[HN Gopher] JPMorgan to spend $1B on rental homes in the US to b...
___________________________________________________________________
JPMorgan to spend $1B on rental homes in the US to become a
megalandlord
Author : raybb
Score : 305 points
Date : 2022-12-31 11:04 UTC (11 hours ago)
(HTM) web link (www.businessinsider.com)
(TXT) w3m dump (www.businessinsider.com)
| dbg31415 wrote:
| I know I just sound old when I say this, but homes should be
| owned by people.
|
| Texas has a "homestead" tax exemption that saves you 2-3k a year
| on your primary residence.
|
| I think up that.
|
| Make it 20k a year savings... people don't need multiple houses.
| Companies certainly don't need to own houses.
|
| Blah blah. I just hate this. It feels like taking advantage of
| people, another barrier to the "American Dream" of home
| ownership.
| pcdoodle wrote:
| 1B is such a small amount, so like 2,000 homes?
| asah wrote:
| 1B is a single building in Manhattan (midtown luxury...)
| mupuff1234 wrote:
| Depends on how concentrated they are.
| xeonmc wrote:
| a concentration camp?
| imgabe wrote:
| > Haven Realty Capital and JPMorgan Chase's asset management arm
| said they will invest up to $1 billion to develop build-to-rent
| single-family homes across the country, according to a November
| 15 announcement.
|
| It sounds like this will involve building new houses, increasing
| the housing supply, which is a good thing.
| jt2190 wrote:
| I agree it seems like that's what the article is saying,
| although there is a confusing part:
|
| > [Haven Realty Capital and JPMorgan Chase plan] to seed their
| investment with up to $415 million in equity. The first
| installment will include a purchase of 250 homes in three
| communities around the Atlanta metropolitan area...
|
| It's hard to tell if these homes have been built yet or not. (I
| assume "not").
| miguelazo wrote:
| Dems would be all over this if the geriatric, sold-out leadership
| had a clue. https://www.kdrv.com/news/top-stories/senator-
| merkley-introd...
| jabthedang wrote:
| [dead]
| IAmGraydon wrote:
| Is it me or does $1B not seem like much? At an average cost of
| $75,000 per unit, they'll have around 13,000 units. There are
| 126,000,000 units in the US, giving them 0.01% market share. That
| is absolute peanuts compared to large property developers.
| jeffreyq wrote:
| Curious as to where you got your numbers from.
|
| Also, the article indicates that "the companies plan to acquire
| up to $1 billion in build-to-rent properties, starting in
| Atlanta."
|
| So, in the grand scheme of themes (greater US) probably a drop
| in the bucket. But maybe it's a big deal when we only look at
| Atlanta.
| BenFranklin100 wrote:
| Two points:
|
| 1. Being a landlord has become a more attractive investment
| because in job-rich regions, cities don't let developers build
| enough new homes. The lack of competition from new units allows
| landlords to raise rents on existing units. Let us be clear on a
| point of confusion: Developers DO NOT EQUAL landlords. Sometimes
| developers will rent the units they build, but often not.
| Developers are the good guys here. When they build shiny luxury
| towers, it gives the Amazon tech bro something to buy instead of
| coming into your neighborhood and bidding up the price of older
| units.
|
| 2. Financialization of homes as a personal investment is a BAD
| thing. It's essentially a Ponzi scheme operating over decades
| where home buyers depend on people wealthier than themselves to
| buy their home at a higher price decades later. This is clearly
| unsustainable. Homes need to stop being seen as an investment,
| but rather a consumption, much like a car or other goods. The
| Atlantic had a good article exploring this topic:
|
| https://www.theatlantic.com/newsletters/archive/2022/12/home...
|
| The solution to our housing crises will include A. State
| governments allow lots of new homes such that homes are no longer
| a scarce (thus expensive) commodity, and B. We put in better
| tenant protections or practices such as multi-year leases that
| can be broken without too much of a penalty. That is, a family
| can, say, sign a 10-15 year lease on a home and still break the
| lease if life events make it necessary.
| parineum wrote:
| > It's essentially a Ponzi scheme
|
| It isn't, at all. The increase in prices is tied to increase in
| GDP, interest rates and disposable income. Unless you think
| investing is a Ponzi scheme.
| crote wrote:
| The problem is that this isn't true. Since 1965, home prices
| have increased 7.6x faster than income.[0] This obviously
| cannot continue indefinitely (that'd lead to everyone
| spending >100% of their income on housing), so at _some_
| point the price increase will have to stop.
|
| [0]: https://www.realestatewitch.com/house-price-to-income-
| ratio-...
| BenFranklin100 wrote:
| You're not even wrong.
| mandmandam wrote:
| > Developers are the good guys here.
|
| Doubt.
|
| Property developers are one of the most despised groups in
| Ireland, despite our extreme housing shortage, and there are
| many very fucking good reasons for that.
| computerphage wrote:
| Like what?
| gambiting wrote:
| I don't know about Ireland, but in UK they are known for
| buying _huge_ amount of land getting all the grants and
| permits for building say, 10k houses, then they build ~500
| houses a year, because if they built more it would crash
| the price. So now there is no land to buy and build on by
| yourself, and developers build fewer houses than they
| theoretically could to keep the prices high. Not to mention
| absolutely abysmal quality of newbuilds at every price
| level, and the smallest(by area) size of newbuilds anywhere
| in Europe - the average new house in the UK is smaller than
| an average flat in most of EU. And of course there are only
| really 3 big companies which have completely strong armed
| the market so you either buy from them, or pay 4x the price
| from a "boutique" developer just so your walls aren't made
| out of cardboard.
| geocon wrote:
| Yeah this is the landbanking problem. The solution is
| something like a land value tax which penalizes this kind
| of speculation and development-throttling. In fact there
| was a great article about that I just posted:
| https://progressandpoverty.substack.com/p/land-and-the-
| liber...
| walthamstow wrote:
| 20% of all Conservative donations 2010-2020 came from
| housebuilders and property developers
|
| https://www.opendemocracy.net/en/dark-money-
| investigations/2...
| mandmandam wrote:
| All of this in Ireland - and much more beside.
|
| Successive Ministers for Housing have dramatically under-
| built social housing, every year, for decades. This,
| while a "housing emergency" has been recognised for near
| as long.
|
| These failures are used to justify things like the HAP
| scheme, which subsidize landlords directly. If this seems
| stupid - you're right. Many have pointed this out, but
| the politicians and landlords and developers responsible
| don't see any issue.
|
| We sometimes subsidize developers to the tune of tens or
| hundreds of millions, just so we can rent the future
| property off of them, at above market rate, for decades.
| And we give it back afterward!
|
| We allow developers to lobby the Government on policies
| that will make housing less affordable for young people.
|
| Sometimes we just straight up give them EUR150,000
| taxpayer cash per unit, to build "unprofitable"
| EUR450,000 units.
|
| All this, while we have all time high homelessness rates,
| with hundreds of thousands more Irish adults living on
| friends couches.... While State homelessness
| organizations accuse charities who question this of
| "virtue signalling".
|
| Even our constructions materials companies are
| staggeringly corrupt, eg, CRH
| (https://villagemagazine.ie/a-history-of-scandal/).
| They're widely known among Irish people to be criminal,
| and have been for a long time. See the mica blocks
| scandal for another example. Yet _somehow_ they all keep
| getting lucrative contracts. No one is ever punished. And
| every time there 's a big documentary planned about their
| various mafia type scams, it gets pulled. "Orders from up
| top".
| meltyness wrote:
| Homes are durable goods, hence an investment. Homes that are
| cared for can last a hundred years or more.
|
| Contrary to your statements, it benefits everyone if these
| _are_ seen as a personal investment - but not a liquid asset
| like stock or something.
|
| Financiers shouldn't make broad stroking national moves on
| this, and it's basically up to state governments to beat back
| their capital by regulating things like quality, tax levels,
| and even build rates to prevent gluts, stem out-of-state
| "investment", maintainable infrastructure. If the banks try to
| dive into "house" be assured that they mindlessly leave it up
| to government to assure upkeep of every other dependency.
|
| Banks can't even upkeep the property they plan to buy, they are
| so dumb and myopic that they'll buy a place, turn off the sump
| pumps in the basement to "save money" and literally destroy 2%
| of the available housing in an area -- which is fine for them
| since they can write it off pricing everything else up a bit,
| not as fine for the people who already couldn't afford a home,
| and are more deeply priced-out.
|
| Governments could make them liable for this, akin to how you
| are contractually obligated not to destroy a leased car, but
| most homeless folks make poor lobbyists.
| bumby wrote:
| > _Homes are durable goods, hence an investment. Homes that
| are cared for can last a hundred years or more._
|
| This is largely context dependent. For example, Japan's homes
| aren't built to last as long as many American ones.
| Additionally, even heavily depreciating assets like cars can
| last virtually indefinitely with proper maintenance. (E.g.,
| Model T's aren't really worth much because there still are
| many around and they are relatively easily maintained)
| meltyness wrote:
| Right, but there remains a need to have responsible parties
| between financiers that are exposed to toxic assets, like
| leverage, expiring options, margins, dark pools, EV ponzi
| schemes, and derivatives markets large enough to collapse
| housing loans up into the fed every 4 years. If the banks
| turn off the sump pump, the fed lights candles to get rid
| of the stink.
| geocon wrote:
| Sure, but durable goods aren't necessarily investment goods.
| Homes do depreciate in value- their quality declines and they
| become increasingly expensive to maintain, and they simply
| don't have the same amenities as newly-built homes without
| increasingly expensive remodeling.
|
| What makes "homes" appreciate in value is almost never the
| building itself, it is the land.
| wolverine876 wrote:
| > Financialization of homes as a personal investment is a BAD
| thing. It's essentially a Ponzi scheme operating over decades
| where home buyers depend on people wealthier than themselves to
| buy their home at a higher price decades later. This is clearly
| unsustainable. Homes need to stop being seen as an investment,
| but rather a consumption, much like a car or other goods.
|
| What do you mean by 'bad'? Morally bad? Macro-economically
| negative? A money-losing investment for the investor?
|
| The investment has been a good one for generations. One reason
| is we have continued to grow wealthier for generations.
|
| Owning your property, with the rights and independence that
| come with it, is fundamental to personal liberty and security.
| Your home is your castle; the landlord's home is not. Not
| everyone has to do it, but you are handing over a lot of power
| to someone else when you rent.
| bluGill wrote:
| Homes are a great long term investment. However They are a
| bad source of income. Cash out refinancing is a bad thing, as
| you are using your house as income now instead of an
| inflation protected savings.
|
| The pay off from investing in a house is when you retire you
| live there rent free, thus needing less in other retirement
| investments. Most home owners fail at this, instead living
| beyond their means and have nothing saved for retirement.
| criddell wrote:
| Along with food, water, and clothing, shelter is a basic
| thing that everybody needs. Few of us see rising food costs
| as a good thing yet many people cheer on rising housing costs
| because they got theirs already.
| crote wrote:
| Homes are seen as an investment: they are being bought with
| the expectation that they can be sold at a later point in
| time at a higher price. However, this leads to some serious
| issues down the line.
|
| I think it is fairly safe to say that the general expectation
| of an investor is that the value of a home will grow _faster_
| than inflation - why else bother investing? This means that
| the average inhabitant 's costs for living in that home
| (rent, mortgage payments) must also grow faster than
| inflation. However, the average inhabitant's income will only
| grows with the inflation rate.
|
| This means that for homes to be used as investment, the cost
| of living in them _must_ be an ever-growing percentage of the
| inhabitant 's income. And this is what we are currently
| seeing in practice: since 1965, home prices have increased
| 7.6x faster than income.[0]
|
| This is obviously unsustainable - we can't end up with
| everyone spending 100% of their income on housing. The big
| question is, who will be holding the bag when the bubble
| bursts?
|
| [0]: https://www.realestatewitch.com/house-price-to-income-
| ratio-...
| cloverich wrote:
| I believe they are generalizing past owning your own home, to
| owning _other_ homes as a pure investment. I.e. becoming a
| landlord. Owning your own home wouldn't require someone
| wealthier than you purchasing it -- even if it did not go up
| in price. When home prices don't rise, purchasing investment
| properties becomes less lucrative and more risky (where as
| purchasing your own home remains low risk).
| BenFranklin100 wrote:
| No I am not 'generalizing past owning your own home'. I am
| saying the official government policies that preferentially
| promote personal, primary residences as investment vehicles
| are bad public policy. As stated, these policies have
| manifested in practice as a decades long Ponzi scheme that
| is built on ever increasing home prices. It's not
| sustainable. Younger generations will not be able to afford
| housing, as we are now witnessing.
| cloverich wrote:
| Hmm in that case I think your argument doesn't make
| sense. "Good investment" regarding purchasing your own
| home is in comparison to renting. The price of the home
| doesn't need to go up for it to be a good place to put
| money, nor does it require any sort of "Ponzi scheme". It
| only requires the total price of maintenance not exceed
| the price of forever paying rent.
| BenFranklin100 wrote:
| That's because twice now you've not bothered to read what
| was actually written. I'm not going to explain the
| argument a third time to someone who isn't putting in the
| effort.
| Cerium wrote:
| The argument here is not that owning a home is bad. Owning a
| home is good. Considering the ownership of your personal home
| as in investment is bad.
| bumby wrote:
| In part, because it incentivizes a lack of diversification in
| wealth, which leads people to support policies that protect
| the one egg in their basket.
|
| Secondly, unless you own multiple properties, it's a market
| you can't exit. You always need a place to live so if you
| sell your "investment" at a market high, you have to buy your
| next "investment" at a market high.
|
| Combining the two, you get a lot of policies that protect
| paper wealth not generating much value. I think it was Putin
| who said something along the lines of "I don't understand the
| American economy. It seems like they're just buying and
| selling homes to each other."
| parineum wrote:
| "Investment" doesn't just mean dollars, it means value to
| the person making it.
|
| Owning a home provides tremendous value to the owner beyond
| the financial aspect.
| bumby wrote:
| The OP seemed pretty clear to me that they were referring
| to a financial investment. I don't think "investment" is
| particularly useful for describing other value, and think
| that more aligns with "utility" rather than an
| "investment".
| geocon wrote:
| Failure to understand imputed rents is a huge problem
| whenever housing discourse comes up.
| rhaway84773 wrote:
| We also need to eliminate the massive government incentives for
| owning a home, or adding similar incentives for renting.
| devmor wrote:
| I dont think we need to eliminate them, just have them only
| apply to a primary residence.
| BenFranklin100 wrote:
| They positively must be eliminated on the primary residence
| if want to halt the financialization of personal homes. Why
| should the related well-off be given a tax break anyway?
| It's regressive. The US is one of the very few countries
| that allow mortgage interest to be deducted:
|
| https://www.progressivemaryland.org/home_mortgage_interest_
| d...
| devmor wrote:
| I don't think someone buying a home for their family
| should be considered "well-off". That should be our base
| standard of living.
|
| The US is also one of the only countries where mortgages
| are so expensive. We wouldn't need the tax breaks if
| housing prices were low, I suppose.
| maxerickson wrote:
| To the extent that they probably put upward pressure on
| housing prices, we should eliminate them.
| ilyt wrote:
| Yeah the person finally getting enough to own a house is
| not enemy here
| prox wrote:
| I would file that under A. There is a massive market now that
| would see any devaluation as bad (they bought into the
| investment scheme)
| BenFranklin100 wrote:
| The mortgage tax deduction and the Homes Sales Tax exclusion
| should be eliminated. They are regressive pieces of
| legislation that serve to widen inequality.
| sokoloff wrote:
| The mortgage interest deduction serves to put prospective
| owner-occupants on an equal footing with prospective
| landlords (for which business loan interest is deductible
| against profits).
|
| The capital gains exclusion I have less strong feelings
| about, but it amounts in large part to excluding being
| taxed on the effect of inflation.
| NoToP wrote:
| The MDI defines "owner occupant" over "landlord" in such
| a way as to effectively subsidize the single family
| detached suburban home lifestyle preference. It
| encourages the middle class to tie up a big chunk of
| their net worth in sprawling developments with
| questionable claims of being an appreciating asset.
| sokoloff wrote:
| I'm trying to gain understanding of your first sentence,
| but have been unable.
|
| Landlords can deduct mortgage interest just like any
| profit-seeking business can deduct interest on loans
| taken on in furtherance of their business. That's true
| for single-family homes or duplexes in a suburb same as a
| rowhouse, 4-plex or 50-unit building in a city.
|
| The owner-occupant deduction applies to their unit,
| whether that's all of an SFR, half a duplex, one level of
| a triple-decker, or 1 unit in a 4-plex.
| lotsofpulp wrote:
| The mortgage _interest_ tax deduction is effectively
| eliminated for 90% of Americans because the standard
| deductions are high enough that 90% of people do not
| itemize to be able to claim the mortgage interest tax
| deduction.
| [deleted]
| rcpt wrote:
| Great let's simplify the tax code and clear it out
| completely. It's never been good policy.
| amelius wrote:
| And can we please make home ownership (or renting) cost part
| of the inflation level?
| sokoloff wrote:
| It already is. Tenant Rent and Owners' Equivalent Rent
| (OER) is included. That's capturing the cost of occupying
| the property, which is the "cost of living [there]" as
| separated from the cost of buying it.
|
| https://www.brookings.edu/blog/up-front/2022/05/18/how-
| does-...
| geoduck14 wrote:
| >Homes need to stop being seen as an investment, but rather a
| consumption, much like a car or other goods.
|
| I'm a little skeptical that homes being disposable is a good
| idea.
| geocon wrote:
| "Consumption" doesn't mean disposable, it means homes should
| be used to be used to fulfill needs and desires, and not used
| to increase wealth (as an investment good).
|
| Easiest way to do that is a land value tax; the home itself
| is not what is appreciating in value anyways, the land is
| what is appreciating.
| postalrat wrote:
| So instead of private megalandlords you want government
| gigalandlords.
| geocon wrote:
| Please, taxing something doesn't mean the government owns
| it. Does the government own someone's home because they
| have to pay property taxes to the city for paving the
| streets and running the garbage service?
| postalrat wrote:
| They are collecting rent as taxes and if you don't pay
| the rent they kick you out. I'd say they own it.
|
| The homeowner just owns the liabilities.
| geocon wrote:
| Do you think the government owns you too, since they take
| a portion of the proceeds of your work and will put you
| in jail if you don't pay it?
| itsyaboi wrote:
| Good point. At the end of the day, men with guns will
| come and put you in a cage if you disobey. Drafts are
| pretty nightmarish too, if you think about it.
| postalrat wrote:
| Nope
| BenFranklin100 wrote:
| Who said anything about disposable? In fact, they could make
| attractive rental investments maintained and held over
| decades if not a century. See Vienna's social or privately
| owned housing that is rented out.
|
| Housing simply should not be seen as the primary personal
| investment vehicle for the average person.
| [deleted]
| gtirloni wrote:
| By their own nature, they will never be disposable in the
| original sense of that word.
| taeric wrote:
| "Has become?" Seems that being a landlord has always been one
| of the more profitable things you could do.
|
| And it has always been an odd split of who you want as tenants.
| Commonly, you either wanted very poor, or commercial tenants.
| Middle class was not desired.
|
| For the middle class, you wanted to be their bank.
| mythhouse wrote:
| every single post that has anything to do with housing turns
| into this
|
| - prices dropping is a good thing
|
| - nimby are the real evil
|
| - we should promote the idea of housing as utility not a store
| of wealth
|
| - but govt encourages housing as wealth via subsidies, tax
| breaks, bailouts ect.
|
| - poc should be allowed to build inter-generational wealth via
| housing. This shouldn't be suddenly cancelled.
|
| - we should be building more public housing like germany and
| france.
|
| - some random side convo about gentrification
|
| - another side convo about suburban housing = bad. we should
| all live in tightly packed cities with no cars.
|
| Rinse and repeat.
|
| I think this topic is might be second only to 'tech interviews
| and hiring' in terms of predictability
| xeromal wrote:
| This should be a bot.
| geocon wrote:
| How dare people get concerned over something so trivial as
| "having someplace to live"
| mythhouse wrote:
| well..lets hear your genius idea then. Idea that isn't
| people voting to bring down their own property values.
| geocon wrote:
| Implement a land value tax by exempting buildings and
| improvements from paying a property tax, shift state
| income and sales taxes onto land value, and ease zoning
| regulations.
| [deleted]
| notatoad wrote:
| that's still going to have the effect of lowering
| property values though.
|
| it's a catch-22. "lowering the cost of housing" and
| "lowering property values" are the exact same thing.
| there's no actual political appetite to lower the cost of
| housing, because all the people in charge of making those
| decisions are property owners who don't want to see their
| investment lose value.
| geocon wrote:
| It may lower property values some, but in the long run
| even homeowners will be better-off as other, more
| burdensome taxes decrease. Sure, increasing land taxes
| may not be that popular, but pair it with abolishing
| income taxes? That's a different political proposition.
|
| It's also why my first step is not to sell it as the
| implementation of a new tax; rather, it is an exemption
| to buildings. People don't like new taxes, but everyone
| loves exemptions!
|
| Political problems are often difficult to solve but that
| by no means makes them impossible.
| bumby wrote:
| > _poc should be allowed to build inter-generational wealth
| via housing_
|
| IMO, this is slightly at odds with the OPs point that
| creating housing investments is a bad thing. One of the
| problems in my eyes is that a disproportionate amount of
| Americans wealth is tied up in their homes. This creates
| incentives to protect those "investments" through things like
| NIMBY policies, tax incentives, etc. An alternative would be
| to create a system that fosters more diversified inter-
| generational wealth.
