USCE Summer 2022: You can't change the crisis settings.

The Something Awful Forums > Discussion > Debate & Discussion > USCE Summer 2022: You can't change the crisis settings.

«‹›279 »

projecthalaxy: Dec 27, 2008; Yes hello it is I Kurt's Secret Son

I see. Thanks everyone. Like I said, I have anecdotes not data, but it seemed like a combination of my personal network saying that its impossible to buy a house anymore because big firms buy them all then rent them out for twice the mortgage, my own Zillow research showing that yeah most houses in North Dallas get sold the same day for a cash offer, and articles like this showing that the big investment firms bought 25-50% of all houses in TX this year meant that might be a good symptom to look at. Thanks for the perspective.

# ? Aug 16, 2022 15:16

Adbot: ADBOT LOVES YOU

# ? May 23, 2024 15:15

Leon Trotsky 2012: Aug 27, 2009; YOU CAN TRUST ME!*

_{*Israeli Government-affiliated poster}

projecthalaxy posted:

I see. Thanks everyone. Like I said, I have anecdotes not data, but it seemed like a combination of my personal network saying that its impossible to buy a house anymore because big firms buy them all then rent them out for twice the mortgage, my own Zillow research showing that yeah most houses in North Dallas get sold the same day for a cash offer, and articles like this showing that the big investment firms bought 25-50% of all houses in TX this year meant that might be a good symptom to look at. Thanks for the perspective.

They are buying up larger and larger shares of houses for sale. But, it is a relatively recent thing and houses for sale in one year are a small amount of the total housing stock.

Institutional investors own less than 0.5% of single-family homes. But, the trend of them purchasing houses when they come on the market has been heading upwards for the last two years.

The huge shortage of houses + extremely low interest rates + collapse in prices due to the pandemic + stock market initially crashing with Covid and uncertainty about when it would recover led to a lot of investment groups getting into the housing game because it was a much more guaranteed avenue of profits.

It will probably tamp down a little bit with interest rates rising and housing prices returning back to normal (and above) pre-pandemic levels. But, the shortage is still going to make it a pretty attractive target for groups who don't want to risk investing heavily in the stock market or startup businesses.

https://news.theregistryps.com/as-i...dream%EF%BF%BC/

# ? Aug 16, 2022 15:26

Eric Cantonese: Dec 21, 2004; You should hear my accent.

Like many public policy issues, our nation's wishful thinking that market dynamics will solve everything so politicians don't have to make tough choices is holding us back. With that government inaction, you basically have a toxic mix of lagging reactions by landowners and builders and local-level policies designed to maximize the value of housing for those who already own it.

The NY Times (I can hear your jeers now) had a good piece on it.

https://www.nytimes.com/2022/07/23/business/housing-market-crisis-supply.html

quote:

We Need to Keep Building Houses, Even if No One Wants to Buy

Right now, builders have too many homes and not enough people to sell them to. In the long term, the United States has the opposite problem: Not enough houses for all the people who want them.

By Conor Dougherty and Ben Casselman

July 23, 2022

The United States has a deep, decades-old housing shortage. Also, at the moment, homebuilders across the country are pulling back on development because they can�t sell enough homes.

How can both of these things be true? That riddle is at the heart of the boom-bust nature of housing, where an excess of regulation and the mixed incentives of the market mean there is never a supply that lines up with demand. One way or the other, solving it will require more building during downturns, and, most likely, some sort of public program to subsidize it.

Consider what the past few months have visited on Hayden Homes, a regional homebuilder that is based in Redmond, Ore., and builds about 2,000 houses a year throughout the Pacific Northwest. At the beginning of the year, Hayden�s biggest problem, shared by almost every other U.S. homebuilder, was figuring out how to supply enough houses for everyone who wanted one.

The company couldn�t find enough land, workers were scarce, lumber prices were exploding, and the faltering supply chain turned the search for everything from dishwashers to garage doors into a kind of corporate scavenger hunt.

The one thing builders were not short on was qualified buyers, who were in abundance because of low interest rates, high household savings and the sudden ability for millions of workers to set up home offices wherever they wanted. To deal with the crush of demand, builders like Hayden began choosing buyers from waiting lists or conducting elaborate lotteries to pick a �winner� from the crowd.

Now, in the space of a few weeks, the situation for Hayden, and the housing market, has reversed. Interest rates on the average 30-year mortgage have jumped to about 5.5 percent, from about 3 percent at the start of the year. That has added hundreds of dollars a month to the typical house payment and disqualified many buyers. At the same time, a broader slowdown in home sales and price gains have caused many would-be purchasers to pull back for fear of buying at the market�s peak.

Following a steep decline in sales for June, and after watching its waiting lists dissipate, Hayden is rejiggering its inventory to emphasize smaller, cheaper dwellings, and ratcheting back the number of already-built �spec homes� it produces. All of this is happening even though the ranks of prospective buyers are still broadly employed, still sitting on a down payment and still dreaming of a new home.

�We would rather forgo a few sales in the future than be stuck with homes we are unable to sell now,� said Deborah Flagan, a vice president at Hayden.

