A rent-stabilized 1 bedroom apartment for $1,100 In NYC? broker's fee is $15K
gothamist.com
gothamist.com
In my section of Germany, housing is even worse with rent caps and tenant rights, plus a lack of housing. Tenants are hard to move on, so landlords are painfully cautious about getting the right tenants - and there isn't a lot of money to maintain properties either, it seems. Our place has the worst decor and electrics, terrible ventilation and mould. And I think we're at the high end.
Systems geared up for incumbents, like "council houses for life" in London, ought to be sunset, just to get housing moving again. I don't think rent control works well, but I don't think open market rent works either. Anything critical with a limited supply needs to be externally regulated in ways that keep the wheels moving.
Classmates with income only from the job centre are unable to find a place to live, although that’s hardly better anywhere. In London the rents are astronomical and competitive but the cycle of finding, viewing, renting and moving is still running fine. In Hamburg people can’t even find apartments for rent.
"Apartments don’t come with kitchens in Germany" - https://alisajordanwrites.com/2018/08/06/apartments-dont-com...
This is so fucking stupid it deserves a dedicated room in the Museum of The Stupid. Kitchens are so fitted to the physical rooms they are in, they are basically part of the house like walls, floors, ceilings and doors.
It's totally mad, isn't it!
And yes, darkness, there was literally no light whatsoever in either of the bathrooms unless our next-door neighbour helped out with some basic light fittings he had kicking around...
Where this love for arbitrary taxation comes from? How much have you donated to your mayor's electoral campaign? Do you golf with aldermen?
I personally think it's awful to see elderly people getting priced out of a house they've owned for decades, young families have to move their kids in their high school years because the taxes have become unmanageable, how it disproportionately impacts POC as gentrification occurs, and all the other ways it impacts people's lives who just thought they were buying a house to set roots for their lives/families but then externalities cause it to suddenly become unaffordable.
It's extremely perverse when you consider that these people's tax dollars are often used by politicians to encourage the very "growth" that contributes to their affordability problem. They court corporations and give huge tax breaks to move their offices/factories to Texas, which drives up the demand for housing, etc.
The issue is availability of property flat out. As long as there's no incentive to make affordable property available, every actor wants their property values to rise and cares little for the negative effects it has on everything else.
Those property taxes exist for good reason because you have to be able to pay for the services / infrastructure from it. Without those matching the area, problematic spirals occur.
What, their retirement savings? How much is recommended to be saved by 65 now - 2 million dollars or something?
The exact situation you're referring to caused Prop 13 in CA, and something has to be done before something like that gets enacted.
Prop 13 wasn't passed as a law to help the unfortunate. It was anti tax hatred of the government. Jarvis wanted a "tax revolt" which is why all property in the state, even oil fields and golf courses, gets the tax break.
No, but it was sold to the public that way of course.
Today yeah the marketing is 100% that it's a welfare program for seniors.
Do you have any more information? At first blush I can see how inheritance schemes would create massive loopholes in this for example.
If so I wonder if that can create the opposite of the problem of elderly people being forced out by rising taxes. Namely someone who wants to move out but can't afford to because after all the deferred taxes are paid from the proceeds of a sale they won't have enough left for another place.
Again, these things are already done in other states, and it doesn’t have to be perfection, just better than it currently is.
There's another way that is better than it currently is, without the downside of building a potentially large debt if the senior manages to live a long time after retirement before finally needing to move.
That's exemptions and/or freezes. E.g., here in Washington if you are at least 61 and have a disposable income under 70% of your county median income they freeze the assessed value of your property and exempt you from part of the state-wide property tax. On a $400k assessed value home that would cut the taxes from $3400/year to $2200/year in my county. The 70% threshold is $65k.
There are more exemptions at 60% ($56k) and 50% ($46k) that remove more of the state-wide tax and also some of county and city taxes. For those below the 50% threshold in my county that would reduce the tax on a $400k assessed home to $900/year.
Washington does also have a tax deferral program, but that is aimed to low income in general rather than seniors. I think it is meant for cases where you have a temporary reduction of income but are expected to recover.
They’ll just record them and wait. It’s the one thing the government has that normal companies/people can’t do. Wait it out over lifetimes.
Meanwhile, I'm pretty sore about the 10% year over year thing, particularly when I hear about how Republicans run a low-tax state or that a wealth tax is unconstitutional/infeasible. I pay my wealth tax every year, but I suspect I'm too poor for the kind of wealth tax they mean. I can at least enjoy the irony.
True but if you're turning 65 after you're tax bill has grown 10% for over a decade as your transitioning to your fixed income years; it's not a good thing just to freeze the tax bill. You might not have time to earn and save enough to cover the value it gets frozen at. It does help soften the blow for many though.
> But honestly it might be better for them to downsize into something more appropriate and perhaps free up the larger houses for families.
I wholeheartedly despise this line of thought, unless it's coming from their individual decision to downsize. You're basically treating the house like a commodity. It's a Home this person lived in, raised family in, hopes to continue hosting holidays in, where grandchildren can go to visit, etc. They should be able to use it until they decide to leave. On average, they only have another decade or so of life left anyway after their taxes get frozen at 65, let them enjoy their home.
It either is an asset or it’s a commodity as far as the market goes. If you want generational housing and for housing to be generally affordable something has to give. Kill it as an asset class and you get what you’re looking for.
10 years is a long time in the housing market. Assets sitting for 10 years under utilized is another way to think about it.
These two ideas - that housing is an investment and that people shouldn’t be incurring tax burdens on them like this - do not square
I personally do not think 10 years is that long in housing. Sure a lot can change in housing over that time but at any given moment, If I'm in need of housing and supply doesn't exist, I can build a custom home in less than 2 years. I can buy in a development basically immediately. This might not be a global truth but it's the state of things in Texas specifically, and has been for a long time. Affordability is the limiting factor, not time.
I think the property taxes in Texas make sense if RE grows at rate of inflation. For a long time, we had affordable housing and now that's not necessarily the case. So the rules/laws need to change to protect people from getting priced out due to taxes is all. It's an issue that didn't bother anyone before because they were assuming their raise in income would cover the raise in taxes. But wages don't increase 10% annually like our taxes do (whole other topic LOL!) so they get put in a hole. Anyone coming into the market now knows the prices, it's all available information, and they can decided if they want to move here or not. It could all be a bubble that pops and corrects one day, but not until inbound population growth slows down.
I don’t propose what you’re saying either. A land value tax is more than sufficient, by any research I’ve seen on this topic. It doesn’t in any sense mean what you’re saying here. Only that under utilized land (usually classified as unbuilt or vacant) is taxed more heavily. Thats one facet. The other is that it shifts the property tax off of building values and onto land values can make both buildings and land less expensive. This has a knock off affect of reducing the value of real estate holdings to varying degrees in terms of value in the short term but stabilizes in the medium and long term.
That would be better in my view but as it exists today, we instead have to rely on building more housing or putting more existing supply in the market, neither of which in broad strokes are happening in a way that keeps pace with demand unfortunately
Also: not everyone who can afford to buy a home can buy a home built from scratch. There are different classes of home buyers and the vast majority aren’t moving into custom homes like that. Its unreasonable to think that it’s common place in aggregate
No, housing is a cost, not an productive investment.
What we actually want, as a society, is for housing prices to go down so people can live places.
Removal of sub class zoning for housing would also be beneficial. Its one thing to zone an area for industrial vs housing but it should not be permitted that when land is zoned for housing they can zone specifically for single occupancy homes for example.
Fact is, everyone needs that to happen right now.
If we change the latter, expectations related to the former will change too.
Quite the opposite, regulation of the housing market rarely ends well. There's quite a few countries that can speak to the horrible deadlocks that occur when regulation suffocates the housing market.
There's nothing particularly wrong with investment per se, now if you make the market so regulated such that there's no competition, you're destroying any kind of forces that push the price down, or if you make the investment so costly the prices go up to compensante.
Heck, there's even countries where the regulation was so insane it was far better to hold an empty home than to actually rent it out.
You can’t have your cake and eat it too. Everyone wants their home to be worth more and more year over year but doesn’t want to incur any obligation for it.
How do you square that with the idea that communities and social connections are more important? Look at what California did with prop 13. It’s a disaster by all accounts. We need to switch models not create more complicated exemptions around property taxation.
Land Value Tax is more equitable and doesn’t have the intrinsic volatility and unpredictably of how we do property taxes today which is assessed in the unit value not the land and only punishes under utilization and vacant land holdings. This encourages building and to some extent smaller parcels of land per unit built
Yet somehow I dont think those two personas make any amount of the "everyone" posting here on HN
Housing being seen as this generational I own it forever thing that Americans have doesn’t also square with the American narrative of housing as an investment.
It’s one or the other. If you want housing to be seen as something that more or less “always goes up” but you can’t be taxed in the increased value then you are by nature distorting market dynamics you don’t see elsewhere.
We need a land value tax instead it’s more fair and less volatile
Not necessarily. The fact that they're getting priced out right now via taxes on the estimated value of the house doesn't mean they can sell the house at that value (being forced to sell) and that they can find a cheaper alternative that works as well for them. So they can be in for a net loss, all things considered.
It's not a premium. It's what housing costs. If they take their "premium" and buy the next house, their tax bill is unchanged (more or less). They have to actually go find a house that is much cheaper so they can afford the tax bill.
