Cities Keep Building Luxury Apartments Almost No One Can Afford (bloomberg.com) 243
Cutting red tape and unleashing the free market was supposed to help strapped families. So far, it hasn't worked out that way. From a report: Austin is experiencing an unrivaled apartment boom. In 2021 the region including the Texas capital issued nearly 26,000 multifamily housing permits, about 11 units per 1,000 residents. That's more per capita than any large US metro area since 1996, when Las Vegas OK'd new apartments at only a slightly higher level, according to rental marketing firm Apartment List. By the same measure, which is based on an analysis of US census data, Austin topped the 50 largest US metropolitan areas in 9 of the last 10 years. Many, if not most, of these apartments are classified as luxury, depending on how you define it. (Some developments are likely using a bit of real estate puffery.) Buildings such as the Hanover have become a flashpoint in a fierce, often bitter debate raging in Texas, the US and around the world. It's about the best way to shelter this generation and the next, particularly in the most sought-after and expensive cities.
Academics, developers and people in their 20s and 30s -- particularly those most active on social media -- have reached an unusual level of consensus. Their solution, supported by a wealth of scholarly research, is simple and elegant: Loosen regulations, such as zoning, and build more homes of any kind -- cheap, modest and palatial. The shorthand for the movement has become "Build, build, build" or "Yes, in my backyard" -- Yimby, for short. It's a rejoinder to the "Not in my backyard," or Nimby, crowd, the hidebound folks who typically thwart construction. Texas is famous for its business-friendly ways, and David Ott is one of many embracing the Yimby approach. He oversees the Texas projects of Houston-based Hanover, which developed the building Young was showing on a recent March afternoon. He says Austin is getting overbuilt, so rents will indeed come down, especially in the suburbs. "It's simple supply and demand," he says.
Academics, developers and people in their 20s and 30s -- particularly those most active on social media -- have reached an unusual level of consensus. Their solution, supported by a wealth of scholarly research, is simple and elegant: Loosen regulations, such as zoning, and build more homes of any kind -- cheap, modest and palatial. The shorthand for the movement has become "Build, build, build" or "Yes, in my backyard" -- Yimby, for short. It's a rejoinder to the "Not in my backyard," or Nimby, crowd, the hidebound folks who typically thwart construction. Texas is famous for its business-friendly ways, and David Ott is one of many embracing the Yimby approach. He oversees the Texas projects of Houston-based Hanover, which developed the building Young was showing on a recent March afternoon. He says Austin is getting overbuilt, so rents will indeed come down, especially in the suburbs. "It's simple supply and demand," he says.
Small homes aren't profitable (Score:5, Insightful)
Developers do not want to build them. They can build a house twice the size for more than twice the profit.
Apartments are similar. Yes, you can fit more smaller apartments in the same space, but it's nothing compared to the higher rent you can charge for bigger apartments.
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Cities don't want them to either, because more expensive apartments provide more in various tax revenues. And neighbors don't want low income, because they attract the poors, who are ugly.
Re:Small homes aren't profitable (Score:5, Insightful)
And neighbors don't want low income, because they attract the poors, who are ugly.
Because crime follows them. The kiss of death for neighborhoods is when you start seeing people put those iron bars on windows and doors.
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That's the crux of it. If you look at the local market around here a lot of time a builder will build the same template of houses in two different neighborhoods. The same brand new house might be $200,000 in one neighborhood and $450,000 10 minutes down the road. The reason? For the more expensive one people are willing to pay significantly more for the same house because they know their neighbors will have to too, and they want to make sure they're around people of similar income.
Low housing prices = p
Re: Small homes aren't profitable (Score:2)
It's why we send our kid to private school.
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Or are they poor because they're ugly?
Either way, for some, the only possible solution is for poor people to go away and die somewhere that normal people don't have to look at them.
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However, as a strange twist, very unattractive people, not just run-of-the-mill unattractive, but "oh. . . my. . . God" ugly people enjoy the same lifetime earning benefits as moderately attractive people.
