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traveler01 ,

Rent control didn’t work anywhere where was tried. It leads to less houses on the market, making the issue even worse. The housing market is too damn expensive, specially due to inflation and the wages not following it. Also everyone wanting to live in overcrowded cities doesn’t help, meaning you either need build more houses or give tax incentives for companies and people to go live in smaller cities.

jackalope ,

Rent control doesn’t fix the problem of inequitable ownership of housing or the bad incentives that prevent the building of more housing or the lack of support for public housing. Rent control is a bad bandaid

WetBeardHairs ,

It helps remove the incentive to buy up all of the single family homes. The calculus is pretty simple -

  1. buy a house
  2. rent it
  3. pay the mortgage, insurance, and maintenance with the overinflated rental costs because everyone colluded to jack up rental prices across the board
  4. eventually own the house entirely off of the back of renters
  5. repeat

Renting a home shouldn’t cost enough for that cycle to be self sustaining.

Hyperi0n ,

The only way rent covers mortgage is if a double rental unit.

linearchaos ,
@linearchaos@lemmy.world avatar

Having money gets you no PMI and better interest rates. It’s cheaper for someone well funded to buy a house than someone who isn’t. I’m not saying that it’s a slam dunk rent is covered, but it can be a lot closer than you’d expect.

It’s not without risk though. The renters could damage the house. There will be broken appliances and roof replacements. You still have property taxes and maybe HOA fees.

Even if it’s half a house for free, that’s a pretty strong addition to your wealth management.

jackalope ,

I don’t think it actually fixes that. Rent control numbers are in the hands of politicians who may just act as toadies for landlords. Maybe they’ll control rent on the higher side some but ultimately they have an incentive to keep that cash flowing.

chiliedogg ,

I work in municipal development.

100% of the single-family home projects that have been proposed in my area for the last year have been rental-only communities.

Like - they don’t even want to give the houses individual water meters. They want to hook them all together, which means they can’t even be converted down the line to something else without digging up all the damn infrastructure.

WetBeardHairs ,

I’ve visited some friends in those rental only neighborhoods. The lawns are all trashed. The neighborhood was less than three years old but it was already sliding toward a slum because of the clear lack of ownership by the occupants.

Honestly I can’t believe that part of the rent didn’t go toward neighborhood wide lawn care.

traveler01 ,

Doesn’t work anywhere. It’s a bad idea and it only makes the housing issue way worse.

UltraMagnus0001 ,

rent control and stop cooperate take over of housing, especially foreign companies.

Furbag ,

Foreign investors and real estate speculators are squeezing the middle class dry. The only options out there if you don’t want to live in the middle of bumfuck nowhere are either really really old properties, really really shitty properties, or too far above your means to be able to afford it.

Renting should be the most affordable option, yet if you actually look at the numbers, you are paying almost as much as the value of an entire mortgage with one monthly rent check in some areas. Properties built in the 60’s that are falling apart and lacking modern amenities should not be going for $2,500/month, but that’s the reality I live in right now. I’m on the fucking brink and I’d do anything to have a chance at climbing on the real estate ladder right about now. I don’t care if my house never gains a cent in value, at least it would be mine.

CaptObvious ,

It’s been the case in my town for decades that a mortgage is much less expensive than rent. The only way renting makes sense if you don’t plan to live here more than a few years or don’t want to deal with maintenance and taxes.

CafecitoHippo ,

I manage the business lending department at a credit union ($400MM in assets) and lately we’ve just had a ton of investors looking for single family homes. For the most part, they’re all just couples looking for properties and they only have a few of them but we also have some realtors buying up a bunch of them. Looking for a new job solely because of that. Feel like I’m contributing to the lack of affordable housing. I liked the job more when we were doing loans for farmers/truckers/commercial real estate/or people that needed equipment. I hate dealing with single family homes.