| screye wrote:
| > - nimby are the real evil
|
| > - another side convo about suburban housing = bad. we
| should all live in tightly packed cities with no cars.
|
| Are they wrong though ?
|
| Removing zoning restrictions (and fake
| environmental/historical significance reports) will
| immediately restore supply-n-demand stability to housing.
| Want more housing ? Build it. Simple as that.
|
| > second only to 'tech interviews and hiring' in terms of
| predictability
|
| The main difference is that no one has a good alternative to
| tech interviews. On the other hand, every single NIMBY
| problem has been analyzed to death, with location relevant
| solutions proposals and verified proofs of them working.
| standardUser wrote:
| Many of those perspectives have gained ground in recent
| years/decades and were not common or popular perspectives in
| years past, when housing prices weren't in crisis. You make
| it sound like repetitive nonsense when in fact these are
| salient points, relevant to the times and worthy of being
| spread and discussed.
| scifibestfi wrote:
| > Being a landlord has become a more attractive investment
|
| This is changing as we speak due to the interest rate. These
| investments are less attractive if you can get a safe 4% or
| higher return without having to deal with tenants and
| maintenance.
| tppiotrowski wrote:
| Is 4% an average rate of return for landlords? 4% of what:
| the capital you used to buy the house?
|
| So if I buy a house for $100,000, I get $4000 in rent per
| year? Or I get $4000 in my pocket after I use the rent money
| to pay the mortgage and property tax?
| toomuchtodo wrote:
| Typical RE return targets are 10-20%. Anything less than
| that and you might as well be in public securities.
|
| There are different ways to calculate returns: IRR, cash on
| cash, but it's immaterial for this discussion. TLDR you
| want returns higher than you can get elsewhere easier.
|
| (you must not just develop housing, you must lock it up
| from investors if you want to ensure long term
| affordability; capital is callous, uncaring, and voracious
| for returns)
| rcpt wrote:
| Also taxes. The housing bubble is a choice that voters make
| because voting demographics skew towards property owners.
|
| 1031 exchange
|
| Mortgage interest deduction
|
| Opportunity zones
|
| Taxpayer backing of Fannie and Freddie (allows insane leverage
| and eliminates interest rate risk for borrowers)
|
| Lack of any federal property/land tax
|
| Historical precedent that the government will bail out property
| owners in times of financial uncertainty
|
| Countless local tax cuts (Prop 13 etc)
| pjc50 wrote:
| I note these are mostly US-specific reasons, but the property
| bubble has been a thing all over the world both now and
| pre-2008. It's a phenomenon of popular cities everywhere.
| gruez wrote:
| Those specific reasons might be US-specific, but other
| countries have other policies to favor home ownership for
| the same reason (ie. "voting demographics skew towards
| property owners"). For instance, it's pretty common in
| other countries to have capital gains exemption on houses.
| rightbyte wrote:
| > other countries have other policies to favor home
| ownership
|
| You make it sound like a bad thing? Policies should favor
| the people. There are policies that favor renting flats
| too.
|
| I believe the problem is not "making it a good deal to
| own your home". That should be the default anyway.
| rcpt wrote:
| Ah capital gains exemptions. I knew I was forgetting
| something!
| rcpt wrote:
| Whichever nation you live in likely has similar crap.
|
| In China for example there's no property taxes and you
| can't send your kids to public schools unless you own
| property.
| NoToP wrote:
| China is a weird case where there is no property
| ownership per se, and all the property owners were sent
| to the fields, yet a generation later everyone is acting
| as if their 70 year lease is literally the same thing as
| property and entails the same rights of inheritance and
| so forth.
| rcpt wrote:
| I mean, the government kind of mandates property
| investment over there.
| TrackerFF wrote:
| Developers purchase land where they get the best ROI, and as
| I've witnessed it, that means first and foremost very central
| apartment blocks aimed at yuppies and financially secure people
| over 40.
|
| In order to get the attractive spots, they'll throw you a very
| lucrative bid, which also raises the surrounding property
| values considerably (well, until the blocks have been finished,
| that is. Could take years in cities with strong NIMBYism).
|
| To be honest, many of the newer and "cheaper" apartments in
| such blocks (still costs you $350k minimum) kind of suck.
| Small, narrow, etc.
| iso1631 wrote:
| > Financialization of homes as a personal investment is a BAD
| thing
|
| there's two parts to home ownership
|
| Physical asset, which deprecates (or needs a lot of maintenance
| to keep its value)
|
| Land, which appreciates, as they aren't making any more
|
| The former is fine. If you take a wreck and improve/renovate it
| and sell it for more than you paid, that's great, should be
| encouraged. The problem is the land value. Ironically the US
| tends to tax the physical asset far more than the land.
| s1artibartfast wrote:
| I'm not even sure homes are depreciating assets any more.
|
| The increase in labor costs may now exceed the rate of home
| degradation.
| aidenn0 wrote:
| If a small number of bored NIMBYs can stymie development, what
| can a giant firm like JP Morgan do?
| credit_guy wrote:
| A giant like JP Morgan does it either way. JP Morgan
| originates mortgages (via Chase Home Finance). It likes to do
| that in places where the price of homes does not go down. Put
| it differently, it likes to do that in places with strong
| NIMBYs. I suspect Citi and Bank of America and Wells Fargo
| have the same preferences. I'm not sure how these preferences
| manifest themselves, and I'm also sure they are not doing
| anything illegal. But they create some market pressure to
| hinder development.
| college_physics wrote:
| If you think about it, why have a buy-to-let market that requires
| assessing landlord credit risk, property value risk _and_ rental
| cashflow (occupancy) risk, just eliminate the hapless
| intermediaries.
|
| Next step: build-to-lease EV's.
|
| Final step: Eloi renters/users and Morlock builder/banker/owners
| Animats wrote:
| Strange. This made a lot of sense during the time of cheap money.
| Less sense now.
| robg wrote:
| Yeah, this should be regulated. If electricity and water are
| public utilities, housing should be too.
| maxerickson wrote:
| I guess I don't think JPMorgan should be regulated a whole lot
| more here than someone that owns a single rental. The renters
| of either place should have a reasonable experience.
|
| This ends up being a relatively small investment relative to
| the overall housing market (thousands of units gets you to a
| billion dollar acquisition cost). I can see it being a problem
| if large investors started to own most housing, but the best
| check on that is probably distributed and local (building more
| housing).
| shrubble wrote:
| Question: if you or I need a loan to buy a house the interest
| rate is 6% or so, currently. Does JPM have a source of far lower
| interest rate loans than that? Or are they simply creating the
| money out of thin air by creating credit, in effect, loaning
| money to themselves?
| prepend wrote:
| The corporate bond rate for AAA companies is currently 4.71%
| [0] so they are likely able to borrow at a lower rate than you
| or I could mortgage.
|
| They can't just create money out of thin air. And even if they
| could, that money would compete with other investments.
|
| In some ways, that's what banks do as there are deposit reserve
| ratios and what not where they take in deposits and loan out
| more. But JPMorgan internal projects would "borrow" similarly
| to anyone else who wanted to use $1B to buy a bunch of houses.
|
| [0]
| https://ycharts.com/indicators/us_coporate_aaa_effective_yie...
| impossiblefork wrote:
| But wouldn't there be an additional tax advantage:
|
| Suppose that we have a company buying houses and an
| individual buying a house using his salary. In order to move
| money from a company to an individual income tax must be paid
| and if a company instead invests its money, I assume that no
| tax is paid immediately.
|
| Consequently if companies start bidding for houses, they will
| have much more money available than individuals, ensuring
| that houses will in the long run hardly ever be owned by
| individuals.
|
| The result would thus be large company-owned estates, filled
| with renters.
| prepend wrote:
| The individual would just form an llc or even c-Corp and
| use that to purchase the real estate.
|
| I think most real estate rented out is technically owned by
| a corporation because of the liability issues. So we're
| already there. But I think there's a difference between a
| solely owned Corp and a huge Corp. But for tax purposes,
| they seem the same.
| impossiblefork wrote:
| Yes, but ordinary people earn their income from wages,
| which are always taxed before they can be put into any
| LLC.
|
| Thus they will end up severely disadvantaged in
| competition with actual companies for ownership of
| housing and land.
| mpeg wrote:
| When you buy new builds in bulk you also don't pay full
| price, the builder will extend a nice discount as it provides
| a great channel to get rid of inventory and move on to the
| next site.
| DueDilligence wrote:
| .. Blackrock, y'all.
| scarface74 wrote:
| Blackrock bought pre-existing inventory. How is this similar?
| mpeg wrote:
| Blackrock invested over PS350m just in my former employer to
| finance new builds in the UK, it's not just second hand.
| scarface74 wrote:
| And they haven't as far as I know in the US.
| mpeg wrote:
| Indeed, Blackrock invested hundreds of millions just in a
| former employer of mine in the smaller UK market.
|
| They are really heavily invested in property
| ggm wrote:
| What rate of return is socially acceptable? Putting the market to
| one side, there's affordability to tenants, this is a _home_ not
| just an investment vehicle which has to balance off against
| investment returns, in many cases LPTs are what pension funds
| invest in, so the income in turn is funding retirement.
| kubb wrote:
| 0%, large landlords should be non profit cooperatives, there
| should be several to ensure efficiency/prevent monopoly
| stagnation and they should be under constant scrutiny from
| independent parties.
| thefounder wrote:
| Sure, who wants to put money into that?
| swagasaurus-rex wrote:
| People who actually need the housing? It's not like land is
| cheap after all.
| devnullbrain wrote:
| It's effectively the new risk-free rate. So whatever watershed
| where it stops making sense to put money in a mortgage instead
| of a viable, profit-making, problem-solving business.
| Ekaros wrote:
| Hmm, maybe we should ban selling housing for more than the
| purchase price + inflation based on some index. If rent
| controls are popular, why not also have price controls on
| properties themselves. Maybe allow some increase if entire
| building is replaced, but some value must be attributed to land
| that can not increase in value.
| scarface74 wrote:
| Why would anyone invest money just to get the same returns
| they can get on an inflation adjusted government bonds?
| hgsgm wrote:
| [dead]
| chii wrote:
| > What rate of return is socially acceptable?
|
| the market rate of return. You establish this by making sure
| that a market has enough participants that they all vie for the
| investment. This will drive down the rate of return, down to an
| acceptable level that allows participants to continue.
| BirdieNZ wrote:
| Land/location is not a capital good and isn't affected by the
| same market rules as capital goods, because it is unique and
| possesses monopoly properties. It's essentially impossible
| for land and other natural resources to have a free market,
| by nature.
| willis936 wrote:
| Microeconomics suggests there are multiple common scenarios
| where consumers are priced out of the market entirely. If you
| can't afford rent then you can't afford to move. People
| homeless to appease shareholder value.
| ElfinTrousers wrote:
| Seeing a free market fundamentalist preach in 2022 is like
| watching a doomsday cultist try to explain why the world
| didn't end on time last week.
| HPsquared wrote:
| 1 billion? With a B? That's not going to make any difference to
| anything. Maybe if it was all within a single city.
| moneywoes wrote:
| Is build to rent more likely to succeed than zillows program that
| failed?
| alexbiet wrote:
| Homes should be afforded by and owned by families. Corporations
| have no business owning family homes. The fact this is even a
| thing shows how broken the system actually is.
| xwdv wrote:
| It's not the mega landlord that people have a problem with, it's
| that the rent is too high. Land lording isn't going to go away,
| so it's best to focus efforts on reducing rents.
| BirdieNZ wrote:
| Land value tax would fix this!
| xwdv wrote:
| Tax gets passed on to the consumer.
| civilized wrote:
| Big financial institution confidently bets that NIMBYs will
| control housing supply for the foreseeable future.
| andylynch wrote:
| So, one or two neighbourhoods? Barring some dramatic kind of
| tenure reform, this isn't such a bad idea for tenants, given that
| unlike so many landlords, this venture is being run by firms big
| enough to attract scrutiny, and competent enough to know what
| processes and laws to follow, even if they will push those
| boundaries.
|
| As an aside, the article also refers to a story on 'digitising
| the rental market' which seems to be about moving the US market
| away from rent checks? Why are these still a thing there? in most
| countries at least in OECD this is like doing business via fax or
| even telex.
| stonepresto wrote:
| Sounds like you don't live in the US... I have a feeling rental
| companies are very different where you live. They are
| notoriously and laughably bad here. Broken webapps, slow
| replies, understaffed maintenance crews, misdirection in the
| name of profit, and sometimes outright deception.
| javajosh wrote:
| An excellent argument for further consolidation of every
| industry - now they are big enough to attract scrutiny! Look,
| less competition is actually _better_ for consumers!
|
| I mean, wow.
| andylynch wrote:
| Not arguing that at all - real estate is weird in that it's
| much less liquid than other retail markets, and moreover
| buyers ie renters are at a further economic and information
| disadvantage. So some consolidation in the context of making
| the market more transparent and better regulated for renters
| to counter this _maybe_ should not be immediately dismissed
| if there is not a political mandate for more dramatic
| reforms.
| javajosh wrote:
| It sounds like you're arguing in good faith, but no, I'm
| sorry, you're just wrong. In any conflict, a smaller
| adversary is better. Individual landlords, who live in the
| neighborhood, are in every way more accountable for their
| behavior.
| ngoilapites wrote:
| Now it is time to update regulations, but how? Not even in
| Germany they could do it.
| badrabbit wrote:
| Look, I have a lot of strong opinions but I cannot get over the
| fact that housing as an investment is a thing, especially by
| corporations.
|
| Let's back up a bit.
|
| The richest country in the history of humanity has a ton of
| homeless people yet its corporations buy up houses purely for the
| sake of preventing others from living in the house so they can
| sell it at a higher price later on.
|
| Is that not absurd?
|
| Even canada, vast beautiful land with most living close to the US
| border. Yet land or house in the middle nowhere in the Yukon
| costs a fortune now. All because this one simple disease:
| corporations, which are legal entities constructed to allow a
| group of people to use their collective wealth to advance a goal
| (such as profit) are treated the same as natural persons whose
| rights and liberties are naturally justified beyond the scope of
| any country's laws, all because collective wealth meant
| collective power to influence lae makers and judges?
|
| The answet to this and so many other first world ailments is
| simple:
|
| 1) corporations as legal entities are not the same as natural
| persons. They are not created equal to individuals and do not
| enjoy human rightd or civil liberties.
|
| 2) Land and housing is for individual needs first (because of
| #1). Investment housing by nature forms a perverse incentive,
| investors can instead invest in derivstives or ETFs where they
| can build equity in a similar way without robbing people of
| housing.
|
| I am really shocked that these things are missing from mainstream
| discussions. It sounds like everyone wants to avoid the big fat
| elephant in the crowded room.
| thinking4real wrote:
| Of course these things aren't heard in mainstream discussions.
|
| The media, and by extension the minds of majority of our
| citizens, are owned by the same corporate entities you mention.
|
| They control language so that people will go along with their
| greed.
|
| So if you're a corp, you steer the discussions around your
| profit seeking avenues so people don't even posses the language
| necessary ti discuss your demise.
|
| People will never discuss the abstract idea that this whole
| "legal entities == people" thing is fucked, because they think
| they're clever to talk about some vague future tax that will
| never be implemented because the corps own the politicians too.
|
| People aren't avoiding the elephant - they have been programmed
| to not realize the elephant is the problem.
| wefshill wrote:
| [flagged]
| elforce002 wrote:
| So it begins. Slowly but surely, the WEF mantra is taking shape:
| "You'll own nothing and you'll be happy".
|
| It feels like we're heading back to feudalism, only with extra
| steps.
|
| This will create social unrest, to say the least.
| jmyeet wrote:
| And then JPMC like all property developers will buy politicians
| to prevent even more housing being built to appreciate their
| existing assets. We know how this goes.
|
| The uber-concentration of wealth and the exploitation of labor
| that we are allowing to happen is short-term thinking.
|
| The #1 factor in homelessness by a mile is the cost of housing.
| Poverty is the most significant factor in crime. We, as a
| society, would rather spend billions on an overmilitarized
| ineffective police force to be "tough on crime" rather than
| address the systemic issues that lead to that crime.
|
| The first stage we will see is a well-documented phenomenon
| called the alienation of labor where the people required to
| produce something cannot possibly afford it. Once that reaches
| housing (and some argue it already has) then we're in big
| trouble.
|
| What comes next? War and revolution. These are the ultimate forms
| of wealth redistribution once wealth inequality becomes too
| extreme.
|
| This country produces enough wealth for every man, woman and
| child to have shelter, food and health care, period. It is a
| political decision to let people die on the streets, starve or
| die from being unable to afford insulin. This is state violence.
|
| A fairer distribution of wealth isn't just about the morality of
| providing for basic human needs. It's also about giving those
| increasingly-consolidated megacorporations customers for the
| widgets they sell and preventing the inevitable violent uprising
| that lies at the end of the road when late stage capitalism turns
| into neofeudalism.
| tinco wrote:
| $1B is absolutely peanuts, if they spend this yearly on acquiring
| real estate it will be a hundred years until they could be
| considered a mega landlord like for example Blackstone with its
| $550B worth of residential rental properties. They bought a
| billion and a half worth of properties in the small provincial
| city of Amsterdam in The Netherlands over the past couple years
| and it doesn't even make a dent on the housing market. That, and
| because of their corporate nature they're a lot less shitty
| landlords than the previous owners were.
|
| I'm in full agreement that big money is a threat to society, but
| at least be realistic about the numbers. Just imagine how
| insanely large amounts of money you need to corner the market.
| I'm not saying it's impossible, but if the articles aren't
| talking about trillions, then they're simply not relevant.
|
| Maybe if the article was about a thousand JPMorgans becoming
| "mega" landlords it could be relevant. Also.. who is really
| losing here? The way I see it, this is a threat to the lower
| upper class, who are being pushed out of the renting market. Are
| we supposed to feel bad for them, or is this article intended
| audience the lower upper class?
| opportune wrote:
| I agree with this take, $1b is absolutely nothing in the
| housing market. It's like 3000 homes, maybe more in a cheap
| market, less in an expensive market. It could distort a
| regional market if it's all concentrated in one area, but in
| the grand scheme of things it's a rounding error.
|
| I am also of the opinion that big landlords are typically
| preferable to smaller landlords. They are very predictable
| known entities with brands to protect, and have legal
| departments that ensure they will follow laws. They may in some
| cases be more eager to raise rent (although my corporate
| landlord hasn't in the last year despite the market rate
| increasing about 10%) but they're not gonna do random manual
| inspections or capriciously fail to perform maintenance, nor do
| something batshit like change your locks.
|
| The only thing I find problematic is when entities like
| blackstone purchase SFH for rentals as I see it as a way of
| capturing value from the middle class (taking the margin that
| makes home ownership economically attractive) where it wasn't
| previously.
| tinco wrote:
| Definitely agree, though in Amsterdam they only bought rental
| units, no SFH, I don't know what their global strategy is in
| that regard. I'm not sure if there's a clear business case
| for buying single family homes and turning them into rentals.
| You're basically competing with the entire mortgage industry
| then, families have insane buying power when backed by
| mortgages. They also make decisions that make no financial
| sense, basically only tempered by governmental regulation and
| the risk appetite of mortgage lenders.
| crtified wrote:
| Indeed it would be surprising if a company in JP Morgan's
| position did NOT have significant property holdings. It's a
| foundational investment class.
|
| And frankly, having worked on the inside in the land
| development industry: the primary clientele of virtually every
| land development office in the world - from small city to large
| - is either wealthy old dude/family, or their companies.
|
| Because land = wealth. If you have one, you can have the other.
| Or already do. In that sense, this JP Morgan topic is, as you
| say, just a drop in the ocean.
| gbasin wrote:
| To play devil's advocate, these big institutional buyers moving
| into the single-family home market after a huge run up just feels
| like suckers rushing in at the top.
|
| We're possibly at a multi-generational peak in inflation-adjusted
| returns to homeownership. Total population growth has essentially
| peaked, and working age population is falling. Expect more
| inflation over the next 50 years as we have more retirees (pure
| consumers of goods) to working age folk (who are net producers).
| On top of that, we've built more housing than "needed" in 99% of
| the country (look up the numbers if you're curious...
| construction has outpaced population growth).
| robocat wrote:
| > look up the numbers if you're curious
|
| Perhaps provide a link? I did a Google and the first result
| said the opposite.
| wolverine876 wrote:
| The megalandords are potentially a serious threat to democracy.
|
| Property rights are, to many theorists, the foundation of
| liberty. The widespread ownership of property is arguably the
| foundation of democracy. Owning your home gives you rights and
| independence; your home is your castle. The landlord's home is
| their castle.
|
| Now we are concentrating wealth and property back into the hands
| of a few, a corporate aristocracy. You can use property at their
| pleasure. What happens if you want to do something politically
| unpopular? Put a sign in your yard? Work someplace or say
| something on social media? What if you have a dispute with this
| landlord - can you compete in court with their lawyers? where
| else will you live? Will other megalandlords accept you?
|
| They also will have enormous influence in local communities.
| Property owners, not renters, are the influential people in any
| community. These new megalandlords will concentrate that power in
| a large corporation which has enormous resources. Local
| government will not be able to compete.
|
| How does this arrangement differ from feudalism, with the wealthy
| controlling the land and the rest reduced to renting it. Well
| past feudalism, the concentration of property ownership has been
| a serious obstacle to democracy in many countries trying to make
| that transition. Now we are going backward.
