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Zeitgueist posted:I love how almost your entire post is listing how rent control is bad for landlords, which is basically the entire point of rent control. Just because it is bad for land lords does not mean it's good for tenants. With artificially low rates and some cities that have rent control on all buildings built before 1978 (eg Los Angeles), rent controlled buildings become a prime spot to buy and flip (bad for tenants) because there is such a large upside in potential gross income. On top of that, rent controlled buildings are prime investment opportunities because they are generally old; like I said earlier some cities make the distinction between rent controlled and not rent controlled based on the year built. Older buildings are 'grand-fathered' in with their zoning. It's not a surprise that an old project has a density of 1 Dwelling Unit/1,000 SF and a new one has 1 Dwelling Unit/2,500 SF. The higher the density the better for land lords. In places like Los Angeles, you simply cannot build as many units on the same lot as you were able to. It's just not legal anymore but laws like SB 2112 (California) let you rebuild a property that may be legal non-conforming if its involuntarily destroyed. Essentially this means your investment in a super high density old project is safe because you can always squeeze the same amount of units in should something happen (earthquake or whatever). I don't know where I stand about rent control. I have lived all over the world and I have lived in rent controlled areas and places that had market rents. I have also worked in real estate and see how easy it is and how some land lords prefer to buy rent controlled buildings because the larger upside in some cases. On top of that, I have lived in Manhattan where my rent was a huge part of my paycheck and it was crushing. Lastly, I note that small apartment projects are good investment opportunities even for first time buyers, especially with a FHA loan for an owner-user apartment complex (tenants pay off your mortgage). Either way, I have experienced the good and bad about it and I still am not sure if it's essentially a good or bad thing. But all I have to say is that housing is absurdly expensive not only in the US but in other places as well. Paris, London, NYC come to mind. Berlin was the only place where I felt like rent wasn't too bad but trying to buy there seems a bit risky because the gross income multipliers and capitalization rates are at the absurd sometimes because rents are so low there. It's almost better to rent than own there. I thought about buying an apartment in Berlin for investment purposes and the Gross Income Multiplier was around 25x and the OAR was something like 2% which is ridiculous. The price was something like 1,500 EUR/square meter. So unless you are absurdly rich and can buy a place and afford the mortgage on your own you need some sort of income (rent from tenants) to help pay down the mortgage and if rents are low then any sort of entry level investment opportunity is pretty risky because you are just trying to break even. As I said earlier, I am not sure if rent control is a good or bad thing, but I have to say that there are a lot of ways it can screw over middle class people who are trying to invest into real estate for the first time because they don't have as much capital available to them as the super rich. I will say though with 30 year Treasury Notes yielding absolutely nothing in investment opportunity, the housing crash of 2007/2008 and other avenues of investment that are risky or yield too little, apartments are still one of the few places that are relatively 'safe' to invest in. Even if the price of the complex goes underwater, you still have rents to help you at least break even. Not sure where most middle class people think they are going to make investments to try to improve their situation. Investing in a treasury note won't even cover inflation really. loquacius posted:I am by no means an expert in this area, but from what I've heard rent controls in San Francisco have led to landlords just evicting people when they wanted to raise the rent instead of pricing them out the old-fashioned way. Some other cities, such as Palm Springs, peg the rent based on a % of certain indexes. I know less about SF rent control but I imagine it is something similar to NY or LA where you can basically do renovations which let you bump the rent up and push people out. The faster you get out long term tenants out and get new tenants with rents closer to market rents the faster you can start generating more money out of the project. Which is nice especially in California because if you buy a rent controlled building that has severely depressed rents especially at a low price your property taxes will be quite low (max in California is ~1% of the property value). So if you don't sell the property, you can pay artificially low property taxes and generate rents that are at market levels. e: edits made. Sort of shot from the hip but hopefully gives some insight. Without getting into too much details, I spend a significant amount of time with people who buy and sell real estate (for work) and about 40% of them are rent controlled so maybe I can give a bit perspective on some other angels. I will say that some people are pretty blatant and open about wanting to kick out all the tenants as soon as the deal closes with the short-term plan to flip the property asap. 2nd edit: The one thing I will say about Germany vs the US in terms of rent control or any sort of housing restrictions between land lord vs tenant is that I think Germany does a lot better to protect long-term tenants against eviction. Yes you may have done renovations and are trying to raise rents, but you can't just kick someone out after 30 days notice like in the US. In Germany the amount of eviction notice you have to give is based on how long the tenant has stayed there. After a certain amount of years the tenant gets an extra 3+ months of eviction notice and for really long term tenants you'd have to give something like a half year+ of eviction notice. Enigma89 fucked around with this message at 18:49 on Oct 16, 2014 |