4lan ,

We need legislation now.
50% tax on any property past your 2nd. Let people downsize and rent their home to young families, while buying a condo for retirement or whatever. But if we keep on this path we will truly be living our entire lives as a subscription model and never own a thing

orcrist ,

If foreign investors were a serious issue, local legislation would have already solved the issue. This is all about domestic greed.

sturmblast ,

Rent has been high for a LONG time… and yet somehow it keeps going up. I’m very fortunate in my rental situation… but I do see the other side of the crunch, which is LIFE is fucking expensive. Every last thing we do these days is expensive. When you are getting squeezed in every single direction…

4lan ,

I just got a 24% raise. Went to negotiate it lower and they basically just said “the market is the market”

I’m not getting a 24% better apartment. Their property tax has gone up only 6.9 % and I know based on two employees their labor costs didn’t change.

The sad thing is moving to a slightly cheaper, and much worse, apartment will cost me about the same over the course of one year as staying. Because of paying a deposit and pet deposit etc

I just got a big raise and it’s all gone to rent now. One step forward one step back for a decade I feel like. Doubling my salary in 5 year means nothing to my quality of life

Quaternions ,
@Quaternions@lemmy.world avatar

Yup. I currently am renting a house built in the 60s. Hasn’t been updated since the 70s, so not only is rent sky high, but so is our utility bill. My landlord doesn’t give a shit enough to upgrade the house. Why should he? He’s raking in the cash without having to spend a dime, and the fucking state I live in allows it to happen.

GoofSchmoofer ,
@GoofSchmoofer@lemmy.world avatar

Used to live in a 110 year old house with paper thin wall, leaky roof, a basement that flooded at every drizzle, a shit claw tub"Shower" and the rent was stupid high for that crap box.

teamevil ,

All I can say is the absolutely shit apt I lived in in South Florida, wasn’t maintained, gross and expensive for 2300 a month wanted to raise our rent to almost 2400 a month for an apt that should cost 1600(being generous).

Fuck corporate landlords

4lan ,

My complex just got bought out by an investment company. 24% rent increase after years of <5% increases

This is going to be 50% of my after-tax income. They own half of me

teamevil ,

Just move, we did it and found a local landlord, bigger apt newer better maintained and it is 25 bux a month cheaper.

4lan ,

I did look into that, my entire area is insanely expensive to rent in. With moving costs and deposits I’d be spending more in a year by moving.

I am looking into moving states but wouldn’t have time to get a new job. Going to have to bite the bullet and start planning for next year. Working on IT certs to get better paying jobs.

rjs001 ,
@rjs001@lemmygrad.ml avatar

No, fuck all landlords. They are all scum

afraid_of_zombies ,

Ok what is the catch? No way in heck economists are on our side.

InternetCitizen2 ,

Maybe they are noticing that if enough slaves die they are next to pick up the shovel.

afraid_of_zombies ,

Probably.

CmdrShepard ,

They want us to buy up property at inflated values (both price and interest rate) then default in a few years so they can buy them up in foreclosure auctions at a steep discount.

roboticide ,

“The enemy of my enemy is my friend.”

Economists want a perfect supply-demand capitalist dreamland. Demand drastically outstripping supply indicates something is wrong with The System^TM and that’s not acceptable, so they want to fix The System^TM .

It’s clear the demand is there, so it’s not a consumer problem. The supply is super-limited and being reduced every day. That’s a supply problem. The only options are incentives (don’t really work in this situation) or regulation (which economists hate but no other choice).

I assume most economists just don’t want to see what happens when that system reaches an absolute breaking point, so sign on for regulations it is.

tallwookie ,
@tallwookie@lemmy.world avatar

no one is going to actually be able to tell a property owner what they can and can’t do with their property, or how much rent they can charge.

saying otherwise is just circlejerking.

CmdrShepard ,

I think you’re circlejerking. Rent control exists in a lot of places and you also have leverage through taxes and tax incentives to help shape the market. Not to mention rentals are covered by a different set of rules than your own property that you use personally.

gowan ,
@gowan@reddthat.com avatar

There are very few things almost every academic economist agrees on. One of the things that almost everyone agrees on is that rent control does not work. Im shocked they got 30 economists to sign on.