More often than not, it causes them to move out of an area that has seen growth to an area that has not seen as much. This might be moving from Houston to a suburb of Houston, or moving from a suburb of Houston, to a small town 100 miles outside Houston.
The correct "Other way to think about it" is like telling someone this;
You bought this property when the neighborhood was worth nothing. You lived here for years when it was nothing. That might mean it was rural or crime ridden or whatever; but it was cheap and you could afford it. Good job sticking it out all those years and then letting "us" build it up around you. However, now that we've done that, we feel you are still a nothing if you can't afford the tax bill, so go find another rural/crime ridden area to live in. That's where you belong.
In practice it’s not that cut and dry
I agree with this part. Viewing it as investment is the wrong choice.
This makes it more of a modest investment overall, one that people would stop tying their entire net with to
Deferring tax increases based on the sale of a house until the next owner is what California does and it’s a disaster.
Land value taxes are more equitable and treat it closer to a commodity and drive more efficient utilization
I'm not sure i agree with this take.
The building is clearly a depreciating asset. If left alone the house will eventually be worth nothing because a decrept properly carries liabilities instead (neighborhoid fire hazard, penalties , fees etc) So there no nominal value there.
Onward to the land. The only real reason for land to appreciate is because it ia scarce resource. But then you see that the land also has a carrying cost (taxes) that is fixed regardless of its use. Therein lies the dilemma. If land is an asset that generates expense , and then that expense only grows as time passes but theres no income associated with it, are you really seeing land appreciation when you sell, or are you simply recouping your carrying cost during the term it was held?
If I were 5x leveraged my net worth on a jackpot like that I'd probably cash out and move to an island to.
Depending on the structure of TX property taxes, it is certainly possible to have your tax bill increasing rapidly while property values are stagnant or even falling.
If grandpa and grandma are just living in their house in Texas and surviving on the last of the pension, they're not even vaguely in the same category as a property owner deciding which of the next condo buildings to buy.
Alternatives exist (eg taxable value set by what you paid not marked to market)
Having one reducing reliance on property taxes
I will also accept inheritance tax at 90%, if you really want to skip property taxes :)
LVT would actually negate the parent posters complaints, as only the underlying land would be assessed and the penalties only really kick in if the land is unoccupied or is not utilized (sitting vacant is the most common of this, followed by lack of utilization, for instance under many LVT implementations large lot owners with single homes also get hit with underutilization penalties to encourage subdividing and utilization of the land which is a net win for society And often the immediate land owner. Objections tend to philosophical on this point)
It disincentives empty / under-utilized land holdings like vacant lots or lots that could support more utilization (usually via an activities like building homes on top and selling / renting them or farming)
There is nuance in implementation details but in broad strokes that covers it in tl;dr fashion
I’m glad we cap ours at 3%. And our community hasn’t collapsed for lack of property tax revenue yet.
And we are a progressive state, while Texas is conservative. Would have thought it would work out the other way around but I guess not.
https://www.nbcdfw.com/news/local/frisco-soldier-gets-home-b...
The amount was in the low hundreds (maybe $300).
HOA liened her house, then forced sale.
A local landlord put a bid that was found later to be about 70% under market (like $125,000 offered for a $400,000 home). The HOA Board voted to accept the offer and sold the house to this landlord.
In the drama that unfollowed there was also this little nugget: the landlord was on the HOA Board, and was one of the ones who pushed for the forced sale, and then voted in favor of the Board accepting his short offer on the house.
I don't recall the details of the outcome, although I believe some compensation was paid out to her.
Our rates are 23 mil.
I think this is outside the realm of what most people run into affordability wise and frankly at that level of income I’m willing to bet affording the property tax is much less of a concern
Do you actually have numbers on this? It's a huge talking point for the anti tax crowd but as far as I can tell there's no epidemic of house rich boomers being forced out of their homes.
If you are at least 61, and your disposable income is less than 70% of the median income for your county you get two forms of property tax relief:
1. The assessed value of your property is frozen at the value of the first year you signed up for the tax relief. If your disposable income goes about the threshold for a year but comes back down the next you won't lose your frozen assessment. If you go above the threshold for two consecutive years you do lose the freeze. When it comes back down again you get a new freeze at whatever the current assessment is.
2. You are exempt from all "excess property taxes" and part of the state property tax that is for schools. An "excess property tax" generally means voter-approved levies, such as local school taxes.
If your disposable income is under 60% of the median income for your county but above 50% in addition to #1 and #2, you get:
3. You are exempt from regular property taxes on the maximum of $50k or 35% of the property value, but not more than $70k. For example for a $400k property you'd be exempt for $70k, so your regular property taxes would be computed as if your property was assessed at $330k.
If your disposable is under 50% of the median income for your county, in addition to #1 and #2, instead of #3 you get:
#4. You are exempt from regular property taxes on the maximum of $60k or 60% of the property value. For a $400k property this would mean regular property taxes would be based on a value of $160k.
In my county the 70/60/50% thresholds are $65k/$56k/$46k.
In my county a $400k assessed value home for someone below the $46k threshold would have an annual tax of $900, compared to around $3400 for someone not in the tax relief program. Here is a breakdown of the two (with some rounding):
$300 $ 760 fire
$240 $1000 state general
$ 930 local school
$140 $ 360 county road
$100 $ 260 county
$ 50 $ 130 stormwater management
$ 40 $ 111 regional library
$ 7 $ 18 PUD
$ 2 $ 2 noxious weed
You can own two housing units untaxed, as long as you can produce evidence you spent at least 30 days a year in each of them. This doesn't disrupt non-speculators-- even the modest rich with a single vacation home, or the snowbirds who have a home in Minnesota and a winter place in Arizona don't see an impact.
Anything beyond that? Annual tax of 70% of its appraised value.
Nothing appreciates fast enough to justify holding it at that cost, so you'd see a fire-sale on housing. Add some cheap state-backed credit to lubricate the transition period, and unoccupied units glut the market while renters become owners.
Multi-family structures might create some interesting situations. With the landlord effectively forced to divest himself of properties, he has to reinvent himself as a service contractor, bidding for the maintenance contract on the buildings he once owned. This would be a great moment for karmic feedback against the ones who had neglected quality and safety-- who'd contract for $200/month maintenance from the same firm that never fixed anything when you paid $1500/month for maintenance-plus-land-access?
LVT only works if it is applied uniformly and with zoning reform. It will actually be a tax break for landlords because they are utilizing their property near the limit of its value.
* Land ownership is generally public record, or at least orchestrated at local government levels for property tax assessment, school enrollment eligiblity, and other similar local services.
* Some states already have concepts of presence-- different tax regimes for part-year residents versus full-year.
I'd expect that this would end up being relevant in only a very narrow set of cases. Most cases are slam-dunk clearly "owner occupier" versus "investor-owned", and hopefully they'd put more than a HN post worth of effort trying to define rules that handle the ambiguous cases.
I tend to be a bit suspicious of the LVT, because it can create toxic consequences for individual landowners.
Sure, if I have an empty lot and a new Job Factory opens next door, a rising LVT creates incentive for me to build. But if I already had a house there, my LVT has tripled and my house is no longer affordable.
Locking the LVT to the current owner might prevent that toxicity, but it also encourage all sorts of evasion strategies.
Why punish people who helped build the place? Why would you want to steal value from people who simply want to be left alone?
If you want to buuld you dont need to kick people out that have less than you. Instead, you have to make it easier for others to build. If the state makes that impossible via state taxes and regulation, blame the state not the citizen that simply wants to live happy.
A lot of social housing is currently reaching that 30 year mark, and it's barely being replaced. And costs for new constructions simply don't make a lot of sense right now, also affected by increasing building standards - which also prevent conversion of much vacant commercial space.
https://youtu.be/mav_Y0ZcVpw showing a random purchasable apartment in Russia.
Ownership is nice for the long term, but sometimes people just aren't ready for that. Some careers nowadays involve several training periods which happen in multiple different cities and stretch out for 8-12 years. Sometimes to get a good job in a less dynamic city you are better off working in SF/NY for a few years after school even if that's not where you want to end up. Maybe people learn faster that way. Retirees may be better off renting if they don't want to do maintenance and may only live there for a decade before moving into assisted living.
This system isn't always managed as well as it could be — subsidized unit requirements are layered on top of that, and in St. Paul the payoff period is only thirty years, which has made some developers balk. The political factions often imagine all investors as good or bad instead of as a force that can be managed to achieve desired social outcomes.
It’s a way to get around some of the issues that rent control causes, such as reducing construction.
Unfortunately, due to how our rental market works, it’s largely young people living in those more expensive apartments, which is terrible for birth rates and inter-generational equality.
Recently, the current government decided this game was unfair, and tightened taxes and housing regulations to the point where it only really makes sense now for large corporate landlords. Unsurprisingly this led to landlords exiting the market, and now there are too few rentals, leading to insane rents.
Landlords basically have no other option, we don't really have a credit score system like the US does, so it's much harder to verify how trustworthy you are. There are agencies that can tell you if somebody's currently in debt or not, but as far as I'm aware, somebody with no credit history is basically indistinguishable from somebody with "good" history.
Some may consider it the end-goal, to be fair - as eventually you'd drive landlords completely out of business. The problem is that this is antithetical to higher density, because you need landlords of some form if you have anything denser than a duplex. You can have condos perhaps, but not everyone can afford to get into one, or even wants to.