|
| Do you think these wealthy, powerful people, who pride themselves
| on their naked aggression and disregard of others' welfare, who
| have a long history of buying government, will not use this
| power?
|
| A crucial question is, is this part of the deliberate attack on
| democracy by the (unnamed) coalition of wealthy and corporations,
| or truly just an investment? Regardless, the power will be there
| for that coalition to utilize.
| codingrightnow wrote:
| Yes. This should be illegal. Where are our politicians to step
| in and stop this?
| CommanderData wrote:
| The article said JPMorgan. No politician is stepping in
| anytime soon.
|
| They are all complicit. At least in the UK, our politicians
| have a rich relationships with companies like these (ex -
| exployees, advisors, donors) and no one bat's eye.
| geocon wrote:
| Behold the rise of neofeudalism: you can already see it in
| California, thanks to Prop 13.
|
| Land value tax would fix this.
| IG_Semmelweiss wrote:
| Prop 13 was a direct result of a California court decision.
|
| I forget the 1960s case, but the gist of it was it instituted
| equalization in school budgets out from property taxes in the
| name of equity.
|
| In other words, high property taxes in 1 town were forced to
| be transfered to the neighboring town with a lower budget, so
| much so that the transfer had to be make payments by pupil
| within a $100 band.
|
| That was instituted blind to school performance of course.
|
| This actually took hold in many states not just California,
| however CA was the o ly one that forced transfer payments
| within a $100 band. There are different flavors of this all
| accross the country
|
| Of course, homeowners are not idiots. They dont want their
| tax dollars wasted. So soon after this case forced these
| transfer payments, there was a swell of home owners pushing
| for prop 13.
|
| Makes sense. Local taxes to local benefit. If my taxes are
| going elsewhere, why should i pay more?
|
| And so here we are. Almost 50 years later. Prop 13 is here to
| stay and is the only restraint that communities have against
| out of control state spending.
| istjohn wrote:
| It's truly incredible the mountains that are moved in
| politics to ensure poor families attend inferior public
| schools since Brown v. Board.
| HideousKojima wrote:
| Not sure what you mean by "inferior," funding levels have
| little if anything to do with school quality once basic
| needs are met:
|
| https://en.m.wikipedia.org/wiki/Abbott_district
| thatfrenchguy wrote:
| > And so here we are. Almost 50 years later. Prop 13 is
| here to stay and is the only restraint that communities
| have against out of control state spending
|
| Nope, prop 13 (and the resulting income taxes) is somewhere
| between feudalism and class warfare, transferring money
| from the young who work to old people who pay nothing and
| spend their days at city hall making sure nothing ever gets
| better.
| treeman79 wrote:
| There was also the whole issue of older people being forced
| out of their homes due to the rising property taxes. Turns
| out they vote in high numbers.
| rcpt wrote:
| Lies.
|
| Since 1977 (before Prop 13) we've had the California Tax
| Postponement Program. Low income seniors, the disabled
| and the blind can defer taxes indefinitely. They have
| zero pressure from the state to move.
| seanp2k2 wrote:
| Also, the biggest winners from prop 13 are businesses
| like Disney:
| https://www.curbed.com/2020/10/prop-15-california-
| property-t...
|
| Meanwhile, anyone who didn't buy a house or property for
| a business 20+ years ago is priced out of the market, so
| we have tons of low-quality stores and businesses that
| are insulated from competition. It's interesting how many
| free market advocates will throw their values out the
| window when it benefits them to do so.
| rcpt wrote:
| Right. And consumers get none of this benefit. When was
| the last time you scored cheap gas because of station's
| property tax?
| seanp2k2 wrote:
| It's hard to have a ton of sympathy for people paying
| very little tax on their 7-figure property. Sell it and
| move anywhere else...but the real pro move is to just
| rent it out and live somewhere else. We have neighbors in
| our Silicon Valley suburb who live in RVs in their
| driveway so they can rent the entire house and still
| "live" there. Great retirement plan / grift that will
| never be available to younger generations.
| rcpt wrote:
| Serrano v Priest
|
| This is the paper https://www.journals.uchicago.edu/doi/abs
| /10.1086/NTJ4178881...
| seanp2k2 wrote:
| Prop 13 also has the great benefit of keeping anyone new
| out of the neighborhood, as they'll be paying potentially
| an order of magnitude higher tax on the same property.
| Meanwhile, folks living on the edge of poverty already can
| stay in their 7-figure homes, unable to afford anything
| locally as everything else has moved on price-wise, so we
| get underfunded schools surrounded by de-facto
| millionaires. Businesses benefit even more, just look up
| what Disney's Prop13 benefits are like. This is a great
| idea too, as it ensures that land owners who have owned in
| a place for decades are untouchable in terms of investment
| performance due to the massive tax benefit, so they can
| charge market-rate rent while paying a small fraction of
| the tax that anyone else trying to do the same today would.
| /s
| rcpt wrote:
| Worth noting is that this whole scam is arguably illegal
| under the Fair Housing Act.
|
| Prop 13 rewards long time landowning families. Who's
| that? White people. Even if the law wasn't explicitly
| racist originally it's impact has been. And only impact
| matters in the law.
|
| Here's a link to a good paper on it
|
| https://twitter.com/jarosenthal/status/132813628615926169
| 8
|
| If the current court weren't a joke I think this would be
| worth pursuing.
| tzs wrote:
| > Prop 13 also has the great benefit of keeping anyone
| new out of the neighborhood, as they'll be paying
| potentially an order of magnitude higher tax on the same
| property.
|
| Prop 13 is around 45 years old, which is much longer than
| the median homeowner tenure in California. That suggests
| that new people are moving into neighborhoods.
| birdyrooster wrote:
| They mortgage their houses for huge sums and then buy
| cheaper homes elsewhere and then fill it with multifamily
| amounts of people who trash the area (bc it wasn't
| engineered for this many people) all while blocking it's
| redevelopment. This is why San Francisco is a disgusting
| mess.
| IG_Semmelweiss wrote:
| San Francisco is a disgusting mess because of govt
| policies that directly incentiviE and subsizide fentanyl
| outdoor homelessness, and act such programs are magnet
| for others in the same situation .
|
| Renters are not taking dumps in the street.
|
| Homeless people are
| IG_Semmelweiss wrote:
| But let me play devils advocate here.
|
| 50%+ of california decided for this. Have you pondered
| why? First, are we really talking a massive tax benefit?
| Prop 13 is about tax increases to be limited ? Is that
| insane? Or is it maybe housing prices that are insane?
| Something does not add up.
|
| I dont control the price of my home. Why should I pay
| ever incessant amounts over something I dont control and
| is effectively, paper gains?
|
| But, I'll tell you what does control prices. Whose fault
| it is that there is no property being built in all the
| farmland along 280 between SF and Palo alto or Menlo
| Park.. Sure it looks nice, but its 40% of available land.
| Just farms.
|
| Worse...some of farming is almonds... which take so much
| (subsidized) water. Again, why?
|
| Why are there no municipalities created in those areas?
| Why is there no competition in the bay area's overpriced
| land ? Look into who controls the creation of new
| municipalities. Thats where a key problem for CA.
| rcpt wrote:
| 65% of California voted to overturn the 1963 Rumford Fair
| Housing Act, thereby allowing property sellers, landlords
| and their agents to openly discriminate on ethnic grounds
| when selling or letting accommodations.
|
| https://en.wikipedia.org/wiki/1964_California_Proposition
| _14...
|
| The supreme court had to overturn the law.
|
| Direct democracy is an objectively horrible way to
| govern. The US realized this hundreds of years ago and
| The Federalist Papers explicitly called out the "problem
| of faction" which is why we have a representative
| democracy instead of US citizens voting on federal law
| directly.
|
| Children, immigrants, future transplants and prisoners
| can't vote. Should we be okay to grind them into dirt if
| it'll enrich voting demographics?
| IG_Semmelweiss wrote:
| Yet switzerland has the oldest continuing government in
| the world.
|
| Meanwhile, we had at least 1 close brush with failure
| (civil war). And counting.
|
| You need to take care of factions and you need big,
| heated arguments at the local level. So they dont end up
| scaled up at the federal level.
|
| Otherwise those scaled up "solutions" ends up massive
| problems, such as the sudden reversal of abortion,
| foreign interventions, and housing/ credit meltdowns due
| to federal subsidies of mortgage insurance.
| poulsbohemian wrote:
| As I don't live in CA, explain to me how this would work? As
| an outsider, it sounds on the surface a lot like those people
| who advocate for a flat income tax, IE: you and I both own a
| half-acre, but I have a single-wide trailer and you have the
| Hearst Mansion, but we are both taxed the same amount.
| HDThoreaun wrote:
| That's the point. If you own a valuable piece of land, the
| government needs to incentivize you to density so that the
| community has cheap housing. Putting a single wide on a in
| demand spot is wasteful and should be punished.
|
| More generally, land value tax returns land to its rightful
| owner, the people in the community. No one created land so
| it doesn't make sense to allow people to profit off it.
| geocon wrote:
| The idea is to tax land as a percentage of its value
| (notably, not its size). This is because land is a
| necessary good which is exclusionary: because there is a
| fixed supply of land, it can only be owned at the expense
| of someone else.
|
| So, let's take the scenario you gave: it depends very much
| where the mansion and the trailer are. Generally, people
| build mansions on high-value land and trailers are on low-
| value land, so the mansion will be taxed more than the
| trailer (a half acre in LA has a much higher value than a
| half-acre in rural Nevada where I live). If they are on the
| exact same lot, though, then yes they would pay the same
| tax. The idea is that taxing this way incentivizes the best
| use of land. Imagine that you have identical plots in New
| York, one is a big apartment complex, and the other a
| parking lot. With a property tax, you take a huge tax
| penalty for building, and so the housing complex pays a lot
| of taxes and the parking lot almost nothing. With a land
| value tax, however, the parking lot and the housing complex
| pay the same amount in tax, so it incentivizes the owner of
| the lot to build a more profitable housing complex there as
| well, and they take no tax penalty.
|
| Prop 13 in CA is a law that freezes property tax
| assessments at sale, so you have people who are paying
| taxes on a home currently worth $2 million as if it were
| only worth the $150k they bought it for in 1980. This means
| it is always better just to rent the house out than sell
| it, since you have a huge tax benefit, making housing
| almost impossible to buy. Worse, you can pass the frozen
| assessment on in your will. So it is almost literally
| creating a quasi-landed gentry class.
| throwaway5959 wrote:
| It also means that the moment you buy land yourself in
| CA, you have a strong financial incentive to maintain the
| status quo. And thus the cycle continues.
| rightbyte wrote:
| > Land value tax would fix this.
|
| The banks decide what your house is worth and the gov then
| tax you based on that. Seems like a way to force people into
| a never ending grind and kicking out seniors. No thanks.
| janalsncm wrote:
| A LVT is a fixed tax per square foot of land. It
| incentivizes maximizing the property value on the land and
| building high density housing there.
| geocon wrote:
| To clarify, it's not a flat dollar amount per square
| foot, it's a flat percentage of value. An acre of land in
| Wyoming is not taxed the same $/sqft as an acre of land
| in NYC.
| jeffreyq wrote:
| How does "value" get defined here? In the context of LVT.
| rcpt wrote:
| The same way we've been doing property assessments for
| decades. Just easier because there's no structure to
| assess
| daveguy wrote:
| Why couldn't ther be a tax per sqft? LAT rather than LVT.
| Would it change incentives in the way gp hypothesizes?
| Seems like it would.
| geocon wrote:
| That would be a terrible idea, frankly, because it will
| cause gradients of overbuilding/land abandonment and
| underuse. Think about it this way: you have a city where
| land is worth $30/sqft/yr in the center, $10 at the edge
| and $20 in between. If you set the tax at $20/sqft/yr,
| you will not incentivize people to build enough in the
| center of the city. It will be just fine in the middle,
| but it would be impossible to earn enough money from land
| to pay the tax on the outside of the city, so people
| would just abandon the land or try to build way more than
| you would actually want there (in which case the supposed
| land tax is actually cutting in and taxing labor and
| property as well)
| daveguy wrote:
| I didn't mean there would only be a sqft / yr based on
| the value. I meant there would be a sqft / yr + value. So
| the city center would still be a higher tax than the
| edge.
|
| The edge would still be worth more to build on because of
| the lower base-dominant tax.
|
| But it does make the edge less accessible to lower
| incomes due to the base tax.
|
| It should probably be a max value or max sqft on a given
| entity than try to indirectly force that with tax values.
| There's a reason we have anti-trust laws.
| zip1234 wrote:
| My understanding is that in most places taxes would go down
| for homes. They would go up massively for those with vacant
| lots or a lot of land in prime areas that is being
| underutilized, which is why LVT is great.
| geocon wrote:
| Er, an LVT doesn't tax the house at all, that's precisely
| the point. It only taxes the land... It's literally just a
| property tax that _doesn 't_ tax the house.
| tzs wrote:
| So if I've got 10 acres that I'm keeping as an
| undeveloped wilderness to provide habitat for migratory
| birds to use during migrations and you've got 10 acres
| next to mine with a 200 unit apartment building on it we
| pay the same amount of tax?
|
| That doesn't seem fair since your 10 acres is using way
| more of nearly every government service property taxes
| fund and requires more of nearly every government
| infrastructure that property taxes pay for.
| [deleted]
| stephenhuey wrote:
| Reminds me of this 10 days ago:
|
| https://news.ycombinator.com/item?id=34073880
| Firmwarrior wrote:
| Sounds about right.. we're seeing the first steps toward a
| return of Madame Guillotine already. Reddit is flooded with
| populist rage subs like AntiWork. Angry populist candidates
| (Trump and Bernie) dominated the 2016 election cycle
| bumby wrote:
| The less positive view is that when boomers begin to leave
| the housing market, it won't release housing pressure by
| putting more homes on the market, but rather create a wealth
| transfer to their children who may just rent out the homes
| for more than the equivalent sale.
| yunwal wrote:
| > A crucial question is, is this part of the deliberate attack
| on democracy by the (unnamed) coalition of wealthy and
| corporations, or truly just an investment
|
| These things are one and the same. There is nothing to do with
| billions of dollars outside of buying influence.
| ThrustVectoring wrote:
| > What if you have a dispute with this landlord - can you
| compete in court with their lawyers?
|
| Bold of you to assume that they wouldn't just cancel your
| lease, share your do-not-rent status with the other mega-
| landlords, and hope that homelessness makes you go away.
| danaris wrote:
| I mean, this is presumably _also_ something that you might
| _attempt_ to contest in court.
| treeman79 wrote:
| I moved into a house from From a mega rental. All the windows
| were open when we did The inspection. Had a massive chemical
| smell after we closed it up. Company kept making excuses
| about smell. Well in 3 months family suffered a whole series
| of strokes and other issues. Eventually found a gas leak. It
| didn't have the rotten egg smell so took awhile to figure
| out.
|
| Plus we just were gone mentally.
|
| Doctors wouldn't fill paperwork saying that high levels of
| toxic gas caused medical issues, so lawyers wouldn't take the
| case.
| baby wrote:
| Why didn't you just leave and stop paying rent?
| treeman79 wrote:
| We eventually did.
| UncleMeat wrote:
| This is often hard. Even if you find a new place and
| move, your landlord will come after you for the remaining
| rent on the lease. If you don't succeed, you'll have a
| ding on your credit report that makes it harder to get a
| home loan and may make it nearly impossible to find
| places to rent.
| actionfromafar wrote:
| Maybe it was in winter, alleyways are kind of cold to
| sleep in that time of year.
| moneywoes wrote:
| Name and location? If you're comfortable could you email me
| more details
| sizzle wrote:
| What kind of toxic gas leaks into households that can't be
| detected by smell? Radon?
| treeman79 wrote:
| Natural gas. Some sort of butane. Leak was in attic.
|
| Growing up gas had a rotten egg smell. So we didn't
| realize. Also when we called they kept insisting it was
| the carpet, the floors, the paint. They would come out
| and say nothing was wrong and that smell would go away.
|
| There was also a carbon monoxide leak that the dector was
| going off on. That was what make us stupid as shit while
| dealing with it.
| eh9 wrote:
| Wouldn't many of these disputes fall to small claims court? I
| thought lawyers weren't a thing and big COs just settle in
| small claims
| hungrigekatze wrote:
| Just for reference here's a list of small claims amounts by
| state (link below). I grew up in $rustBelt state where the
| small claims max is paltry. Then I moved to $coastalState1
| and was surprised by how much larger their small claims
| maximum amount was. Then I moved to the other coast and was
| surprised AGAIN by how large their amount was.
|
| TL;DR: Depending on the state you're in Small Claims max
| payouts range from $2,500 (Kentucky, Rhode Island) up to
| $25,000 in DE and TN. Also note that some localities such
| as NYC, Nassau, etc. have different amounts from the rest
| of NY State. Also note that there are some exceptions to
| the max. amount in some states for eviction claims and
| other special classes of [small] claims.
|
| https://www.nolo.com/legal-encyclopedia/small-claims-
| suits-h...
|
| Also, IANAL, but this "my home had poisonous gas in it that
| the owner knew about and was negligent in remedying" _is
| not_ a small claims case. Injuries / loss would, IMO,
| easily exceed any small claims amount.
| mikeyouse wrote:
| Small claims have dollar limits and most corporate
| landlords enforce arbitration agreements to prevent any
| possibility of a smaller court from damaging their
| interests.
| miguelazo wrote:
| Exactly-- this stuff would end up in pro-corporate
| arbitration, depending on the jurisdiction.
| gloryjulio wrote:
| We need the Japan model to ease up the supply. That's the only
| direction to solve housing problem
| naveen99 wrote:
| It's turtles. JPMorgan is publicly traded. The renter can just
| buy as many shares of it as he wants and pretend it's his home
| equity.
| seanp2k2 wrote:
| How much of that profit is passed on to shareholders vs
| benefitting land owners directly? There's also the matter of
| not being able to live in those shares, having to still pay
| rent, still pay massively inflated property taxes yourself...
| TaylorAlexander wrote:
| This is nonsense. 99.99% of renters can't buy enough JPMorgan
| to make a difference. They don't have the money and that's
| why they're renting.
| speakfreely wrote:
| Good luck getting 95% leverage to buy $500k worth of JP
| Morgan stock.
| naveen99 wrote:
| Equity is the part of the mortgage paid off (unleveraged
| value in the house).
| throwaway5959 wrote:
| Maybe the fact that someone can get 95% leverage to buy a
| fixed rate mortgage for _30 years_ is part of the problem.
| We should bright back 50% down, five year mortgages and cut
| the rest of the stuff out.
| roflyear wrote:
| Then everyone would have to rent.
| darth_avocado wrote:
| But if tomorrow JPM decides to invest like Kathy Wood and
| lose all the money, the renters will be without home equity
| and the JPM equity.
| ramesh31 wrote:
| > It's turtles. JPMorgan is publicly traded. The renter can
| just buy as many shares of it as he wants and pretend it's
| his home equity.
|
| Try asking your brokerage for $400,000 of margin at 5% on a
| $20,000 account and see what they say.
|
| There's no financial instrument even remotely close to what a
| 30 year mortgage is for the average individual.
| naveen99 wrote:
| I believe you can get higher leverage on treasury bonds at
| your broker. My 1 year treasury bonds use less than 2%
| margin.
| roflyear wrote:
| What's the rate? You're not getting free money.
| naveen99 wrote:
| It's 1% above what you make on the treasury. Less than
| mortgage rates for sure, and if interest rates drop it
| might become free money, of course if interest rates go
| up you are swimming naked.
| skybrian wrote:
| That argument is way too theoretical. Some people want to own
| their home and others want to rent. The optimal amount of
| rental housing is not zero. Whether there is too much or not
| enough rental housing is an empirical question that depends on
| local conditions.
| naasking wrote:
| The cost of housing rising above median livable wage is not
| theoretical. We're well past that in some parts of the
| country.
| skybrian wrote:
| But does that mean there is too much rental housing
| available or not enough, versus owner-occupied housing? If
| you want rents to be lower, it's strange to argue against
| an increase in rentable housing.
| naasking wrote:
| Rent has also skyrocketed, so your framing as some trade-
| off between availability of rent or buy does not seem
| correct.
| sokoloff wrote:
| All else being equal, do you think JPMC building $1B of
| new rental property to raise or lower rents?
| Beaver117 wrote:
| Well someone is paying it, or else the prices would come
| down. The middle and lower class are just being pushed out
| daveguy wrote:
| There should not be megalandlords that can control a
| significant portion of housing anywhere. "Some people
| want..." is a lot more theoretical argument than gp. There
| needs to be limits on the power of landlords. I am curious as
| to what other countries have done to avoid it. Monopolies are
| illegal in the US, but it seems difficult to bring anti-trust
| against landlords.
| seanp2k2 wrote:
| >Monopolies are illegal in the US
|
| If Comcast isn't a monopoly for many in this country, I
| don't know what is. Serious question: what are some notable
| examples of the government taking actual action against
| monopolies in a meaningful way that made them no longer
| monopolies?
| kaashif wrote:
| > Local government will not be able to compete.
|
| Local government is, by and large, NIMBY and thus on the side
| of the megalandlords.
|
| Local government does not compete with property investors, it
| is already controlled by them.
| wolverine876 wrote:
| That's not my experience; that is, it happens, but certainly
| not always. Look at major cities with rent control, for
| example.
| geocon wrote:
| Rent control is, I regret to inform you, also NIMBY; it
| benefits current residents at the expense of future ones.