The following is apropos as it even addresses the specific policies of SF and NYC mentioned here. If you need to see a progressive voice go look at Emmanuel Saez as his work is what Sanders and Warren based their tax plans on.

www.kentclarkcenter.org/surveys/rent-control/

Rent control is a horrific idea. Over the long term is disincentivizes the construction of housing. If you want to bring the costs of housing down then you need to build more housing ideally multi family units not kore luxury housing which is what rent control creates incentives to build.

ihwip ,

OK but we have more empty houses than homeless people. We don’t need more houses. We need to stop wasting resources for the sake of capitalism and stop letting people die for it as well. There is going to be a point where people start setting fire to vacant houses in protest. It is amazing what millions of desperate people will do when their screams of frustration go unheard long enough.

This is the chaos that our leaders secretly want. Otherwise they would have to be abysmally stupid. There is no excuse for ignorance in the information age.

gowan ,
@gowan@reddthat.com avatar

No we have more vacant homes which is not the same thing as available or usable. A house that no one lives in and is being sold is counted as vacant. An unrented apartment listed for rent is vacant

Your premise is based on a flawed concept if what vacant housing means.

afraid_of_zombies ,

800 billion on the military could probably be enough to fix up all those houses.

gowan ,
@gowan@reddthat.com avatar

Not without making a bunch of people in the military or dependent on it homeless.

afraid_of_zombies ,

Make the military fix them. They are always bragging about vocational training. Right now the only training they give is how to not seeing a therapist for PTSD. This would at least teach them how to do some basic carpentry work. And would benefit us a lot more compared to making planes that can’t fly in the rain.

pokemaster787 ,

we have more empty houses than homeless people

This is true, but very few of those houses exist where homelessness is a major problem. Location plays a huge role in someone’s life and we can’t just ship everyone that’s homeless or struggling to a dying small town in the US.

afraid_of_zombies ,

The lowest non-condemned house in my city is currently listed at over half a million dollars. There is a three story office building in my block that has been empty since March 2020.

gowan ,
@gowan@reddthat.com avatar

And the office building won’t have the plumbing a residential building needs.

afraid_of_zombies ,

Pity we don’t have people whose job it is to do plumbing work. Nope, doesn’t exist.

MiddleWeigh ,
@MiddleWeigh@lemmy.world avatar

Human suffering is power. Kind of crazy imo. I’m imaging a bit of ritual too, like a sacrifice.

stillwater ,

Meanwhile Ontario removed rent control on all buildings newer than 2018 and now people find their rents going up by 40% over a year with no recourse because the government is favouring the developers over all others, and no government level wants to mandate what developers should build.

afraid_of_zombies ,

Meanwhile areas in North America that didn’t have rent control also show skyrocketing rents. Rent control is starting to look pretty good. I would rather get decades of lower rent than not.

gowan ,
@gowan@reddthat.com avatar

It’s almost as if there can be multiple causes and rent control has been proven beyond all doubt to not work.

afraid_of_zombies ,

Areas that did not have rent control now = rent going up

Areas that did = rent going up

Except that areas that did still got decades of lower rent.

You talk a lot about proof but I am not seeing any.

stillwater ,

Almost, except for the parts where there’s no proof only wishful statements, and there’s more doubt than ever.

afraid_of_zombies ,

There are very few things almost every academic economist agrees on. One of the things that almost everyone agrees on is that rent control does not work.

Economists work for banks not for us. Their models have no connection to the real world. They support bailouts but not student loan debt reduction. Says all you really need to know about them.

SpaceCowboy ,
@SpaceCowboy@lemmy.ca avatar

Are you an economist?

Or did you just see a supply and demand curve and think that’s all there is to it?

If you studied economics beyond the 101 level, you’d know the supply and demand curve is a theoretical concept that doesn’t actually exist in the real world because the requirements for it are impossible. Supply and demand most definitely exist, but it’s more of a fuzzy force kind of thing not clean lines on a graph. Realistically, it’s more like fuzzy splotches on the graph instead of clean lines.

And there are multiple levels to it as well. Cities have to compete with other cities to attract businesses and businesses would prefer to be in a city where they don’t have to pay someone $100K per year to sweep the floors. Which might happen if that’s the pay level required to live in a city. You could get into a yo-yo situation where a city becomes unaffordable, people and businesses leave, causing the rent prices to drop, attracting people an businesses back, causing it to by unaffordable again, etc, etc. This instability comes at an economic cost that’s greater than the inefficiencies caused by rent control.