The problem facing Hayden and other builders is simple: Sales of new homes are falling � down 15 percent this spring from a year earlier � at the same time that a wave of homes, begun before the jump in interest rates, are hitting the market. The number of homes that have been completed but not yet sold hit a 15-month high in May. Redfin, the real estate brokerage, recently reported that buyers are trying to back out of sales agreements at the fastest pace since the early weeks of the pandemic.

�Demand has slowed enough that builders are finding themselves with homes and no buyers for them,� said Ali Wolf, chief economist with Zonda, a housing data and consulting firm. �That is a problem we haven�t faced in years.�

Developers are responding the way Economics 101 says they should: by cutting prices on the houses they have already built, and by pulling the plug on virtually any project that wasn�t already too far along to be abandoned. Builders started construction on about 93,000 single-family homes in June, down 16 percent from a year earlier.

�Very smartly, builders are saying hey, let�s rein it in,� said Rick Palacios Jr., director of research for John Burns Real Estate Consulting. �Yes, we are undersupplied from a structural standpoint, but when rates roughly double in the space of three or four months, builders don�t care. They are planning their business for the now.�

If the slowdown continues for more than a few months, as many economists predict, the next step will be to cut back on future land development. The likely effect of this would be that when housing gets going again, builders will remain behind. So families will once again be clamoring for homes, getting one will once again depend on winning a lottery � and the housing shortage will continue to crush family finances and make it harder to build wealth.

�This is going to have a significant impact on future supply,� said Randall Lewis, a principal at the family-owned Lewis Group of Companies, a developer of master planned communities in California and Nevada. Mr. Lewis�s company takes raw land and over the course of decades adds basic infrastructure like sewers, streets and traffic signals. When companies like his pull back, the number of lots homebuilders can use in the future declines.

�We are now saying we�re going to look project by project and say which ones are we are going to go ahead on and which we are going to take a pause on,� he said. �As a developer, the question is, how much money do you want to put in the dirt when you don�t know what the future is going to hold?�

That is a problem, because while the challenge for builders, in the short term, might be that they have too many homes and not enough buyers, the challenge for the country, in the long term, remains precisely the opposite: There are not enough houses for all the people who want them.

Last year, Freddie Mac estimated the nation�s housing supply deficit at 3.8 million units, up from 2.5 million in 2018. Other analysts come up with different figures, but pretty much everyone agrees that the country hasn�t been building nearly enough homes to keep up with demand, especially for middle and lower-income families. The failure to build those units is the single biggest contributor to the affordability crisis that in recent years has spread from a few coastal cities to a much larger swath of the country.

Sam Khater, Freddie Mac�s chief economist, said there was an irony to what�s happening right now: The Federal Reserve is trying to snuff out inflation by increasing interest rates, which is leading to a pullback in construction, which will make housing even less affordable down the road. In a sense, policymakers are solving the immediate cost-of-living crisis (inflation) by making the longer-run cost-of-living crisis (housing) even worse.

�It�s an unintended consequence,� Mr. Khater said.

The housing market has responded so quickly to the Fed�s actions because it is built on debt, making it ultrasensitive to interest rates. Builders borrow money to build new homes, then sell them to buyers who, for the most part, borrow 80 percent or more of the home�s cost. When banks pull back on credit by raising monthly borrowing costs, it causes buyers and builders to retreat for different versions of the same reason, which is the fear they will be left with property they can no longer afford and might be worth less than they paid for it to boot.

The slowdown in homebuilding wouldn�t have such a significant effect on the nation�s overall housing supply if builders could quickly adjust to demand, making up for the recessionary shortages during boom times. But they can�t: Housing is a hugely fragmented industry of mostly independent companies that includes developers that spend decades turning raw land into parcels that can be built upon and subcontractors that hire laborers by the hour. The system works fine when demand is strong, but deteriorates with even a modest sign of trouble and can take years to restart, creating a backlog that gets deeper each time building slows.

�It�s much easier to turn it off than to turn it on,� Mr. Palacios said.

The collapse of the housing market during the Great Recession put many smaller home builders out of business, and left the ones that survived extremely cautious. Housing starts cratered to 554,000 in 2009 from 2.1 million in 2005, then barely recovered, even as demand steadily grew. Only in the past couple years did developers finally start building at something close to their pre-bubble pace � only to slam on the brakes now that rates are rising.

That cyclical dynamic is exacerbated by another problem. In the places where new housing is needed the most, existing homeowners don�t want it and local governments won�t allow it. Around the country, a combination of rampant NIMBYism � neighbors who protest new development � along with zoning and land use regulations, heavily limit how much housing can actually be built.

In other words, backlogs grow during downturns because of market forces, then persist during good times because of government-imposed limitations on construction.

�It�s a chronic issue,� Mr. Khater said. �We have both a market failure and a government failure.�

Those failures are both on display in San Francisco, which has a decades-old housing shortage. When interest rates were low and demand was strong, developers desperately wanted to build, but had to spend years obtaining the necessary approvals and permits. Now that the market has turned, some of the projects that managed to survive that process are being called off because developers can no longer afford to build them.

Michael Covarrubias, chief executive of TMG Partners, is a developer of residential and commercial property in the Bay Area. Mr. Covarrubias said he had two projects he could legally start construction on, with about 800 condominiums between them. But they�re furloughed because of rising costs of materials and financing.

