we have a farmers market that's probably 10 minutes away and is amazing, they generally have someone there playing music live. Which, btw, this area is _known_ for (it's independent artists).
It feels like too many people here imagine LCOL means living in the middle of fields with cows milling about. rural areas are even cheaper but what you're imagining and reality do not match.
It may not ultimately be what you prefer, but to call it in the middle of nowhere is just vastly ignorant. I live in a city.
For software devs tho, you are right. Just get a remote job.
Honestly confused what it is you’re suggesting
And that they also won't organize to try and fix the issues with the housing in the HCOL area.
I agree with the sentiment personally, it's why I always tell people to move.
I was watching a youtube video earlier this week about a couple who did exactly that. They lived in portland oregan. they bought a rundown old trailer that no one wanted, put the elbow grease in to clean it up and rented out a space for it.
They then realized that with their income it was going to take many more years than they wanted to become financially independent. So they moved out of state and w/i 2 years had paid off a 2 bedroom home (they had savings and sold the trailer) and were living in it and considered themselves financially independent (they no longer had to work to live).
They talked about how their family shunned them when they moved away and they've learned not to talk to friends about it because it just causes friction.
some people do it, it's just most won't.
Congrats on whatever opportunities you've made work for you but many people are tied to where they are due to onerous management, community, family etc. We are not the highly mobile society of even two decades ago and the false promises of mobile technology haven't truly been fulfilled. We got close during COVID but business interests and human nature got in the way of fulfilling what people on this forum have been touting for a decade or more with remote work.
What's the implication here? That you're extra safe? Or that it's a neighborhood that they would also choose?
It's just a strange signifier to me. Does a real estate agent mention this? Do they know they play this role? Are they compensated in any way? Should other neighborhoods encourage the presence of a single police officer home?
Why is it a strange signifier that a police officer living next door and a park where kids are openly playing implies it's a nice neighborhood that you might enjoy living in?
it's like saying it's a strange signifier that you would avoid a neighborhood with homeless walking down the street pushing carts and empty syringes laying around the sidewalk.
Neither of those seem strange conclusions and I posit that if you can't understand that it says more about you than anything else.
and yes, I've been shown houses in neighborhoods like that, and no, I didn't move in.
Moving to a LCOL is always my recommendation as well.
I'd expect living next to a cop to be cheaper, not more expensive.
The point is that here, a 70k salary is easily good enough to buy a nice house in a nice neighborhood.
Are there nicer houses in nicer neighborhoods? We have a lot of old money here, gated mansions with groundskeepers, and so forth.
That wasn't my point.
1,1k gets you a room. If you are lucky.
I'm sure everyone else wants it.
Get drawn from a rental lottery at random? Offer your first born child? Supplement your rent with sexual favors to the landlord?
I would assume you will start to see short-term/hard-money loans for the 15k as we've seen in the bay area for all cash offers on homes.
It was an older apartment with newly renovated kitchen and bathroom, albeit small. The brokers fee was something like $3000(thought this was ridiculous).
At the time I also found a similarly priced apartment but at last minute for some reason it was pulled the broker said.
I don't think any amount of searching can find such deals now.
I was able to get the apartment by subleasing someone else in apartment in the building. I always paid my rent on time, and caused no issues for the landlord (parties, etc). When a new apartment opened up, I was giving first dibs.
I also had a time in a rent-stabilized apartment in NYC (East Village, probably not far from yours) and the answer of how I got it: luck. It happened to be available when I was looking and I happened to beat everyone else to the seller's agent by physically sprinting with my deposit check in hand.
My local university offers housing for grad students. At least 50% is unoccupied at any time because there is no pressure for them to fill units. That would just be more work. So getting one is tricks and favors.
Then once another apartment became vacant, because you already lived there you were able to regularize your presence by terminating your sublease so you could lease directly?
Here is an example from centre of Prague. 400 euro per month, 20k compensation
https://www.sreality.cz/detail/pronajem/byt/2+kk/praha-smich...
What ever happened to the class action suit against 3% fees... did that ever go anywhere [2023 recollection]?
Though if you want affordability, that leaves Chicago and Philly.
NYC sucks in that sense though, as a lot of industries that are conglomerated in NYC haven't ensured salaries keep up with those in High Finance and Tech
At least Boston has relatively affordable suburbs and Bay Area level wages, DC has plenty of federal jobs that pay competitively, and SF has the larger tech industry (which is still going great despite a couple high profile layoffs)
Miami-Dade is very sprawly, like Los Angeles.