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Oct 16, 2014 18:20
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Interlude posted:In other news, it's interesting to note that so-called "affordable housing", even in reliably liberal Democratic strongholds like NYC, isn't what you'd think it is. People paying top dollar to live in a glitzy new building don't want to run into poors in the elevator. So the city allows the developer to build "poor doors", or separate entrances for the subsidized rent set. To be fair these projects are not really being built for affordable housing. They are luxury condos that is more or less being forced by the government to provide some affordable housing units in order to receive a higher maximum allowable density. I'm not saying the 'poor doors' are a good thing. I am just saying that the people living there are generally at high paying jobs who can afford the insane rents there and are essentially subsdizing the people who are living in the low income units. My flatmates (three of us) and I paid around $3,000 a month for a 650 square foot apartment in Manhattan. The apartment directly across from us paid $300 a month (old Chinese couple). The only question I asked myself a lot during that time is that if everyone in the building paid closer to market rent if it would be fairer and lower for everyone in general. Or if over time the land lords would just charge everyone the extreme prices. Essentially what I am wondering is if by having rent control in these buildings it inflates the price for people who 'can' (barely) afford it at the price of helping a few people in the building to skate by with low rents. esquilax posted:Rent control and overly restrictive zoning are pretty complementary. The primary symptom of overly restrictive zoning is high prices (which is mitigated by rent control) and the primary symptom of rent control is that no new housing gets built (which is impossible anyway due to bad zoning). On top of that, during the boom a lot of apartment complexes were converted to condo units so the number of rentable units actually went down which raises the price for everyone else. I wrote a lot in those 2 posts, sort of a lot of random thoughts that I have been thinking about the last few 6 months so this thread came at a good time but if I had to point my finger at any one single issue it would be zoning. I am eager that there is someone in D&D that knows more on the subject because I'd be curious to read about it. Enigma89 fucked around with this message at 19:13 on Oct 16, 2014 |
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Oct 16, 2014 18:56
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mugrim posted:I am familiar with zoning and have seen how it directly affects people, but how does rent control actually work? Who does what? Essentially land lords are limited on how much they can increase rents by a % unless certain requirements are met (tenants moving out or improvements/renovations). The thinking is, if someone moves out then you can bump the rent up. Or if you do renovations then the increase in rents should help compensate the land lords for the money they spent on fixing up the property. I know land lords are painted as villains in a lot of places and in some places most are right (NYC comes to mind) but in other places rent control does make investing in apartments a bit risky and it boxes out a lot of people in the middle class trying to find any safe/reasonable investment opportunity. Enigma89 fucked around with this message at 20:20 on Oct 16, 2014 |
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Oct 16, 2014 20:12
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Ardennes posted:Rent control may help a bit but landlords will find every way to get around it and many cities that have rent control have simply loosened them over time. DC theoretically still has rent control but doesn't apply to housing after 1975. New York has the mass transit but the not the right amount of housing quantity to really supply everyone. Prices are still rapidly going up and even people with decent jobs are being priced out to the outer areas like Bushwick. I remember when I first moved to New York, I couldn't afford to live in Manhattan as an intern so I lived in Brooklyn. There was one street that I would not cross at night because things got a bit sketchy there. I ended up moving to Manhattan and heard about the rapid gentrification of Brooklyn. I went back to visit my old area and I noticed that on my self-made border there was a new bagel shop that sold loxs on bagels  So yes, mass transit does help for more areas to be viable to live in and to help a bit but if you do not have the quantity then people are just pushed to the fringes instead of actually living within their city. I still can't believe people are dropping $1,000,000 on apartments in Bushwick. Bit of a pinpoint example but New