�Real estate at its core is a simple business,� Mr. Covarrubias said. �You have to get a return on your costs, and it�s harder and harder to make the math work.�

Around the country, the persistent shortage of housing has caused a number of legislators to revisit an old idea: Public housing. In California, Hawaii, Rhode Island, Maryland, and Colorado, legislators have either introduced or passed proposals to allow state and local governments to develop housing for a range of incomes.

�If government gets in the business of providing housing, we can be that countercyclical supply,� said Alex Lee, Democrat of San Jose and member of California�s State Assembly. This year Mr. Lee introduced a measure that would have created a new state agency to build mixed-income housing across California. It failed in committee, but Mr. Lee has vowed to continue pursuing government-built housing.

To expect private companies to build during downturns is to expect them to risk financial ruin. The government can try to help families with rising costs by capping rent increases and providing subsidies or loan programs that help first-time home buyers.

But unless the government builds new housing itself, or creates incentives for builders like Hayden to keep at it when it doesn�t make sense, the housing shortage is destined to compound each time the economic winds blow against the building industry.

The precise solution is politics, but there�s little mystery what the problem is. America doesn�t have enough housing, and someone has to build it, in bad times as well as good.

Conor Dougherty is an economics reporter and the author of �Golden Gates: Fighting for Housing in America.� His work focuses on the West Coast, real estate and wage stagnation among U.S. workers. @ConorDougherty

Ben Casselman writes about economics, with a particular focus on stories involving data. He previously reported for FiveThirtyEight and The Wall Street Journal. @bencasselman � Facebook

# ? Aug 16, 2022 15:31

Kalli: Jun 2, 2001

On the other hand: https://fortune.com/2022/06/26/housing-market-and-home-price-boom-made-bigger-by-investors-and-wall-street/

quote:

In the first quarter of 2022, investors made up a record 28% of single-family home sales, according to a report published last week by the Harvard Joint Center for Housing Studies. That�s up from 19% in the first quarter of 2021. It�s also far above the 16% that investors made up of single-family home sales between 2017 and 2019. (To conduct the analysis, the Harvard researchers analyzed home sale data collected by CoreLogic.)

....

Researchers at Freddie Mac, who did their own analysis of public records, found a more modest jump in investor purchases than Harvard and Redfin researchers. Between December 2019 and December 2021, Freddie Mac found investor home purchases climbed from 26.7% to 27.6%. However, Freddie Mac acknowledges its analysis isn�t fully capturing all-cash purchases by investors.

...

Let�s be clear: The vast majority of investor home purchases in America are still made by small or midsize investors: ranging from average Joes owning an Airbnb rental to individuals who�ve spent years amassing a hefty portfolio of rentals. According to the Harvard study, 74% of investor purchases in September were made by investors with portfolios of less than 100 properties. The remaining 26% of investor purchases were made by groups with property portfolios of at least 100 units.

That said, it�s clear that those big investors were among the biggest drivers of the uptick in investor purchases.

�Investors with large portfolios (at least 100 properties) drove much of this growth, nearly doubling their share of investor purchases from 14% in September 2020 to 26% in September 2021,� wrote the Harvard researchers. �By buying up single-family homes, investors have reduced the already limited supply available to potential owner-occupants, particularly first-time and moderate-income buyers.�

Who are these big investors? Some are massive rental companies like Invitation Homes�the nation's largest owner of single-family rental homes�which grew its portfolio during the pandemic. Blackstone, which founded Invitation Homes back in 2012, also got back into the single-family home business during the pandemic. (In 2019, Blackstone had backed away from the business after selling its remaining shares of Invitation Homes.)

The Pandemic Housing Boom also saw a surge on the iBuying side of the market. These iBuyers�including firms like Opendoor, Offerpad, RedfinNow, and Zillow Offers�went around the country making swift offers to home sellers. The companies would then quickly put the home back on the market. It's less of a traditional "home flip" and more of a volume play: On each sale, iBuyers net a "service fee" that the firm charges the buyer in exchange for the speedy transaction.

As the housing boom took hold, it saw Zillow�s earnings initially soar�with the real estate site posting a record $52 million profit in the first quarter of 2021. That fed Zillow�s iBuyer confidence as it quickly grew its home buying business to over three-fourths of its total revenues. Of course, Zillow's home flipping business would go on to implode in epic fashion last fall. But only after Zillow�s much-lauded algorithm overpaid, analysts tell Fortune, for thousands of U.S. homes.

But most housing investors are still groups you�ve likely never heard of. The Opendoor and Blackstones of the world, at least for now, are still a small piece of the investor pie.

�While large corporate investors are rapidly rising as a share of the market and are likely to expand, they remain so small that their market share only has a modest impact on the overall percentage of investors,� wrote Freddie Mac researchers earlier this month. During the pandemic, iBuyer and institutional buyers have jumped from around a 1.5% market share of purchases to around 4.5%, according to Freddie Mac.

# ? Aug 16, 2022 15:32

Rigel: Nov 11, 2016

Personally, I'm more worried about rents and annoyed at the low housing starts and bad housing policy causing rent to go up than having difficulties buying a home.

