Good. Bye bitch.
They’d flood the market with properties shifting us along the supply curve to allow younger people to afford properties?
Darn, that’d be so… awful? No, I was looking for awesome.
First person I’ve seen who didn’t say it increases supply.
Nice.
Is it really functionally any different? “increases supply” is a decent shorthand
Isn’t that exactly what they just said?
Hey, I remember my macroeconomics!
Supply/demand is usually micro…
It probably won’t flood the market as property/land is sort of like gold. Renting it is just extra money on top of land value rise. It only gets rarer. (In desirable locations)
The problem is basic. Everyone wants to live at A but A has finite amount of space. This is the core theme of property gold. Renting is just double dipping
The solution is complex. It isn’t to expand A but to make B equally attractive. If the small area in city was not the ultimate goal of whole country the price boom would rapidly crash overnight.
What is priced isn’t property but dreams and aspirations, prestige, bright future in the city of opportunity. Even love in a way because good luck finding someone in some rural mud hut.
Hence the inaction of government to invest in the rural areas adds to the housing bubble. And of course capitalism itself prays on individuality at the cost of community. Me get rich in the city vs Build community and improve what is around me for me and others. The second is not advisable to anyone to even attempt.
Everything is fuelled into those few acres of asphalt and concrete. The impossibly hot focus point of the nation.
So incredibly fierce that you can die out of heat even during winter. The speed limits on the arteries are rather minimums than maximum as the circulation of wealth cannot tolerate stopping for even the 20 seconds of red light. Every crossing is a race starting line but there is no end. Furious engines roar jolting towards the success.
The night is day and the day is madness.
Don’t threaten me with a good time.
Is there a downside further in the article or is it just all positive news?
The downside is they’ll just be bought up by corporations who will be even shittier landlords.
If the market is adequately regulated they wont be shittier landlords. There somehow is this romantic idea of smaller scale landlords to be like the good old guy that want to help a family find a good place and accept a modest profit. They exist, but the majority are just equally cutthroat like large corpos. Difference is that large corps have more means to be strategic about it and accept risks like 5% of tenants suing successfully while the rest just accepts the illegal treatment.
If the market is adequately regulated
Well there’s your first mistake lol
It is not an argument against regulation though. Regulation of markets like housing and healthcare, is reasonable and necessary. These cannot work as free markets because the one side has their life depending on it, wheras the other just can have another customer.
living isn’t a requirement, have you seen how many people willingly consume drugs and sugar despite knowing the risks. Let the free market collapse the upper class (almost certainly after the working class but still)
My current landlord has broken half a dozen laws, so yeah… At least corpos don’t do that.
Let me tell you how it works in the real world right here right now in the UK. Large corpos set targets on how many rentals they want to acquire. For example, Lloyds announced a few years ago that they’re building a portfolio of 50k properties. Yes, fifty fucking thousand homes!
And so small landlords are forced to sell due to changes in the law. Corporate investors buy them in an instant at full asking price or even higher to ensure that property value doesn’t go down and so you, a mere mortal, can’t buy shit.
Next, they freeze the properties and don’t release anything on the market. That creates an insane housing shortage and rental prices go through the roof. A few years later they will start introducing their portfolio to the market slowly to avoid crashes at 2-5x price compared to just last year. People are desperate and pay through the nose.
Boom! Mega profits! What is your 3% yearly cap when they just jacked up the price five times? It will take many years to make a dent.
You know what would help against that? regulating how much property a company can acquire in an area. within a certain timeframe. Or regulating that the land tax and similiar things go up after having say more than a hundred or a thousand properties.
This is arguments for regulation not against it.
Land tax would be grand!
Idk about that. Almost all renting horror stories are with small private landlords.
good, get a real job
My mom is in her sixties, not everyone wants to work until the day they die
In LA County, looks like the median home price is $1M. The proceeds of such a sell, combined with presumed other typical sources of retirement income and social security should provide for an above-average retirement lifestyle.
I’m not talking about LA county, which this article is about, but just the general idea that every landlord can just go and get a job.
Also, 1 million only lets you take out a maximum of $40,000 per year safely which is not above average. Social security? Is that still $900 a month? That’s way below the median income in LA county even when added together.
You’re also assuming the mortgage is completely paid off
Considering the proposal is only about LA county, figure I’d use that, but we can consider things either way.
I would expect that whatever means had the retiree have both a home and at least another property left them with other typical sources of passive income. So in aggregate, I would expect social security, with retirement savings, plus the value of the house produces an overall viable income.
Whether the mortgage is paid off or not is immaterial unless they are somehow “upside down” on it. If the mortgage is not paid off, then selling it also removes the mortgage payment.
But let’s say that it is unreasonable to sell, maybe somehow the person has all of their money tied up in the property and can’t sell the property for an amount to get enough passive income. This measure would not force her to sell, it simply caps her rental income increase to 3% a year. Her property value may go up, but that doesn’t make her mortgage go up (if she even has one). County assessments would make her tax bill increase some, though generally a pittance. Even if you are concerned about the tax bill, you could have some clause that assessments or property tax for people with rental properties is similarly capped if the owner is subject to a rental income cap. In most contexts, the ability to guarantee oneself a 3% a year raise would be pretty respectable.