This is unsurprising as Miami is a relatively new city that expanded post-WW2, like LA.
The cities I listed above were already fairly high density before the automobile was invented
Also more comparable populations that way too.
Same way most people in the NY Metro live in less walkable boroughs or suburbs.
And it's the same story in any other "international" city - be it London, Tokyo, Paris, etc
I love NYC. I don't mind going into Boston or such for the day, but there's nothing like NYC on east coast. It's fantastic.
The thing that NYC really has going for it is that the rest of the country is a giant suburban dystopia.
none of the things that you're saying are true compared to my experiences (or those of my friends) in any way that i can think of as meaningful.
the only city i've been to that feels like it's captured the same "vibe" as NYC, for me, has been Paris.
Tokyo was more impressive in its sprawl and history (and obviously cleanliness), but there is a sense of Japanese monoculture that saturates everything in a way that is almost tactile. not in a bad way, but definitely such that i felt like something was "missing" during my visit.
Singapore gets really close to the same feeling, but for all of its heterogeneity there's an undercurrent of authoritarian sterility that made it very difficult to feel comfortable (Disneyland with the Death Penalty, indeed).
anyway this is already pretty long winded so i should probably stop talking, but NYC has a lot "going for it" besides the rest of the US just sort of being a suburban hellscape. at some point i'll move out, but living here has been a really comforting reminder that international views such as yours of American cities are incorrect.
The day I left I moved out over a pool of dried blood from a stabbing in front of my door the night before. I've lived in over 20 countries since then and not experience anything similar except maybe in Canada, which has similar drug problems as the US.
This kind of reflexive defensiveness by some New Yorkers feels annoying to the rest of us
But Flushing is too far from Manhattan and too close to La Guardia. I'd gladly pay more not to listen to that shit all the time, the car noise in the city is bad enough.
Most immigrant communities agglomerate in Queens - from Korean to Chinese to Azeri Jewish to Bangladeshi to Jamaican
The homeless are a problem, but New York has them too.
If a politician wanted to score major brownie points, breaking the broker cartels would be a major win.
Put up with this sheisse in Boston. First, last, security, and broker fees. It's the reason I left the east coast and never looked back.
My landlord didn’t provide any more utility this year even though they jacked up my rent $1000/month this year. Nothing about my place got any better and I’m not getting anything out of it. They’re doing it purely to extract money from me because they know no one else is building and we just had 150k+ migrants move into the city to compete for a fixed supply.
End of the day, landlords don’t deserve more money and I don’t know why anyone here argues for it. It’s like you want bezos to have even more money - it’s super weird.
People keep trying to rationalize the status quo with complex explanations, when the dynamic is really "Army setting up a school" dead-simple (or, even more applicable, Soviets setting up apartment blocks): if you care about fulfilling the need, it gets done. The problem is that there are competing interests that profit from housing insecurity and homelessness, and the government routinely chooses them over us. Nothing will change until the choice is made to throw these entities - developers, management, investors, etc. - under the bus, instead of people who are simply looking for a safe place to live. Unfortunately, without a massive reorganization of the economy and even society, it's impossible to have both come out winners.
Just cause some capitalist lost a few dollars doesn’t mean anything. Capitalists don’t do any labor - that’s the whole point of why they invest in things. They put money in places hoping that they’ll get more out of it without having done anything. But it’s a risk - and the government shouldn’t be backing risk taking speculators who gamble with their money. It should be backing laborers!
But it doesn’t. Government is controlled by capitalists because capitalists have the discretionary money (thanks to stealing it from laborers) to keep lobbying to keep status quo.
Introducing rent control makes it even less likely to have new builds. Try to think like a millionaire that could potentially invest in real estate: would you buy a 2 million house not knowing that you can recoup that investment and also make a profit? Isn't it easier to just dump the money in an ETF and get 8% on the market?
> you need it to prevent landlords from just extracting more money
Why do you need to prevent people from making money? Would you like someone preventing bradlys from making that much money? How much is too much? If you work in tech like most people here, you're probably making more than 99% of the world.
Making money is not a problem, if there is money to be made in real estate, investors would flock to it, increasing supply and therefore decreasing prices and profits over time. The problem is when the economics are not allowed to float freely: because of rent control, limitations to building (like zoning laws), insufficient infrastructure (like being stuck on an island with bad connections) etc.
Fundamentally these are in disagreement. If you believe that landlords should control the world then keep believing this idea that housing should also be an investment.
I don’t think housing should be an investment. It is impossible for something to be a good investment and affordable. They go against one another.