If you can rely on the value of homes always going up over the long run, then there's some value in being sort of indirectly forced to save for retirement and being able to take the gain from selling your home tax-free. But that is a big if, and if you can't absolutely count on your home investment paying off, then its mostly a lifestyle choice more than anything else. You don't have a landlord and fewer rules to follow, but you trade off the ability to very easily move away, and having to fix anything that breaks. The only time I ever bought a home was when the government offered a massive bribe to everyone during GWB's presidency, and I hated it. Sold a few years ago when I had to move, and I'm never doing that again.

# ? Aug 16, 2022 15:32

cr0y: Mar 24, 2005

As someone who bought a house two months ago the entire market can eat my entire rear end. I had a deal fall through 1.5 years ago and since then that house has gone up 35%. I'd love for prices to keep going up now that I'm in the market but I'm happy if the entire market just doesn't meltdown again because that would be very much on brand with my luck.

# ? Aug 16, 2022 16:07

Tibalt: May 14, 2017; What, drawn, and talk of peace! I hate the word, As I hate hell, all Montagues, and thee

cr0y posted:

As someone who bought a house two months ago the entire market can eat my entire rear end. I had a deal fall through 1.5 years ago and since then that house has gone up 35%. I'd love for prices to keep going up now that I'm in the market but I'm happy if the entire market just doesn't meltdown again because that would be very much on brand with my luck.

Can't get burned on a crash if you don't try to play the housing market!

But yeah, is ubiquitous. My wife painted her home office an unpopular/unfashionable color, and our friends were aghast that we'd hurt the resale value by not having it home ready to be staged at a moment's notice. We have no plans to sell any time soon, the house is going to need a renovation anyway, but everyone is a part-timr realtor and flipper these days.

# ? Aug 16, 2022 16:33

Solkanar512: Dec 28, 2006; by the sex ghost

Tibalt posted:

Can't get burned on a crash if you don't try to play the housing market!

But yeah, is ubiquitous. My wife painted her home office an unpopular/unfashionable color, and our friends were aghast that we'd hurt the resale value by not having it home ready to be staged at a moment's notice. We have no plans to sell any time soon, the house is going to need a renovation anyway, but everyone is a part-timr realtor and flipper these days.

I've been trying to teach myself basic landscape design because I loving love plants, and if I see the phrase "curb appeal" again, I'm going to scream. This is my loving home, not some HGTV investment scam.

# ? Aug 16, 2022 16:38

Heck Yes! Loam!: Nov 15, 2004; a rich, friable soil containing a relatively equal mixture of sand and silt and a somewhat smaller proportion of clay.

I hate the flipper mentality.

Bitch I plan to live in my house until my kids are grown. No I don't want to flip it just so I can blow all the profit just getting a different house that may not be as good.

Housing as an investment is a loving curse.

# ? Aug 16, 2022 16:40

Star Man: Jun 1, 2008; There's a star maaaaaan
Over the rainbow

Do individuals actually come out ahead when they flip their house, or do they just have to convert their profit into buying a house that's just as expensive as their old one?

# ? Aug 16, 2022 16:41

Mooseontheloose: May 13, 2003

projecthalaxy posted:

I see. Thanks everyone. Like I said, I have anecdotes not data, but it seemed like a combination of my personal network saying that its impossible to buy a house anymore because big firms buy them all then rent them out for twice the mortgage, my own Zillow research showing that yeah most houses in North Dallas get sold the same day for a cash offer, and articles like this showing that the big investment firms bought 25-50% of all houses in TX this year meant that might be a good symptom to look at. Thanks for the perspective.

Housing policy mostly resides in the locality and then the state so think of this way of ascending power in housing:

Local/County -> State -> Federal

The federal government policy lever is mostly tax credits, incentives, voucher's, and law suits. There used to be way more government owned housing in the 1960s but they also had they unfortunate effect of concentrating poverty. A lot of housing policy effects are from Great Depression redlining and expansion of the highway system couple with cities restricting how things are built (for good and bad). If I had a federal policy wand I'd create a flipping tax where (unless you inherit a property) you have to pay a 50% tax on the sale of a house you flip if you hold the property for a year or less, 40% for two years or less, and scale down to five years. I'd also plus up the section 8 voucher program AND increase DOJ enforcement on racist landlords.

Locally, you have to do a lot on square footage and acreage restrictions to bring the costs to something reasonable.

# ? Aug 16, 2022 16:41

HD DAD: Jan 13, 2010; Generic white guy.; Toilet Rascal

Heck Yes! Loam! posted:

I hate the flipper mentality.

Bitch I plan to live in my house until my kids are grown. No I don't want to flip it just so I can blow all the profit just getting a different house that may not be as good.

Housing as an investment is a loving curse.

Wait, people actually live in ~~investment structures~~ �houses�?

# ? Aug 16, 2022 16:46

Leon Trotsky 2012: Aug 27, 2009; YOU CAN TRUST ME!*

_{*Israeli Government-affiliated poster}

Star Man posted:

Do individuals actually come out ahead when they flip their house, or do they just have to convert their profit into buying a house that's just as expensive as their old one?

Sometimes. Most of the "investor" house purchases are places falling apart and the company has the resources to repair it on the cheap for resale.

It's a little different for individual people. But, it depends on the house/market. You usually are just trading your time/labor for profit.

If you aren't doing any rehab work and aren't in some kind of insane local housing market, then buying a house with the sole purpose of flipping as-is is a big risk and usually not a huge profit.