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It can be a vicious circle. If you're not beautiful you're going to have a harder time getting a high-paying job which will make you poor. If you're poor you'll have a harder time affording quality food and health care, and having free time/spare physical energy for exercise which can make you ugly. If you come from a poor background your ancestors probably also had a harder time attracting beautiful mates which can put you on the back foot genetically.
But more to the point, wealthy property owners don't di
Re: Small homes aren't profitable (Score:2)
Yeah, I dunno...my wife isn't beautiful and she makes $160K/year, which is more than my ugly ass too.
Re: Small homes aren't profitable (Score:2, Funny)
I'd fuck a hot poor girl.
I'd even give her some money to help her be less poor.
Re: Small homes aren't profitable (Score:5, Insightful)
Yeah, I dunno...my wife isn't beautiful and she makes $160K/year, which is more than my ugly ass too.
I'd fuck a hot poor girl.
I'd even give her some money to help her be less poor.
Yo dude slow your roll before you lose your sugar mama.
Re: Small homes aren't profitable (Score:4, Insightful)
Re: ya'll focusing on the wrong aspects here (Score:2)
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Nice FP. So how about considering the social and psychological damage of the "my tiny kingdom" mentality fostered by small homes? Shoot first, ask questions about lost balls or turning around in my driveway afterwards!
However, mostly I'd like to add a couple of historical footnotes. In my youth as a whippersnapper programmer I did a lot of work for commercial realtors in that selfsame Austin. The big crisis of those days involved office buildings and to a lesser degree shopping centers. The way capitalism w
Re: Small homes aren't profitable (Score:3)
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We have three large parcels of land right now under development for expensive apartments near downtown. They have been stagnant for a decade. They need funding other large parcels are being developed into relatively affordable townhomes
Austin is unique in Texas for two reasons. First, it is the only cit
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The permitting and inspection process, along with things like environmental review, not to mention site prep, are all essentially fixed overhead - whether you build expensive housing or cheap housing, you're really not going to be able to skimp on those costs. EIR is often used as an excuse to deny development, even in areas that can support the increase in higher end market units, so a lot of money has to be spent to actually push through a housing development.
So assuming the market can support it (and if
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Well you also have localities who are pushing things (at the request of existing residents) like limiting the number of houses that can be built (because they don't want more traffic), or restricting density requirements so that your number of houses per acre is a maximum amount such that its not feasible to build houses but so small).
I mean I get it to some degree - Americans (including myself) have a very individualist mindset and largely want to be off to themselves without lots of other people to bother
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I'm of the mind that if you don't want people to urbanize your neighborhood, you're going to need to pick a spot to sacrifice to be the damage soak.
From that perspective, building mass transit and hyperdense neighborhoods around those trains, subways, and monorials, helps to relieve stress on the neighborhoods that want to stay the way they are. But that means proactively voting for and pushing through hyperdense development... which is problematic, because that also means willingly diluting your own votin
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Re:Small homes aren't profitable (Score:4, Interesting)
> they shouldn't expect to be able to buy or rent the fancy new housing unit, ...and their parents were too
Bullshit.
Someone "beginning their career" today would be in their mid 20s. "Their parents" therefore would be between 40 and 50. Let's say 50s, who themselves started their careers in their mid 20s, meaning they were getting out into the world circa 1990s.
The average new house in 1990 cost about $150,000 (adjusted to 2020 dollars)
The average new house in 2020 cost about $400,000.
And if we go back to the 1970s when the boomer generation was entering the workforce, the average new house was about $60,000.
Housing has gotten crazy expensive, and to say "Oh you shouldn't expect to be able to afford a place to live right away, so just suffer until you succeed" has got to be the second worst take on the problem imaginable. (The worst being to just make homelessness a crime...)
=Smidge=
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I thought the worst take was to just blame the younger people who can't afford houses of spending too much on avocado toast, presumably to the tune of hundreds of thousands of dollars.
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Nevermind that avocado toast is a relatively inexpensive and filling dish when made at home. Fancy versions being in restaurants and cafes is just what restaurants do.
Re:Small homes aren't profitable (Score:4, Informative)
You'll notice that a lot of homes like that are also much smaller the further back you go.