This seems like such an emotional response. The landlords are also controlled by mortgages if they are small, or by boards of directors - and shareholders if they are large.
The landlords can control the rent for their units, that's it.
As to investment properties vs affordable ones, there can be some issue there, for example if you buy a house just to park the money somewhere, but you don't rent it out, you keep it empty. That kind of behavior can be really damaging. These are the only kind regulations I would introduce: 1. don't allow properties to sit empty - tax them heavily. And 2. also don't allow airbnb's in highly troubled cities. Unless you're literally sleeping in the same house with the guests, airbnb's shouldn't be allowed for individual housing units.
> I don’t think housing should be an investment
Let's run a thought experiment: Let's assume you're a retired small business owner that has 5 million dollars in the bank. You can A. built a house in your city and rent it out or B. put the money on the stock exchange.
Everything else staying equal, which of the options would create more housing units in your city?
Why do you think that's the case? Many companies are a good investment, while they still provide affordable products. Something can be cheap in an absolute sense, while still providing a good return on investment.
See, to me, this vitriol is what seems super weird. It seems like you must be talking about some sort of property shark that owns 8+ figures in property and extracts the maximum possible from the poor peons that dare to want a roof over their heads. Maybe with some large company thrown in the mix for good measure.
My father and grandfather are both in rental (well, they did whatever they could to make their way, primarily carpentry; rental is only part of the picture). Both of them started with nothing and managed to bootstrap their way into some properties, fixing them up as they went. They do all the work on their respective properties themselves. There isn’t a management company involved. They aren’t some evil men trying to extort the populace, the goal is just to live, provide for family, etc. Yet by definition, they are landlords - that thing that so many here despise unilaterally with such passion.
Probably there is considerable diversity (or at least two classes of landlords). But laws are going to apply to both groups.
If you do something that drives up the value of the property - you'll get some amount of that when you go to sell the property. If your father buys properties, rehabs them, and then rents them out... Guess what? He's double-dipping. He's going to charge more for rent and he's going to be able to sell the property for more later. In one instance (selling the property), yes, he's doing labor and will reap some reward for his labor. In the other, he's not really doing any labor to keep charging more rent.
I had "small time" landlords many times. They always jacked up the rent 10-20% every year. You think they're doing that because the 1920's house I was renting was getting improved every year or they were doing anything to make it better? Nope... They just wanted more money and because no one was building more housing - they knew they could get it.
> going to charge more for rent
You mean, be able to charge anything at all.. it’s not like we’re taking about buying turn-key properties and updating the cabinetry or something.
> not really doing any labor
Properties require upkeep. (N) properties require N times the upkeep. In addition to normal expenses, there are also risks; for example a tenant may damage your property, and then you need to fix it. You may think your security deposit covers that; in reality that amount of money can usually only cover minor repairs / cleaning. Landlords need to recoup that sort of thing over time, so it ends up getting rolled into your rent.
I really don’t think you understand how expenses for these things work. The way you’ve been talking, it sounds like you think your rent check goes directly into the landlord’s bank account as profit. Maybe you should try home ownership, and see what the actual ledger (expenses + time) looks like over time. Compare that plus your mortgage to rent. You may need to do this for the long haul to see the real picture though, not just a couple of years.
Better yet, acquire some properties and try your hand at rental yourself —- either you’ll end up filthy rich for nothing like you seem to think it works, or you’ll learn a valuable lesson about the true cost of services…
Because, while you assert that landlords offer no value, the fact remains that there are people in this world who want to rent, not own. Without landlords, how is that supposed to happen?
Rent control definitely works, because owners lock in the original price of the building with a fixed-rate mortgage. If you buy a building in 1960 to rent out, you can rent it out at 1960s prices pretty much forever, with only a tiny fraction added to cover increasing property taxes (subsidized for owners of rent-stabilized apartments) and the increasing costs of routine maintenance.
If I were to become Dictator of New York City tomorrow, I think I'd freeze rents as a factor on the acquisition cost of the property + prevailing interest rates on 30 year fixed mortgages. If you want to make today's market rates on your property, you have to build a brand new building. This incentivizes the creation of new housing, and provides stability to existing tenants through rent stabilization even for newcomers to the city.
NYC is full of vacant land. You can kick cars out of a parking lot and turn it into a 50 story residential skyscraper without any problem. You can tear down nearly-abandoned office buildings and replace them with housing. Tearing down a building where people are happily living is completely unnecessary. Profitable? Sure, it can be. But the city is under no obligation to making housing profitable. Housing is infrastructure; does the city make a profit by charging tolls on roads? Nope! They don't need to; they exist for the public good, not for your 401(k) plan.