# ? Aug 16, 2022 16:49

Cheesus: Oct 17, 2002; Let us retract the foreskin of ignorance and apply the wirebrush of enlightenment.; Yam Slacker

Rigel posted:

Personally, I'm more worried about rents and annoyed at the low housing starts and bad housing policy causing rent to go up than having difficulties buying a home.

I own my home but this article infuriated me: https://www.sevendaysvt.com/vermont...1382.1660664691

quote:

The single-family house in Essex Junction was a portrait of the stability that Lisa Scavone and Dean Fraser had been trying to attain. Nestled in a suburban neighborhood, the two-bedroom home on Spruce Lane appears bigger than its 1,850 square feet, with a wide brick fireplace, vaulted ceilings and a finished basement.

When they began renting the house in October 2020, the couple saw it as a crucial stepping-stone for their budding family. Fraser, who is employed remotely in commercial construction, could take calls during the day without disrupting Scavone as the pediatric nurse slept before her overnight shifts at University of Vermont Medical Center. They filled the airy living room with toys for Fraser's 6-year-old son and the family's dog.

Scavone and Fraser paid $2,350 in monthly rent to UVM associate professor Tiffany Hutchins, who owns half a dozen rentals in the area. "When we moved," Scavone said, "we told her we're looking to be here for like five years, and then build a place or buy a place." Last year, Fraser's son started kindergarten in the Essex Westford School District.

Last summer, citing Vermont's "critical shortage of rental units" and "spiking home values" and costs, Hutchins increased the rent by nearly 11 percent, to $2,600, effective on January 1, 2022. Scavone and Fraser, with a combined income over $100,000, weren't happy about the extra $3,000 in annual costs, but they could absorb it. They sought to lock in the elevated rent for a yearlong lease. Hutchins, however, began sending them links to listings of nearby homes that were going for even higher rents. One such "comp," or comparable, was a split-level near GlobalFoundries with mint-colored walls. Its owners had purchased it in 2019 for $286,500; the house was listed for $3,300 per month. "I think it is time to reassess," Hutchins wrote in an email to Scavone and Fraser.

The landlord decided to "test the market." On March 24, she posted the Spruce Lane house to the listing website Zillow for $3,600 per month, utilities not included. Within hours, she said, she had a rush of inquiries. Later that day, Hutchins asked Scavone and Fraser to make time for showings for prospective new tenants. Hutchins also said she would not be renewing their month-to-month lease come June. The date was just a few weeks after their planned May 6 wedding in Scavone's native Chicago.

...

In Essex Junction, Hutchins had the right to end Scavone and Fraser's month-to-month lease in order to seek a higher rent. They still felt wronged and were angry that their family's housing situation could be upended so swiftly. Fraser described it as "degrading."

"I'm trying to create stability � we're trying to create stability � for a kid. And, you know, all the things that we were taught to do growing up, it's out the window," he said in June.

Hutchins' attorney filed eviction paperwork in Chittenden Superior Court on June 6, as soon as the date had passed when Fraser and Scavone were told to vacate the carriage home. Eviction proceedings can drag on for months before the county sheriff receives authority to physically remove a tenant from the premises, which Fraser and Scavone were counting on as a way to buy themselves time to find a place to live.

"We didn't really have any other options," Scavone said.

Hutchins had already signed a lease with a new tenant, to whom she was planning to rent the house for $3,400, despite having listed it for more. That tenant, Hutchins said, was counting on her scheduled move-in date, but Scavone and Fraser never moved out.

As the date neared, Hutchins knocked on the front door early one morning, unannounced. She had come to see whether they were packing their things, she said, but Fraser refused to discuss it. Fraser said he asked her to leave because she hadn't notified them that she was coming. He then called the police, who arrived but told him it was not a law enforcement issue.

Hutchins said she never asked Fraser and Scavone to pay the $3,600 rent she had advertised for the house. Following the initial increase to $2,600, she said, Fraser refused to negotiate a second increase in good faith, despite the fact that, in her assessment, the rent they'd been paying was still "woefully under market" and she was planning to renovate the kitchen.

Hutchins claimed that Fraser was trying to ruin her reputation by contacting Seven Days about the situation and told her he planned to make her "famous." Fraser denied saying that.

As for the higher rent: Hutchins said her expenses had gone up, and the same day she'd listed the property, she received distressing news about a family member that compelled her to seek an increase.

"This isn't a story about greed," Hutchins said. She added: "This is what happens when you try to negotiate a rent increase with someone who is unreasonable."

# ? Aug 16, 2022 16:49

PitViper: May 25, 2003; Welcome and thank you for shopping at Wal-Mart!
I love you!

Are variable property tax rates based on primary residency not common? In MN, there are homestead property tax exemptions based on whether the property is your primary residence or not, so property taxes would be higher on second or investment properties vs owner-occupied primary residences. I feel like that could be a nudge that localities could use to discourage investor ownership of otherwise affordable SFH.

This is done at the state level here AFAIK, so I'm not sure that counties or local municipalities would have the authority to increase property taxes in the same way. The most common municipality taxes are local school or infrastructure referenda, versus the base property taxes that are collected by the state and redistributed back down to the county or municipality.