And if there's a lack of landlords willing to rent, there will be a lack of landlords willing to build to rent, and so the housing stock will continue to increase at a glacial pace.
The laws of unintended consequences can strike in weird ways - making it easier to evict may result in more housing in total ...
Great! Housing should never have been allowed to become a commodity.
How do you solve the problem of condo owners not maintaining a property and letting problems fester for a couple decades after which they might be dead or move out?
There is normally a kind of owners assembly in which the various owners can take (binding) decisions or action regarding such problems or anything that concerns the building as a whole. It might not be mandatory in all countries I suppose, but it should be.
Extreme examples include: https://en.wikipedia.org/wiki/Surfside_condominium_collapse
I cannot express how much pain occurred to figure that out! Still occurring.
The good news for them is, in 5-10 years the dynamics will likely look very different. It's already been changing against landlords, for instance with the covid rent holds, rent control expanding in some areas, cost of money rising and changing market dynamics, etc. I expect a lot of landlords will be trying to exit shortly, and the ones who think they can't are going to be trying to squeeze as much return as they can - as their expected future return due to speculative property prices disappears.
So poster - it might be more worthwhile taking an inventory of who is around you (and if the influence they have is helping you), what YOU actually want your life to look like long term and your own values, and figure out how to get there and if you're willing to pay that price or not.
It may produce more bespoke, custom houses though. But they'll only go to those who can afford to do a LOT more to get it.
The reason why that listing has a $15k broker fee is exactly BECAUSE of the weird and hard to deal with reality that is a rent controlled apartment in NYC.
There are probably other off the books type things going on too, IMO.
If you want something transparent and easy to get for the average person, making it a commodity with clear rules is exactly what you want! If you want to incentivize gaming the system, the other direction encourages that.
Regardless of if it is a commodity or not, there needs to be constant vigilance regarding manipulation, scams, etc. Scams and manipulations are easier to hide when goods AREN'T commodities. There are some amazing horror stories (on both 'sides' of the economy) behind NYC rent controlled apartments and living in NYC in general.
[https://www.merriam-webster.com/dictionary/commodity]
From the link:
"1 : an economic good: such as a : a product of agriculture or mining agricultural commodities like grain and corn b : an article of commerce especially when delivered for shipment reported the damaged commodities to officials c : a mass-produced unspecialized product commodity chemicals commodity memory chips 2 a : something useful or valued that valuable commodity, patience also : THING, ENTITY b : CONVENIENCE, ADVANTAGE … the many commodities incidental to the life of a public office … —Charles Lamb 3 : a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (such as brand name) other than price 4 : one that is subject to ready exchange or exploitation within a market … stars as individuals and as commodities of the film industry. —Film Quarterly 5 obsolete : QUANTITY, LOT"
As it is though, the social housing sector is woefully underfunded, leading to sometimes decades-long waiting lists (at least where I live, in the Netherlands).
The key is which ones insulate the giver (landlord/lender) from non-payment (e.g., which are guaranteed by the government).
In the aforementioned situation, the home owner is both creating equity and saving 25% extra each month.
It creates a very broken situation. But the Dutch government has coddled home owners for four to five decades already. And the real estate market is often zero sum, where advantaging one group disadvantages another.
Time to make home owners bleed for a couple of decades. Balance must be restored.
In countries where housing was socialized they had a system of residency. You couldn't move to another city, without a permit. If you live in Tholen, you shouldn't be able to move to Amsterdam, unless you mary someone from there or if society determines there's a social need for more workers in the capital.
After all, you can't socialize things while maintaining bourgeois concepts like "freedom of movement". You can't eat the cake and have it too, right?
Sure, maybe not everyone will be able to live smack in the center of Amsterdam, but there’s enough space in other parts of the city, not to mention nearby places like Amstelveen, Hoofddorp or Almere (which, you will know, house mostly ‘overflow’ from the Amsterdam market).
It isn't expensive to build such areas, so there is no reason not to do it except if you want to punish the poor.
Why? What value do they provide, other than having a bunch of money upfront? I’d argue there are many, many ways to fund building construction other than for-profit ownership
Providing capital is useful! You can't just ignore that.
And it’s much much much easier to eventually evict someone and lose thousands than to try to get loaned money back from someone who is judgement proof, losing hundreds of thousands.
I think you’d agree that we could fund a national/regional/global system that would provide a sufficient safety net for a system where everyone is paying into some kind of equity for their land. You just don’t agree that it’s worth it / sets the right incentives / a bunch of other reasons I could never think of that I’m sure are sound. But I hope you see why taking the “but everything’s on fire!!!!” macro perspective is appealing in theory :)
Most of Europe somehow manages to live in individually-owned private apartments. Even if you rent, the landlord will rarely own the entire building.
Just like school loans.
Automobile loans.
Etc.
As it should be. Why would you want to allow someone to be judged for _not_ having been in debt in the past?
You can always ask for references if they rented before, that might help somewhat.
To some extent, renting an apartment does take on some debt. You're basically being loaned the property in exchange for making interest payments.
Which, to me, they should not be allowed to do. I'm yet to find a rental property that lets you pay rent in arrears, so there's absolutely no use of credit occurring.
Not to mention you have the ability to literally burn down their property (even by accident) with no real way they can stop you, since you have the run of the place. At best they can try to lock you up afterwards, but if you do it right it would be nearly impossible to prove.
Having a tenant in possession is always a 'credit' risk.
If it's credit, report it. Don't charge people a fee to do so. I'm actually fairly surprised the bureaus haven't forbidden this. And if I was a renter and this was being done to me as a condition of rental I'd be disputing the tradeline.
> they've always got some degree of 'arrears' risk going on.
That's not a default of an extended line of credit.
> Not to mention you have the ability to literally burn down their property (even by accident) with no real way they can stop you
That's your investment risk as a landlord and why you carry insurance, still has nothing to do with my creditworthiness. Like you say, "even by accident".
Same reason some employers like to check your credit if they expect you to be handling their or their customers money.
A track record of following your agreements when other people’s money is at stake, in a way they can get what is agreed on at the end of the day is important to them - and to if they want to place their money or assets in your hands going forward. There are many ways for a loan, or tenant, to go south and be a bad deal for them.
If that is inconvenient for you, they’ll usually be happy to tell you to bother someone else instead. If they’re smart, anyway. Dumb lenders lose principal, and that’s death to them if they do it too often.
Personally I don’t write loans/notes or rent out property because I’m not interested in dealing with the manipulation or excuses. I do have excellent credit though. And have had people write private notes for some side projects of mine. YMMV.
You pay upfront for the use of a home/apartment/condo - you are not being extended any kind of credit.
For the same reason prepaid phones don't report to credit bureaus.
That corner cases exist where you might be out money through the fault - or not - of the tenant doesn't make it a credit instrument.
All of your examples are entirely understandable - they're just not credit.
That's why there are separate reporting agencies for tenants and evictions.
No matter how you slice it, you are not extending credit to anyone by renting your home.
> A track record of following your agreements when other people’s money is at stake, in a way they can get what is agreed on at the end of the day is important to them - and to if they want to place their money or assets in your hands.
Now you're trying to conflate doing a credit _check_ for prospective tenants (something I have zero issue with and is completely different to this) with "allowing property management companies to, for a fee of course, report your entirely-paid-in-advance rental / lease payments as credit arrangements in arrears.
Perhaps if you start billing your rent in arrears, there would be a case for this.
To wit, the fact that in some situations you might be out some money doesn’t mean you have extended someone credit.
> If credit is the concept of ‘I get back what I loaned out, plus agreed upon interest per the agreement’
By your argument if you lend me your car and ask me to fill it with gas/replace the gas I used and I don’t, you could report my default to a CRA. Somehow I don’t think that would work.
Did you read it before replying?
For instance, I literally said a lease is ‘credit like’. Not actually credit. And that some landlords and employers might want to check your credit report before engaging with you to see how you do with credit, as they might give them useful information on how you might do in other areas they care about - not that they would report their own activities there.
The car loaner situation is also completely inapplicable to a lease - which, btw, is almost the exact same broad structure as a bond.
Possession of X is given to debtor in exchange for monthly payments of Y with some additional conditions, and in the event of default or end of term, X needs to be returned to the bond writer in whole. With optionally some funds held in escrow (security deposit) in case of default or damage to X.
It’s real property for a given time in exchange for rent of course, not a chunk of principal for time in exchange for interest, but it’s the same kind of deal.
And similar to most bonds, the full interest/rent amount isn’t paid up front. It’s done for given periods of time (a month being pretty standard).
Now one could imagine a way a car loaner could be structured so that payment of gas IS payment for the loaner, and even how it could be structured as an automobile lease. But it would require that structure no? And would be pretty ridiculous paperwork wise.
Property leases already follow that structure.
Right - leases are credit-like, somewhat. However, leaving aside the concept of eviction taking time (that to me is investment risk, not 'extending credit') - lease payments are made in advance, and when I was a tenant, every single one had a clause allowing for termination in the event that prompt payment was not made, in advance.
My objection there is that these payments should not be being reported to Credit Reporting Agencies because they're not credit.
And as supporting evidence, if they were credit, every tenant for decades would have every lease or rental agreement being reported as a matter of business. Why has that not happened? Because it's not credit. And now, some "innovative" companies are offering to work with Property Managers and landlords to offer it as a "service" to their tenants.