Honestly we need a lot of 750 SQFT condos and/or townhomes that are priced reasonably. And honestly the free market would probably even facilitate that if the zoning regulations would get the hell out of the way.
Re: Small homes aren't profitable (Score:2)
Your math doesn't always pan out.
My kid is 7 and I'm 53.
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What's completely missed is that typically when somebody is at the beginning of their career, they shouldn't expect to be able to buy or rent the fancy new housing unit
Except the issue here isn't that someone at the beginning of their career is expecting this, it's that they have no housing available to them. Someone late career may be interested in the luxury apartment, and leave behind ... an equally expensive house that the beginning career people also can't afford.
There's simply an oversupply of luxury. Housing is not trickle down economics. Sitting on a house does not cause it's value to degrade like a second hand car.
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What's completely missed is that typically when somebody is at the beginning of their career, they shouldn't expect to be able to buy or rent the fancy new housing unit, just like they can't necessarily buy every other fancy new item they want.
If Austin is like the Bay Area, the housing shortage is most acute at the bottom end and not really all that bad at the top. New luxury apartments won't be available for those to those who really need them for 20 years, if ever. (Many luxury apartments have amenities that will never work at low rents). Where are the middle and low income people going to live in the mean time?
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Re:Small homes aren't profitable (Score:4, Insightful)
This isn't true in California, because of Prop 13.
In Cali, the folks who've been there for longer are property rich, and have negative impetus to sell, because if they do so, they may reset the property tax floor.
This creates a negative feedback loop-- there is less supply, so prices go up, so you're less incented to sell (if you want to keep living there), which decreases supply...
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The age at which people buy a house or an appartment is continuously going up. Down here it is now a bit more than 40 years. My parents, father is a teacher, mother was a house wife, bought their place in their early twenties. Their home was new and shiny, big house, big garden. Worked a while as an engineer, high profile job/customers. My colleagues were able to buy a house at their 40's, no housewife
Re:Small homes aren't profitable (Score:5, Interesting)
Apartments are similar. Yes, you can fit more smaller apartments in the same space, but it's nothing compared to the higher rent you can charge for bigger apartments.
Even creating more luxury apartments will help significantly because they are far more dense than detached homes. Most new buildings are not going to be affordable when new, but today's new buildings become the affordable homes of future generations. I don't think we need to be too concerned with new housing be affordable for average residents, we just need to build more in general. If there are enough new homes for the upper middle class to move into, then the middle class can move into the older homes which then hit the market.
Re:Small homes aren't profitable (Score:4, Interesting)
I think you hit on a critical point - most new buildings are not going to be affordable when new.
First - most new housing being "luxury" is par for the course, it's basically advertising fluff. It's new, so of course it's luxury.
Next - Look at the car market. Poor people get used cars, not new cars, most of the time.
As for YIMBY and "cities keep building luxury apartments almost no one can afford" - well, everything I've read says that cities are dealing with enormous shortfalls of housing. It's going to take time for market corrections to take place and rents to trickle down from the new builds.
So you're right - if there are enough homes for the rich to move into, the upper middle class can move into where the rich used to be, when there's enough homes for the upper middle class, the middle class can move into where the upper types were, etc...
For that matter, once there's enough quality housing for the upper types, then the housing developers will start building cheaper housing, seeing the glut.
It's just going to take a long while.
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Only if people will buy them. I just saw a 9000 sq foot monstrosity go up in a neighborhood that has 2000 sq foot average homes, topping out around 3000. Big family homes in a family community. this developer bought a plot of land and absolutely filled it with this huge house because on paper that will be worth several million dollars, but its not clear if it will sell for that because the size and amenities don't really fit with the community and the types of families that tend to move to that area.
I'm
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Developers do not want to build them. They can build a house twice the size for more than twice the profit.
Apartments are similar. Yes, you can fit more smaller apartments in the same space, but it's nothing compared to the higher rent you can charge for bigger apartments.
And if that theory were actually valid across the standard curve of income, then every home would be 5000SF+, cost 2 million or more, and we'd all be driving around in $100K luxury cars.