| whatshisface wrote:
| I don't think there is any way to get a voting system to
| stop favoring people who vote in the current election
| over people who can't or don't, but the OP was talking
| about something different: local governments favoring a
| slight minority of voters (landlords, some of whom are
| nonresidents and can't vote at all) over the larger
| number of tennants. I say "slight minority" because quite
| a few "landlords" are not the Victorian aristocrats our
| cultural legacies from Marx's time make them out to be
| but rather individual people who saved up and now let one
| property.
| sokoloff wrote:
| > any way to get a voting system to stop favoring people
| who vote in the current election over people who can't or
| don't
|
| Would that even be desirable? I feel that serving the
| desires of the voters is an essential (and desirable)
| property of democracy.
| wolverine876 wrote:
| We do want majority decision making, but Democracy,
| outside a theoretically extreme sense, is self-
| determination for all, not just the majority.
|
| That's the reason for rule of law, human rights, and
| limited government - to protect those without power. The
| people with power always have had self-determination.
| sokoloff wrote:
| Totally agreed; nevertheless, any voting system capable
| of expressing the desires of voters _should_ result in an
| outcome that better meets their desires than the desires
| of non-voters. If it didn't, why would anyone vote?
| wolverine876 wrote:
| > I don't think there is any way to get a voting system
| to stop favoring people who vote in the current election
| over people who can't or don't
|
| The purpose of human rights is to protect those people.
|
| > I say "slight minority" because quite a few "landlords"
| are ... individual people who saved up and now let one
| property.
|
| I agree, but that seems to be changing as these large
| investors buy up homes. That change is the point.
| rcpt wrote:
| The "problem of faction" is theoretically solved via
| representative democracy. That was the idea in the
| Federalist Papers.
|
| It's not perfect but absolutely works better than direct
| democracy which has led to things like Prop 13 and it's
| endless extensions
| PontifexMinimus wrote:
| Agreed. Whether there is rent control, the local
| authority should be obliged to offer to let houses at the
| controlled rent to people wanting them, building new
| houses if necessary.
| wolverine876 wrote:
| The question was, 'are local governments controlled by
| landlords?' Rent control is evidence that they are not.
| Mechanical9 wrote:
| More often I'd say they're on the side of all local
| landlords, not necessarily megalandlords specifically. But
| your point is correct and I have yet to see a city council
| that wasn't stacked with property investors.
| ErikVandeWater wrote:
| Counterpoint: NIMBYs in SF preventing development of new
| housing by even a small entrepreneur:
| https://www.youtube.com/watch?v=ExgxwKnH8y4
|
| Something tells me JP Morgan would have an even tougher time
| getting past the NIMBYs.
| kaashif wrote:
| I'm saying local government is generally heavily influenced
| by local property investors and will thus try to block all
| development.
|
| You are right that NIMBYism isn't good for developing new
| housing, which is what JP Morgan is trying to do. How do
| they get past that initial hump? I don't know, but they
| obviously think they can.
|
| But once that housing is built, there will be every
| incentive for JP Morgan to go ultra-NIMBY to protect their
| investment.
| vagrantJin wrote:
| The title has a made up word because it would never pass
| editorial to call it "fuedalism" as you rightly stated.
|
| There is no discussion to be had here. It's the return of
| Europes peasant/aristocrat economy back in full swing. Only
| took a century to come back. Oh well...
| highwaylights wrote:
| I would imagine democracy is what makes this a precarious
| business decision for JPMorgan.
|
| Currently, most people do not rent. If they did, then it would
| be much less lucrative for the landlord - especially if people
| are struggling.
|
| "Vote for me and I'll cap rents at (amount below cost)!" is a
| fairly easy solution to that problem in a democracy.
| Atlas22 wrote:
| Just got a bit closer to WEF's "prediction" for 2030.
|
| "You'll own nothing. And you'll be happy"
|
| Doesn't seem very... Democratic or even republic to me...
|
| Source: https://twitter.com/wef/status/983378870819794945
| skfingngihg wrote:
| [flagged]
| olddustytrail wrote:
| It's both. I'm not sure what your understanding of these
| terms is that you don't realise they're orthogonal, but I'm
| afraid it's wrong.
| CottonMcKnight wrote:
| There should be a Godwin's Law for "we're a republic, not a
| democracy."
| MonkeyMalarky wrote:
| I've been on the internet a long time and this meme feels
| like it's appeared out of nowhere in the last couple
| years, it's really off-putting. We're talking about the
| USA. America! Democracy is their brand in every speech
| and bit of media. They've been been showboating how
| awesome democracy is and how the free world would prevail
| the entire cold war. And now suddenly it's "yeah no we
| aren't actually a democracy"? This meme is the biggest
| narrative retcon I've ever seen.
| europeanguy wrote:
| $1bn on rental homes
|
| That's 10,000 $100,000 homes, or 5,000 $200,000 homes, or 2,500
| $400,000 homes.
|
| Is it just me, or when put like this it doesn't seem so many?
| The high rise where I live has, I estimate, 200 units. So at
| $400,000 per, they're buying roughly 12 high rises. Doesnt seem
| like a "threat to democracy". What am I missing? I would
| imagine that right now most of these high rises are owned by a
| few firms already.
| bumby wrote:
| Americans, by and large, don't own their homes. If you
| disagree, stop paying your property taxes and see what happens
| to your ownership.
|
| There's a reason "real" estate derives from the term for
| "royalty".
| rcpt wrote:
| You're confusing Allodial Title with Fee Simple land
| ownership.
|
| It turns out that Allodial Title is a terrible system and has
| largely been abandoned since the middle ages.
| blululu wrote:
| No, home ownership in America is ~65%. You need to pay taxes
| to support the infrastructure and you need to pay the bank to
| service your mortgage, but both are proscribed by a clear and
| largely static legal framework that does not infringe upon
| your legal ownership of the property.
| bumby wrote:
| No doubt. I was just pointing out that there is a very
| different dynamic than the colloquial definition of
| "ownership". Just like you don't "own" your digital Kindle
| library in the same way as if they were physical books.
| It's an entirely different framework of rights.
|
| I will still have ownership of my car if I don't register
| it. I can still use it as long as it's not on public roads
| etc. This is entirely different than if I don't pay my
| property taxes. I don't maintain use (or even ownership) of
| the property. Just because this distinction is clearly
| spelled out in a legal framework doesn't negate the
| difference.
| kelseyfrog wrote:
| A steel man interpretation of GPs argument would be that
| payment mechanics of property tax and subscriber services
| are more alike than people want to admit. You own your
| Netflix movies and land alike as long as you pay the
| subscription cost. Both eventually will be revoked if
| payment is withheld. Why should we call one subscribing and
| one owning when the results are the same?
| nickjj wrote:
| Yeah I'm not sure why their post is so heavily downvoted.
|
| You pay property taxes or you lose your home. You also
| need to build your house to an exact specification that
| your local government came up with, of which you have no
| control over.
|
| In other contexts this isn't classified as ownership.
| Ownership to me is if I spend $300 on a lawn mower, it's
| mine forever with no future costs associated to it beyond
| repairs. I can do whatever I want with it, including
| modifying how it works or smashing it into a thousand
| pieces. Both of which are true if you buy a lawn mower
| today.
|
| With the house scenario there's also tons of things out
| of your control that could be classified as "well, you
| own your house but things are about to get drastically
| different for you". For example what happens if you build
| a house in a nice empty area of land but you don't own
| all of the land surrounding your property. Over the years
| a couple of new houses are built around you and things
| are fine. But then 5 years later the town decides to
| build a fire station across the street from your house.
| Your living conditions are now ruined. A deafening siren
| may go off at any hour of the day or night and there's
| going to be extremely loud fire trucks and sirens all
| around you.
|
| I don't know what would happen in this scenario but
| something tells me it doesn't end well for you as the
| home owner? Something tells me the town isn't going to
| offer to buy every house near the fire station over the
| market's value then pay to re-locate you to a different
| part of town (because you don't want to leave a specific
| school district or move to a different town / state). It
| also kills the market value of your house for future
| sales. Maybe at best they'd offer you a relatively small
| lump sum of money which is no where near worth the noise
| pollution and future loss of value on the house.
| sokoloff wrote:
| > You also need to build your house to an exact
| specification that your local government came up with, of
| which you have no control over.
|
| Things are much less dire than this. My city's zoning
| doesn't come anywhere near an exact specification for
| buildings. It sets certain minima and maxima, but to call
| those an "exact specification" is a gross exaggeration.
|
| Further, even if you need a variance from elements of the
| zoning, those are generally easy to get if there's good
| cause (or in practice in our city, merely a not entirely
| unreasonable reason).
| wolverine876 wrote:
| > Ownership to me is if I spend $300 on a lawn mower,
| it's mine forever with no future costs associated to it
| beyond repairs. I can do whatever I want with it,
| including modifying how it works or smashing it into a
| thousand pieces. Both of which are true if you buy a lawn
| mower today.
|
| This in old, tired theoretical argument. Your lawnmower
| won't have much impact on your neighbor, but there are
| things you can't do with it: (e.g., modify it to emit
| poisonous gas, make painfully loud noises, or fling
| objects at high speed through your neighbor's window).
|
| The answer is simply, you are subject to the law. If that
| makes you not free and oppressed, then you are not free
| and oppressed.
| dsfyu404ed wrote:
| There is a huge difference between being able to do
| basically whatever you want with your property pursuant
| to the law and being constrained by whatever a typical
| rental contract for that type of property is. To imply
| otherwise is lying just lying with some fluff on top.
| Mechanical9 wrote:
| The results do not seem equal if you take account for the
| actual costs and privileges. Owning property has more
| rights and renting has more costs.
|
| Rights: If you do not pay your property taxes, you will
| probably have 6 months to several years before your home
| is taken. If you do not pay your rent, the eviction
| process will likely start immediately and the landlord
| will probably make your life more difficult until you
| leave, even if you live in a state with stronger tenant
| rights.
|
| Costs: Taxes are somewhere between $500-$5000 per year
| for an average home, while rent is more like $500-$5000
| per month. Rent is on par or greater than the mortgage
| cost for an equivalent space, I have only seen lower
| rents when the home was not still mortgaged.
|
| So while owning and renting may both theoretically be a
| subscription or a service with regular costs, the costs
| and benefits are not the same.
| [deleted]
| ramijames wrote:
| This should be illegal.
| kennend3 wrote:
| what you fail to grasp is that in many cases this will be a
| positive thing.
|
| How many "slumlords" are in the marketplace today?
|
| people illegally renting "rooming houses", illegal basement
| units, etc.
|
| Perhaps JPM entering the realestate rental business might put a
| "floor" on the low quality rental units?
|
| Lastly, what makes buying property and renting it out illegal?
| If you owned a house would you like renting it out to be
| illegal?
| blackhaz wrote:
| Illegal basement units? Immaculate, spacious, architecturally
| distinct PS1M maisonettes with period features and private
| patios.
| kennend3 wrote:
| Not sure your focus on UK, but the article speaks to JPM
| spending in the US where illegal basement apartments are
| very common.
|
| https://comptroller.nyc.gov/reports/bringing-basement-
| apartm...
| [deleted]
| throwaway6734 wrote:
| No it shouldn't
| scarface74 wrote:
| It should be illegal for corporation to spend money to build
| new housing units?
| hackerlight wrote:
| No. You are focused too downstream and skipping the source of
| the problem. What should be illegal is the surrounding context
| that _causes_ JP Morgan 's decision to buy up units to be
| detrimental in the first place. This is zoning restrictions
| that block new unit construction.
|
| Without such restrictions, JP Morgan buying up thousands of
| units does little to both rents and unit values in the long-
| run.
| scarface74 wrote:
| What does buying existing housing have to do with the
| article?
| dazc wrote:
| How does this differ from banks lending money for traditional
| mortgages, it's just another method of financing?
|
| Yes, I know the cost of housing is insane and something should
| be done about it, but introducing some level of market
| efficiency isn't necessarily a bad thing.
|
| I can't speak for the US but in the UK a huge majority of
| private landlords are individuals, many of who want to earn a
| living from renting out two or three homes max. I rent an
| office from such a person, his sense of entitlement is off the
| scales.
|
| Some of these landlords had the homes fall into their laps via
| inheritance, some are simply playing an arbitrage game, very
| few are actually doing anything economically productive.
|
| Anything that threatens this method of exploitation has to be
| positive.
| vlovich123 wrote:
| One major difference is that a mortgage is essentially "rent
| to own" - at the end of the repayment you own the property.
| Here ownership remains with JPMorgan?
| okasaki wrote:
| But if you're renting you're paying the landlord's mortgage
| not your own and you own nothing either way.
| dazc wrote:
| Sure, but renting is going to be what a lot of people
| continue to do - save some miracle of market disruption.
| [deleted]
| barbarousbull wrote:
| Most BTL (buy-to-let) landlords will have interest only
| mortgages. You wont be paying down their capital as they
| have none. The revenue that they generate is the
| difference between your rent payment and the interest
| payment. The landlord will never own the property.
| mpeg wrote:
| Indeed, as a UK renter dealing with one of these mega
| landlords (eg Greystar) is so much better than the usual
| exploitation game that private landlords play.
| beowulfey wrote:
| Fascinating. My experience in the US is the exact opposite.
| Corporate landlords are generally awful, where everything
| they rent out is full of shoddy repairs and minimum-cost
| 'luxury facilities' to drive up rent. Private landlords,
| particularly where the owners live in the same building,
| are almost always better. My experience has largely been in
| urban areas of the US, not sure about smaller towns; I
| suspect higher demand is what allows for it.
| jltsiren wrote:
| In my experience, the main benefit of corporate landlords
| is predictability. Especially when they are large. They
| have a reputation, and you know in advance what you get.
|
| Private landlords are a gamble. They are better on the
| average, but the variance is also higher. Because most
| private landlords only have a handful of properties, it's
| effectively impossible to know in advance what they will
| be like if something goes wrong.
| andylynch wrote:
| My guess here is that in part to how common renting has
| traditionally been in the UK (pre WWI , something like
| 9/10 homes were rented, this greatly declined to ~7%
| until rising again since the nineties). More than a few
| big UK landlords have been around for centuries.
| kennend3 wrote:
| Individual experiences are anecdotal but here's a few of
| mine.
|
| My Son lives in a "mega landlord" unit in Saskatoon
| (Canada) and it is well maintained and his rental fee is
| very reasonable.
|
| My Son-in-law lives in a "mega landlord" unit in New
| Jersey (USA) and it is also in excellent condition.
|
| I personally rented from a private individual in
| Connecticut for several years and it was a slumhouse.
|
| Landlord was never around, no one to call when things
| didnt work. we actually had to fix the heating system in
| Jan because we were freezing cold and the owner was once
| again MIA.
| stonepresto wrote:
| I've had the same experience. Terrible treatment by large
| management companies. Moved as a result to a private
| landlord and they're fantastic.
| bombolo wrote:
| Probably in uk it's not so widespread yet, so they can't
| show their true face yet.
| abigail95 wrote:
| Illegal, to invest in housing?
|
| Imagine if it were illegal to invest in farms, or trucking
| companies.
| wahnfrieden wrote:
| It is viable to make it illegal, don't act surprised
| ilyt wrote:
| The investment promoted here should be ones buying more
| houses, not renting out existing ones
| hungrigekatze wrote:
| IMO, as someone who has (briefly) worked in real estate tech the
| United States NEEDS TO pass legislation similar to what Canada
| has passed regarding the ownership of homes by non-Canadian:
|
| >Broadly speaking, the Ban prohibits foreign corporations and
| individuals who are not permanent residents of Canada or Canadian
| citizens from purchasing residential real estate in Canada
| between January 1, 2023, and December 31, 2024. Any contractual
| obligations arising or assumed prior to January 1, 2023, will not
| be subject to the Ban
|
| https://www.mltaikins.com/real-estate/its-not-just-foreign-b...
|
| Banning non-Canadian residents from purchasing residential
| properties as well as banning corporations that are owned (in
| part or in whole) by non-Canadian residents seems like a good
| start. It will be interesting to see how many LLCs (or the
| Canadian equivalent) get created by Canadians but that are
| actually used as shell companies for international buyers. I hope
| that there's some sort of flagging of Canadian individuals who
| suddenly become real estate moguls, buying up dozens or hundreds
| of properties via LLCs, when the Canadian had no interest in real
| estate prior to 1 Jan 2023 (which is when the law takes effect).
| mintaka5 wrote:
| https://www.nbcnews.com/id/wbna6902224 uh-member this?
|
| ownership society my ass!
| feet wrote:
| You thought it was ownership for people? Nah, ownership for our
| corporate overlords. Us plebs get to rent everything
| asah wrote:
| You're supposed to own shares in those corporations.
| feet wrote:
| As if that somehow makes it better when they purchase all
| the homes and jack up rents? How many people can even
| afford to buy voting shares especially among the renting
| population? Do they have enough money to throw around like
| that?
| mintaka5 wrote:
| in the past year after the COVIDicide i've traveled all
| over the US, and it's fuckin scary how many empty homes
| there are. owned property, but empty. no for sale signs.
| no occupants. why are these homes not selling? i will
| never rent a home! i've been renting for 30 years and it
| SUCKS. we have to live under the torment of never having
| a place to call home ever! the looming threat that when
| we lose our jobs because of pandemics or disasters, or
| economic turmoil, there's no guarantee that we'll ever
| not be homeless. ask me, i know from experience, i am a
| homeless programmer, living in a shelter, typing this
| from the public library. i lost my job in September, and
| my rental. i have no cash to drop money on rent now, so
| this is just one example of what's to come for the rest
| of you who don't own property. it's a LIVING HELL!
| [deleted]
| thefounder wrote:
| So getting in the casino game is the answer
| feet wrote:
| Could you please expand on what you mean? I don't think I
| understand
| Someone1234 wrote:
| One thing I think has become clear to investors is that the US
| Government will always "socialized the losses" for Housing. Which
| is to say that while such ventures could be considered risky
| investments (particularly during a downturn), the US Government
| has made clear that there's a floor on housing and that the
| money-gates will open if things turn bad.
|
| So in essence the US government has created, for corporations, a
| nearly risk free investment. Highly profitable in the good years,
| and the bill picked up by all of us in the bad years.
| frankreyes wrote:
| Because the implicit promise of housing is that it will never
| depreciate it's value. It's a safe bet against inflation over
| long run.
|
| For normal homeowners who want to pass an inheritance to the
| next generation, a house is both a home and, a retirement plan,
| and an inheritance investment.
|
| The big losers in cheap housing are the families that've paid a
| mortgage for 30 years in order to save money for the future.
|
| Asking for cheap housing, today, is like asking for eating the
| cake and selling it too.
| wildrhythms wrote:
| > the implicit promise of housing is that it will never
| depreciate it's value
|
| An asset with infinite growth... very sustainable system
| we've created isn't it?
| frankreyes wrote:
| I wouldn't say infinite growth. Boom and bust cycles have
| been the norm in the few couple thousand years.
|
| But housing prices are artificially held up because of
| voters and taxpayers who would vote them out of office if
| 2008 were to be the norm, it's not a shady conspiracy.
| anon9384929 wrote:
| This is a silly take in my opinion.
|
| Something never depreciating against its value is simply bad
| economics. Things will always appreciate and depreciate. I
| don't know who promised you this, but it sounds like you got
| sold a bridge in Brooklyn.
|
| Given that, there are plenty of other ways to save, pass on
| an inheritance, etc. You don't need to hoard land so that I
| can't live anywhere.
|
| I don't really care about your 30 year mortgage,
| respectfully. I probably wasn't born when you signed it - why
| do you get to fuck me out of having affordable housing when I
| wasn't even born yet to have that fight with you?
| frankreyes wrote:
| > I don't know who promised you this, but it sounds like
| you got sold a bridge in Brooklyn.
|
| Gold keeps increasing in value, the Mona Lisa too... Econ
| 101.
|
| I've already partially answer this in another comment but
| if you think about it: I'd never buy a property with a 30
| year mortgage if I'd known it'd lose its value. I'd be
| better or cheaper to just rent. But then if buying is a bad
| choice, because what just said, then who we'd be renting
| from?
|
| I'm with you, that housing should be affordable. But it
| seems that everyone here forgets basic Economics.
| crtified wrote:
| The population curve helps ensure that the fixed amount of
| planet available is needing to be divvied among a
| continually, exponentially increasing quantity of humans.
|
| Or, from another angle, the uninhibited spread of the human
| race does come with significant ecological drawbacks, at
| large scale. Those costs are realised, in the value of land
| over time - _while_ the population curve sustains.
| geocon wrote:
| > Asking for cheap housing, today, is like asking for eating
| the cake and selling it too.
|
| We don't want cheap housing that appreciates in value so that
| we can use it as an investment. We want cheap housing that we
| can live in, period. We are being screwed out of that because
| other people got cheap housing and then decided it should
| appreciate forever, and pulled the ladder up behind them.
|
| You are right, though, that it is impossible to have housing
| be affordable and an investment good. That's why we want it
| to stop being an investment good.
| frankreyes wrote:
| I'd never get into a 30 year mortgage knowingly that after
| 30 years it'd be less valuable than what I paid.
|
| Therefore, want it or not, mean it or not, the whole point
| of buying a property is to get something that appreciates
| in value. Otherwise it'd be cheaper or better to just keep
| renting.
|
| In order to stop being an investment, we need more houses,
| both in quantity and diversity. Lower the barrier to entry
| for everyone, everywhere.
| spacemadness wrote:
| You got value. You have a roof over your head and that
| money isn't being burned up completely in rent. The
| problem is people want to enjoy having a nice house and a
| large return as well. There is no good coming our way
| from current asset owners pulling up the ladder to new
| home owners. Salaries cannot keep up with homeowners
| investment expectations.