However, you look at things and very quickly you realize the benefit to the tenant is almost a side effect:
These services charge a fee to the tenant, a portion of which goes to the landlord (can you say kickback?), and if you look at the websites of these services, the "allow your tenants to record good payment history on their credit report" is but one bullet point. Every other bullet point talks about the benefits to you as a landlord.
You mentioned landlords doing credit checks to establish a sense of the tenant's fiscal responsibility. I think that is fine. As for evictions, damage, deposits being withheld, and so on - there's a need for that. And it exists, entirely separate to the CRAs.
This whole thread started because of one point, that I don't believe they should be able to report it as a credit tradeline, because it's not. And I still think the single biggest argument I have that that's the case is that it's only been in the last three or so years that this has been offered, when credit reporting has been around since the 1980s.
You REALLY need a lease to not be a type of credit, and hence not be within the scope of a credit reporting agency? Or included in a credit score?
Though, notably, not like anyone necessarily needs to care if it fits the nominal term on their sign if they want to take on new business right? (though various regulations can of course come into play in some cases)
Hell, a ton of their revenue now seems to come straight from 'credit monitoring' services which are only thinly veiled scams near as I can tell.
The issue I have with the argument you're making, is that as you yourself note - investment risk is fundamentally the umbrella under which credit risk lives. And that is the same umbrella that landlord/tenant risk lives under. And in fact, the risk that a landlord takes on with a tenant is SO CLOSE to the risk that someone takes on with lending someone money, that it's an ALMOST artificial distinction.
Near as I can tell mostly due to historical reasons.
Renting existed long before standardized currency (and hence the ability to loan someone currency). And since having a roof over ones head is rather fundamental to being able to survive at all in most places, the power dynamic is prone to abuse in many concrete ways unique to property.
But, for example, leasing a car is 100% tracked by credit reporting agencies on a credit report. And the difference between leasing a car and leasing a house is... the car can move? and isn't generally a primary residence for anyone. and is cheaper.
So actually aren't renters being screwed here, because paying their rent on time could actually help them build a better credit score by showing they CAN do credit-like activities on time - without having to go into 'debt'?
In fact, wouldn't it actually HELP renters move to owning (by having lower costs to borrow on their mortgage), if they could build a better credit score by renting? And it seems like companies have picked up on that, which is why they're offering it for a fee.
One of the biggest complaints I've heard from folks (and felt myself) for instance, is that paying an equivalent amount in rent does nothing to qualify oneself for paying a similar mortgage. But if reported on credit and included in credit score, it would.
So if you really don't want the credit agencies to be reporting on it, I guess the question is - why?
Too much centralization in an already too powerful set of entities?
Too much transparency in an area prone to really screw some people who have a hard time behaving? After all, the downside would be someone who can't pay their rent would also have a hard time getting a mortgage, but that generally already happens.
Too much absolutism/numericalism for something that "shouldn't be"?
Think they're a bunch of assholes who need to die?
I can see some reasons why you'd object, I'm just not buying the reason you're using on it's face. It's like saying home depot can't sell furniture because they're a 'home improvement' store, and furniture doesn't improve the home itself, but just the experience of living in it. And that no one would benefit from buying furniture there.
And besides that there are other places who specialize in selling furniture.
Which okay maybe? But perhaps you just hate Home Depot? Or maybe you own a furniture store?
I can certainly empathize if that is the case! I don't know though.
Unfortunately, they do provide a lot of value in specific situations which others are unable to do, which is why they continue to do pretty well. Lame.
It also isn't clear that them also just selling furniture and 'eating' all the local furniture stores like almost everything else they have done is anything anyone is going to work hard to stop, and maybe Home Depot is good enough.
A loan has a risk to the principal that you’ll not repay it in full. A lease has a risk to the principal that you’ll drive down the value of the property or even destroy it. Same difference, approximately.
Both have the actual cost they’ll be worth less at the end of the term than they were beforehand, due to inflation and wear/tear.
The biggest difference between a loan and a lease is that instead of them giving you x amount of $ directly (aka exclusive control of that money), they’re giving you exclusive or semi-exclusive control of an asset they value at x amount of $.
And that the asset has an address attached to it, and you can live there.
Holding zero balances on accounts means you aren’t costing them money, which is better than defaulting on loans, not making payments, etc. but doesn’t mean you actually made them much money. People who never get into debt are generally not valuable customers for companies who make their money off interest.
People who require they keep book keeping/overhead for (aka keep active accounts), while not paying them money are actually costing them money.
If you show a past history of being able to cost them money, and then not actually doing so, or even making them money, that is certainly better than actually costing them money.
Aka, you held some debt for awhile, but made your payments and paid it off. Those are high credit score/low risk folks.
Having large outstanding credit balances (especially escalating ones) and only making minimum payments means you’re currently making them money, but are a relatively high risk of costing them money shortly in the future when you inevitably default. Which is a low credit score/high credit risk.
If you have high open credit, but rarely use it, they can’t tell if you’re high risk (you’re waiting to blow all your credit and leave the country) or low risk (would work yourself to the bone to pay every dollar back and would never overcommit) - but one thing is for sure, you aren’t actually making them money right now, and there is some risk you’ll max out your credit and disappear.
If you are paying ongoing interest and never default though, you’re the gravy customer for a CC company, as you’re be paying them waaaaay more interest than anyone else. So medium credit score, medium credit risk.
It’s a balancing act.
Someone with zero credit history is a complete unknown, which for various reasons is likely the highest risk of all, and why it’s also only slightly easier to get credit in that situation than if you were a serial bankruptcy machine.
And that's actually good. What more could you possibly need to know other than a person's revenues and their debt to be able to decide if they're capable of paying rent? Why would you care if they've had or had not had debt previously? The American credit score system is dystopian (it can literally make or break your life because it's being abused by prospective landlords or employers) and broken (made by private entities who suffer no consequences in case of mistakes, be they leaking your data or mistaking identities).
Also, often in pretty bad shape, so easy to take pity on. Until they screw you personally, anyway.
And that would be easy to see when you ask them for proof of revenue before renting to them...
Oh and don’t have a friend pretending to be their boss on the other side. Easier to do now than ever, especially with all the free phone and text services.
Used to be you had to have a friend halfway decent with forgery at least (or with a similar enough name and a real job they’d buy it).
Or steal someone’s mail.
Or any number of scams.
And don’t worry, very few judges will throw them in jail if there are a bunch of kids in tow - even if they aren’t actually theirs, unless you can prove it.
Some people never stopped modifying those ‘F’’s into A’s on their report cards, and just got better at it not getting caught.
Good due diligence should catch it of course, but it’s always a game of cat and mouse.
How thorough would you need to be to feel comfortable? How thorough do you think you would you need to be to actually not get scammed with 99% certainty?
> we don't really have a credit score system like the US does
Shady predatory credit rating agencies like in US or even Germany are abomination, it's a thing to avoid not to follow.
I have a strong feeling that "worst decor and electrics, terrible ventilation and mould" is indeed an actual high-end housing in Berlin. A modern bright renovated house with brand new appliances would definitely be frowned upon by a typical german landlord.
Every reluctant landlord capitulates and sells... eventually.
It's the same intention: Increase the short term return on capital
German rental market is one of the things I decided I will never again deal with in my lifetime. There is finite number of refrigerators and washing machines one can buy, finite number of deposit disputes one wants to experience.
Whatever people think about migrants we can at least agree that everyone living in an area (town/city/country) all should have a roof over their head.
The real problem seems the disconnect between people, companies, processes and regulations getting in the way of building and the people, companies, processes and regulations wanting to move there or expand the population.
I guess I can see charging some money, but pre-vetting renters is probably just a matter of submitting their application to some service, and maybe doing a Google search, right? How much would you pay someone for that? About $7500?
And I imagine that in an $1100 rent-controlled building, you don't have to do too many showings before someone bites, so how much of a burden is that? A few hours? Would you pay me $7500 for that?
I guess I could see $1000 being a generous amount of money for brokers fees in this situation, if everything was being fairly run. So, in my view, the difference between the asked-for $15000 and the generous $1000 is the amount of inefficiency in this process introduced by what amounts to greed. Greed is to be expected, but when it starts to look predatory, regulators sometimes step in—which means it may be short-sighted and ultimately self-destructive greed.
To be fair, probably nothing will come of it, and the market will just dictate these costs. But, it's still a shitty thing to do.
Equifax, check. Ten minutes and done.
Maybe also all those things you did in high school that went on your "permanent record" ?
Sometimes, especially in peak season when they do open houses for a whole afternoon. Many times the broker told me to pick up a key from the doorman and let myself in and let them know if I was interested.
There was supposed to be a crackdown on the practice in NYC in 2020, but the brokers lobby was too powerful.[0]
One can only hope that such legislation eventually passes -- and has teeth.
[0]: https://www.nytimes.com/2021/05/27/nyregion/broker-fees-real...
When I rented a place in Cambridge in 2019, the rent was $3200/month. To get the lease signed I had to write a check for 4x that amount (first+last+security deposit+broker fee). $12,800 before even dealing with any moving costs.
The worst thing about it is that it increases the cost of moving very significantly. So people are coerced into accepting large rent increases as long as the increase is less than forking out another broker fee to move to a cheaper apartment.