The entire point being made here is profit hardly matters when unrelenting greed alienates your product from the very consumer base it was intended for. Those aren't "developers". They're greedy parasites contributing to a problem. The only thing all that "profit" will guarantee, is an inevitable market crash.
Not that Gre
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It may not be enough to crash the market again. It could just stretch people's debt to the brink but not too far that the economy breaks.
I do wonder what would happen if there were zoning restrictions in specific areas on property sizes / building cost limits that scale with inflation. Someone would be able to build and make a profit even if it's somebody else.
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It may not be enough to crash the market again. It could just stretch people's debt to the brink but not too far that the economy breaks.
Out of control housing costs is hardly a localized problem anymore. And we're not talking about a luxury watch or a yacht here. We're talking about the very asset that allows adult humans to move out of their parents bedrooms. To accept job opportunities, start lives, and build families.
Quite frankly, I could give a shit if Greed doesn't want the market to crash again. It needs to, and everyone knows it. And with bank interest rates continuing to climb adding hundreds more to an obscene monthly cost, th
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The summary of the article is missing key points - the free market hasn't worked, at least not yet. Possibly not ever, since the free market is not a self balancing system that provides for everyone. Build anything means they've built very expensive high rises that few people can afford and housing prices in Austin are not going down because of it. So yes, they are building lots of apartments, and that's great, but they've been focusing on high end apartments. That is, they're not expensive because they'r
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This is a problem that has been building up for decades though. It shouldn't be surprising that a few years of countering policy wouldn't be enough to completely solve the problem.
As long as they're able to sell and get those "very expensive high rises" occupied, they're doing their job.
Also, with inflation the way it is, "rent" is actually very unlikely to actually decrease unless you adjust for inflation.
The result, predictably, is not making housing more affordable for those with less money.
You might ne
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Developers do not want to build them. They can build a house twice the size for more than twice the profit.
Apartments are similar. Yes, you can fit more smaller apartments in the same space, but it's nothing compared to the higher rent you can charge for bigger apartments.
If housing is so short premium stuff is still in demand, you still have zoning and government fat finger problems.
"We need 100,000 units!"
"Ok, approve 2000. Hey, why are you building rich people housing?"
Go figure.
They aren't meant for habitation (Score:5, Informative)
You'll get a few people that live in ultra luxury apartments they purchase, most of them part-time, but that's a rarity. The brutal reality is that most are a form of wealth management, not for people to actually use as a home. Not even as a 2nd, 3rd, 5th, or 10th home. Most don't even use their own "luxury apartment" when they are in the same city.
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It's a ponzi scheme like cryptocurrency
Everything you said is correct except this last sentence. Unlike crypto, there's always something intrinsically valuable about real estate, because it actually exists in the real world. It's a physical, tangible asset that you can live in; ergo, unlike crypto, it has some real value. Heck, in this context, the word "real" in real estate comes from the Latin word realis which means existing and true.
Re: They aren't meant for habitation (Score:2)
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Look at "Billionaire's Row" in New York. Those, and other high-end luxury apartments, exist for the wealthy for a very specific purpose: They allow them to use business (or other) entities to buy property as a way to manage wealth and tax obligations.
Comparing "Billionaire's Row" to this problem is like watching someone bitch about the price of a McLaren at the used Kia dealership. Billionaire's row was obviously developed for billionaires. Everyone knows, understands, and expects this. And it certainly validates your corrupt tax loophole point.
No one expected to find realtors and landlords using the "Billionaires Row" excuse in fucking Austin, Texas. That's the difference here. Most likely the only reason they can even market them as "luxury" is b
Re:They aren't meant for habitation (Score:5, Interesting)
BishopBerkeley isn't incorrect but he and others like yourself should also note that private equity started buying RV (temporary) and mobile home (permanent) properties years ago. Add in that during the pandemic it didn't take very long for Commercial REITs to be emptied and for private equity to start buying up single family starter houses in all cash offers, sight unseen, no inspection, in many areas. They knew the pandemic was driving a long-term spike into Commercial properties.