# ? Aug 16, 2022 16:57

Tibalt: May 14, 2017; What, drawn, and talk of peace! I hate the word, As I hate hell, all Montagues, and thee

Real estate taxes in the US are a baffling patchwork of county level decisions that directly feed into paying for school districts, so any statement about what's 'typical' has an asterisk that could blot out the sun. People have been advocating for vacancy taxes in a lot of major cities, but NIMBY homeowners and real estate developers are often the two most powerful political blocs in a metropolitan area, so it's pulling teeth to do anything that might cause house prices ~~to go down~~ not go up as fast.

# ? Aug 16, 2022 17:01

cr0y: Mar 24, 2005

Back to Trump - why do we think he has a mole in his ranks? Didn't the FBI know about the documents and their location because of surveillance footage and those dreadful librarians?

# ? Aug 16, 2022 17:01

tagesschau: Sep 1, 2006; D&D: HASBARA SQUAD
THE SPEECH SUPPRESSOR

Remember: it's "antisemitic" to protest genocide as long as the targets are brown.

Tibalt posted:

But yeah, is ubiquitous. My wife painted her home office an unpopular/unfashionable color, and our friends were aghast that we'd hurt the resale value by not having it home ready to be staged at a moment's notice. We have no plans to sell any time soon, the house is going to need a renovation anyway, but everyone is a part-timr realtor and flipper these days.

The fact that we're in "investment tips from the shoeshine boy" territory in housing yet again tells you how sustainable these price levels really are.

# ? Aug 16, 2022 17:03

silence_kit: Jul 14, 2011; by the sex ghost

Property taxes are a great form of tax. It�s a tax on wealth.

# ? Aug 16, 2022 17:04

Mooseontheloose: May 13, 2003

Tibalt posted:

Real estate taxes in the US are a baffling patchwork of county level decisions that directly feed into paying for school districts, so any statement about what's 'typical' has an asterisk that could blot out the sun. People have been advocating for vacancy taxes in a lot of major cities, but NIMBY homeowners and real estate developers are often the two most powerful political blocs in a metropolitan area, so it's pulling teeth to do anything that might cause house prices ~~to go down~~ not go up as fast.

Great example.

quote:

Part-Time Residents Say Tax Exemption Policy Is Unfair
Once again, it�s time to talk about the residential tax exemption
BY SOPHIE HILLS JUL 28, 2021

PROVINCETOWN � �We just all want to be treated fairly,� said Patricia Miller during the open comment segment of the Provincetown select board meeting on July 12. Miller, who is president of the Provincetown Part-Time Resident Taxpayers Association (PPRTA), was objecting to the residential tax exemption (RTE) in Provincetown, which offers year-round resident home owners a property tax benefit, while increasing the property tax paid by others.

The policy is unpopular with part-time residents who object to paying more based on their status. The RTE doesn�t distinguish between a year-round resident who �actually needs a tax break� and one who could afford to pay, Miller said.

The effect of the RTE is weighted, however, with the greatest benefit going to those with the least valuable properties. The formula is complicated, and many residents � and even town officials � don�t understand how it works.

The exemption isn�t automatic. Full-time residents must apply for the benefit, and not all do.

The RTE is revenue neutral, that is, it doesn�t change the total amount of property taxes collected by the town. This means that home owners who don�t get an exemption, including part-time residents, must pay more. To make up for the lost revenue, the overall tax rate goes up.

Provincetown�s property tax rate for fiscal 2021 was $7.08 per thousand. Without the RTE, it would have been $6.77. The exemption amount for that year was $175,221 � which is 25 percent of the average value of all residential properties. Under Massachusetts state law, the RTE can be set as high as 35 percent.

According to the Mass. Dept. of Revenue�s Division of Local Services, the RTE �shifts the tax burden within the residential class from owners of moderately valued residential properties to the owners of vacation homes, higher valued homes, and residential properties not occupied by the owner.�

Although several people spoke on the RTE during the open comments section of the select board meeting, it was not actually an agenda item. �It was a part of our packet the meeting before,� said board member Louise Venden, and came out of a discussion about town goals.

But the RTE was �not something being presented for the select board to review� at the July 12 meeting, said Venden.

The official tax classification hearing by the select board will be on Aug. 23, said Principal Assessor Scott Fahle. Each year, the select board must vote on whether to adopt the RTE and, if so, at what percentage.

Sixteen municipalities in Massachusetts have adopted the RTE, including Truro and Wellfleet.

The PPRTA opposes the RTE, arguing that part-timers already pay nearly 85 percent of residential property taxes. �They pay more taxes because the total value of real estate owned by nonresidents� is so much greater � �85 percent,� said Venden in rebuttal.

Venden plans to request an analysis showing how many homes of residents and nonresidents are valued within certain ranges, she said. �I think it will be revealing and clearly show why nonresident taxpayers pay 85 percent of the taxes,� said Venden.

As of 2019, only 28.6 percent of Provincetown homes were owned and lived in by year-round residents, while 59.6 percent were owned by seasonal residents, according to the Cape Cod Commission. During the select board meeting, the PPRTA�s Miller spoke about the �division� created by the RTE, �pitting neighbors against neighbors.�

According to its website, the PPRTA is a �volunteer-run organization of concerned taxpayers� offering membership levels ranging from $35 for individuals to $1,000+ for patrons. Separate from membership on the website is a donor list, sorted into tiers by amount. One of the part-time residents and Provincetown taxpayers who spoke during the public comment portion of the select board meeting is a patron of the group, having made a donation of at least $1,000, and several other speakers are �friends� of PPRTA � having donated between $200 and $499.