In the end, I'm not sure it's that bad. I moved to NYC in early 2012. I found a rent-stabilized apartment with the help of a broker, and paid about $600 less per month than a market rate apartment. I paid $3000 to my broker, and conservatively saved about $79,200 over the lifetime of the apartment lease relative to equivalent market-rate apartments.
For instance, I'm a single man. I could get numerous remote jobs. This wouldn't help my chances of dating a young professional woman though if I moved out to BFE. Thus, why I'm in NYC. They just need to make more housing. A ton of the projects here in the city are completely frozen.
The situation seems to be much, much worse now 12 years later from what I have read.
$1,100 is considered "well below market rates" for a 1 bedroom apartment in NYC? That's _nuts_ to me.
I'm paying $1,600 for a 3 bed, 2 bath 1800 sq ft house with a 2 car garage. Vaulted ceilings, my neighbor is a police officer and I'm on a corner lot across from a park. fire department is literally 3 blocks away. IOW, I pay more because of the neighborhood.
Granted, I live in a LCOL area, but that's kind of the point. If you feel you don't have the buying power, move. Hell, I know a woman who has a mortgage that she pays off of a fixed income and a bit of side work (600/month I think? in that ballpark) and she's buying more house than that.
As I mentioned, I know a woman who is buying more house than that and her income is technically below the poverty line.
In addition, I work remote in tech and looking up the average salary in NYC, I'm making more and it's not close. Not everyone can do that and I understand that, but my point is that people around here don't feel as though house ownership is out of their power.
What i do not care is a 2 car garage. That already implies a lifestyle i really do not want. So where wpuld i move to in the US?
if you don't want a 2 car garage then fine, move downtown.
You can get _anywhere_ in this town in 20 minutes or less. We flat don't have the traffic that places like NYC does. rush hour might be a bit slower depending on where you go, but not appreciably slow.
I feel like people who don't live in these areas have a lot of misconceptions.
who knows, maybe it's not really that bad and I'm ignorant here, it's possible.
But my point is that if you don't own a car there's automatically a limited range of movement that you have. It might be better in NYC (it probably is), but we have areas like that too. We also have public transportation in the form of buses rather than subways and they stop a lot so it can take longer but you can get anywhere in this city via bus, including the suburbs.
You can absolutely pick an area for its walkability and use the bus transport to move around the rest of the city. But to leave the city will require a vehicle or a greyhound.
> who knows, maybe it's not really that bad and I'm ignorant here, it's possible.
You answered your own question.
NYC most definitely has far longer commute times than this area.
Even in rush hour traffic, 20 minutes implies driving from 1 side of this city to the other, some in NYC are reporting commute times of over an hour.
For software devs tho, you are right. Just get a remote job.
Honestly confused what it is you’re suggesting
And that they also won't organize to try and fix the issues with the housing in the HCOL area.
I agree with the sentiment personally, it's why I always tell people to move.
I was watching a youtube video earlier this week about a couple who did exactly that. They lived in portland oregan. they bought a rundown old trailer that no one wanted, put the elbow grease in to clean it up and rented out a space for it.
They then realized that with their income it was going to take many more years than they wanted to become financially independent. So they moved out of state and w/i 2 years had paid off a 2 bedroom home (they had savings and sold the trailer) and were living in it and considered themselves financially independent (they no longer had to work to live).
They talked about how their family shunned them when they moved away and they've learned not to talk to friends about it because it just causes friction.
some people do it, it's just most won't.
That’s basically your argument. Living in a LCOL area is not comparable to living in NYC.
There is a reason millions want to live in NYC and almost no one actually wants to live in, say, Iowa.
FYI, the trains in Tokyo are privately run by corporations.
Moving to a LCOL is always my recommendation as well.
I want to walk, not drive, out my front door, and be within 15 minutes, on foot, from entertainment and dining and friends and shopping and groceries and pharmacies and salons and cafes. And I want those things because I have social/communal living desires, not antisocial/isolated ones, and because I've lived in many different kinds of environments and seen just how much nicer it is to live in a walking city.
The problem is that many walkable cities continue to refuse to build upwards. NYC, Philadelphia, Boston...they're all vastly 2-4 story construction from 100 years ago. Paris generally goes up to 7 or 8, but has restrictions preventing much more. So they get more and more expensive. But they only get more and more expensive because they continue to be more desirable places to live despite the expense.
The problem is that people who can't afford that think it is a hate crime if they can't afford to live in Brooklyn with the rest of the hipsters.
I don't think this word means what you think it means.
I looked up the average salary in NYC out of curiosity and I make well above the average there.
but I live extremely cheaply and part of that is the lessons I learned as a child. I could afford a much bigger house, much nicer cars, more toys. I choose not to.
I know people who will finish paying off a vehicle and turn it in for another one. Not essential.
Just because someone _feels_ as though something is important doesn't mean that it is. The difference between middle class and poor is that poor has to deal with reality, middle class gets to keep the delusion that things like nice cars are essential.
These people are choosing not to move. It's great that they can afford it but maybe they should stop complaining vociferously about how victimized they are for choosing to live in that area.
Good, then nothing is essential and we can stop worrying about whether something is essential or not and go back to talking about desirable.
You may try and argue some of the grey areas, but most of the things you listed are _clearly_ not essential, they're desirable by specific people, as you said.
(personally speaking, like many people I have eczema, and my wellbeing tends to be diminished by having a scraped anus)
My mother has heart issues and she has a pump that's connected to her 24/7. She has a medical condition and so has special needs. I would not call that pump an essential but it certainly is essential for her.
The context of this conversation has been _in general_, my responses were never meant to apply to those with medical conditions.
to answer your question, a bidet is a nice to have, a toilet would be an essential otherwise you're shitting in the street, as you implied about downtown SF. Because toilet here does not mean literally toilet, but someplace reserved for using the restroom. When I go to the river to fish they have an outhouse there and I absolutely use it, as do construction workers with the mobile outhouses they employ.
defecating and urinating are absolutely essential activities, how you clean yourself afterwards needs to happen but any specific way of doing it is not essential.
But doing them in a toilet is not, unless we start expanding the definition of essential to include dignity and thriving.
buuut... well you know your response is bullshit.
hey guys, dontcha know the only essentials are death and taxes! otherwise you have to admit that a brand new car driven off the lot is also an essential!
yeah, ok...
I was born and raised in a city with >2M population, and surely my needs are extremely different than someone who is accustomed to a rural life. Even small things like, sleeping in an extremely quiet rural town has been a torture for me every time I tried it. And I am sure, opposite is true for people who are used to hearing absolutely no sounds at night.
For instance… I am medically… complicated. Living somewhere rural where I’m more than 10 or 15 minutes from an ER isn’t really viable for me. Well, I mean, it would be, right up until it isn’t.
She absolutely lives near a hospital. I live in a city, just one that's LCOL. Hell, one of our hospitals is renowned for it's heart research.
City planning is hard, but it's absolutely the case that cities just do it very stupidly and poorly and myopically and to preserve the wealth of the wealthy at the expense of the everyone else. There are not any good reasons for Cambridge, MA to have a 35 foot maximum height limit, only shitty ones. It's not a hate crime, but it is both hateful and a crime against society.
I think it would do you good to work out the difference between things that make you angry and things that are unjust.
I agree with you, transportation and planning is intentionally manipulated by wealthy landlords to maintain their high rents. Absolutely. So don't live there? Don't base your self worth on how impressive the resume's of your neighbors are? Find other neighborhoods that aren't based on inherited multi-generational snobbery and artificially restricting access to education to elite morons?
You're using a specific definition of "crime" that is different than the one the people you're arguing against are using, and that makes the argument not apt.
Being shameful for causing harm is also what calling something a crime can mean.
But lets go along with your desire to get away with using your definition instead of the original way the word was used in this context. Is it really a 'grave offense against morality' for a city to democratically decide to not allow skyscrapers? What would be the consequence of not allowing skyscrapers, is it that people like BugsJustFindMe starve to death? nope. That you will be deprived of basic human needs like shelter or the right to self determination? nope. The 'grave moral harm' done to you is that you can't afford to live within walking distance to that cool bar you like to go to. How ridiculous are you going to be?
Wait until you hear about the verbs "sanction" and "dust". Words being able to have multiple common meanings is just facts.
That's a very bold statement and a total oversimplification. Like the rest of your comment too IMHO. Do you think people in the countriside don't have "social loving desires"? I know lot of people living on the countryside and friendship is much more better than in an anonymous city (IMHO).
The GP has a different point of view; there's nothing special about yours or about NYC that makes yours better. The two of you deserve each other.
Well there is something special about the higher cost places.
That thing special, is that they are more desirable by a much larger amount of people.
Otherwise prices wouldn't be so high.
So yes, the more in demand places are better to a much larger amount of people.
The quality of something and validity of people's preferences doesn't depend on popularity.
For the average human music listener, yes that is what that means. Should we dive into the relationship between "preferred" and "better"?
The preference is not individually objective, but objectively the people have spoken.
Yes, that's what I'm talking about. They are not the same things; there is nothing magical about subjective preference that makes something 'better', no matter how many people share it. If they like burritos and I like ramen, does that make burritos 'better'?
In fact, people can prefer things that are clearly 'worse', for many purposes, such as beer over hydration fluid. People can prefer things that are clearly wrong, such as disinformation.
sue me. I think food for someone without food is more important than a middle class person being able to drive a brand new car.