One of my friends bought a home in a mobile home park, and fixed it up herself. This was likely the only way she was ever going to own a home. They were lucky enough to have the older person owning the park retiring. He agreed to sell to a tenant cooperative that exists only to own/maintain the park. They literally dodged a bullet. Less than a 5 years later private equity came knocking. Two other mobile home parks "nearby" (within about 50-75 miles) were bought and rents jacked up in short order.
That's not including the RV facilities being bought out for similar reasons. Look in RV travel magazines where they talk about spiraling facility costs for little to no improvement.
Wall Street and private equity today don't care about their mythical place as the "efficient distribution of capital" to drive the economy... they're simply engaging in rent-seeking (literally in many cases) behavior acting as a unaccountable force taxing on the public at large and the economy. Building places people can't afford to live doesn't matter to them, they are seeking actual tenants or people that will use services.
Land prices. (Score:5, Interesting)
Take for example places like Keller (just north of Fort Worth, TX). The cheapest lot to put a house on is $375K. No builder is going to buy a $375K lot and build a $150K house on it. It would never sell. So they have to build a million dollar home to make it worth it.
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Take for example places like Keller (just north of Fort Worth, TX). The cheapest lot to put a house on is $375K. No builder is going to buy a $375K lot and build a $150K house on it. It would never sell. So they have to build a million dollar home to make it worth it.
And what exactly makes it worth it to populate a city full of nothing but million-dollar homes ONLY because an absolutely corrupt market has priced the dirt beneath them at 10x what it's actually worth?
You might grow mansions there. Good luck growing the kind of services millionaires still rely on, around it. I've yet to find the millionaire who will happily pay $50 for that cup of morning espresso so their local barista can afford to live within caffeine-addicted distance.
Affordable (Score:3, Informative)
Affordable = high crime, little income for the city, pissed off neighbors, white flight, must be subsidized.
Supply and Demand (Score:2)
Don't overlook this point (Score:2)
The developers, builders, architects, they get paid whether the project succeeds or not.
Investors write off many failed projects. At least the astute and 'big' ones. Those they bait with promises take it in the teeth. Oh well, bad luck.
It's called Filtering (Score:2)
Of course new construction is going to be desirable, hence more expensive. However, people move out of less-desirable housing to move into the more desirable "luxury" housing. This process is called filtering.
The alternative is that we build shitty housing. What possible point would there be in building shitty housing, especially when the majority of the construction cost is in the structure itself?
Bit of a scare headline (Score:2)
I can't read TFA so I don't know if it has more detail.
I'm not sure I see the issue. So most people can't rent them. The landlord only needs one. Are these units going vacant? And if they are, that's a problem why? Hang out a bit, eventually the landlord will decide they'd rather have a lower rent than no rent at all.
The summary hinted at this and I wonder if the article digs into more detail. It shouldn't matter if builders build expensive or cheap apartments. Expensive ones will get rented to rich people,
Timing (Score:3)
Housing is scarce for everyone, so the first things that get built will be for rich people. As the demand for that tapers off, the middle income housing will get built. After that, the low end stuff will get built. It takes a few years. It doesn't get fixed in a year.
I saw this happen in a ritzy town near me. A bunch of uber-expensive apartment buildings went up within a couple of years of each other. We're talking multi-million dollar, 2000-square-foot-plus custom apartments. The last one was finished about two years ago and still isn't sold out. The next building that went up had cheaper apartments. Currently they are building a large complex a few blocks away from the main drag that will have *much* more affordable apartments.
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Is this the housing version of tinkle-down economics?
Economics (Score:2)
No, it's just regular economics. People with more money will pay more for housing. Once that level of housing is full, developers have to build cheaper housing.
The exception is when the floor for housing construction is artificially kept high due to building requirements and fees. For instance, the city I live in was just busted for overcharging developers for inspection fees and directing the excess to the general fund, which is explicitly forbidden by state law.