| [deleted]
| nerdchum wrote:
| I currently live in a van because I can't afford rent or a home.
| The past few weeks at -10 degrees has been rough. So nice to see
| that corporations are buying the existing homes and governments
| are restricting the amount of homes that can be built so the
| corporations shareholders will have a safe place to park their
| money while inflation is at 10%. Boy this version of government
| and capitalism is awesome. Let's do drinking water next!
| pibechorro wrote:
| This isn't capitalism.
| MerelyMortal wrote:
| HN is full of some very intelligent people, but it's scary to
| see that even most of them are buying into the changing of
| the definition of "capitalism".
| krapp wrote:
| Yes it is, don't be naive.
| fundad wrote:
| Housing should be nationalized
| myth_drannon wrote:
| Water is owned by Coca-Cola already.
| glogla wrote:
| Its Nestle, actually.[1]
|
| [1]: https://en.wikipedia.org/wiki/Nestl%C3%A9#Water
| throwaway6734 wrote:
| Investors are chasing easy profits. The fault lies with anti-
| development and NIMBY forces
| ehnto wrote:
| Corporate rental housing should not be allowed. Free markets
| are not fair enough to make sure everyone is properly housed,
| and once enough of it is owned they will price gouge. There
| are plenty of other places for companies to make money.
|
| In my opinion, housing is the final frontier for this. If
| housing is bought up by corporates and rented back, we are
| both feet into corporate dystopia. Land should be between
| citizens and the states that write the titles.
| throwaway6734 wrote:
| Why allow anyone to own multiple houses then?
|
| Providing rental properties is a valuable service
| wildrhythms wrote:
| > Providing rental properties is a valuable service
|
| Carpenters and bricklayers provide a service. Plumbers
| and electricians provide a service. Simply holding a deed
| is not a service.
| metadat wrote:
| Maintaining the property is certainly a service.
| the_gastropod wrote:
| I have been a renter my entire adult life, and over the
| decades have plowed several hundred thousand dollars into
| the pockets of the various landlords I've rented from.
| The total maintenance done during all my tenancy is: 1. A
| broken seal on a washing machine was replaced 2. A leaky
| toilet was repaired 3. A broken kitchen drawer was
| replaced
|
| I don't believe my case is particularly uncommon. In ~20
| years of renting, ~$500k of rent paid, the total
| maintenance done on the units I've rented probably cost
| under $100. Toss in the most expensive paint and cleaning
| regimen after I've vacated, and let's call it a cool
| $1,000. If the value landlords are providing is
| "maintaining properties", their margins here are
| colossal.
| quesera wrote:
| Major expenses you're not including, though:
| - Property taxes - Hazard insurance - Debt
| service - Some utilities (water, trash, sometimes
| even electricity and HVAC, depending on your rental
| agreement) - Maintenance and repair of exterior and
| common spaces - Repairs and updates after you move
| out, and before you move in (assuming you have not been
| in the same apartment for 20 years)
|
| Yes of course you're paying for these things via rent.
| But the owner's margin is probably much smaller than your
| math would suggest.
|
| The value provided to you in the owner's margin includes:
| - Someone to call if *anything* goes wrong. (Oven broken?
| faucet dripping? window stuck? Disposal burned out? All
| problems have one simple solution: Call this number.)
| - Flexibility of movement. Want to move at the end of
| your lease? No problem. (Need to sell to move? That will
| be a long and/or exhausting process, and will cost you 6%
| of the property sale price!) - The security of
| knowing that you will never be hit by surprise
| maintenance costs. $30K for a new roof? $20K for a new
| furnace? $250K for a seismic retrofit? Never going to be
| your problem. - The ability to live where you want
| to! In many locations, there are no apartment-equivalent
| units for sale.
|
| Some property owners are terrible to do business with,
| and in some markets/neighborhoods only terrible owners
| are easily found (there's a reason for this! See also
| hiring, dating, etc).
|
| But as an exchange of cash for services, the equation is
| more balanced than you might realize.
| eulers_secret wrote:
| Depends on _how_ you rent. I went through and calculated
| my total housing expenses for the last 15 years- they're
| about $120,000; in my area that's a (minimal) down
| payment. It's less than a year of salary.
|
| I've had all appliances replaced, a new roof (and a new
| ceiling when this leaked), the parking lot resurfaced
| twice, and a new water heater, endless bits and bobs
| (sink disposal, all new light switches, door knobs, fully
| new shower enclosure and faucets). Maintenance shovels
| snow, cleans up leaves, and de-ices. I have never mowed a
| lawn, shoveled snow nor done any physical labor at all-
| I'm still in good shape, there's a gym and pool on
| premises.
|
| My apartment is small, that's why it's inexpensive. But I
| won't have kids and don't need >1 bedroom. Already
| married for the whole time as well. Depends on how one
| wants to live their life.
| spacemadness wrote:
| I think we're all just completely forgetting that rent
| price is a function of where you live. Just throwing out
| numbers like this isn't helpful.
| metadat wrote:
| Agree 100%, the margins tend to favor the owner. It
| varies by property, some are much higher maintenance.
|
| My point is simply that these things don't take care of
| themselves and need to be managed one way or another.
| crote wrote:
| Landlords virtually always hire maintenance companies to
| maintain the property - and you're paying for it via your
| rent. You could hire the same maintenance companies if
| you owned it yourself.
| ehnto wrote:
| I don't disagree. I think we would benefit from a survey
| that shows how many people actually want to be renting.
| Since property is so expensive, thanks to how lucrative
| of an investment property has become, individuals are
| struggling to buy since they are competing with deeper
| pockets. I argue this isn't a free market, it's a market
| slowly being cornered by investors. Not a problem for
| say, fancy watches. A big problem for a core living
| utility.
| scarface74 wrote:
| So what individual do you think can afford to _build_ $1
| billion in rental homes? The parent poster is incorrect
| about what JP Morgan is doing. This will increase supply
| not decrease it.
| ehnto wrote:
| Traditional property developers don't usually hold onto
| the properties they build, they sell them off. Even
| skyscrapers sell off their apartments and commercial
| sections. Maybe some don't now, but I think that might
| reflect a shift from building being most profitable to
| renting being most profitable. In that case, eventually a
| renting-developer would lose incetive to build more as
| not to dilute their rental margins.
| scarface74 wrote:
| And the people buying them also have profit incentives.
| Whether JPM is doing it to profit from rentals directly
| or with the expectation that some future buyer won't make
| a difference.
|
| But it's illogical by any standard economic model that
| any supplier will not build more units if they see it can
| bring in more money. Either they build more or someone
| else does.
| Temporary_31337 wrote:
| Still JPMC assumes that it will make them money. So it
| won't help with housing affordability and availability.
| Brigand wrote:
| You can both reduce unit price in comparison to the
| market and make tons of money. Happens all the time. The
| t-model is a prime example.
| lowercased wrote:
| model-t didn't require a lot of zoning/permits/etc. at
| least, at that time.
| scarface74 wrote:
| How can it not help housing availability by increasing
| supply?
| qualudeheart wrote:
| Elon Musk. Jeff Bezos. Warren Buffet. Sam Bankman Fried
| until not long ago.
| scarface74 wrote:
| None of them did it using a sole proprietorship. They all
| set up corporations. What's the difference?
| FredPret wrote:
| Interfering in the market always makes the outcome worse
| because it increases costs for both buyers and sellers.
|
| Crazy real estate prices are caused by NIMBYs blocking new
| builds - heavy interfering.
|
| Check out this graph of new builds in the States. Zoom out
| to max. Note how it's basically flat with some ups and
| downs. It should go up exponentially with the population.
| https://tradingeconomics.com/united-states/housing-starts
|
| Here's a sheet from the gov that seems to show something
| similar:
| https://www.census.gov/construction/nrc/xls/starts_cust.xls
| ehnto wrote:
| I don't disagree with your point about nimbyism, but I
| don't think that proves allowing corporations to buy
| those same finite assets up would be any better. Then you
| just have the same asset bubble but instead controlled by
| a corporation with even less interest in affordability or
| maintaining a community.
| FredPret wrote:
| Corporations will deploy massed capital in pursuit of
| higher profit. If we stop all meddling in the housing
| market, this will result in much more new housing being
| built.
|
| We need millions of new units. The capital for that can
| come from individuals or corporations, but corporations
| are just a way to pool capital and seems like a quicker
| and more effective approach.
|
| No corporation in any industry has ever cared about
| community and affordability. And yet these things have
| emerged multiple times wherever sane, free markets exist.
| Eisenstein wrote:
| A non-regulated market cannot be a free market on any
| decent time scale. Without ensuring fairness by
| government bad actors will capture the market,
| externalize costs, and work against the public interest.
|
| Are you saying that regulation (market interference) is
| universally bad?
| mcculley wrote:
| I live in an apartment unit in a 25 story tower. I rent it
| from a corporation that owns it. Would that still be
| allowed in your plan? Would the restrictions on who can own
| housing only apply to single family homes?
| ehnto wrote:
| Apartments are an interesting example, but ultimately no
| different to individual homes. The unit being inside a
| larger building only changes your agreements with fellow
| apartment owners. As a renter you aren't really concerned
| with any of that. When a developer builds a tower, they
| sell all the units to individuals or companies. In my
| variant, companies couldn't own them and so only
| individuals could buy the apartments.
|
| The dream would be that individual ownership is cheaper,
| but maybe if the prices were lower building towers
| wouldn't be lucrative to developers. I am sure there are
| a bunch of edge cases like that.
| mcculley wrote:
| One of the reasons that I currently rent an apartment
| instead of owning a single family home is that I want
| someone else to handle maintenance. Maintenance issues
| involve more than just "agreements with fellow apartment
| owners". There are common areas, common equipment such as
| elevators, trash chute, pool, gym, and common services
| such as security guards, maintenance staff, and
| concierge. In condos, this is managed by the homeowners
| association. Proposing that apartment buildings such not
| be owned by corporations, but instead that only
| condominiums should exist, with associated homeowners
| associations, is to propose a less liquid housing market.
|
| I have owned single family homes and condos and rented
| apartments and condos. There are good reasons for all of
| these choices. Those proposing to allow fewer choices are
| not convincing me that they have thought it through.
| 2OEH8eoCRo0 wrote:
| It's not an issue right now though. I look around and I see
| thousands of apartments and condos for rent from different
| entities- many of them small renters. There are also tons
| of houses for sale.
|
| Why aren't they all corporate owned yet? I think a lot of
| renting is not profitable but if all you need is a place to
| live that's no problem. Perhaps I'm a bit ignorant here?
| ehnto wrote:
| The worry is that during a recession, when real estate
| assets are cheap, corporations might buy up the assets in
| order to rent them back or sell them for profit. It is
| just a worry at this point, but this rumbling from JPM is
| not confidence inspiring.
| HWR_14 wrote:
| This happened in 2008 for instance (or at least in the
| aftermath of 2008)
| iso1631 wrote:
| > In my opinion, housing is the final frontier for this. If
| housing is bought up by corporates and rented back, we are
| both feet into corporate dystopia. Land should be between
| citizens and the states that write the titles.
|
| All land should be owned by the public. To use it you would
| rent it for the market value, that money would be
| distributed to the citizens as a basic income. As the land
| becomes more valuable (society shifts to urbanization and
| cities become more valued), the cost of that land
| increases, but so does the basic income.
|
| That's what happens now, except the people benefiting from
| the cost of the land isn't the public, but the land owner.
|
| On the other hand, if a new power plant is opened up, land
| value reduces, and the land occupier pays less. Currently
| they just lose out, hence the NIMBY problem.
| naveen99 wrote:
| US property taxes are effectively rents.
| knubie wrote:
| Corporate food production should not be allowed. Free
| markets are not fair enough to make sure everyone is
| properly fed, and once enough of it is owned they will
| price gouge. There are plenty of other places for companies
| to make money.
| HarryHirsch wrote:
| You are aware that food riots routinely bring down
| governments, which is why there is government policy that
| keeps the price of food affordable. (It also brought us
| consolidation and rural depopulation, but that's the
| price you pay.)
|
| The thing that's really worrying is this - real estate is
| inherently unproductive. Investment capital ought to be
| steered into areas that yield technological progress, not
| into the equivalent of gold stored inside a mattress.
|
| That's the real reason that policy that keeps housing
| affordable is needed. It's not only good social policy
| but also good technological policy.
| spacemadness wrote:
| Housing as a speculative investment is absolute lunacy
| and entirely unfair to upcoming generations. I agree this
| is not where investment funds should be going. It's doing
| nothing but cause mass financial struggle to younger
| generations to enrich older generations--but what else is
| new. The incentives need to change to shut down NIMBYism
| and foreign/corporate investment in housing in a
| constrained market.
| throwaway6734 wrote:
| The people making housing a speculative investment aren't
| the investment firms, they are just along for the ride.
| It's your average middle to upper middle class homeowners
| that refuse to allow new housing to be built
| ehnto wrote:
| If you think there is no difference between the food
| industry and real estate, then I am afraid that is a
| failing of your own deductions.
|
| The issue I forsee is deep pockets cornering specific
| markets and dictating the price to people who haven't got
| as much flexibility. Corporate scale slum lords, in other
| words. It is already happening with private real estate
| investors.
|
| Anyone can ship in and sell potatoes, I can even buy them
| online. The market forces work because I have so much
| flexibility. Not everyone can move, nor should they have
| to move just because money moves in. People live in
| communities not investment potfolios.
| gruez wrote:
| >Anyone can ship in and sell potatoes, I can even buy
| them online. The market forces work because I have so
| much flexibility. Not everyone can move, nor should they
| have to move just because money moves in.
|
| But within a given city you have a choice of hundreds, or
| even thousands of landlords? Any specific building might
| only be owned by one landlord, but you don't exactly have
| to move to the other side of a city to get away from that
| landlord.
| albertsondev wrote:
| That's no guarantee either, especially with increasing
| consolidation of land under larger corporate umbrellas. I
| recently moved away from Columbus after getting on the
| bad side of an investment group that seems to own nearly
| all of the publicly-listed apartments in the area within
| my price bracket, and are still actively buying up more.
| Said bracket is fairly low, granted, but it's all I can
| afford on even a decent full-time income, especially with
| other expenses spiking as of late.
|
| Columbus has recently found itself to be the new largest
| city and center of economic growth in the state, and
| changed rapidly and radically over the past couple of
| decades. As a result, it's nowhere near as seasoned and
| well-established as many other major metros, and the
| massive influx of new monied interests into the area
| quickly cornered their respective markets.
|
| Moving back to the Cleveland area, which was quite the
| boom town a century ago but has infamously been in near-
| perpetual decline ever since (with many residents, like I
| had, migrating to Columbus), has much healthier
| competition in the rental market.
|
| Perhaps in a few decades as new assets are built and
| today's ones slosh around the economy, Columbus will have
| healthier, more diverse competition and see your point
| ring true. It's certainly healthy in other sectors--one
| of my favorite things about living there was the great
| wealth of hole-in-the-wall bodegas, ethnic grocers,
| restaurants, and food trucks around me that meant even on
| my last dime I could always try new cuisines--but at
| least for those of us for whom even a high five-figure
| income is a distant dream, options are very limited.
| Firmwarrior wrote:
| Hey man, I agree 100% on the point you're making. BUT if
| you're reading hacker news in your spare time for fun,
| you can definitely find a remote gig that pays a
| comfortable six figure income and elevates you to
| membership in the class of people putting the squeeze on
| middle America. I don't know you or your situation, so I
| can't provide any real advice, but I can say with
| absolute certainty that something is out there for you
| albertsondev wrote:
| So I'd like to think. In reality my skills don't exist on
| paper save for basic helldesk work, and even that's been
| a crapshoot. Loving the positivity, though. Should
| probably throw more work into networking and portfolio
| pieces in between shifts.
| wildrhythms wrote:
| [dead]
| HWR_14 wrote:
| JPM decided it was more profitable to buy single family homes
| instead of apartment complexes. I'm not sure it's as simple
| as "more apartments = more money".
| thorncorona wrote:
| Would be nice if our so called corporate overlords grew some
| morals for a change.
| javajosh wrote:
| So, yes, housing is artificially scarce because of "anti-
| development and NIMBY forces". But there are other forces at
| work, particularly good old market forces.
|
| Corpos that compete with me when I am buying housing for my
| family can go suck a big fat dick.
| throwaway6734 wrote:
| >Corpos that compete with me when I am buying housing for
| my family can go suck a big fat dick.
|
| Why? If they're willing to overpay for properties it will
| benefit the current homeowner and will encourage new
| development
| Jotra7 wrote:
| [dead]
| DangitBobby wrote:
| Does it really benefit the current homeowner if the house
| they buy with the money also has inflated prices?
| Aunche wrote:
| Market forces exist whether you like it or not. If you
| design policy pretending that they don't, the market just
| spills over to a closed system of exchanging political
| favors, AKA corruption.
| rqtwteye wrote:
| That's the natural progression of capitalism if you don't take
| measures against wealth accumulating at the top. Owners need to
| find ever more places where their capital can earn money.
| bombolo wrote:
| You mean feudalism where the lord owns everything and
| everyone else is a serf
| MonkeyClub wrote:
| > You mean feudalism
|
| I think you're spot on with this.
|
| This seems to be the public establishment of a neo-
| feudalism, where the new barons are the megacorp
| capitalists, who can afford to strategize long-term and
| implement land grabs, while lobbying with governments to
| strenghthen their stranglehold on the people by capturing
| natural resources. Capitalist piracy, in a sense.
|
| Now, I'm not a (neo-) Marxist in the strict sense, but this
| is too much in line with the Marxist understanding of the
| state as an institution that looks out for the interests of
| (big) property owners, rather than those of the people.
|
| Fast forward a couple of decades, and we can project with
| some certainty an outright voiding the social contract that
| understands the state as a neutral institution that cares
| for the interest of the people, and reverting to such
| feudal-esque configurations.
|
| And, for the record, no, I don't believe for one second
| that playing it the capitalist way and buying shares in
| megacorps has any possibility of having a positive counter-
| balancing effect. It'd be more like buying shares in
| slaveships, and partaking of the profits of the trade.
| pocketarc wrote:
| The difference is that you can be the lord by simply buying
| JP Morgan shares and enjoying the profits.
| adbachman wrote:
| This system will create at least three times as many
| Lords.
|
| But that's not enough Lords!
|
| Strong, "let them eat cake" energy with this one.
| synu wrote:
| How would you practically become a lord by buying public
| shares on a working class salary?
| feet wrote:
| That's the trick, you won't. But they want you to _think_
| you can
| Firmwarrior wrote:
| YOU can do it, since you're here and presumably have a
| technical skill that can pay 2-5x the median income. That
| opens up the door to saving and investing your way to
| wealth MrMoneyMustache style
|
| I agree that most people can't, and we need to do
| something to ward off a populist uprising
| feet wrote:
| Ward off a populist uprising perhaps by actually fixing
| the system to work for everyone instead of the few with
| money?
| makeva wrote:
| Yes you just need money so you can make money, why can't
| the poor just figure this out? ...
| nostrademons wrote:
| It's pretty good advice on a micro-level, though. When
| you see a situation brewing where one side is going to
| get screwed and another side is going to get-off
| handsomely, _take the winning side of the trade_ if it 's
| at all open to you. Do this enough times and you end up
| one of those rich capitalists, because each trade that
| ends up in your favor opens up more opportunities for
| future trades.
| wizhi wrote:
| Yeah sure, be a part of the problem, that'll solve
| everything!
|
| Now where does the average person find the initial
| capital, such that they can enter the game of
| capitalism..
| matheusmoreira wrote:
| > Owners need to find ever more places where their capital
| can earn money.
|
| Because of inflationary currencies that punish anyone that
| simply accumulates money instead of investing it. They want
| to make everything "efficient" by incentivizing everyone to
| either spend their money or lend it out so that someone else
| can spend it. Under such a system, people _must_ allocate
| their capital just to break even. To fail to do so is to lose
| money to inflation.
| crote wrote:
| What's wrong with losing money?
|
| After a certain point, personal wealth is nothing more than
| a highscore showing how good you are at the capitalism
| game. There is no _need_ to accumulate an ever-growing pile
| of money - you could just spend it on stuff and let
| trickle-down economics do its job. It 's not like you are
| going to need it when you inevitably die.
| ihm wrote:
| Capitalism worked the same way under the gold/silver
| regime. Marx wrote Capital which explains this dynamic in
| the 1800s when that regime was in effect.
| moneywoes wrote:
| Sorry to hear that. If you provide your state there may be some
| resources we can find
| grugagag wrote:
| Late stage capitalism!! This is turning into a tehcnofeudalism
| fast. Surveillance is getting ready, facial recognition check,
| no location privacy check, all money in fewer hands check. It
| will be ugly, no pitchforks will work this time
| matheusmoreira wrote:
| No idea why you're being downvoted. Neotechnofeudalism is one
| of the most interesting concepts I've come across on this
| site and it's a very realistic vision of the future we're
| heading towards.
| prepend wrote:
| I think futarchy is more likely than neotechnofeudalism.
| More Star Trek, less Star Wars.
| krapp wrote:
| The groundwork for a neotechnofeudal future is already
| being laid. Futarchy seems like something only nerds will
| ever care about.
| prepend wrote:
| First nerds care about it, then everyone else does.