The retirement savings is what she used to buy the property, so the property IS the retirement savings
3% a year is fine, but only when the inflation is below 3%. If this affected my mom when the inflation was 10%, then of course it wouldn’t pay for her increased costs of living
What a bad-faith argument. People who do every single other job have managed to save for retirement.
My mom was a housewife before she divorced my dad. She bought properties with the divorce settlement.
Guess she should have saved for retirement then like the rest of us have to do.
How does a housewife save for retirement?
With the money that put a roof over her head and food in her mouth, same as the rest of us.
My dad’s no longer paying anything to her, and he wasn’t contributing to any retirement account for her when they were married
Guess he should have been doing that. And maybe she should have been somewhat aware of their financial situation. It sounds like your mom is a product of her own poor decisions.
She’s doing fine as a landlord, thank you
Good?
Good.
Excellent!
Hurray!
Huzza!
3% was the top annual pay increase at the Fortune 500 company I used to work at. 3% max increase for those that “exceeded all expectations”. Probably less than 1/3 of employees.
So if it’s good enough for a Fortune 500 company, it’s good enough for every landlord. 3% max, and only to max 1/3 of their locations/rooms.
My old company’s “top” level required the VP to sign off on. So maybe 1-2 people in a department of 150 got it.
One of the issues is if material costs to maintain the property increase steeper than this cap.
Though the solution is pretty practical – cap it at inflation.
Don’t really care honestly, since the prices they’re charging now are nowhere near their operating costs as it is.
They can take a hit to their profit. Or sell an “unprofitable” property.
This is the truth. You need to create conditions that make renting unprofitable and unsustainable, and all of a sudden property prices will begin to fall as landlords sell. This happened in London after WW2, when renting was over-regulated and most of the residents ended up owning their own apartments as landlords sold off property. After deregulation, the reverse trend began again.
What happened to the number of new apartments being created?
And this is somehow not a problem for salary increases?
Introduce additional legislation that limit property sales to corporations and I’ll donate to yer campaign
Good. Fuck landlords. There should be a law they can only own multi family units.
Good riddance
SELL UP MOTHERFUCKERS
You know that they will just sell to large corporations that will fuck you over even harder. This is not to be celebrated
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So, when we get there, let’s also fix THAT problem. Im not a lawyer but I will bet my left hand it’s possible to write a law that can block large companies from investing in houses.
If you see people trying to fix a problem and your first instinct is to look for a reason to preserve the status quo, … Well don’t be like that.
There should be a logarithmic scaling on taxes for a home depending on how many you own. A normal person should be able to own a home. A rich person might be able to afford 3, a billionaire should be able to afford 10.
Yeah, big corporate landlords are a problem. Stopping all landlords from jacking up prices is a good thing. This can build momentum for more effective legislation for corporate landlords.
“But if I sold it, I’d lose money!!!”
They will. And you’ll end up homeless.
I fail to see the downside.
Those new tenants (if the new buyer is a landlord) will have to pay a higher rate
Sure, the landlords are going to sell each otger the houses every year to be able to raise the rents. Lol!
There’s an average renter turnover. If the market would usually see a 5% increase yoy, and average stay us 5 years, this 3% policy means you’d have tenents “underpaying” by about 13%. So, to compensate, instead of new leases being 27% more expensive, they’ll be 40% more expensive after 5 years.
The root cause of all the raising home prices and rents is always the same: nimbys and lack of housing supply. Rent control works for people who are already in a home, but makes the problem worse for everyone else (who move, or become adults, etc)
Homelessness is a downside.
This would driving down the cost of housing because of an increase in inventory. Sell them to whom? Other landlords? Or would it be workers?
I think I just found my latest political campaign
Private landlords would just sell to large corporate landlords who could profit with smaller margins.
large corporate landlords who could profit with smaller margins.
Could, but typically refuse to.
Sounds like that should be blocked too.
There was a proposal about how there should be heavy fees if you own more than one house, which would solve this problem.
Great. That isn’t going to happen and doesn’t fix the initial problem.
And these corp landlords can choose to not rent any longer, let the property remain empty for the legal length of time and then start renting again at the new and more profitable higher rate.
I don’t know the laws in California, but isn’t there just a surplus of houses empty for this very reason? If you look at the numbers, they could be sitting on these houses and get low interest loans on the value, which earns higher invested interest elsewhere. Anyone squatting can get away with it because the company will just do the legal route and get more money from these people (even if it’s debt that just hangs over their heads for a while). The rich just keep getting richer…
I’m guessing landlords would just property swap.
Buy, evict, rent at a higher price
Yes, other landlords that can get new tenants for more money. If the houses just change hands every year, there is no cap since everyone plays musical chairs