You can manipulate language as much as you want, I will still judge you for that opinion.
A large part of why I made the post I did is because people post shit like this on this website and expect to be protected by such judgements.
absolutely not, it's an immoral stance made by moneyed people who believe this site is a safe space.
I can tell you from my experience, whatever it is, you seem to apply it to me. You're attributing things to me that I haven't said nor have they crossed my mind, and attacking me about whatever is making your angry. I just stopped by at my favorite spot for a chat.
And you are doing it in the worst way possible where you get to be technically correct, but correct in a way that is completely irrelevant to what anyone else is saying and is also worthless.
Here is how this conversation basically went.
Other person: "I like these very common qualities about housing that many other people also like. This is proved by the fact that houses with all these qualities have much higher demand and price".
You: "Whoa dude. Have you consider that everything is relative? And that there is no way to prove that those qualities are better than other qualities?
What about a person who really likes their house to be burnt down. Or to have rats in their walls. Or to have high crime and being in constant danger. Nothing is better or worse dude!"
All of this is completely worthless commentary. Yes, it is technically true that I cannot use math or science to prove that certain qualities about a house are better or worse.
But that doesn't matter. Because we live in the real world and it is perfectly ok to generalize preferences without getting into the fact that I cannot prove to the universe that some qualities are better than others.
Instead, we can just generalize things based on obvious and common preferences.
> Other person: "I like these very common qualities about housing that many other people also like. This is proved by the fact that houses with all these qualities have much higher demand and price".
That's backwards. The other commenter was saying their home was less expensive and larger than what was in NYC, and therefore superior.
> we can just generalize things based on obvious and common preferences
We can't truly say something is better or worse without some scale on which to measure it. Is a Macbook or cloud Linux instance better? It depends on what we want to do with it - graphic design? Macbook. Host some files publicly? The Linux instance. In other cases it depends on the user - a veteran Linux sysop may use their favorite OS for more things, an Apple guru will prefer theirs.
For some things almost everyone shares the same scale and generalizations are accurate. We could generalize that people prefer running water, heat (as needed), roofs that don't leak, larger spaces (to some limit), lower costs, etc.
But for other things people have different scales and then generalization is false. In this case, preferences for location vary widely; some want NYC because on their scales, it scores really high; some want quiet suburbs, based on their scales; some want rural or small town, warm climate or four seasons, etc. The other commenter seemed to assert that their scales/preferences were universal, and I disagree.
IMHO the best part of human interaction is learning about people and points of view I don't already know - I learn infinitely more than hearing myself talk or by framing their points of view in my perspective; that limits what they say to what I already know, like a someone insisting mathematics be described only in English words they already know - they need to learn new words and use some actual math, or they are limiting themselves. The other commenter seemed maybe to think it was a fight (I don't want to speak for them), so we didn't get far.
> you are playing a word game that ignores anything that actually matters
It seems like you're saying that the other person's ideas are games, and yours are the only ones that actually matter. If you notice I'm not addressing your ideas, you might be right, but not because I'm playing games - I actually have different ideas. My ideas aren't measured by how much they agree with yours - I use a different scale in that case.
Those are the very best chances to learn in life, IME - an opportunity to open territory I didn't even know existed 5 minutes before. If I am curious and interested (and I genuinely am), I find that almost everyone has very interesting, valuable things to say. You too.
I think I'm signing off, as this thread isn't yielding much of that sort.
What you're doing is called post-hoc rationalization. You took issue with the idea of me telling people to move if they can't afford a house and tried to back into all sorts of reasons why that's not possible and tripped over the philosophy of nihilism in your haste.
Ok and it is less expensive because it doesn't have other qualities that are in demand by other people in the market.
And someone coming along and saying "well everything is relative! " Is a worthless comment.
It is worthless because it is perfectly fine to talk about common qualities that are in demand by the market.
> without some scale on which to measure it
The scale that everyone is obviously talking about is market demand.
It is ok to talk about market demand and commonly demand qualities.
> the best part of human interaction is learning about people and points of view I don't already know
Ok and this has nothing to do with the completely objective measurement of looking at market demand.
It is an irrelevant point that does nothing but distract from what everyone else is talking about.
Apparently I'm angry that other people spend a lot more than me to live in a nice neighborhood in a nice house? rawr, why is my life so much better than the people in NYC!?!?!?
When it's all done I'm still going to believe food is more important than a brand new car. I'm comfortable knowing things are true.
Personally, if you're not a coward you'll proclaim here and now that a brand new car is as important as food. After all, this stuff isn't knowable.
Of course not, you know how heinous that position is, but it's the direct result of what you're arguing here, that we can't make judgements like that.
instead of reading my posts as angry, read them as a complete and utter dismissal of your argument. It has no merit and it's easy to see because you won't make the proclamation that's the obvious result of your stance.
Your argument is just nihilism in a funny dress.
A poor person is _forced_ to strip down to the bare essentials. Middle class _should_ do the same but they have enough money that they can afford the delusion until they can't (lifestyle inflation) due to losing a job, unforeseen expenses (medical bills, for example). The wealthy can do whatever the hell they want because the unforeseen expenses and job loss are a blip to them rather than an existential crisis the way it is for the middle class and poor.
IOW, just because someone is not willing to forego something does not imply it's an essential, it implies they have a preference they won't compromise on. That may or may not be a good decision, but people make poor decisions all the time.
I drive a 2004 corolla, early in 2023 I decided I needed a minivan and purchased a 2007 Honda Odyssey and then paid to have it fixed up. The GPU in my gaming machine was literally more expensive than the initial purchase of that Odyssey.
I'm a tech person and a gamer, I was not willing to compromise on the GPU but at no point was I ever under the delusion that made it an essential. it's like sneaking that candy that you know you probably shouldn't eat, it's a guilty pleasure.
On the flip side, if someone tells me they can't leave NYC because of family, I absolutely get it.
When discussing demand and pricing, preferences are the only thing that matter.
By definition the thing that is the most popular is the thing that is the most in demand and therefore has the most money trying to purchase that good.
This is important and relevant to the discussion of housing, because it tells us how to satisfy the most people's preferences.
Therefore my statement is true and you didn't agree with me when I said: 'Well there is something special about the higher cost places.
That thing special, is that they are more desirable by a much larger amount of people.'.
This statement is still true.
I live in a city, you can have all of those things here. In fact, we have an entire stretch down the side of a river that has restaurants and other things down the side of it. The housing in that area is some of the most expensive but still doesn't touch NYC.
One way of thinking about this is that everyone in NYC is wrong. Another way of thinking about this is that NYC might have more of those things and then some. Does your city have a dozen museums, dozens of museums, or hundreds of museums? Does your city have a 24/365 public transit system? Bodega cats? Offices of all of the top companies worldwide? Something equivalent to the high line? Broadway? If not, why not? Some places have some of these things. How many places have all of them?
apply whatever the hell you want to rationalize that existence, I don't personally care.
When you're done screaming about how terrible it is that you'll never own a home, come join sanity.
or don't. I don't give a shit about your rationalization.
What's the implication here? That you're extra safe? Or that it's a neighborhood that they would also choose?
It's just a strange signifier to me. Does a real estate agent mention this? Do they know they play this role? Are they compensated in any way? Should other neighborhoods encourage the presence of a single police officer home?
Why is it a strange signifier that a police officer living next door and a park where kids are openly playing implies it's a nice neighborhood that you might enjoy living in?
it's like saying it's a strange signifier that you would avoid a neighborhood with homeless walking down the street pushing carts and empty syringes laying around the sidewalk.
Neither of those seem strange conclusions and I posit that if you can't understand that it says more about you than anything else.
and yes, I've been shown houses in neighborhoods like that, and no, I didn't move in.
I'm shocked...
oh wait, no I'm not, the post wasn't honestly given.
I'd expect living next to a cop to be cheaper, not more expensive.
The point is that here, a 70k salary is easily good enough to buy a nice house in a nice neighborhood.
Are there nicer houses in nicer neighborhoods? We have a lot of old money here, gated mansions with groundskeepers, and so forth.
That wasn't my point.
People generally care where they live more than they care about the things you describe. Location is the most important factor for most people in real estate purchases - so much so, that it's a cliche.
You are free to have your own preferences, and I'm glad it has worked out well for you. But let's not be incredulous that others have different priorities - that's the human interaction baseline.
what I'm incredulous about is the constant complaints followed by an obvious solution but no action towards it.
And while they make the best choice they can, they can still have problems with it - what in the world works out otherwise? Jobs? Elections? Anything?
no one gives a shit, seriously. This is the worlds tiniest violent playing for those who refuse to adjust to not having as much resources as they'd like to have.
oh man, I'm so turrble, telling them they should probably live as if they're only half-millionaries.
offly enough, reality doesn't give a shit.
If a multi-millionaire cannot accept a solution that has them living like someone worth 500k, maybe the issue is with them as the vast majority of people survive while being worth far less.
But hey, repeat how you just can't understand what I'm saying, I'm sure enough people will believe that to make it worth saying.
1,1k gets you a room. If you are lucky.
Not sure how your proposed solution works while also defying basic economics.
"oh, but market forces so I'm just going to stay here and continue posting online about how horrible it is that I'll never be able to afford a house!".
You do you I guess.
I think you should start visiting these areas before you say that.