York is a pretty good example of how bad a housing situation can get. I can't believe that a world class city like New York has some pretty basic problems when it comes to housing. NYC did flex their rules on zoning for micro apartments, I know Seattle did the same. It will be interesting to see if it will work, I know I would of gladly live in a microunit when I first moved to New York, I did hear that the rents for those units (~200 SF) is around $900/Month for micro-units in Manhattan which is somewhat reasonable especially when you consider the location. I think the most depressing thing about bouncing around relevant world capitols is that even people who are well educated have 'given up' with ever trying to own an apartment or home in the city and are fine with the idea of renting for the rest of their life because the prices are just too obscene. As soon as you go into the interior of those countries things are a bit different and people see home ownership as a major goal. I can't see how the problem doesn't spread. Enigma89 fucked around with this message at 21:07 on Oct 16, 2014 |
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Oct 16, 2014 20:58
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Popular Thug Drink posted:Here's how to fix gentrification. Local jurisdictions are already allowed to create tax districts with special property tax rules. When an area is ripe for gentrification, create a tax zone which applies to any property owner who lives in the house or has family living in the house as a sole residence. Either freeze the property tax or allow it to rise a small amount every year. When the house is sold, the new owner is subject to the full property tax assessment. This may be nice for people who don't move but for those that do it's a hardship.
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Oct 16, 2014 22:51
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Popular Thug Drink posted:Public transportation is expensive as hell and doesn't help people who cross into the wrong jurisdictions. If I lose my home in Urban County and find a rental out in Flykicker Country twenty miles away, it doesn't help me if the residents of Flykicker Country don't participate in the regional mass transit program. That is a public transportation/city planning issue. If you lived in an actual city you wouldn't need to go 20 miles away. But a lot of American cities are built with the expectation that you will live somewhere, drive somewhere else for shopping and drive somewhere else for working. If people are having to drive 20 miles to go do a daily thing then they don't live in a city. Los Angeles is better described as a collection of cities rather than just one city. Even though this goes against my own interest, I wish more people moved out of the interior and into actual cities to get the towns in the interior to develop more densely. I can't believe how some places (SD/LA for example) continue to sprawl instead of building up like an actual city. Maybe it is very cynical to say that but it's 2014 and these places are still doing a terrible job of trying to build inward/upward rather than out. Enigma89 fucked around with this message at 23:09 on Oct 16, 2014 |
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Oct 16, 2014 23:04
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OwlBot 2000 posted:A few things that may be getting missed: I never really liked this reason. Some people get lucky and are born in world capitols and they get to stay without having to pay the premium. Any one who makes the move from the interior to a world capitol then has to pay higher rent just because they are not from there.
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Oct 17, 2014 17:18
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mugrim posted:Who in the middle class is trying to buy an apartment building as an investment? Or do you mean a business? Even then, who are these people and how on Earth can they afford it? The clever ones are. The others are putting are investing in...? I don't even know what is actually a profitable investment anymore for the middle class. You buy a 4-plex as an owner-user with a low interest loan (FHA). You use the tenants to pay off your mortgage and you live in one of the units for free. You can even move out because as far as I can tell in my experience no one ever really checks if you live there.  I know several people who have done this and they have basically used the government to subsidize their initial real estate investment. There is real no need to buy an actual 'home' with your FHA loan. You are allowed to by a multi-unit project.Also to sweeten the deal you are allowed (in California) to sell the building and if you do an 'exchange' within 30 days of the sale you can take the money you got from your recent sale and put it into a bigger project tax free. Enigma89 fucked around with this message at 01:10 on Oct 18, 2014 |
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Oct 18, 2014 00:59
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| # ¿ May 9, 2024 03:04 |
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Found an interesting article on ZeroHedge re: NYC Real estate: “The Census Bureau estimates that 30 percent of all apartments in the quadrant from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year.” http://www.zerohedge.com/news/2014-10-16/meet-proposed-tax-could-crush-high-end-nyc-real-estate
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Oct 22, 2014 16:59
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