| CyberDildonics wrote:
| I don't know what "neotechnofeudalism" is, but if a bank
| built a single building 60 floors high with 8 condos on
| each floor and the condos averaged about 2 million USD
| each, would that then be neotechnofeudalism ?
| inthepipe wrote:
| If that construction was part of a broader concentration
| of capital in the top 0.1% of society that was then
| deploying that capital to buy up as much real estate as
| possible, then yes.
| HarryHirsch wrote:
| No idea about that, but wasn't it Blackrock that is
| buying up half of Cleveland?
| mbg721 wrote:
| The other half is Baker Mayfield's den, still unsold
| after the insurance commercials.
| rabite wrote:
| I have some empty apartments in Kharkiv, Ukraine if you want to
| get in one. I'll let you stay for free until you get a few
| months revenue-positive. There's lots of opportunity due to the
| ongoing conflict. All sorts of moneyed interests are entering
| the region.
| nerdchum wrote:
| [flagged]
| rabite wrote:
| well dude, the apartment has heat, and maybe you can help
| some of that money vanish into thin air.
| joshuanapoli wrote:
| In this case, JPMorgan's partnership is building new homes, not
| buying up existing ones. So it should work to reduce the cost
| of housing.
| mikhailt wrote:
| Where do you see this?
|
| The article says:
|
| > The first installment will include a purchase of 250 homes
| in three communities around the Atlanta metropolitan area.
| thinkingkong wrote:
| Almost everyone has taken an econ101 class but it will not
| reduce the cost of housing. At all. When large corporate
| interests control this many resources they keep the price
| pinned. Simultaneously the cost of building new property has
| gone up especially now that the materials and the demand for
| housing is collectively understood. Add in inflation. The
| price of housing will never be reduced.
| huitzitziltzin wrote:
| Since I have taken Econ 101 and taught it, it's worth
| pointing out that literally no one thinks this is how
| housing markets work.
|
| You _can_ draw a set of supply and demand curves which keep
| prices the same under a supply increase, but not bc "large
| corporate interests keep prices pinned." More important is
| that that special case is not relevant to housing markets.
|
| There is also relevant empirical work on this issue.
| Increase supply and prices will fall. I'd bet you a billion
| dollars on that outcome.
| tedd4u wrote:
| Not an expert here but one thing I've noticed is that
| large / corporate landlords prefer to let a property sit
| empty rather than reduce the rent as supply/demand theory
| would indicate. My understanding is that this is because
| there are special tax benefits like you can write off the
| loss to lower your tax burden. How does this factor in?
| cscurmudgeon wrote:
| You have a contradiction, basic Econ tells us it will
| reduce prices.
|
| https://www.sfchronicle.com/opinion/openforum/article/Yes-
| th...
|
| https://www.investopedia.com/ask/answers/040215/how-does-
| law...
|
| Edit: And downvoted, follow the Science^TM except
| Economics, in that case follow randos
| mouzogu wrote:
| > reduce the cost of housing
|
| yes, because JP is investing in a depreciating asset, lmao.
| cscurmudgeon wrote:
| So laws of supply and demand don't work because "lmao"?
|
| Edit: Folks blaming Capitalism, Sauron, etc., but none will
| open up a spare room vin their home for the homeless for
| free (due to "reasons"), lmao.
| eatsyourtacos wrote:
| Supply & demand are not some type of fundamental laws of
| the universe. They are always changing and based on
| greed.
|
| If I produce 100 widgets and am perfectly happy selling
| them for $10 and barely think I'll sell 10 of them.. but
| then they are highly popular and everyone wants them, you
| might see me constantly increasing the price because
| people like them and want to buy them. But that is
| literally greed in action. I did the math that I would
| make a nice profit at $10. But now that rich people
| decide they will pay $50 for each one just because they
| have the money and don't care, the people that could only
| afford $10 are priced out. And now the price has been
| increased and only people with a lot of disposable income
| can afford it.
|
| Yeah, look at that "supply & demand" in action. Greed and
| and an excuse of "but wut could I do, the curves I
| plotted forced me to increase my prices even though I
| could have left them alone!"
|
| The above is exactly a ticketmaster type example. We let
| "the market" set the price because people are willing to
| pay more and more, but those are the small percentage
| with a lot of disposable income that then get to have all
| the fun while people sit back and say "no one has a right
| to go to the concert [except those that can afford to
| keep on paying more and more]".
|
| Economics is literally based on the assumption and
| ACCEPTANCE that everyone is a greedy asshole like
| yourself.
| lurquer wrote:
| You're assuming there's just one type of 'widget.'
|
| If you've cornered the market in 'luxury' widgets,
| someone else will make a 'bargain' widget and sell to
| those with less money.
|
| Hotels are a good example. The luxury brands are
| competing for the wealthy. But, you don't have to be a
| Ritz-Carlton to make money... indeed, you can often make
| more by selling rooms to the less wealthy (as there are
| more of them.) And, on it goes, all the way down to the
| Motel 6's and the mom-and-pop motels.
| hacktehplanet wrote:
| The laws of supply and demand only says that an increase
| in supply will decrease price if everything else remains
| the same. Since that isn't the reality in housing markets
| there is nothing in the laws of supply and demand saying
| prices can't increase more by building more than they
| otherwise would have.
| cscurmudgeon wrote:
| That basically says more supply can't CAUSE price
| increases.
| mediascreen wrote:
| So, you are saying that increasing the supply of housing
| in this case actually would cause an increase in prices?
| How would that work?
|
| I agree that there is no guarantee that building housing
| lowers prices, other causes (like increases in demand)
| may cause prices to go up (and the increased supply would
| lower the upward pressure). But I have a hard time to
| understand how increased supply would not have a downward
| effect on prices.
| pastacacioepepe wrote:
| > But I have a hard time to understand how increased
| supply would not have a downward effect on prices.
|
| We can build housing much more efficiently and cheaply
| than we could 60 years ago, yet it's never been harder to
| buy a house.
|
| The law of supply and demand only works as expected when
| used in an extremely simplified model.
|
| If you account for all the other real factors (corporate
| greed, governmental intervention, NIMBYsm) that are
| skimmed over by economists, it becomes clear that the law
| of supply and demand should never be used alone to
| forecast future economic conditions.
| joking wrote:
| I don't think that you can build much cheaper than
| before, is like the cars, they have more or less the same
| price but have improved in many ways (efficiency for
| example). Anyway, the building cost is many times not the
| most important thing in the price of a house.
| pastacacioepepe wrote:
| > they have more or less the same price but have improved
| in many ways (efficiency for example).
|
| If that was true, buying a house today would be as easy
| as it was in the 60s. In fact it isn't.
| prox wrote:
| Would it be possible to crowdfund housing projects? I
| have seen some examples in europe where you buy into a
| housing with your savings. Development is complete done
| through collective desires of the fund.
| nirvdrum wrote:
| Not to be glib, but isn't that the role of government?
| Society crowd-funds projects with taxes. I appreciate
| that a smaller group could have finer control over
| decisions, but that might be a hard sell.
| cscurmudgeon wrote:
| Nah, that is too much more work than blaming Capitalism
| lmao.
| izzydata wrote:
| Usable land is finite.
| gruez wrote:
| Right, but thankfully most people aren't interested in
| raw land area and more interested in livable space. If
| you bulldozed a few dozen houses and built an apartment
| building on top, you still increased the amount of people
| that could be housed there.
| NoToP wrote:
| I'm on the 21st floor. This floorspace didn't come with
| the land.
| standardUser wrote:
| Why would anyone think isolated acts of charity can solve
| endemic problems that are built in to a society? That's
| like saying the wealthy should send a check to the IRS if
| they want higher taxes. Toddler logic.
| pastacacioepepe wrote:
| We're not talking about iphones here, people need housing
| to survive.
|
| The housing price could keep rising forever but the
| demand will always be high, it's not like people can just
| "give up on housing for this year".
|
| Being a mega-landlord will also allow JPMorgan to
| influence the general market price.
|
| So no, it's not really as easy as "the laws of supply and
| demand".
|
| Edit: lol, never ever touch the dogmas of neoclassical
| economics on HN. Running into a church during mess and
| shouting profanity would get you a better reception.
| Aunche wrote:
| That's how most businesses work. Teslas building a new
| factory reduces the cost of EVs
| metadat wrote:
| Yet the EV prices keep increasing
|
| Edit: Agreed @cloverich, it's possible I did miss the
| point. At the same time, automotive price increases seem
| disproportionately higher compared to other fungible
| goods. It's possible the supply chain and labor issues
| have hit this sector harder than e.g. farming. It'd be
| interesting to quantify what the differential would be
| without the capacity from new factories.
| cloverich wrote:
| They would be increasing faster without the increased
| production, I think you might have mis interpreted their
| point.
| grugagag wrote:
| > In this case, JPMorgan's partnership is building new homes,
| not buying up existing ones. So it should work to reduce the
| cost of housing.
|
| This is the most naive take. JP morgan is going to sqeeze as
| much profit as possible, why would they do anything to lower
| rents?
| kennend3 wrote:
| > JP morgan is going to sqeeze as much profit as possible,
| why would they do anything to lower rents?
|
| Thankfully everyone else who is currently in the rental
| business is NOT donig this already?
|
| Speaking of naive, you fail to understand JPM will have to
| compete with the existing landlords or their units will
| remain empty.
| rightbyte wrote:
| Landlords might not want to maximize income by lowering
| rents since they might have to write down their property
| values and thus prefer "temporary" vacancies.
| falcolas wrote:
| The demand for housing outstrips supply. There will be no
| competition.
| nostrademons wrote:
| Then building new homes means that people who were
| previously homeless now get to rent. At exorbitant
| prices, yes, but most would say that is better than
| homelessness.
| s1artibartfast wrote:
| There already is. Look around and you won't see any 1 BRs
| listed for 1M/month rent.
| cscurmudgeon wrote:
| They won't do it out of altruism, if the market forces them
| to lower rents, they will have to do that.
|
| Everyone in this thread is acting as though anyone building
| new houses is Sauron and that any action will make house
| prices and rents always go up.
| nirvdrum wrote:
| I think the problem is they'll have a highly concentrated
| group of units and can essentially price fix them. They
| won't be competing with themselves. And landlords love to
| raise prices when others do under the guise of "market
| rate". If you have a captive audience (e.g., surrounding
| a college), there's nothing renters can do about it other
| than move farther away.
|
| Being single-family homes complicates the issue, too.
| We're not talking about high-density units, so the
| growing housing supply is fairly constrained. I don't see
| it being enough competition to lead to a pricing war.
| Meanwhile, it's taking away land that could have been
| used for home ownership, which will likely raise the
| value of other single-family homes in the area, movin
| home ownership even further out of reach for many.
|
| I get that not everyone wants to own a home, but it's
| nice to have the option. If you're laying down roots, you
| can lock in a fixed-rate mortgage and have an asset. When
| renting from a megalandlord you're subject to the whims
| of quarterly earnings and your one year lease might not
| afford much protection. I think you're also discounting
| the cost and hassle of having to move when JP Morgan
| raises prices above the competition. It's very unlikely
| people will exit en masse, causing the landlord to adjust
| the rental price back down.
|
| You might be fine with all of that, but ridiculing people
| because they're uneasy with the situation is not helping
| the discussion at all.
| simplicio wrote:
| They'll lower rents _in order_ to maximize profit. Number
| of units goes up, demand stays constant, the price will
| need to come down or they 're stuck with empty units that
| generate negative profit.
| falcolas wrote:
| Demand is not remaining constant. And it currently
| outstrips supply.
| s1artibartfast wrote:
| Demand would still be lower than if JP didn't build the
| houses.
|
| That may be higher than today, but it is lower than an
| alternate future where we ban building houses.
| welshwelsh wrote:
| When demand is greater than supply, then the limited
| supply goes to the highest bidder. Nothing wrong with
| that.
|
| JP Morgan is building more housing though, which is
| always a good thing because it increases supply.
| Governments need to ensure that building more housing
| remains an accessible and profitable venture.
| prepend wrote:
| > why would they do anything to lower rents?
|
| Why does anyone? To capture market from people who don't.
|
| JPMorgan can squeeze as much profit as possible AND lower
| rents.
|
| Companies will extract as much profit as possible. But this
| isn't always a bad thing as it can be quite profitable to
| service customers in a mutually beneficial way.
| HWR_14 wrote:
| That doesn't mean they'll lower rents. Far better to have
| X% empty than lower rents X% for any value X.
| prepend wrote:
| I don't think so. For an individual corporation that owns
| 4000 houses empty houses are really bad. Perhaps in the
| short term, they'll try to hold a price, but will start
| discounting and adjusting down as homes stay empty.
|
| This is pretty simple supply and demand and if you
| increase the supply, then prices will drop.
| HWR_14 wrote:
| Total revenue remains constant as long as X=X. Without an
| increase in total revenue, there is no reason to incur
| the costs of renting out a unit.
|
| So, if I have 4,000 units and I let 100 stay empty to
| raise rents 8%, I win.
| nerdchum wrote:
| The highest a landlord lord can raise rents is all of a
| tenants disposable income.
|
| After that there's diminishing returns. You are correct.
| iso1631 wrote:
| Because demand outweighs supply that's what tends to
| happen. The more people get paid, the more housing prices
| increase to capture that.
|
| If supply was able to grow to meet demand, then that would
| put downward pressure on prices, but it isn't allowed to
| grow, and everyone other than the lord of the land suffers.
| nerdchum wrote:
| Still a finite supply of land though in metro areas with
| good economies. So even wth unlimited growth you would
| hit a wall at some point in these metro areas where jobs
| are plentiful.
|
| But would at least buy a hundred years or so for other
| cities around the country to develop solid economies so
| I'm all for it.
| nilsbunger wrote:
| In most metro areas, zoning is the limiter, not land. You
| could quickly double the housing supply if you allow
| townhomes, duplexes, and small apartment buildings in
| areas currently captive to single family homes.
| loandbehold wrote:
| It's popular opinion expressed here that single family
| zoning is the only thing limiting supply. I'm not sure
| it's correct. There's a limited amount of construction
| capacity in every given area. Limited amount of
| construction labor (construction workers, engineers,
| managers), construction equipment and materials. It's not
| easy to scale it up. Upzoning is not a panacea.
| [deleted]
| ben_w wrote:
| If -- and it's a big if because civil infrastructure is a
| lot more than just domiciles and a bit of tarmac to
| travel on -- it were done right, the metro areas could
| expand. And many have, which is why we're increasingly
| urban as a species.
|
| Sure, still technically finite, but even just at the
| Netherlands' population density, we could fit the world
| population into 1/10th of the world's land area, so it
| isn't a real constraint.
| grapheneta wrote:
| > Let's do drinking water next!
|
| Come to England, we've already done that! One of only two
| countries in the world to completely privatise its water, the
| other being Chile.
| nerdchum wrote:
| "By 2020 the price of water had risen by 40% in real terms
| since privatisation and almost a quarter of households had
| difficulty paying their water bills."
|
| https://www.bmj.com/content/378/bmj.o2076
|
| Just wow. Also, English water is 70% foreign owned
| apparently. That sounds unsettling. Also, didn't Liz Truss's
| cabinet not have a single English man on it recently? Out of
| 22 spots not one English male. Also isn't London property
| like 40% foreign owned?
|
| Interesting times we live in.
| iso1631 wrote:
| They annoying thing is that it's not even privitsed in a
| sensible way. A reservoir company could pay a yearly rent
| to the taxpayer for the amount of water it could capture,
| and the space the resoviors use. They could then charge for
| water on demand per litre to a company that distributes
| that water, then that company would charge per litre to the
| consumer
|
| Having to buy 1000l of water for PS1 and sell it for PS1.20
| gives a major investment to not throw the stock away
| through leaks. Other company have incentives to do things
| like building more storage (to buy supply when it's cheap
| and sell when it's not), and the consumer gets to choose
| which supplier to use. Same with sewage.
|
| The main problem is the last mile would have to remain in
| public ownership as you couldn't have multiple companies
| providing pipes to each premises, and that I believe is
| where most of the leaks go
| nerdchum wrote:
| Internet companies are a good example of how difficult it
| is to bring a utility to a giant metro area. I'm not sure
| if that's because of government barriers or because of
| actual physical logistics. Even Google Fiber seems to
| have given up. But then you look at places where internet
| is managed by the government like Fort Collins and you
| have extremely fast, extremely cheap community internet.
| But then again, that's a pretty small homogenous rural
| community. I'm not too familiar with the ins and outs of
| utility distribution just sporadic data points so I can't
| hope to get close to the truth about this.
|
| It does seem like if you have the government and industry
| working together on something, it's the worst of all
| worlds rather than just one or the other.
| snapcaster wrote:
| What are you talking about on Liz Truss cabinet? first
| result on google was this article
| https://www.npr.org/2022/09/08/1121610336/uk-liz-truss-
| diver... and every single one of them is english. "Raised
| in london", etc. etc.
| rocknor wrote:
| > Also, didn't Liz Truss's cabinet not have a single
| English man on it recently? Out of 22 spots not one English
| male.
|
| Is there an exact definition of an "English man" you know
| that we aren't aware of? Most of them are born and brought
| up in England, they seem pretty English to me. And why do
| you specifically point out males, what about English
| females?
| [deleted]
| lazyeye wrote:
| Whatever the situation the
| arguments/analysis/incentives/outcomes always seem to align
| with the interests of the mega-wealthy.
|
| Recently, for example, the arguments around off-shoring jobs
| have changed completely due to the supply-chain crisis and its
| impact being greater than situation previously, when the only
| consequence had been that the people that dont matter lost
| their jobs.
| newaccount2021 wrote:
| [dead]
| ashwagary wrote:
| You think other states will copy New York and restrict Airbnb due
| to this housing crunch?
| rcpt wrote:
| Honestly with how serious we take zoning laws I don't
| understand why Airbnb isn't already banned everywhere.
|
| Airbnb essentially rezones residential units as commerical
| hotels
| seydor wrote:
| Now that's innovation
| lizardactivist wrote:
| I can't imagine a company like that would make a good landlord.
| scarface74 wrote:
| I will deal with a professionally managed property any day over
| an individual landlord.
| rcpt wrote:
| Yes 100%
|
| "Mom and Pop" never fix anything and keep security deposits
| with no justification all the time in my experience.
|
| Big corps might not have nice stories to tell you about how
| the neighborhood was 50 years ago but at least they behave
| predictably
| scarface74 wrote:
| On a related note, my wife and I travel half the year
| flying to different cities. We explicitly chose to do
| hotels instead of dealing with AirBnbs for the same reason.
| I always know what I'm going to get when staying at Hiltons
| and I know that they are going to be professionally managed
| and legal.
| rcpt wrote:
| I'm in the middle of arbitration with Airbnb now because
| they wouldn't refund me when a host denied me entry after
| I arrived because the host thought my negative covid test
| was faked (?!).
|
| What a shit company.
| xivzgrev wrote:
| If they're building new housing I'm ok with this. It's the mega
| investors buying up 10k+ existing houses that suck for people and
| drive more to rent.
| llampx wrote:
| I remember reading about a company that was using the latest
| technology to be a fully automated landlord. From video
| verification to sign the lease and unlock the keys, to
| automatically accepting and denying tenants based on AI... seems
| like these mega-landlords would not be possible without the use
| of AI and extensive automation.
| Retric wrote:
| 1B is a tiny investment in this space, many individual
| skyscrapers are worth significantly more than 1B.
|
| Managing ~3,000 single family home rentals is possible for a
| single small office assuming it's all in a small geographical
| area. But the article mentions they are outsourcing the work to
| a third party.
| hotpotamus wrote:
| Can the AI call the County Sheriff to arrange an eviction? That
| would be wonderfully dystopian if possible.
| bombolo wrote:
| You don't have a judge decide on that first? That seems
| insane.
| hotpotamus wrote:
| Having never been an evictor or evictee, I don't know the
| process. But I see no reason an AI couldn't act as judge
| either; think of the efficiency.
| bombolo wrote:
| ai passed the bar exam?
| webo wrote:
| Heh
| https://twitter.com/infoecon/status/1608877464914395137
| bombolo wrote:
| lol. I've read someone saying that if chatgpt can do
| computer interview questions... maybe the questions are
| trash. Seems we aren't the only ones with the issue.
| Kon-Peki wrote:
| In Chicago, the Cook County Sheriff will not do evictions in
| the winter, and are very hesitant to do an eviction if
| children live at the house unless they have verified that
| they have another place lined up.
|
| Most but not all big corps want nothing to do with being
| landlords in Chicago, though there are a lot of local
| corporations involved. My first apartment in Chicago was
| owned by the family that also owns the Blackhawks hockey
| team, and you had to call their front office with any
| problems. I'm sure that was fun for them - any phone call
| could be about some important hockey business, or maybe just
| a broken toilet.
| hgsgm wrote:
| [dead]
| mpeg wrote:
| Having recently had to move homes, I welcome these mega
| landlords with open arms. They verticalise the whole process
| and in doing so greatly improve the experience for tenants.
|
| The traditional process with estate agents and unreasonable
| private landlords is completely broken and extremely
| frustrating to deal with.
| 29083011397778 wrote:
| > I welcome these mega landlords with open arms
|
| Because corporations with the cashflow of nation-states have
| routinely given better customer service in your experience?
|
| Or does it sound simpler having only 3 choices to rent from
| in your city instead of 30? Because it does sound like a hell
| of a time-saver making it onto 30% of your city's "Do not
| rent to" list when you can do it by taking a single company
| to small-claims court over an issue they don't want to fix,
| when you have tenent protections laws on your side forcing
| them to.