It takes me less than 5 minutes to get to 2 different grocery stores, a theater, a market dedicated to fish, a greek restaurant, a Mediterranean bar, a mexican restaurant (very good btw), Target supercenter, Lowes, various stores dedicated to clothes, one dedicated to hobbies (not hobby lobby), and more I could go on about. In 20 minutes I can be sitting on a dock by the side of the river enjoying the breeze and fishing. In 30 minutes I can be standing at an orchard purchasing peaches, in 45 minutes I can be standing at a lake enjoying the fishing there. In the summer we have a farmers market that's probably 10 minutes away and is amazing, they generally have someone there playing music live. Which, btw, this area is _known_ for (it's independent artists).
It feels like too many people here imagine LCOL means living in the middle of fields with cows milling about. rural areas are even cheaper but what you're imagining and reality do not match.
It may not ultimately be what you prefer, but to call it in the middle of nowhere is just vastly ignorant. I live in a city.
It is precisely because I spent the first 30 years of my life in such a place that I don't want to.
Beleive it or not not everyone wants a giant lawn, white picket fence and 1.8 kids in the middle of incredible blandness, unworldliness, and closemindedness.
I won't speak to your story but that's not been my experience and yes, this is a conservative area. I'm left leaning but have friends on both sides of the aisle and of varying religions.
I did once get fired for admitting to being agnostic but I dismissed it as assholes, every area has assholes. By far most of the people I run with and encounter don't act like that.
go watch that and understand that conservative areas where BY FAR more supportive than New York.
This is a common trope amongst youtubers and they _consistently_ find that these conservative areas are more accepting than the liberal areas such as New York. And they're more willing to speak up.
But go on, explain to me why an asshole defines the entire region. I want to hear how we have more assholes and somehow can't be forgiven for that, but apparently NYC can!
FYI, I'm not a conservative.
Congrats on whatever opportunities you've made work for you but many people are tied to where they are due to onerous management, community, family etc. We are not the highly mobile society of even two decades ago and the false promises of mobile technology haven't truly been fulfilled. We got close during COVID but business interests and human nature got in the way of fulfilling what people on this forum have been touting for a decade or more with remote work.
I'm sure everyone else wants it.
Get drawn from a rental lottery at random? Offer your first born child? Supplement your rent with sexual favors to the landlord?
I was able to get the apartment by subleasing someone else in apartment in the building. I always paid my rent on time, and caused no issues for the landlord (parties, etc). When a new apartment opened up, I was giving first dibs.
I also had a time in a rent-stabilized apartment in NYC (East Village, probably not far from yours) and the answer of how I got it: luck. It happened to be available when I was looking and I happened to beat everyone else to the seller's agent by physically sprinting with my deposit check in hand.
Then once another apartment became vacant, because you already lived there you were able to regularize your presence by terminating your sublease so you could lease directly?
My local university offers housing for grad students. At least 50% is unoccupied at any time because there is no pressure for them to fill units. That would just be more work. So getting one is tricks and favors.
I would assume you will start to see short-term/hard-money loans for the 15k as we've seen in the bay area for all cash offers on homes.
It was an older apartment with newly renovated kitchen and bathroom, albeit small. The brokers fee was something like $3000(thought this was ridiculous).
At the time I also found a similarly priced apartment but at last minute for some reason it was pulled the broker said.
I don't think any amount of searching can find such deals now.
Here is an example from centre of Prague. 400 euro per month, 20k compensation
https://www.sreality.cz/detail/pronajem/byt/2+kk/praha-smich...
What ever happened to the class action suit against 3% fees... did that ever go anywhere [2023 recollection]?
The homeless are a problem, but New York has them too.
Though if you want affordability, that leaves Chicago and Philly.
NYC sucks in that sense though, as a lot of industries that are conglomerated in NYC haven't ensured salaries keep up with those in High Finance and Tech
At least Boston has relatively affordable suburbs and Bay Area level wages, DC has plenty of federal jobs that pay competitively, and SF has the larger tech industry (which is still going great despite a couple high profile layoffs)
Also more comparable populations that way too.
SF and NYC do have neighborhoods like this, but those occupy very tiny portions of those cities comparably to Miami.
Miami-Dade is very sprawly, like Los Angeles.
This is unsurprising as Miami is a relatively new city that expanded post-WW2, like LA.
The cities I listed above were already fairly high density before the automobile was invented
It's even worse than LA. The LA metro has better connectivity across the city of LA than Miami Metrorail does in Miami.
> I explored Brickell and Miami Beach
Did you walk or take public transit to Little Havana or Little Haiti?
Same way most people in the NY Metro live in less walkable boroughs or suburbs.
And it's the same story in any other "international" city - be it London, Tokyo, Paris, etc
I love NYC. I don't mind going into Boston or such for the day, but there's nothing like NYC on east coast. It's fantastic.
This kind of reflexive defensiveness by some New Yorkers feels annoying to the rest of us
The thing that NYC really has going for it is that the rest of the country is a giant suburban dystopia.
none of the things that you're saying are true compared to my experiences (or those of my friends) in any way that i can think of as meaningful.
the only city i've been to that feels like it's captured the same "vibe" as NYC, for me, has been Paris.
Tokyo was more impressive in its sprawl and history (and obviously cleanliness), but there is a sense of Japanese monoculture that saturates everything in a way that is almost tactile. not in a bad way, but definitely such that i felt like something was "missing" during my visit.
Singapore gets really close to the same feeling, but for all of its heterogeneity there's an undercurrent of authoritarian sterility that made it very difficult to feel comfortable (Disneyland with the Death Penalty, indeed).
anyway this is already pretty long winded so i should probably stop talking, but NYC has a lot "going for it" besides the rest of the US just sort of being a suburban hellscape. at some point i'll move out, but living here has been a really comforting reminder that international views such as yours of American cities are incorrect.
The day I left I moved out over a pool of dried blood from a stabbing in front of my door the night before. I've lived in over 20 countries since then and not experience anything similar except maybe in Canada, which has similar drug problems as the US.
But Flushing is too far from Manhattan and too close to La Guardia. I'd gladly pay more not to listen to that shit all the time, the car noise in the city is bad enough.
Most immigrant communities agglomerate in Queens - from Korean to Chinese to Azeri Jewish to Bangladeshi to Jamaican
If a politician wanted to score major brownie points, breaking the broker cartels would be a major win.
Put up with this sheisse in Boston. First, last, security, and broker fees. It's the reason I left the east coast and never looked back.
I don't think this meets the criteria most would consider “working”.
Rent control tries to make housing more affordable by reducing the cost, which immediately reduces the supply. At that point, rent control ends up increasing housing costs.
Theory and real-world case studies mean that this is so obvious, that I just assume anyone that's passed economics 101 and is advocating for rent control is either grossly incompetent, currently very drunk, or is disingenuous and actually wants to use the power of the government to make sure other people cannot obtain secure and stable housing.
Or they are one of the lucky few living in a rent controlled apartment.
Remove market economy and the Party will distribute housing as it sees fit, and you have affordable housing, like in the Soviet Union.
Otherwise, inevitably housing will cease to be accessible once a bit more than 50% of population is happy with their housing conditions - then they will vote for people who will help them build value of their house by locking out the underhoused minority.
I can't see a fix to this that won't undermine either democracy (by somehow making people's political choices matter less or not at all, openly or covertly, aka "Putin elections"), or market economy. Both of which sounds worse than just putting up with unaffordable housing.
It's hard to increase transportation infrastructure in a built-up area. And when you do, everybody says it didn't work because traffic is still bad or trains are still overfull. But they never notice that population increased during construction. If you could stop growth, then your transportation needs stabilize.
Doesn't really feel fair to me though, because it's so hard to move into the closed city.
Personally, I'm a fan of limiting rent increases to a max of something like 5-10% per year. Not so much that it's a total hardship to deal with a max increase; not so little that landlords have to do max increases every year or get way off market; also not so little that a landlord can't catch up later if they purposefully lag on increases to keep a preferred tenant.
But it's always supply and demand that gets the upper hand in the end. If there's a shortage of supply, and you put in more market rules & regulations, costs will shift elsewhere (like the broker in the article) or the black market will simply grow to clear the market.
Ask anyone actually living in Stockholm, and you'll hear how the system really works. Last I heard there was a 20 year wait to get an apartment the legal way.
My landlord didn’t provide any more utility this year even though they jacked up my rent $1000/month this year. Nothing about my place got any better and I’m not getting anything out of it. They’re doing it purely to extract money from me because they know no one else is building and we just had 150k+ migrants move into the city to compete for a fixed supply.
End of the day, landlords don’t deserve more money and I don’t know why anyone here argues for it. It’s like you want bezos to have even more money - it’s super weird.
Introducing rent control makes it even less likely to have new builds. Try to think like a millionaire that could potentially invest in real estate: would you buy a 2 million house not knowing that you can recoup that investment and also make a profit? Isn't it easier to just dump the money in an ETF and get 8% on the market?
> you need it to prevent landlords from just extracting more money
Why do you need to prevent people from making money? Would you like someone preventing bradlys from making that much money? How much is too much? If you work in tech like most people here, you're probably making more than 99% of the world.
Making money is not a problem, if there is money to be made in real estate, investors would flock to it, increasing supply and therefore decreasing prices and profits over time. The problem is when the economics are not allowed to float freely: because of rent control, limitations to building (like zoning laws), insufficient infrastructure (like being stuck on an island with bad connections) etc.