You see an economy isn’t just one simple supply and demand curve. You might want to consider that economists might be aware of some factors you aren’t aware of.

gowan ,
@gowan@reddthat.com avatar

No, I did not just see asupply curve nor did the dozens of economists polled. The fact is it has failed to make housing more available or decreased the cost of housing when implemented.

Arguing for rent control is the economic equivalent if arguing against climate change. Pretty much everyone is in agreement on the issue.

afraid_of_zombies ,

Except climate change is backed up by data studied and gathered by real scientists the vast majority of which are under no pressure to prove it.

Rent control attacks are generated by economists. A pseudoscience employed by the banks to create propaganda.

They are not the same.

SpaceCowboy ,
@SpaceCowboy@lemmy.ca avatar

The point is to provide relief for those who can’t afford rent.

Please show me actual economic modelling using real world data of the negative impacts of rent control. You know, something that isn’t just theoretical extrapolations based on the non-existent supply and demand curve done by someone who spent too much time reading propaganda on mises.org

gowan ,
@gowan@reddthat.com avatar

I literally link to the IGM forum.

www.kentclarkcenter.org/surveys/rent-control/

If you have no idea who that is it is a collection some of the most highly regarded economists in the world. They universally turn their back in the policy. You are arguing with the consensus of the largest group of academic economists we currently have

It is odd that you are accusing me of being an AnCap for representing perhaps the least controversial opinion in academic economics. Perhaps you should look into taking even just 101 which MIT has on line for free to rectify your inexperience and lack of education.

SpaceCowboy ,
@SpaceCowboy@lemmy.ca avatar

What is that link? So over a decade ago, 40 people that I don’t know indicated their opinion about rent control on a website. That’s your proof? Of what exactly? What was the methodology in which they were selected? Come on, some basic science please!

At any rate that’s not an economic model involving real world data. It’s just a poll on website that 40 people responded to.

And I did take Econ 101. And also Econ 201 where they explain the requirements for supply and demand: -Free movement of labour -Infinite number of competing companies -Perfect knowledge -No barriers to entry

In other words, things that are impossible in the real world.

Looking at a supply and demand curve and thinking you know about economics is like reading Act 1 of Romeo and Juliet and thinking you’re a PhD in English Literature. Supply and demand is theoretically how things are supposed to work which you learn about in Econ 101. Beyond Econ 101, most of economics is about why it doesn’t work like that in the real world what regulations are needed to approximate something vaguely resembling supply and demand. And sometimes a regulation that moves away from supply and demand in one market can get us closer to a reasonable supply and demand approximation in other markets. As I mentioned before, rent control helps the labour market, which is kinda important.

gowan ,
@gowan@reddthat.com avatar

You could click on each name to realize they are all economists or youcould read the sentence where I mention they are all economists.

The poll results you are arguing against is a consensus of experts. If you think you know better I think you need to takea second to ask why a person with no education in economics would know better than a group of people with doctorates.

You took 101 and 201 and you have no idea who the University of Chicago’s IGM forum is? You either went to a clown collage, paid no attention in macro, or are completely full of shit. I strongly suspect you are lying about your credentials here as again the view Im giving would have been taught to you.

SpaceCowboy ,
@SpaceCowboy@lemmy.ca avatar

Ok, so you got nothing but appeal to authority, and the “authority” is a decade old poll that 40 people responded to on a janky website?

Apparently this IGM forum is something paid for by the Chicago Stock Exchange. I don’t see any indication of the methodology they used to select these particular people. Given the source of their funding, it makes me a little suspicious. $1.5 million to 40 economists to answer an email once a week? Was the Chicago Stock Exchange paying that money for honest answers or were they paying for the answers they wanted to hear?

And they don’t seem to do any macroeconomic analysis. Methinks it’s just some bullshit meant to influence public opinion. I guess it worked on you.

PeepinGoodArgs ,

an economy isn’t just one simple supply and demand curve.

Aggregate supply and aggregate demand.

Boom. Roasted.

This instability comes at an economic cost that’s greater than the inefficiencies caused by rent control.