Plenty of people are making TONS of money on brand-new buildings. In the 12 years I've lived here I've watched Downtown Brooklyn change from a forgotten wasteland to the home of the tallest building in Brooklyn. The neighborhood is full of $1M studio apartments (and up for more space) and they are sold before the building even breaks ground. People want new stuff and they can afford it. It doesn't have to come at the cost of existing residents.
In practise, I've yet to see anything working that doesn't make rentals either scarce or prohibitively expensive.
Ask anyone actually living in Stockholm, and you'll hear how the system really works. Last I heard there was a 20 year wait to get an apartment the legal way.
But it's always supply and demand that gets the upper hand in the end. If there's a shortage of supply, and you put in more market rules & regulations, costs will shift elsewhere (like the broker in the article) or the black market will simply grow to clear the market.
I don't think this meets the criteria most would consider “working”.
Rent control tries to make housing more affordable by reducing the cost, which immediately reduces the supply. At that point, rent control ends up increasing housing costs.
Theory and real-world case studies mean that this is so obvious, that I just assume anyone that's passed economics 101 and is advocating for rent control is either grossly incompetent, currently very drunk, or is disingenuous and actually wants to use the power of the government to make sure other people cannot obtain secure and stable housing.
Or they are one of the lucky few living in a rent controlled apartment.
Why don't we just make murder and rape also legal to better track it?
Whenever we artificially manipulate the market with ceiling prices, it necessarily means there will be some demand unfulfilled. A better approach is to build enough housing to satisfy the demand.
Honestly, I don't mind brokers. I think many people feel wronged by them because of huge bills for little perceived work, but they're not exploiting any monopolies or regulations to exist, like say for example a lot of trade workers do. If you're concerned about NYC housing you should be advocating for ways to make more housing, not killing the market with rent stabilized units and regulations.
Example of why price controls on goods always seem to produce shortages of that good. Solving issues on the supply side is generally a better idea than fiddling with market prices.
This whole deal has very much jumped the shark.
As to if they can actually ever make money on this? Good question. If it was clearly penciling out in a spreadsheet though, competition would ensure it wouldn’t for long in the most in demand markets.
Other markets are saner because there is less competition, usually. This started changing nationwide about 10 years ago, as competition nationwide got out of hand due to easy money.
2) renters do all sorts of crazy bullshit sometimes, and unless you’re really good at managing it as a landlord you’re screwed. Sometimes even then you’re still screwed. Markets like Manhattan especially so.
Landlords which know how to manage these kinds of tenants often turn these kinds of tricks against all tenants to increase returns, and the courts adapt to be even more tenant friendly in many areas or political pressure makes things like rent control inevitable. Which amps up the game.
Eventually market conditions shift (either due to changes in money supply, or because the well is ‘poisoned’ on the landlord or tenant side), and we see things like 70’s era NYC or SF which nukes most of the property values for so long, the speculative players are forced to give up - either because they are broke, or because they have ‘greener pastures’ they are pursing. In RE, usually the former due to market liquidity issues.
That's about the average situation in NYC. Brooklyn Heights is obviously extra-expensive because it's nice and is a 20 minute to commute to pretty much anywhere in the city, but the math is about the same everywhere.
Meanwhile, if you're just going to go for a single unit in a new building as an investment property, budget on about $1.2 million for a 1 bedroom that you could MAYBE rent at $5k/month or $900k for a studio that you could rent for $4k/month. 20% down on a $1MM apartment, you're looking at a mortgage of $5k/month. Add property taxes, $6k/month. Add insurance, $6100/month. So you need to come up with $1100/month as long as your tenant pays on time. That's not a monthly loss per se, you get to keep the principal and recover it when you sell. But how much money you make really depends on your access to capital. I recommend being rich in advance of your foray into becoming a landlord in NYC. If you are buying these units at 0%, and many people are, this is a very nice racket.
Personally, I wouldn't do it. A lot of the more affordable units in NYC are in co-ops, which often prohibit renting (to keep prices lower). So the market has already priced in that "investment property" premium for condos, in the area of 20-30%.
Not a particularly good investment I guess.
So 3.2% real yield - which is not much lower than the earnings yield on stocks, but with the ability to go heavily leveraged without being exposed to the rapid margin calls in equities. (It's no surprise that many multi-millionaires got their start by developing/renting out property.)
A good hedge fund would be able to offer higher than that still.
Just to have a place to live?