Fundamentally these are in disagreement. If you believe that landlords should control the world then keep believing this idea that housing should also be an investment.
I don’t think housing should be an investment. It is impossible for something to be a good investment and affordable. They go against one another.
Why do you think that's the case? Many companies are a good investment, while they still provide affordable products. Something can be cheap in an absolute sense, while still providing a good return on investment.
Can you see how that is not affordable? Things that go up in value forever are not affordable...
This seems like such an emotional response. The landlords are also controlled by mortgages if they are small, or by boards of directors - and shareholders if they are large.
The landlords can control the rent for their units, that's it.
As to investment properties vs affordable ones, there can be some issue there, for example if you buy a house just to park the money somewhere, but you don't rent it out, you keep it empty. That kind of behavior can be really damaging. These are the only kind regulations I would introduce: 1. don't allow properties to sit empty - tax them heavily. And 2. also don't allow airbnb's in highly troubled cities. Unless you're literally sleeping in the same house with the guests, airbnb's shouldn't be allowed for individual housing units.
> I don’t think housing should be an investment
Let's run a thought experiment: Let's assume you're a retired small business owner that has 5 million dollars in the bank. You can A. built a house in your city and rent it out or B. put the money on the stock exchange.
Everything else staying equal, which of the options would create more housing units in your city?
People keep trying to rationalize the status quo with complex explanations, when the dynamic is really "Army setting up a school" dead-simple (or, even more applicable, Soviets setting up apartment blocks): if you care about fulfilling the need, it gets done. The problem is that there are competing interests that profit from housing insecurity and homelessness, and the government routinely chooses them over us. Nothing will change until the choice is made to throw these entities - developers, management, investors, etc. - under the bus, instead of people who are simply looking for a safe place to live. Unfortunately, without a massive reorganization of the economy and even society, it's impossible to have both come out winners.
Just cause some capitalist lost a few dollars doesn’t mean anything. Capitalists don’t do any labor - that’s the whole point of why they invest in things. They put money in places hoping that they’ll get more out of it without having done anything. But it’s a risk - and the government shouldn’t be backing risk taking speculators who gamble with their money. It should be backing laborers!
But it doesn’t. Government is controlled by capitalists because capitalists have the discretionary money (thanks to stealing it from laborers) to keep lobbying to keep status quo.
See, to me, this vitriol is what seems super weird. It seems like you must be talking about some sort of property shark that owns 8+ figures in property and extracts the maximum possible from the poor peons that dare to want a roof over their heads. Maybe with some large company thrown in the mix for good measure.
My father and grandfather are both in rental (well, they did whatever they could to make their way, primarily carpentry; rental is only part of the picture). Both of them started with nothing and managed to bootstrap their way into some properties, fixing them up as they went. They do all the work on their respective properties themselves. There isn’t a management company involved. They aren’t some evil men trying to extort the populace, the goal is just to live, provide for family, etc. Yet by definition, they are landlords - that thing that so many here despise unilaterally with such passion.
Probably there is considerable diversity (or at least two classes of landlords). But laws are going to apply to both groups.
If you do something that drives up the value of the property - you'll get some amount of that when you go to sell the property. If your father buys properties, rehabs them, and then rents them out... Guess what? He's double-dipping. He's going to charge more for rent and he's going to be able to sell the property for more later. In one instance (selling the property), yes, he's doing labor and will reap some reward for his labor. In the other, he's not really doing any labor to keep charging more rent.
I had "small time" landlords many times. They always jacked up the rent 10-20% every year. You think they're doing that because the 1920's house I was renting was getting improved every year or they were doing anything to make it better? Nope... They just wanted more money and because no one was building more housing - they knew they could get it.
> going to charge more for rent
You mean, be able to charge anything at all.. it’s not like we’re taking about buying turn-key properties and updating the cabinetry or something.
> not really doing any labor
Properties require upkeep. (N) properties require N times the upkeep. In addition to normal expenses, there are also risks; for example a tenant may damage your property, and then you need to fix it. You may think your security deposit covers that; in reality that amount of money can usually only cover minor repairs / cleaning. Landlords need to recoup that sort of thing over time, so it ends up getting rolled into your rent.
I really don’t think you understand how expenses for these things work. The way you’ve been talking, it sounds like you think your rent check goes directly into the landlord’s bank account as profit. Maybe you should try home ownership, and see what the actual ledger (expenses + time) looks like over time. Compare that plus your mortgage to rent. You may need to do this for the long haul to see the real picture though, not just a couple of years.
Better yet, acquire some properties and try your hand at rental yourself —- either you’ll end up filthy rich for nothing like you seem to think it works, or you’ll learn a valuable lesson about the true cost of services…
Because, while you assert that landlords offer no value, the fact remains that there are people in this world who want to rent, not own. Without landlords, how is that supposed to happen?
In practise, I've yet to see anything working that doesn't make rentals either scarce or prohibitively expensive.
Rent control definitely works, because owners lock in the original price of the building with a fixed-rate mortgage. If you buy a building in 1960 to rent out, you can rent it out at 1960s prices pretty much forever, with only a tiny fraction added to cover increasing property taxes (subsidized for owners of rent-stabilized apartments) and the increasing costs of routine maintenance.
If I were to become Dictator of New York City tomorrow, I think I'd freeze rents as a factor on the acquisition cost of the property + prevailing interest rates on 30 year fixed mortgages. If you want to make today's market rates on your property, you have to build a brand new building. This incentivizes the creation of new housing, and provides stability to existing tenants through rent stabilization even for newcomers to the city.
NYC is full of vacant land. You can kick cars out of a parking lot and turn it into a 50 story residential skyscraper without any problem. You can tear down nearly-abandoned office buildings and replace them with housing. Tearing down a building where people are happily living is completely unnecessary. Profitable? Sure, it can be. But the city is under no obligation to making housing profitable. Housing is infrastructure; does the city make a profit by charging tolls on roads? Nope! They don't need to; they exist for the public good, not for your 401(k) plan.
Plenty of people are making TONS of money on brand-new buildings. In the 12 years I've lived here I've watched Downtown Brooklyn change from a forgotten wasteland to the home of the tallest building in Brooklyn. The neighborhood is full of $1M studio apartments (and up for more space) and they are sold before the building even breaks ground. People want new stuff and they can afford it. It doesn't have to come at the cost of existing residents.
Why don't we just make murder and rape also legal to better track it?
Whenever we artificially manipulate the market with ceiling prices, it necessarily means there will be some demand unfulfilled. A better approach is to build enough housing to satisfy the demand.
Honestly, I don't mind brokers. I think many people feel wronged by them because of huge bills for little perceived work, but they're not exploiting any monopolies or regulations to exist, like say for example a lot of trade workers do. If you're concerned about NYC housing you should be advocating for ways to make more housing, not killing the market with rent stabilized units and regulations.
Example of why price controls on goods always seem to produce shortages of that good. Solving issues on the supply side is generally a better idea than fiddling with market prices.
This whole deal has very much jumped the shark.
As to if they can actually ever make money on this? Good question. If it was clearly penciling out in a spreadsheet though, competition would ensure it wouldn’t for long in the most in demand markets.
Other markets are saner because there is less competition, usually. This started changing nationwide about 10 years ago, as competition nationwide got out of hand due to easy money.
2) renters do all sorts of crazy bullshit sometimes, and unless you’re really good at managing it as a landlord you’re screwed. Sometimes even then you’re still screwed. Markets like Manhattan especially so.
Landlords which know how to manage these kinds of tenants often turn these kinds of tricks against all tenants to increase returns, and the courts adapt to be even more tenant friendly in many areas or political pressure makes things like rent control inevitable. Which amps up the game.
Eventually market conditions shift (either due to changes in money supply, or because the well is ‘poisoned’ on the landlord or tenant side), and we see things like 70’s era NYC or SF which nukes most of the property values for so long, the speculative players are forced to give up - either because they are broke, or because they have ‘greener pastures’ they are pursing. In RE, usually the former due to market liquidity issues.
Just to have a place to live?
That's about the average situation in NYC. Brooklyn Heights is obviously extra-expensive because it's nice and is a 20 minute to commute to pretty much anywhere in the city, but the math is about the same everywhere.
Meanwhile, if you're just going to go for a single unit in a new building as an investment property, budget on about $1.2 million for a 1 bedroom that you could MAYBE rent at $5k/month or $900k for a studio that you could rent for $4k/month. 20% down on a $1MM apartment, you're looking at a mortgage of $5k/month. Add property taxes, $6k/month. Add insurance, $6100/month. So you need to come up with $1100/month as long as your tenant pays on time. That's not a monthly loss per se, you get to keep the principal and recover it when you sell. But how much money you make really depends on your access to capital. I recommend being rich in advance of your foray into becoming a landlord in NYC. If you are buying these units at 0%, and many people are, this is a very nice racket.
Personally, I wouldn't do it. A lot of the more affordable units in NYC are in co-ops, which often prohibit renting (to keep prices lower). So the market has already priced in that "investment property" premium for condos, in the area of 20-30%.
Not a particularly good investment I guess.
So 3.2% real yield - which is not much lower than the earnings yield on stocks, but with the ability to go heavily leveraged without being exposed to the rapid margin calls in equities. (It's no surprise that many multi-millionaires got their start by developing/renting out property.)
A good hedge fund would be able to offer higher than that still.