The difference that the RTE makes in the taxes paid by nonresidents is modest. Last year, as noted above, it was 31 cents per thousand dollars of valuation. So the owner of a house valued at $500,000 paid an extra $155 in property tax last year under the RTE. The owner of a million-dollar house paid an extra $310.

Venden, too, sees division in the community, but the solution, she said, isn�t just to do away with the RTE.

�There is a growing divide here, as there has been in the country, between rich and poor,� she said, but �as a community, we have a lot of money,� and that can be used to find solutions.

Much of that money is held by nonresident taxpayers, and �they should have a place at the table,� said Venden, who�s in favor of allowing them to serve on the finance committee, an idea that Town Moderator Mary-Jo Avellar has opposed.

A criticism of the RTE is that it doesn�t create affordable housing. But the value of the RTE �is not to create more housing,� said Venden. Rather, it�s meant to �help preserve modestly-priced housing.�

A nonresident home owner in Provincetown for 15 years before moving here full-time, Venden said the additional cost to nonresident taxpayers is �not a lot of money. It�s not taxation without representation. It is simply preserving the homes and dwelling places of people who have more modestly priced homes here.�

The bottom line for Venden: �The RTE is not unfair and it does have a purpose� � and she�s in favor of leaving it where it is at 25 percent � not increasing the exemption amount.

# ? Aug 16, 2022 17:06

Kalli: Jun 2, 2001

The housing market is a trainwreck due to a confluence of factors that basically make addressing it a near impossible task politically even beyond investor types vulturing everything.

So much of people's savings are tied up in housing
The lack of mass transit.
Decades upon decades of culture devoted to how dangerous / bad the cities are, against mass transit, naked housing discrimination.
Suburbia being built outwards massively over the past 70 years.

So we're trying to get people elected whose job it is to go up to old white folks and say, hey we want to destroy a chunk of your life's savings so that you have to sit in more traffic and a bunch of (((hoodlums))) can move in down the street. Kinda obvious why even the bluest areas can't do poo poo to begin to address the problem.

Side note, apparently the etymology of hoodlum is not what I would've guessed considering the 'hood' in the name.

# ? Aug 16, 2022 17:08

silence_kit: Jul 14, 2011; by the sex ghost

Vacancy taxes are a good idea, but I�m not so sure that there are a lot of vacancies in rental housing in hot markets, homes in vacation-y areas excepted.

# ? Aug 16, 2022 17:12

Bar Ran Dun: Jan 22, 2006

silence_kit posted:

Property taxes are a great form of tax. It�s a tax on wealth.

Sometimes poor or old people can find themselves with a suddenly high value home.

High property taxes can force them to sell. Often when poor or old people come suddenly into a lot of money that money evaporates as fast as it came.

So it can turn stable situations into unstable ones.

There is better wealth to tax. But at the same time the reaction tax caps on values like in CA are also pretty terrible and gently caress over everybody who isn�t a owner already.

# ? Aug 16, 2022 17:24

Bar Ran Dun: Jan 22, 2006

silence_kit posted:

Vacancy taxes are a good idea, but I�m not so sure that there are a lot of vacancies in rental housing in hot markets, homes in vacation-y areas excepted.

I like vacancy and second and third home taxes those are way more target to rich people wealth.

# ? Aug 16, 2022 17:25

Twincityhacker: Feb 18, 2011

Randomly, but as a long time viewer of HGTV it's really telling that it orginally had a lot of programing involving redecorating and making your own yard look good has turned into massive renovation and flipping shows. =/

# ? Aug 16, 2022 17:26

Gerund: Sep 12, 2007; He push a man

Vacancy taxes that specificly target AirBNBs would be great, actually.

# ? Aug 16, 2022 17:27

Mooseontheloose: May 13, 2003

Twincityhacker posted:

Randomly, but as a long time viewer of HGTV it's really telling that it orginally had a lot of programing involving redecorating and making your own yard look good has turned into massive renovation and flipping shows. =/

Time and place. In 2008/2009 there were lots of post War and ranch housing to convert but now those deals are harder to find.

# ? Aug 16, 2022 17:29

Heck Yes! Loam!: Nov 15, 2004; a rich, friable soil containing a relatively equal mixture of sand and silt and a somewhat smaller proportion of clay.

This is beyond parody at this point.

https://twitter.com/AndrewYang/status/1559519779089747968

# ? Aug 16, 2022 17:32

Cimber: Feb 3, 2014

Mooseontheloose posted:

Time and place. In 2008/2009 there were lots of post War and ranch housing to convert but now those deals are harder to find.

Yep. Boomers sold off their homes and moved south so there was a lot of inventory in the market. Around that time Gen-X could finally afford houses so they purchased then (thats when we purchased too). Also cheap money and lots of loans pre financial crisis. Now the inventory has gone down and investment firms don't want to hold bonds any more, they want to hold the actual inventory. Supply has gone down but demand has gone up as the millenials are now trying to buy, and they are (again) getting screwed by the earlier generations.