Time to increase taxes on speculators (Score:2, Interesting)
California actually is ahead of the game (Score:2)
In the home of NIMBY via CEQA, California has laws that now let all sorts of zoning be bypassed to build new housing. It's just so expensive to do it that so far not a lot is happening. But it *is* happening. Accessory dwelling units in single-family zones are allowed by right, for instance, including garage conversions (including legalization of older, illegal conversions). Areas within a certain distance from major transit stops can't be single-family zones any more. Developers are starting to use a nucle
creating permanent debt (Score:2)
Wait... (Score:2)
So HAVE rents come down?
Developers don't care who buys... (Score:4, Interesting)
so long as someone buys. Considering that anyone in the world may buy US real estate, they are probably hoping rich people from other countries will buy the properties if rich Americans aren't willing to.
The cost to build affordable housing versus the cost to build luxury is probably about the same for the labor and only the extra fancy materials will cost extra. This means they can make a lot more money building luxury then starter homes.
Considering we still don't have any kind of residency requirements for real estate, this kind of thing will keep happening. I think that's part of the plan and they just don't want to say that part out loud.
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How would that help new constructions?
Re:Need more rent control (Score:4, Interesting)
As long as they can get investors to set them up, they will continue to do it.
There is some idea that they can build bigger for more profit and they continue to do that even though there isn't the audience.
I bought a home that's 50 years old and was huge for that time, but all of my surrounding neighbors are building larger homes. America has always pushed for the bigger is better ideal. Many people are getting wise to this or they are just no longer able to afford this.
While I am not a fan of the tiny home trend, I see merit in moving people into a manageable home. I have rooms in my home I never go to because there just is no time. I clean them from time to time, but that's about it.
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There is some idea that they can build bigger for more profit and they continue to do that even though there isn't the audience.
I see no indication that these apartments are staying vacant.
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A quick Zillow search shows a lot of availability. I don't know Austin neighborhoods, but there is quite a mix.
When I started out in San Francisco in the mid 90's as an engineer I could rent a studio for $1,200 or share a house for $500, with a salary of $36k. The equivalent affordability today is a salary of about $75k. Generally things look about normal to me. Lower salaries seem to have scaled at the same pace, although the highest end is making a lot more.
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The problem is that the "affordable" homes are winding up bought out by businesses, and wind up either renthouses or short term rentals. This takes those smaller units out of the market forever, leaving only the larger (3000-4000 + sq ft homes) for the taking, because they often require large HOA fees.
There are a lot of people out there who would be quite happy with a 1500-2000 square foot place on a big enough chunk of land to have a decent backyard. However, those wind up becoming property of real estat
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It seems common. A lot of STR (short term rental) units are out there, just because people don't want to be with the riff-raff at a hotel, and prefer somewhere more exclusive. STR units seem to be very profitable, because people will pay the per-diem rates. Plus, STR owners don't generally have to deal with the taxes and regulations that hotels do, which gives them a financial advantage there.
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One of the companies my dad worked for did this. However, it was more because they had enough visiting staff that it worked out cheaper than constantly renting hotel rooms.
It was also for work purposes - dad stayed there for a bit because he was doing work in that city for a couple months.
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The only reason vacant homes are a good investment is because the demand is way, way, way greater than the supply. I doesn't matter much of what is built as long as supply meets demand. If too many large houses are built then that will depress the profits on the investment. Less money will flow into investing in large houses. Depreciation is not a fictitious expense. Houses need maintenance and upkeep otherwise the drop in value making them terrible investments.
For all my life, limits are placed on what and
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The problem is that the "affordable" homes are winding up bought out by businesses, and wind up either renthouses or short term rentals. This takes those smaller units out of the market forever, leaving only the larger (3000-4000 + sq ft homes) for the taking, because they often require large HOA fees.
There are a lot of people out there who would be quite happy with a 1500-2000 square foot place on a big enough chunk of land to have a decent backyard. However, those wind up becoming property of real estate holding companies because, even if they are vacant, it ensures property values go up and stay up. It isn't like states or cities care, because the big companies pay their taxes, as opposed to individuals who might have issues if they lose their jobs.