It’s extremely difficult to get someone who only understands Econ 101 to grasp the idea of competing economic inefficiencies. Conservative think tanks have been on a rather successful crusade to ensure that de-regulation is only good. So, it’s difficult to convince someone that higher taxes on “job creators” leads to a better, less expensive life for everybody else.

SpaceCowboy ,
@SpaceCowboy@lemmy.ca avatar

Yeah and aggregate demand is basically impossible to model because people be crazy.

And sure, rent control could cause issues in the long run, but in the long run we’re all dead anyway. Other, bigger, problems will likely happen sooner than something like rent control having a significant economic impact.

CmdrShepard ,

Using SF and NYC as the main examples kinda distorts things as these are both some of the most expensive, developed, and dense parts of the country where development costs are staggeringly high. Something not working there doesn’t mean it doesn’t work anywhere else. The rate of increase in property/rental costs is unsustainable.

gowan ,
@gowan@reddthat.com avatar

They are perfect examples as rent control did NOTHING to impact the costs of housing there.

CmdrShepard ,

It did for the folks using it.

gowan ,
@gowan@reddthat.com avatar

Not over the long term

CmdrShepard ,

Please explain how.

Surp ,
@Surp@lemmy.world avatar

Housing should NEVER have been part of determining ones worth or wealth etc. People need places to live…fuck this shit. Idgaf about people that boohoo about selling their home later in life when soooooo many of us can barely afford a rental in shitty areas these days. I have zero sympathy for any owners concerns as I can’t even own and I make more money than I ever have in my life. Can’t win vs the rich bastards that swoop in and pay 100k above asking price and just destroy any chances many of us have at just having a home and a life. Fuck your “starter home” boomer mentality. I want a home to die in someday and it can be the first home I buy if I ever get to

SpaceCowboy ,
@SpaceCowboy@lemmy.ca avatar

Yet another negative side effect of supply side economics. More money in the investor class than there are good investments. So they dump money in real estate which drives up the price.

We have to wait for the people that love Reagan out of nostalgia to die off. Then we can tax the bloated investor class and have a healthier economy.

ryathal ,

It’s more a symptom of artificially low interest rates. A lot of the money currently buying up places to rent them would happily buy mortgage backed securities instead, but that market bottomed out when rates were 2-3%, so they bought property directly instead.

It’s going to take time, but eventually some companies will prefer the low risk 7-10% MBS vs managing property to get roughly the same return if you’re lucky.

willeypete23 ,

Why don’t we just move into vacant homes? Don’t pay rent or buy, just move in. There’s so many in my area that if I did get caught and kicked out of one I could just go down the street to the next.

Igotz80HDnImWinning ,

If a space goes unrented long enough it should be repossessed from the landlord. The law should work both ways. Manifest destiny but for homes.

afraid_of_zombies ,

I happen to agree. I am sick of perfect fine forests being torn down for new construction while old buildings stay vacant. Often on the same block.

InternetCitizen2 ,

There are rules around this. Its called squatting.

justaveg ,

youtu.be/3xZXdXxYBGU

afraid_of_zombies ,

Then you get arrested for breaking and entering. We are really good at keeping people out of places not so good at putting them into places.

willeypete23 ,

We should make owning residential, single family real estate for commercial purposes illegal. You own it, you live in it, don’t live in it, don’t own it. That would make gobbling up houses and renting them out unprofitable and force cities to open up multifamily development

nednobbins ,

That sounds nice in theory but what happens when you want to sell your house?

The only potential buyers would be people who either currently rent or are ready to sell their old house as soon as they buy yours.

What if someone wants to fix it up first? Nope, they can’t do it. It will cut out the flippers but we’ve also just cut out all the renovators and restorers.

We could do something like this (and it may not be a terrible idea) but there will definitely be a cost. If we add that law, all the people who currently own homes (that includes both investors and owner occupiers) will see the value of their real estate holdings drop. In the US, over 65% of people own their homes and for most of them, their home is their single biggest asset. Richer people can diversify more so while this law wouldn’t hurt the 35% who don’t currently own homes, it will disproportionately affect the poorer end of the 65% homeowners (who have proportionately more of their savings tied up in their home).