# ? Aug 16, 2022 17:34

projecthalaxy: Dec 27, 2008; Yes hello it is I Kurt's Secret Son

It's a good thing Andrew Yang thought up having the country not be divided. We've been divided for so long but it turns out the key was for some silocon valley guy to just be like "hey, quit." We all could stop being divided at any time, and now we will! Yang Gang!

# ? Aug 16, 2022 17:35

Mooseontheloose: May 13, 2003

projecthalaxy posted:

It's a good thing Andrew Yang thought up having the country not be divided. We've been divided for so long but it turns out the key was for some silocon valley guy to just be like "hey, quit." We all could stop being divided at any time, and now we will! Yang Gang!

What if we created a party that took the social liberalism of the left but the financial parts of the right. Surely, that is a winning combo no one thought of, I am so smart give me billions in VC capital please.

# ? Aug 16, 2022 17:36

Tiny Timbs: Sep 6, 2008

What if instead of being divided this way we were divided this other way

Makes you think

# ? Aug 16, 2022 17:37

Tibalt: May 14, 2017; What, drawn, and talk of peace! I hate the word, As I hate hell, all Montagues, and thee

cr0y posted:

Back to Trump - why do we think he has a mole in his ranks? Didn't the FBI know about the documents and their location because of surveillance footage and those dreadful librarians?

The leak was that there was a mole, and a lot of people have been talking to the FBI. The leak probably came from the Trump side, so who knows if it's true.

But as I understand it, something had to justify the request for the footage, so there's probably someone saying something to the FBI.

# ? Aug 16, 2022 17:41

Cimber: Feb 3, 2014

Tibalt posted:

The leak was that there was a mole, and a lot of people have been talking to the FBI. The leak probably came from the Trump side, so who knows if it's true.

But as I understand it, something had to justify the request for the footage, so there's probably someone saying something to the FBI.

I wonder if it was Cassidy Hutchenson who was the leaker. She got ceremonially kicked out of mara-largo in the spring, right? Right around the time she figured out her lawyer was actually not helping her but using her to get access to the jan 6th information. She got pissed off and blabbed abut everything she knew to the FBI, including info about the documents.

# ? Aug 16, 2022 17:42

Devor: Nov 30, 2004; Lurking more.

Tibalt posted:

The leak was that there was a mole, and a lot of people have been talking to the FBI. The leak probably came from the Trump side, so who knows if it's true.

But as I understand it, something had to justify the request for the footage, so there's probably someone saying something to the FBI.

Are Secret Service agents ~around~ Mar-a-Lago when Trump isn't in residence? It seems they would maintain a nominal presence.

And do they have the ability (or duty) to bring shady stuff to the government's attention?

# ? Aug 16, 2022 17:45

cr0y: Mar 24, 2005

silence_kit posted:

Property taxes are a great form of tax. It’s a tax on wealth.

I'm in Pittsburgh and there's a situation going on here where houses that haven't been assessed in ages get reassessed when the house is sold and people get surprise tax increases that they never budgeted into their monthly payment, so on day one of owning the house they're already behind the eight ball in some cases. I'm talking like a house that assessed forever at 80k and sells today at 300k, that's hundreds of dollars a month.

No one in the house buying process warned me about this and it's just something that I thought about and caught beforehand and budgeted accordingly for.

# ? Aug 16, 2022 18:01

Tatsuta Age: Apr 21, 2005; so good at being in trouble

cr0y posted:

I'm in Pittsburgh and there's a situation going on here where houses that haven't been assessed in ages get reassessed when the house is sold and people get surprise tax increases that they never budgeted into their monthly payment, so on day one of owning the house they're already behind the eight ball in some cases. I'm talking like a house that assessed forever at 80k and sells today at 300k, that's hundreds of dollars a month.

No one in the house buying process warned me about this and it's just something that I thought about and caught beforehand and budgeted accordingly for.

that's wild, your realtor should surely have explained that to you. incredibly basic thing that happens everywhere. should have been very obvious during appraisal process.

# ? Aug 16, 2022 18:05

Cimber: Feb 3, 2014

Well, thats what you get for wanting to live in Pittsburgh.

# ? Aug 16, 2022 18:10

kzin602: May 14, 2007; Grimey Drawer

Devor posted:

Are Secret Service agents ~around~ Mar-a-Lago when Trump isn't in residence? It seems they would maintain a nominal presence.

And do they have the ability (or duty) to bring shady stuff to the government's attention?

SS agents have a duty to the united states not to the president. That said I don't know if trump got to keep his chosen agents or if Biden had treasurey assign them.

# ? Aug 16, 2022 18:14

Adbot: ADBOT LOVES YOU

# ? May 23, 2024 15:15

A GIANT PARSNIP: Apr 13, 2010; Too much fuckin' eggnog

Housing is in a bubble and a lot of these investors are gonna get hosed when the bubble pops and they�re sitting on inventory whose value is crashing but still requires a good 2% - 4% annual payment to cover taxes and maintenance.

It�d be funny if it wasn�t for the giant disruptions to hundreds of millions of people who are just trying to live their lives.

# ? Aug 16, 2022 18:17

The Something Awful Forums > Discussion > Debate & Discussion > USCE Summer 2022: You can't change the crisis settings.

«‹›279 »