|
| They can "greatly improve the experience" when everything
| goes smoothly, but it's difficult to argue with a tag-team
| comprised of a computer database, and a different customer
| service agent for every call you make.
| ethanbond wrote:
| Institute high Land Value Tax and eliminate most zoning and JPM
| can do whatever they want with their money. They'll just have to
| compete on units and services provided instead of who had enough
| capital to capture indefinite land rent.
| slaw wrote:
| We should start with Federal ban on zoning.
| onlyrealcuzzo wrote:
| So you wouldn't mind if someone surrounds your house with
| landfills and nuclear waste storage?
|
| _Most_ zoning seems to make life worse for renters.
|
| But not _all_ zoning is bad.
| MerelyMortal wrote:
| No neighbors and a safe neighborhood? Don't temp me.
| slaw wrote:
| I mean zoning for house development. Article is about
| homes, isn't it?
| rcpt wrote:
| fwiw where I live in Los Angeles we have actual operational
| oil derricks right in the middle of residential
| neighborhoods but it's nearly impossible to build apartment
| buildings.
|
| https://www.theatlantic.com/photo/2014/08/the-urban-oil-
| fiel...
|
| If zoning can't prevent the heaviest of heavy industries
| from sharing space with schools and playgrounds then I
| don't see why keeping it around to kill new housing
| projects is so useful.
| vasco wrote:
| Land value tax which is free if you live in an owner occupied
| property, without the ability to sublet. Higher if rented out,
| and then make a linear increasing penalty percentage with the
| number of properties owned. So if you own one house and live
| there, zero tax. If you own 5 properties, you pay zero on the
| one you live in, then regular tax on the second, tax+penalty on
| the third, tax+higher penalty on the fourth, etc.
|
| It would not make any sense to create real estate ETFs under
| this world for example because the tax penalty would be
| extremely high.
| Aunche wrote:
| So you want to punish developers building apartment complexes
| in high-demand cities, while billionaires can enjoy their
| hundred million dollars tax free? NIMBYs tend to be private
| homeowners, so this would defeat much of the purpose of the
| LVT.
| californical wrote:
| You could develop a giant complex and sell the units to
| individuals instead of renting!
|
| Or there could also be a different tax rate depending on
| density. Single family home would be taxed the highest.
| Lower taxes for townhomes. Lower still for apartments.
|
| The rate would still increase with number of units that a
| single entity owns, but by a smaller amount for more-dense
| housing.
| impossiblefork wrote:
| This is the system we have in Sweden, although it has a
| problem in that it sometimes happens that developers
| saddle the resulting condominium association with debts,
| which are sometimes substantial.
| consp wrote:
| > So you want to punish developers building apartment
| complexes in high-demand cities
|
| I don't know about the US but in other places you can
| actually buy an apartment which would solve that problem.
| zirgs wrote:
| Developers can sell apartments to private citizens or other
| corporations. They don't have to rent out apartments
| themselves.
| geocon wrote:
| This is very inferior to just a regular land value tax if you
| understand the incentive structure
| vasco wrote:
| "I'd tell you why you're wrong but I'm busy" can be said to
| anyone about anything. Care to expand?
| geocon wrote:
| The point of an LVT is to incentivize the efficient use
| of land and to compensate the public for the recognition
| of exclusionary title to use of a location. This doesn't
| change based on who it is that is using the land or what
| they are using it for. Take a $20 million plot of land in
| LA; it makes no sense to exempt a person with a mansion
| there from paying a tax and penalizing a developer who
| builds a huge apartment building that can house 50
| families! By keeping the LVT flat and not exempting
| particular uses, you avoid distorting the market and- in
| the case of a homestead exemption- punishing people who
| build apartments over single family homes, etc.
| vasco wrote:
| > The point of an LVT is to incentivize the efficient use
| of land and to compensate the public for the recognition
| of exclusionary title to use of a location.
|
| I'd say an additional point should be to try and not make
| it so that the path of least resistance for the system of
| taxes being for a few corporations to accumulate all the
| available real estate. From what you say you're fine with
| one company owning all the land as long as they pay the
| tax. What I'm proposing is similar except the tax gets
| more and more prohibitive the more you own, instead of
| being a flat rate.
| rgrieselhuber wrote:
| This is much better. Why tax families who live in their homes
| the same way as landlords with large holdings?
| rcpt wrote:
| Family of renters here. Why should we have our labor taxed
| to support a different families idle wealth accumulation?
| sokoloff wrote:
| That depends on what the purpose of the tax. If it's to pay
| for local government services (fire, police, trash removal,
| schools), then why would you tax them differently?
|
| If taxes are mostly punitive means to shape behavior, then
| sure.
| BirdieNZ wrote:
| Both are benefiting from the labour and value created by
| the rest of society, outsized to their contributions. Land
| receives its value due to all the infrastructure, people,
| businesses, and so on that are around the land, and
| everyone who owns land benefits from this as their land
| value increases. Owner-occupiers benefit just as much as
| landlords (they are, in fact, lords of their land too, but
| their tenant is themselves). They should return to society
| the value that society created for them, in the form of a
| land value tax.
|
| This should of course be offset by a reduction in other
| taxes, but it is a supremely just and efficient tax and far
| preferred to most other taxes.
| dzdt wrote:
| Or make a progressive tax on property value: low tax rates
| for the first $500k or $1m of value and higher after, for
| "natural person" (i.e. non corporate) landowners. Let
| corporate land owners pay the higher tax on all value.
|
| The problem with any of this is with elected government and
| privately funded campaigns, elected officials are mostly
| responsive to the needs of the donor class. So good luck
| getting passed any legislation that benefits the masses over
| the campaign donors.
| kennend3 wrote:
| > Let corporate land owners pay the higher tax on all
| value.
|
| I'm curious as to who you think will pay the tax.. Wont it
| be the tenant?
|
| Under your system rent will simply increase by the cost of
| the tax, which will fully be passed on to the tenant.
|
| This is like applying an "import taxes" and claiming the
| foreign country "pays". - No they don't domestic
| consumption pays.
| rcpt wrote:
| Land Value Tax is not incident on tenants.
|
| https://gameofrent.com/content/can-lvt-be-passed-on-to-
| tenan...
|
| tldr: if landlords could raise the rent and still get
| tenants they'd do it right now
| maxerickson wrote:
| "simply increase by the cost of the tax"
|
| The "simple" part isn't correct. Renters will pay some
| share of the tax, but it's unlikely that the owners would
| be able to shift 100% of the burden.
| scarface74 wrote:
| So how do you think it will help anyone if it costs more to
| _build_ more rental units. Every single response so far is
| going into moral outrage about JPM buying up existing home
| inventory didn't even bother to read the bullet points
|
| > The companies plan to acquire up to $1 billion in build-
| to-rent properties, starting in Atlanta.
| scythe wrote:
| The point is that it would incentivize them to sell
| condos instead, which are then tax-privileged.
| scarface74 wrote:
| And how does that help people who don't want to commit to
| buying a house? The end goal should be affordable housing
| not home ownership. Buying and selling a house has high
| transactional costs and definitely shouldn't be the go
| to. If you need to change jobs, it's much harder to move
| if you own a home.
|
| Besides, "owning" a condo when you still have all of the
| issues of being in an apartment is not ideal. You are
| still dependent on the condo association to fix common
| parts of the building , it needs to be a well run
| association, you have to deal with neighbors and shared
| walls etc.
| vasco wrote:
| Regarding the "owning a condo not being ideal", it's
| actually the norm in many countries, assuming by "condo"
| you mean a flat in a shared building with many houses -
| where I'm from, condominium is the name you give the
| association of neighbors, not the structure. Almost 50%
| of the EU residents live in flats[0]and have to indeed
| communicate with their neighbors and solve common issues
| together through a management company or directly through
| the owners association, depending on the building. I
| think you're making it out to be more complex than it is.
|
| [0] https://www.weforum.org/agenda/2021/07/flats-houses-
| types-ho...
| [deleted]
| megatest123 wrote:
| JPM and the capitalists effectively own the Congress so they
| would never implement a Land Value Tax
| hotpotamus wrote:
| I don't think Congress even matters anymore now that the
| Supreme Court and lower courts are owned by the Federalist
| Society. I suspect any attempts to tax capital will be
| determined to be unconstitutional now. The US is locked in
| all the way.
| matheusmoreira wrote:
| Are you seriously suggesting there's a judiciary
| dictatorship installed in the USA right now? There's one
| where I live and also in many other south american
| countries but I never expected the US to be that corrupt.
| hotpotamus wrote:
| For 50 years in the US, women had some rights of bodily
| autonomy that they lost this year because of the Supreme
| Court. Whether you agree with that outcome, it seems hard
| to deny the immense power there, and why there has been a
| multi-decade campaign on the right to control it.
|
| Look up the controversy over a wealth tax - most
| Conservatives would tell you it's unconstitutional and/or
| wildly impractical, but I pay property taxes every year
| which sure feel like a wealth tax.
| geocon wrote:
| Nah the Supreme Court is pretty deferential to Congress
| especially on powers of taxation, this is a load of
| nonsense
| rqtwteye wrote:
| They give diversity and abortion to the left wing plebes and
| guns and religion to the right wing plebes but would never do
| anything that costs the capitalists money or power.
| larsiusprime wrote:
| Exactly this. Here's a good source for the two-pronged approach
| that's necessary to solve this problem, in case anyone's
| curious:
|
| https://progressandpoverty.substack.com/p/land-and-the-liber...
| newaccount2021 wrote:
| [dead]
| ElfinTrousers wrote:
| I have thought for some time that there is a large fraction of
| the USA population who aren't really wild about democracy, even
| in the flabby and corrupt version practiced here. They'd rather
| have, on a subconscious level, a king and aristocracy ruling
| them. Here we have Blackrock doing their part by trying to
| reintroduce feudalism.
| indigochill wrote:
| In feudalism, all things being average, a vassal benefits from
| loyalty to a lord because the lord provides protection (because
| the lord considers the vassal's land ultimately theirs and the
| vassal primarily as a steward of it).
|
| Corporations buying up and renting real estate is worse than
| feudalism because you're just paying them for the right to live
| in a place. Protection such as it is is "outsourced" to the
| police, but the police don't actually have a material incentive
| to keep the peace either because they get tax money one way or
| the other. If anything, some crime is good for business because
| it provides political leverage to call for more tax money.
|
| So please, let's bring on feudalism because it would actually
| align incentives far better than what we have now.
| elforce002 wrote:
| That's disgusting. The scary thing is that you're probably
| right.
| scotty79 wrote:
| Please, create progressive income tax that is higher, the more
| real estate one entity (including subsidiaries) owns.
| rcpt wrote:
| I've never heard this one before and I have an unhealthy
| obsession with housing discourse.
|
| The idea is to divide up income tax brackets based on property
| wealth instead of income level? That's interesting. Is it just
| your idea or something people advocate for somewhere?
| geocon wrote:
| Land value tax is better, imo, it charges directly based on
| the value of the scarce factor of production (land) and
| encourages development (i.e. more housing). Pretty silly to
| tax someone who owns a bunch of apartments in the middle of
| nowhere tons more than someone who owns one megamansion in
| LA.
| scotty79 wrote:
| The idea is to increase the amount of real estate tax to be
| paid accordingly to the amount of real estate properties you
| own.
|
| If you own a house you should pay higher tax on it than your
| neighbor that has the same house but doesn't have 30 other
| houses like you do.
|
| And of course you should pay more on each of the 30 houses
| you own.
|
| Basically large propery owners should pay higher real estate
| tax than it would be paid if their real estate was split up
| between multiple smaller owners.
|
| That's why I mentioned subsidiaries, so you can't fake-split
| ownership.
| fundad wrote:
| That's what property tax is
| thunkshift1 wrote:
| No it isnt
| nmca wrote:
| Renters are yimby, owners are nimby. Supply side regulatory
| capture is the problem; it is run by democracy. Thus if you look
| at demographic trends in rent-vs-own and turn-out (by region to
| account for non-proportional representation) one should be able
| to forecast when a nation will transition from nimby to yimby. In
| the UK looks to be a ways off.
| Havoc wrote:
| Was chatting to my younger cousins the other day and they were
| surprisingly hostile against landlords. Not some types or some
| practices - all of it. Even relatives doing single buy to let.
|
| Younger generation really isn't on board with all this & only a
| matter of time before it shows in polls
| buro9 wrote:
| I see this amongst younger users (under 35) on the forums I
| run.
|
| They are very happy sharing a vitriolic dislike of everything
| that is a landlord society.
|
| This is very clearly against even a single buy-to-let landlord,
| but fully extends to all AirBnBs, their rental flats/homes (it
| is shocking how few seem to have a communal living space -
| their living room has been converted to a sleeping room to make
| the rent affordable), and it extends to the perception of what
| Netflix is and everything about SaaS business models.
|
| They do not hesitate to share ways in which they sabotage
| landlords in small ways daily. They gleefully share about
| coffee grinds down the sink in the AirBnB that has a septic
| tank, of using "bills included" rentals to run the heater...
| some of them in the cold snap before Christmas went into
| discount AirBnBs just to run the heating constantly, and of
| course there's rampant piracy.
|
| There is a very angry generation coming up.
|
| I'll note, I wouldn't have even thought the demographic of the
| sites I run would be considered left leaning or poverty, these
| are middle-class people who are angry at their hardship
| compared to what they perceive as they easy wealth and times of
| the preceding generations.
| ls15 wrote:
| "Apartment for rent (min. age 35)"
| Mezzie wrote:
| New fake ID market!
| javajosh wrote:
| It's almost like landlords are engaged in rent-seeking
| behavior.
| mbg721 wrote:
| Does most housing "rent" qualify as "rent" for the purpose
| of the phrase? I thought it mostly didn't, because the idea
| was that a rent is a recurring payment exchanged for no
| additional value, but apartments, while hideously
| expensive, are still a you-get-what-you-pay-for thing.
| BirdieNZ wrote:
| It depends on where you live; properly speaking, the
| proportion of your rent that is caused either by
| regulatory capture or by land ownership is the "rent-
| seeking" kind of rent, the rest is "hiring a house" kind
| of rent.
|
| In municipalities with highly restricted supply due to
| regulation, as well as expensive land due to lack of a
| land value tax or property tax, most of your rent will be
| the "rent-seeking" kind of rent. Apartments usually are
| built on very expensive land and are still affected by
| restricted supply caused by regulatory capture, so
| they're not different in this instance.
| standardUser wrote:
| Why does it have to be angry? Landowners and those with
| excessive wealth have fought tooth and nail to keep wages
| low, prices high and laws bent against working people. Do we
| consider those landowners and wealthy people to be angry? No,
| just looking out for their best interest.
|
| But when working people look out for their best interests,
| suddenly there's something wrong with them.
| Regnore wrote:
| It seems to me that home prices are increasing at a much
| faster rate than incomes in many areas. The home ownership %
| of younger people is declining over time:
|
| https://www.prb.org/resources/u-s-homeownership-rates-
| fall-a...
|
| Given the perception (and perhaps reality) that they are
| worse off than their parents generation, it's not too
| surprising that they rebel against the system.
| noahtallen wrote:
| Yeah, it makes sense when you consider what value landlords
| provide. A landlord may provide services like maintenance. But
| a renter pays not only for maintenance costs, but also mortgage
| costs. And the only benefit they get is the maintenance -- not
| even any of the property value.
|
| Renters essentially finance the ongoing ownership of an asset
| without getting any of the value back. At the end of the day,
| the landlord typically doesn't have to do much work (or can use
| rent to pay someone to do the work), but gets an entire house
| in value. Whereas a renter does a huge amount of work to handle
| the cost of rent, but gets nothing at the end of their stay.
|
| The only difference between a landlord and a renter is that the
| landlord has enough money for the initial downpayment in the
| first place. The renter is still covering all ongoing costs
| associated with ownership anyways, including mortgage and
| maintenance. (If they didn't, renting out wouldn't make
| financial sense.)
|
| A renter will easily pay $90k over 3 years, but will have
| nothing to show for it. Whereas the landlord gets 3 years of
| their mortgage paid off.
|
| The financial aspect of renting is very unfair to renters, and
| incentivizes perverse behavior. And JUST because renters don't
| have the upfront capital for a down payment, or because all
| housing inventory has been snatched by landlords.
|
| Reiterating: renters CAN handle ongoing ownership costs,
| because they're already the ones paying for the landlord's
| ongoing ownership costs. In fact, that's the only way that
| renting makes sense for the landlord in the first place.
|
| So the entire concept of renting is based on one class of
| people having capital and one class not.
| matheusmoreira wrote:
| It's just normal rage against capitalism in general. Land is
| just yet another thing that capitalists own. Just like
| factories, corporations. Just yet another facet of the "you'll
| own nothing and be happy" future.
| TrackerFF wrote:
| When I was a student, the typical landlord where I lived was
| someone who owned an extra house, probably inherited or
| similar, had a basement apartment they did not use, and were
| reasonably priced.
|
| Then everyone and their mother decided that becoming a landlord
| is where the money is at, and started bidding each others up.
| This was sustainable because the city had a surge in people
| moving there.
|
| These days, most landlords here are just some random small
| companies charging exorbitant rents while trying to avoid costs
| and responsibilities at all cost.
|
| And as perverse as it sounds, these folks are often also
| involved in local politics, and will actively vote against
| things lie new development projects, changes in zoning
| regulations, etc.
| flutas wrote:
| > These days, most landlords here are just some random small
| companies charging exorbitant rents while trying to avoid
| costs and responsibilities at all cost.
|
| Man that is the most accurate description I've seen in a
| while.
|
| My current apartment (powered by RealPage, just like my last
| 3 weeee) sent us all no less than 6 notifications during the
| cold last week about making sure we run water to not have the
| pipes freeze.
|
| A total of 4 buildings have burst pipes that included the
| fire sprinkler system, and they are now trying to blame the
| residents for not keeping their apartments warm, and also
| trying to say that "this is why you should have renters
| insurance because it's not our fault."
|
| I'm really hoping to get some popcorn and watch this shot
| show go down in lawsuits.
| scarface74 wrote:
| They are naive - period. Home ownership is severely overrated.
| It makes it harder to change jobs when you need to move.
| prepend wrote:
| I think this is much easier now with remote work.
|
| Selling a house is hard. Owning has downsides.
|
| But the upsides almost always outweigh the downsides.
|
| If you plan on moving every year or something, then buying
| will be bad due to the transaction costs. But even if you
| move every 5 years, it's possible that owning will be better
| in the long run.
| scarface74 wrote:
| The people who are priced out of affordable homes aren't
| predominantly those that can work remotely.
| prepend wrote:
| I disagree as there are many $12-40/hour jobs in customer
| service that are remote and can get $100-200k houses in
| the middle of nowhere. I live in an area with lots of
| rural space within 2 hours drive. Remote work has been
| helpful for people who are "computer savvy" and deal with
| being in a remote call center.
| scarface74 wrote:
| Yes and that still doesn't help teachers, firemen, public
| service workers, factory workers, health care workers,
| and all of the other people who can't work remotely.
|
| And there was just another post here within the last
| couple of days about how many of the remote customer
| service work jobs require unpaid training, inconsistent
| hours and are a race to the bottom.
| prepend wrote:
| You're right. I was just pointing out how this risk is
| lower now than 10 years ago. It's not completely
| eliminated.
|
| There are remote jobs of varying quality. But they are
| much more prevalent now, than 10 years ago.
| forgotusername6 wrote:
| This argument is losing its edge. Working from home being
| mainstream now means you don't need to move around as much.
|
| Not that you ever needed to sell up in order to move. As a
| kid I moved around a lot when my father changed jobs. We
| rented in each new place but the family home was kept (and
| rented out).
| neither_color wrote:
| > Working from home being mainstream now means you don't
| need to move around as much.
|
| It's not really mainstream. For tech workers and middle
| management maybe but certainly not blue collar, medicine,
| retail, transportation, HORECA, etc. For perspective, the
| majority of adults in the US don't have college degrees,
| narrowing down their opportunities for work that can be
| done via Zoom. It was a deep point of resentment between
| the cozy work from home laptop class who could have all
| their needs met through delivery apps and everyone else
| during lock-downs.
| seattle_spring wrote:
| Owning a home is a better experience in almost every way -
| "period." Source: have owned several homes and would never,
| ever go back.
| rcpt wrote:
| I agree that leveraging 5x your net worth into a single
| asset in a single location who's value is wholly outside of
| your control has been working out well for many Americans.
|
| But I'm not sure I'd envy people who bought in 80s Japan.
| prepend wrote:
| I had a similar conversation with some young relatives
| recently.
|
| Their argument was "My landlord bought the house 20 years ago
| and it's paid off. So they should charge me less/nothing
| because their expenses are zero."
|
| It was weirdly illogical to me as first, they thought the
| mortgage was the only expense and didn't even know about taxes
| and insurance.
|
| And second, the idea of markets didn't seem to matter and they
| thought they should get very low/free rent because they lived
| there. And they hadn't thought about how people would be able
| to rent if this is how the world worked.
|
| I think maybe it's because of virtualization where there's not
| a clear cause and effect with digital goods so it all becomes
| very relative. Or something. But it made me not want to ever be
| a landlord as negotiating with people like that would be tough.
| BirdieNZ wrote:
| What they've identified is that the amount of profit a
| landlord who owns a house outright can extract from their
| tenants "feels" too high. Even if they can't explain the
| reasons, intuitively they feel there is some kind of
| injustice occurring.
|
| There is, because land owners are monopolists that can
| extract economic rents (extra-high profits due to monopoly
| ownership) far beyond the ordinary rate of return in a fair
| and free market of capital goods.