If we don’t also address that problem at the same time we’ll create a cohort of people who can’t afford to retire because we killed their plan of downsizing when their kids move out and living off the difference.

CaptObvious ,

The only potential buyers would be people who either currently rent or are ready to sell their old house as soon as they buy yours.

What if someone wants to fix it up first? Nope, they can’t do it. It will cut out the flippers but we’ve also just cut out all the renovators and restorers.

Not at all. They can buy and renovate all they want. They just have to sell it afterwards rather than rent it out.

hellishharlot ,

Then you end up with a lot of properties on the market for millions while no one lives in them.

CaptObvious ,

Fair point. So we cap profit at 10% above purchase price, and hit the renovators with 90% taxes if the home hasn’t sold in, say, six months.

gowan ,
@gowan@reddthat.com avatar

What if the market collapses?

CaptObvious ,

Then the speculators eat it. This doesn’t make me sad.

nednobbins ,

We could. Why would anyone want to make those investments once we’ve cut off all their profit potential?

Investors chase profits. We can cut off their profits but when we do that 2 things happen; some of them just leave the industry and some of them break the law to try to get around the regulations. Almost nobody just eats the loss and continues investing.

CaptObvious ,

Exactly.

roboticide ,

We didn’t cut off all their profit potential. It’s just limited.

I don’t really see the problem with this hypothetical. Small time flippers are unaffected. 10% or whatever profit is still profit. If it disincentivizes big commercial flippers or investors because they can no longer make “enough” profit, good, that’s the point.

nednobbins ,

The problem we see when we try to implement price controls is that they inevitably lead to shortages. The oil caps in the 70s are a famous example but the NYC rent controls were just as bad. The standard practice if you wanted an apartment was to look in the newspaper for open house listings that day. You would show up before the open house starts with at least 1 months rent plus first and last months rent as security deposit, in cash. If you liked the place you signed within the first half hour. If you waited someone else took the apartment.

Part of the challenge is that it’s not as simple as a 10% profit cap. What if someone owns a house for 2 years? Do we cap it at 20% profit? Do we index the allowable profit to inflation and then add a “reasonable” offset? Do we want to allow different profit caps for different renovations? (maybe we don’t want to treat swimming pools and solar panels the same way?) How long do you need to live in a house to consider it owner occupied?

As those regulations get more and more complicated you end up with a ton of loopholes. The more you do that the more profitable regulatory arbitrage becomes as a business model.

In general, tight margins favor large companies over small firms. They can operate at such a large scale where they can thrive off of profit margins that would starve small businesses. That’s the general issue with mega-retailers. They operate on single digit margins. Mom and pop can’t streamline their operations enough to survive on those margins.

Our housing stock needs both growth and maintenance. That comes from investment. If we push the private sector out of those investments without replacing them we’ll just end up with a crumbling housing infrastructure. If we cut large businesses out of it government would likely need to take up the slack. And to be clear that government intervention would need to be massive. The real estate market is huge and if we cut out the private sector we will definitely need to raise taxes, by a large amount, to cover it. That’s not off the table but we should walk into a decision like that with eyes wide open.

cjsolx ,

Why would anyone renovate a property if it’s just gonna sit on the market out of reach of potential customers? I would hope that investors would be smarter than that. Like we’re saying, homes should be for living, not for investing. If there’s no pressing need to renovate, then great. Don’t. Whoever wants to buy it as is now can. And if they want to they can renovate what they want at their own pace.

the_post_of_tom_joad ,

Like now

gowan ,
@gowan@reddthat.com avatar

But if they already own a home they can’t do this because they will own two

CaptObvious ,

No one ha said that they can’t own more than one. They just can’t rent one while living in the other. The vacant one stays vacant.

gowan ,
@gowan@reddthat.com avatar

What about rental companies? Who can you rent from? If you can only lose money or break even this would destroy any reason to maintain a home.

nednobbins ,

I’m assuming OP intends to specifically exclude rental companies. As near as I can tell this plan would also exclude individual renters. Not sure how that would play out if someone wanted to defray the cost of their home by renting out a room or subdividing their home.

afraid_of_zombies ,

Do you not maintain the things that you own just because there will never be a day where it is worth 10x what you paid for it?

Btw I really want to meet these flippers and landlords who are maintaining their homes. Every time I have dealt with one they are obsessed with making it look like the house is great, not actually maintaining it. Oh wow you sprayed cookie dough smell before showing it, hey check out that black mold in the basement that stupidly has fucking sheetrock.

ihwip ,

This is the most beautiful strawman I’ve ever seen. Well done!

lolcatnip ,

I live in a rented house, and I’ve rented out a house I owned because I wanted to move and I was underwater on my mortgage. I get where you’re coming from but I do think there should be exceptions. Maybe just capping the rent at 110% of the mortgage payment or 0.5% of the appraised value would be enough to allow some rentals while discouraging people to buy houses just to rent them out.

4lan ,

How about instead of banning it we heavily disincentivize it? After 2 properties you pay 50% in property tax. This allows people to rent out homes to college kids and people saving for a home, without allowing vultures to pick at the bones of the middle class

ScornForSega ,

There’s a supply shortage.

You can’t sprawl your way out of this problem, despite Texas’ best efforts. All you do there is create traffic.

The answer is simple. Legalize housing. More triplexes, more quadplexes, more ADUs, 5 over 1s, more of everything. Developers want to fill this demand. They can’t. They’re hamstrung by city ordnances and state laws that often only allow apartments or single family housing. Not everyone wants or needs a separate house. Make rent boring again and the corporations will lose interest.

jonkenator ,

Exactly! We need the missing middle housing.

Morcyphr ,

more ADUs

This. I own my home and could probably fit at least two ADUs on my property but the permitting fees alone exceed the cost of construction. Not to mention the cost and hassle of obtaining a permit.

Raiderkev ,

Eh, I mean there is a record number of vacant homes at the moment. The investor class owns a fuck load of housing that could be actually be used to ya know, house people. I’d bet If a large tax was placed on 2nd homes /income property, there’d be no supply shortage. So many people bought homes for AirBNB, and rent seeking in the last decade that in years past would be being bought by families. I know in my town they’ve been putting up high rise after high rise. Rent still goes up because of (imo) artificial scarcity. Landlords are using software to fix price on rent, banks intentionally trickle out foreclosures to not flood the market, companies with vacant units are not allowed to drop price of rent and keep pricing high because of financing agreements made when the building was built. Most of the luxury apartments that have been built are maybe 30% full. No one wants to live in a duplex/ triplex /multiplex. People want houses, and there are none because companies like Blackstone backed Invitation homes and Chinese companies/ citizens buy them all to rent seek.

The ripple effect from these rate hikes might help drop rents because a lot of commercial loans are ARMs, and when that rate adjusts, landlords are going to feel pain, but they may just pass it on to their tenants and make housing affordability even worse. We’ve allowed too many people to commodify what was once viewed as a necessity, and the single family home is now an investment vehicle for big business.

The real estate market as a whole feels like a giant game of hot potato at the moment. Something has got to give. The America of today is so much worse than the one I grew up in as a result of all the BS we’ve allowed the investor class to do. It needs to get reigned in somehow because imo the American dream is dead as a result.

AProfessional ,

A vacant home doesn’t mean affordable or accessible. Single family homes are stupidly inefficient and expensive or in middle of nowhere. Dense cities are the only solution.

nednobbins ,

there is a record number of vacant homes at the moment.

We’re currently close to the record for all time lowest vacancy rates. We’re at 6.3%. The highest (over the past 70 years) was in 2009, at 11.1%. It got down as far as 5% a few times. I downloaded the raw data and it says the average is 7.28%

fred.stlouisfed.org/series/RRVRUSQ156N

There’s a popular image of a bunch of Scrooge McDucks sitting on giant inventories of housing but the evidence doesn’t support that. Someone saying, “I saw a bunch of empty houses.” is exactly as logical an argument as a climate denier saying, “It’s been cold all week.” That’s just an anecdote.

The data is very clear on the matter. We don’t have enough housing.

gowan ,
@gowan@reddthat.com avatar

Vacant does not always mean available.

nednobbins ,

The core problem, which causes that shortage, is that we have conflicting views on what housing is for.