|
| This is primarily because land (or more specifically,
| location) is a monopoly good, not a capital good that can be
| created if demand increases.
|
| The extreme end of this reality is feudalism, which most
| countries in the world decided against for one reason or
| another. Your young relatives are intuitively sensing that
| they feel like serfs in feudalism, and there's an increasing
| truth to that.
|
| Land value tax would solve this.
| prepend wrote:
| In my county, they have a "homestead exemption" that only
| applies to people to live in their home. I think this helps
| with the problem you're describing.
|
| This allows the property tax rate to increase while
| impacting non-resident owners more than resident owners.
|
| Sadly though, this kind of tax just increases rent as it's
| an additional cost to land owners.
| defterGoose wrote:
| | But it made me not want to ever be a landlord as
| negotiating with people like that would be tough.
|
| Well, well, if it isn't the consequences of my own opinions.
| fundad wrote:
| Ask them how they feel about owners of any types of businesses.
| VettrianoE wrote:
| What can we do about it ? We can - in maybe 10-15 years time
| with enough protest. But that is too late. If you are 28 yo and
| want to settle down what do you do - create a non profit to
| lobby against corporate landlords?
|
| That requires at least as much effort to do as keeping a
| regular job and maintaining your relationship. A young person
| without a solid family backing is already stretched too thin.
| And families is rapidly disintegrating across America leaving
| the young particularly vulnerable to the corporate landlord
| scheme.
| ihm wrote:
| You can join a tenants union to fight against your landlord.
| In the bay there's TANC (https://baytanc.com) for example
| which I'm a member of.
| tjpnz wrote:
| That resentment is natural given that the people they're
| renting from often had their foot on the property ladder in
| their twenties. For millenials and younger that's the exception
| unless you've had help from your parents.
| prepend wrote:
| Hasn't this been the case for many generations? Houses were
| way cheaper in 1980 and 1990 and 2000.
|
| I don't think it's particularly worse for millennials vs
| genx.
| ilyt wrote:
| It's becoming worse and worse over time
| TrackerFF wrote:
| When I moved from home (almost 20 years ago) to study, I
| had to chose between living on campus - which came out to
| around $150 / month in only the rent, rent private for
| $200-$350, or purchase a smaller apartment. The apartment
| would cost around $50k-$100k, but back then the banks would
| give you a loan with as little as 5% down payment on the
| mortgage. A 20 year mortgage would cost around $200-$400 a
| month, depending on price of the apartment.
|
| Coming up with $2500-$5000 for a down payment was not
| _that_ difficult, even for someone just finished in high-
| school. One could easily save that up over a summer or two.
|
| Fast forward 15 years, and the same apartments now goes for
| $250k-$350k. Rent is $1k minimum, and all the rooms on
| campus are either full and waitlisted, and you can only
| live there for 2 years anyway. Oh, and banks require a
| minimum of 15% for the down payment. And that's for the
| smallest, most basic "starter" units. The 2008-2009 crash
| killed all momentum, and building only reached the same
| pre-crash levels some 5-6 years later. This vacuum led to
| used housing exploding in price.
|
| I think the resentment comes from the fact that many young
| people are paying $1500 in monthly rent, while a mortgage
| for the same unit would come at $1000 / month. They go to
| the bank and apply for a loan, but the bank says _" Sorry,
| you need to save up more for the down payment"_. Next year
| the same house is 5% more expensive, while the rent has
| also increased in the same manner - but salaries have not.
|
| Probably not a problem for us that are working in high-
| paying fields, but for regular people - especially young
| ones starting at the bottom - it probably seems like a race
| where the goalpost is being moved further and further away.
| was_a_dev wrote:
| I don't know how young they are, but it's because renting
| absolutely sucks.
|
| It's an entire inconvenience for not having an inital capital
| for a mortgage deposit.
|
| I've rented many places, both with excellent and terrible
| landlords. And it makes little difference, when the laws offer
| so little protection to the renter.
|
| It wouldn't be half as bad if the inconvience was offset with
| the rent being the cheaper option. But that isn't going to be
| economically viable in such a captialistic society.
|
| Many more would complain if renting was a software product.
| Havoc wrote:
| Renting here too. :( Their stance seemed driven more by
| ethical considerations than affordability. literally being a
| landlord is immoral fullstop. Heard that from two complete
| unconnected people now - different countries
| scarface74 wrote:
| As a former landlord even in the very red business friendly
| Georgia, there are plenty of protections for tenants that
| make it almost impossible to evict anyone in less than three
| months.
| UncleMeat wrote:
| Does this meaningfully tip the balance? Even if you don't
| get evicted (let's be clear - made homeless), your credit
| is still in shambles at this point.
|
| I've rented from several different single-person landlords.
| None of them have ever done any preventative maintenance on
| the property and every single one dragged their feet
| terribly when it came to urgent and necessary maintenance.
| Two summers ago my AC broke and my landlord was
| uncontactable (I tried for days). I arranged for a HVAC
| company to come and repair it on my own and my landlord
| refused to pay for the bill because I didn't use their
| normal company (I was never informed of their normal
| company). Even though in my state it is a legal requirement
| that rented homes have working air conditioning, it was a
| huge fucking ordeal to get my landlord to take the cost off
| my rent.
|
| Now imagine I'm a non-native english speaker who didn't
| have spare time to dig through state regulations and this
| happens to me. I'd just get fucked. That's what happens to
| a huge number of tenants.
| scarface74 wrote:
| Why shouldn't it affect your credit if you don't pay your
| bills?
|
| According to the law in GA, you have the right to put
| your rent toward necessary repairs.
|
| But, all of your anecdotes argue for professionally
| managed properties - like ones being built by JPM.
| UncleMeat wrote:
| I am not saying that refusing to pay rent shouldn't
| affect your credit. I am saying that the "renter rights
| leads to people just deciding to not pay rent" claim is
| BS.
|
| My experience with corporate landlords has also been
| shitty, but in different ways. They've done fun things
| like have terribly sealed granite countertops with stains
| that they charge each tenant for "ruining" but then don't
| actually change out between tenants. I was dinged for
| $2,100 for stains that were present when I moved in (I
| foolishly didn't have photos). The new tenant was in a
| few days later without new countertops.
| scarface74 wrote:
| It's part of every walk through that I've ever done to
| note any pre-existing damage. But I do always take
| pictures.
|
| But we have plenty of evidence from especially around
| 2008-2011 that people were both not worried about
| squatting and not paying their rent and owners doing
| "strategic defaults" credit be damned.
| UncleMeat wrote:
| No walk through with these folks. Just got the key at the
| leasing office and I was off.
|
| Yes, I could have avoided their abusive nonsense by
| protecting myself more carefully. But that's fucking
| awful. People shouldn't need to enter adversarial
| relationships with their landlords on day one.
| scarface74 wrote:
| Would you buy a house without getting an inspection? But
| a used car without getting it inspected? Buy a new car
| without driving it? Change jobs without doing research?
|
| Do you do any large scale transaction without doing due
| diligence?
| UncleMeat wrote:
| Believe it or not, people sometimes end up in situations
| where it isn't possible to do this sort of thing. In my
| case, the unit I had seen and agreed to rent suddenly was
| unable to be leased and so my only option was to take a
| different unit. I had already canceled my lease with my
| previous landlord and arranged a day for movers to come.
| "Oh, I'll just find another place to live" was not an
| option.
|
| I also made a cross-country move during covid and had to
| choose a place to rent based on old photos because the
| current tenants understandably did not want their
| landlord to come into their home to do a virtual
| walkthrough for me.
|
| "Oh, if you don't work hard to protect yourself of course
| you get fucked over" is not a good world. It may be the
| real world but this should not be used as a defense of
| the virtue of landlords.
| scarface74 wrote:
| There are plenty of other options. You move to the new
| place, you move your things into storage and you move
| into an extended stay until you get the lay of the land.
|
| I did something similar. My lease was up and instead of
| rushing to buy a home. We moved our stuff into storage.
| We found an extended stay close by and we stayed there
| six months while our house was getting built.
|
| I had a friend who relocated from Seattle to Atlanta and
| did something similar.
| jonahrd wrote:
| Genuinely curious, are you pointing this out as a case of
| "very protected"?
|
| To me this seems absurdly low. Losing a dwelling is much
| more difficult than losing a job. It can be absolutely
| traumatic, and set people back financially, or worse for
| people who are already on the brink. In Quebec, where I
| live, thankfully it's one year. But it should be longer
| unless you can demonstrate some sort of valid legal reason
| like your tenant is damaging the building. Just cause you
| can extract a higher rent shouldn't mean you upend where
| someone lives.
| scarface74 wrote:
| So who should foot the bill when a tenant isn't paying
| rent? Isn't fulfilling their lease requirements like not
| paying for utilities?
| UncleMeat wrote:
| A major argument for why landlords should make money is
| that they provide risk smoothing. They take on risk and
| the renter pays a premium (like insurance) for that risk.
| But that means that _some landlords have to lose_. The
| idea that landlords should never lose money breaks the
| entire arrangement. If that is the case then there should
| be absolutely zero risk premium and renters should just
| be paying for the cost of maintenance (often skimped
| badly by landlords) and the marginal opportunity cost of
| having either a mortgage or having equity tied up in the
| property (often much lower than the nominal rent).
|
| Landlords often retreat at this point and just say "well
| we are charging what the market rate is" and leave behind
| any pretense that this is a fair economic transaction. In
| that case, landlords can get fucked, in my opinion. A
| system that buys up a scarce and necessary resource and
| then sells it back at prices disconnected from the actual
| value provided by landlords is unethical.
| scarface74 wrote:
| JPM is not buying up existing inventory. They are
| creating new inventory. Why should they do so with the
| expectation of losing money?
| tmnvix wrote:
| They are buying up existing land.
| scarface74 wrote:
| Would it be preferable for an individual to build a
| single family home on the land than a corporation build
| multi unit housing? Which does more to increase housing
| supply?
| UncleMeat wrote:
| Who said anything about expectation? I'm not saying that
| landlords need to lose money in expectation. I am saying
| that _some_ landlords need to lose money if they are
| indeed charging a risk premium. Same way we expect
| insurance companies to make money on average but lose
| money on some individual policies.
|
| My point is that complaining about rare cases where
| landlords lose money because they cannot evict a tenant
| who isn't paying at the drop of a hat is simply
| ridiculous. It is like complaining that an insurance
| company occasionally has to pay out for their policies.
| sahila wrote:
| I think a problem with this approach is you rid yourself
| of all small landlords and move towards corporate owned
| housing. Only those with a large portfolio of homes can
| afford the statistical averages you're talking about.
| UncleMeat wrote:
| That's not really true. Individual people make all sorts
| of investments that in expectation grow but still carry
| risk. A system where renters pay risk premiums to
| landlords is a fine marketplace. A system where landlords
| insist on carrying minimal risk while also using risk as
| an argument for extracting money from their renters is
| garbage.
|
| The truth is that the price of rent is utterly
| disconnected from the value of a landlord's labor plus
| the various premiums you'd pay for risk smoothing, lower
| transaction overhead, and opportunity cost. Landlords
| simply charge whatever they can get away with and we
| should all laugh at attempts by landlords to justify
| their rent through any argument other than "fuck you, pay
| me." After all, I've never heard of a landlord reducing
| the rent when they finish paying off their mortgage.
|
| Once we at least have this shared understanding we can
| start having a real conversation about the merits and
| costs of the system we have today, rather than this fake
| conversation about how landlords are so nice for paying
| for that new roof.
| scarface74 wrote:
| It's not about carrying minimum risk. When you carry more
| risk, you expect a larger return - you increase the rent.
| Which hurts the people you are trying to help
|
| Is your pay based on market rate for your services? Do
| you voluntarily make less money than you can?
| UncleMeat wrote:
| > It's not about carrying minimum risk. When you carry
| more risk, you expect a larger return - you increase the
| rent. Which hurts the people you are trying to help
|
| I don't believe that rents would actually go down
| meaningfully if states adopted laws enabling evictions
| within two weeks. As you say, rent is _actually_ based on
| market rate and is entirely disconnected from the
| expenses landlords pay. All of these discussions about
| landlord expenses are non sequiturs that just hide the
| real discussion.
|
| > Is your pay based on market rate for your services? Do
| you voluntarily make less money than you can?
|
| I am performing labor rather than gating access to a
| scarce and necessary resource. The social damage of
| charging for labor is not the same as the social damage
| of charging for housing.
| scarface74 wrote:
| Your job is enabled by someone at some point taking a
| financial risk to start the company you are working at.
|
| Your pay is also more than likely built on the back of
| the less privileged.
|
| How much "social damage" is being caused by a company
| investing money to build new housing as is the case with
| JPM?
|
| What's the alternative?
| UncleMeat wrote:
| > Your job is enabled by someone at some point taking a
| financial risk to start the company you are working at.
|
| That's true. The founders of my employer are mega-
| billionaires though. I'm not worried about them.
|
| > Your pay is also more than likely built on the back of
| the less privileged.
|
| That's also true. Capitalism is fundamentally unjust. I
| donate a huge amount of money to anti-poverty charities
| annually to help mitigate this.
|
| > What's the alternative?
|
| I am not certain. But we can't even _have_ this
| conversation until people stop talking about landlords
| like they are engaged in some essential charity for
| renters.
| seattle_spring wrote:
| Wait a minute. The risk is from having to pay for a new
| roof, cracked sewer lines, septic replacement, mold, etc.
|
| It's not to allow a subset of renters to explicitly screw
| the owners by deciding they don't need to pay rent.
| UncleMeat wrote:
| Why is one of those acceptable risk and one of those not
| acceptable risk?
|
| "I'll totally be able to get my landlord to pay for mold
| treatment" is a good joke, though.
| rcpt wrote:
| The landlord. If you're not ok with that risk then you
| should sell to someone who is.
| scarface74 wrote:
| Yes because decreasing profit potential is going to do an
| amazing job at increasing capital inflows, increasing
| supply and affordability.
|
| If I know that there is more risk involved in being a
| landlord, why wouldn't I increase the rent to compensate?
| rcpt wrote:
| Higher profit risk means you won't bid as high for
| investment property. Sounds good to me.
|
| If you could increase the rent and still find tenants
| you'd do it right now. No reason to wait for any
| legislation
| [deleted]
| scarface74 wrote:
| Higher profit risks mean that I'm going to charge more.
| If it doesn't make sense for me to invest in real estate,
| why not invest in something else? How does that help
| reduce housing costs?
|
| If the regulations change, all landlords that have any
| business acumen are going to address that by raising
| rent. The entire market is going to change.
| crote wrote:
| Exactly, that's the entire point. If landlords are less
| willing to invest in property the housing price will
| drop, making it easier for people to _buy_ the house
| themselves.
|
| People don't want a landlord, they want a _home_. For
| many people the landlord is currently a necessary evil
| they 'd rather get rid of.
| scarface74 wrote:
| No the entire market is going to change and if I know my
| risks are going to change, I'm going to increase rent.
|
| It's going to increase prices and/or reduce supply as not
| as much capital flows in.
|
| People may not want landlords. But everyone doesn't want
| to own a home. By definition, they want to rent from
| someone else - ie have a landlord.
| rcpt wrote:
| This wouldn't magically create rich tenants in your city.
|
| If you can really do it then why don't you simply
| increase rent right now?
| scarface74 wrote:
| The market conditions as they exist today with the known
| expenses has established an equilibrium. When expenses go
| up or risks go up across the market, the market adjusts.
| dannyw wrote:
| You're running a business, and part of the deal is risk,
| including eating losses.
| scarface74 wrote:
| It's called a "risk premium". If I know my chances of
| losing money is higher, I'm going to raise rents. How
| does that help anyone?
| rcpt wrote:
| Or, and more likely imo, you'll be less willing to bid as
| much when you buy an investment property.
|
| Maybe we can agree that the price-to-rent ratio will
| decrease?
| scarface74 wrote:
| It will increase as you will have less capital flowing in
| willing to increase supply.
| rcpt wrote:
| The supply of land is fixed. If we're talking about the
| US then most of what you pay for when you buy is the
| land.
|
| The current setup hasn't exactly been great at generating
| new housing. Juicing speculation increases nimbyism just
| as much as it increases developer interest.
| scarface74 wrote:
| That is not true in most of the US. Yes the supply of
| land is fixed. But there is plenty of air. Who is going
| to make the investment to build _up_? Individuals buying
| land and building SFHs is not going to help as much as
| building multi unit housing.
|
| There is also plenty of affordable land in the US in
| flyover country.
| Regnore wrote:
| You won't be able to infinitely increase your rent
| (renters can only afford so much), and other landlords
| with more tolerance for risk may not raise rents as much
| (or at all). Some landlords will exit the market which
| will lower the price of housing and transition some
| renters into owners.
| scarface74 wrote:
| How will it lower the cost of housing by decreasing
| supply? Not everyone wants to or should buy a house. A
| house ties you down to one location makes mobility a lot
| harder when you want to change jobs and goes up your
| capital.
| was_a_dev wrote:
| I agree there are a lot of protections for tenants.
|
| I do no think they're sufficient and go far enough.
|
| I say this as someone living in the UK.
| scarface74 wrote:
| How much further should they go?
| rcpt wrote:
| How long can you not pay property taxes before the state
| comes after you?
|
| In California owners have a minimum of 5 years for
| example.
| was_a_dev wrote:
| In a lot of ways. They have in the UK with the latest
| Renter Reform Bill 2022.
|
| https://www.lettingaproperty.com/landlord/blog/renters-
| refor...
|
| I'd like to see some proposals on how much rent can be
| raised with respect to local rates. Some European cities
| have attempted this, but not without issues.
|
| And some enforcable time limits on how soon repairs can
| take - for example a broken boiler.
| easytiger wrote:
| This will cause a crash in supply and a follow on rental
| cost increase.
| was_a_dev wrote:
| The solution is to build more housing
|
| A simple supply/demand model is useful but limited when
| the demand is everyone.
| scarface74 wrote:
| And who is going to foot the bill for building more
| houses without a profit incentive?
|
| Builders of individual homes are building larger houses
| that are unaffordable to the people who need them the
| most. The answer is multi unit housing - like those being
| built by the evil profit seeking capitalists.
| easytiger wrote:
| His answer will be an all benevolent all generous and
| arbitrarily infinitely funded government. Infinite
| housing, for infinite people - the motto of the true
| altruist - all paid for by persons TBD. The same position
| held widely in this thread
| easytiger wrote:
| If it were that simple would not the mass exodus of
| landlord owners have reduced prices? There are massive
| amounts of new supply being built.
|
| Single person occupancy growth in the last 20 years has
| pushed up pressure on stock as has the addition of many
| millions of persons beyond the national fertility rate.
| Incredible levels of regulation of which I wager you know
| nothing make building nearly impossible. I've built many
| properties, managed many, sold many, bought many. These
| flippant simplifications don't make sense. Costs to
| building quality housing to a modern standard are
| considerable. This the explosion in generic poor quality
| housing with aesthetics that are vile. If there were real
| cost pressures we'd see trailer parks everywhere in the
| UK. But we don't.
| scarface74 wrote:
| And how would that increase inventory and why invest in
| rental real estate if my return is limited to inflation?
| In that case, why not just buy bonds?
| was_a_dev wrote:
| Increasing inventory occurs by building more housing.
|
| It wouldn't be linked to inflation, as the housing and
| renting market has historically been above inflation. So
| limiting to market rate would still be beyond inflation.
|
| It would be balancing between having housing as a
| necessity vs a comodity.
| scarface74 wrote:
| "The market rate" is by definition set by people acting
| in their own self interest in a competitive market.
| truckerbill wrote:
| Exactly. It shouldn't be an investment vehicle, rent on
| land causes rocketing costs on everything down the chain.
| Only big monopolies survive. Places that are well
| governed and cheap to live in are often creative hubs.
|
| You might want to argue that monopoly is efficient, but
| it's only a temporary thing until they have built their
| moat.
| scarface74 wrote:
| So who is going to spend millions on multi unit
| dwellings? Do you think everyone should be forced to buy
| a home as soon as they move out?
| truckerbill wrote:
| Tail wagging the dog. Land costs wouldn't be millions if
| you couldn't turn the thumbscrews on tenants.
|
| To be a little less glib, it's easy to imagine other non-
| profit funding structures such as co-ops and government
| help (dirty phrase in the U.S. I know).
|
| I imagine a lot of the costs of actually building would
| decrease a lot when remove the incentive for NIMBYish
| building codes.
|
| There would be challenges as you point out, but the
| overall situation would be much better for all of
| society.
| scarface74 wrote:
| Yes because government housing has worked so well in the
| US and condo associations that are owner managed have
| such a good history.
| standardUser wrote:
| 90 days should be the absolute minimum any human being
| should be expected to vacate their home (or receive a rent
| increase).
| scarface74 wrote:
| Sure in that case, an efficient market would raise the
| rent to compensate.
| boveus wrote:
| This isn't a new thing and there are demonstrable problems caused
| by private equity becoming involved in rental housing in Atlanta:
| https://www.ajc.com/news/investigations/dwellings/apartments...
|
| It isn't surprising that they want to start in Atlanta, as the
| combination of few renter protections, lax code enforcement, and
| affordable housing subsidies can combine to make an ideal
| situation for maximizing profit at the cost of human misery.
| 1123581321 wrote:
| The hazards created by the dynamic public rent subsidy most
| stood out to me. The strongest protection against these units
| would be to replace it with direct cash assistance pegged to
| overall inflation, rather than the cost to rent at specific
| buildings.
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