On one hand, we want housing to be a right. On the other hand we want our houses to be good investments.

Those are conflicting goals. We need to pick one and be ready to sacrifice the other.

If you want your house to be a good investment, it needs to appreciate in value at a rate higher than inflation. The only way for that to happen is if housing keeps getting more expensive on a real money basis. That’s a fancy way of saying that housing will be a bigger and bigger chunk of income.

Every single policy that reduces the cost of housing also degrades its effectiveness as an investment. If people can get housing any time they want, they have no incentive to pay somebody a bunch of money to someone hoping to fund their retirement by downsizing.

Your suggesting to legalize more housing will destroy the ability of homeowners to make a profit off their homes. Even though I stand to earn huge amounts of money from the appreciation of my own house I would support that, but I’m afraid I’m in the minority. The US has a 65.9% home ownership rate and for most people their home is their single biggest asset. If we address the housing shortage those people will all see their single biggest investment asset drop in value.

the_post_of_tom_joad ,

On the other hand we want our houses to be good investments.

I don’t.

I understand you’re speaking in general terms here but no, i think having housing being tied to investments at all is a terrible idea we’ve just normalized.

The flip side of course we’ve experienced, like 2008 when the market went sour, putting people out of home and destroying retirement funds

nednobbins ,

I don’t think it’s a good idea either but we live in a society that effectively decided that we do want houses to be investments decades ago. That’s entrenched now and many people bet their life savings on the promise that their house would be a good investment.

If we change that without taking those people into account they’re all screwed. While some rich people would get screwed in that process a whole lot of poor people would get screwed too.

roboticide ,

I mean, boo hoo?

I bought a house, not because I wanted an investment, but I wanted a place to live. Fuck the CCP, but man were they on the money saying “Houses are for living in,” their current, ironic, housing bubble aside. Houses are homes. You want an investment vehicle, buy stocks or bonds.

If the people who see housing as an investment are outweighed by the people who simply want an affordable home as a right, it’s become an unsustainable and unjust privilege and needs to be rectified.

Also, I think this ignores the larger factors of: poor zoning due to NIMBY-friendly policies at the local level, and corporate greed as companies, not people, buy up supply. Solve these two problems and we don’t have to pick between housing as a right and housing as an investment.

nednobbins ,

The problem with this plan is that it assumes that we’re only hurting some cigar puffing Wall Street fat cats but, in reality, the pain would be felt much more broadly.

In the US, the majority of people own the home they live in. propertyshark.com/…/us-homeownership-rates-by-sta… Those aren’t big corporation or greedy landlords, they’re 50+ percent of the population of each state. Some of those people are billionaires and many of them have below median income. visualcapitalist.com/chart-assets-make-wealth/

Those super wealthy people that we’re happy to throw under the bus don’t have their wealth tied up in their homes. Their real estate investments tend to be small fractions of their portfolios. The ones that would get hit the hardest are the ones with less than $100k. I’m glad that you’re in a position where you can survive a large financial loss on your house but a lot of people don’t have that luxury.

Any plan that just kills their investments without some way to take care of those people will create a disaster. Maybe we could bump up Social Security somehow? That would involve significant tax increases but it could plug the gap.

Huge swaths of our economy are set up to assume that houses are financial assets. NIMBY policies are largely about maintaining or increasing the financial value of the real estate. The corporations buying up all the housing are kind of a red herring. The US has one of the highest owner occupancy rates in the world. There has been a slight (about 1.6%) in non-own occupied housing and only a fraction of those 1.6% are corporations. So it’s technically true that corporations hold more residential real estate but they hold so little of it that it’s unlikely to be a primary factor in home pricing or availability.

As I said elsewhere, the data is very clear on the matter. We don’t have a lot of empty housing inventory being horded by greedy investors. By any reasonable measure, we have a housing shortage.

psycho_driver ,

As someone who worked on multi family property development for fifteen years–for the love of God, force the developers to build to a standard. Simply requiring that the landlords pay all utilities would go a long way toward this, since it would incentavise building a better structure.

FlyingSquid ,
@FlyingSquid@lemmy.world avatar

There is no way the corporate-loving leaders of our country will agree to this, but I wish them luck anyway.

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