Yeah, we are in a heavy urban neighborhood close to a major international airport. We have a big (for the area) back yard and patio and share a fence with 4 neighbors. Of those 4 neighbors, two are in rentals and it is very possible that another will end up becoming a rental soon. We like our current neighbors, but nobody wants to rent forever. It's not really fair to people in the neighborhood to force a situation where your neighbors are turning over ever few years (because who wants to be paying a mortga
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Show us a city in the US where rent control has been a success. Rent control causes developers to pull out of the city and no longer develop new housing. It also leads to landlords investing less in property remodels and upkeep. Why bother spending money on them if they can't get money in return through rent. So, please give us some examples of were it's worked out well. We'll wait...
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It also leads to landlords investing less in property remodels and upkeep. Why bother spending money on them if they can't get money in return through rent.
Newsflash.... Landlords aren't doing shit in most cases to keep their properties up anyways. They use the shittiest of everything that they can get away with. They don't invest anything into the home, because they know that the rental market is crazy and they don't need to. They don't keep the properties insulated properly, because they're not paying the utilities. They don't bother trying to get more efficient A/C units, water heaters, or other appliances because they aren't paying the utilities. As long a
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I can only speak to my own experience and friends who own rentals, but they spend substantial money to improve their rentals. It means happier renter, so they're not spending money between tenants while they try to fill their rentals. It also means they can charge more for nicer units. And people who pay more tend to cause less damage to their units. Sadly, it's the low-priced places people generally treat like shit.
Reality is that the vast majority of landlords are good folks. Only a low single digit perce
Re:Need more rent control (Score:4, Insightful)
Rent control does not fix this. Rent control says you wont get your investment back so don't bother. Wait for the building to fall apart and start over. Don't worry the tenant has no place else to go.
Supply and demand does. The tenant can go to newer dwellings. Then the apartment stays vacant for years and the landlord looses money. They either rent at a lower price, remodel or sell.
Tenants today don't have choice. Vacancy rates are nonexistent because development has been stifled. Too much demand little supply.
Re: Need more rent control (Score:2)
That's because renters generally have no respect for someone else's property.
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And new housing as the story shows is not necessarily a solution - because the "new" housing is all luxury housing and at the same trickle-down is not working. In 2023, anyone who still believes in trickle-down economics really needs to pay more attention.
This is an age old problem - ignore the poor, because all your government (monarch, city, state, etc) money comes from the wealthy. The poor are only there to help out the wealthy with their inconveniences (doing laundry, growing food). So naturally, le
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This story only looks at one city, a city they cite as having the most growth in new apartments of any in the country. It's not the norm.
They've ALWYAS built luxury apartments. Those that were luxury in 2005 are now mid-lux, and those build in 2000 are now the middle-level. It's much the same with homes too. None of this is new. Just a new group of renters who don't understand how it's always worked. Everyone wants a 500sq-ft apartment on Central Park in NYC but only to pay $300/mon in rent for it.
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Na, a vacancy tax should be enough.
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To further increase the cost of housing.
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Laughs in "key fee".
I can't believe rent control still has sway in any serious policy making circles, but it still does.
Aside from the infamous key fees used to get around it in NYC, see also the rent controlled mobile home park in California. The work-around? Well, since space rent is capped, all of the sudden the unit in the space that used to be valued at $20k eventually got valued north of $250k, until it all fell apart. I forget who the big losers were, but probably the people who got loans to buy th
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The rent on the average one bedroom apartment in Los Angeles is more than the entire, pre-tax income of someone making minimum wage (at California's much higher than federal rate).
Whatever insane fantasy you suffer from, it is, in fact, about can't.
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it's called survivor bias. if he did it (with or without help of inherited advantages, that's irrelevant) everyone can do it, and anyone who doesn't is morally inferior.
yeah, quite sick, very common.
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The word I would use is:
narcissism
noun
excessive interest in or admiration of oneself and one's physical appearance.
A diagnosable form of mental illness.
Re: It isn't about can't... about too lazy... (Score:2)
Maybe that person shouldn't live in an expensive place like L.A.
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I'll give you that it's not much and I sure as hell wouldn't be satisfied living like that, but you CAN make ends meet, even in a city like Los Angeles.
Re:It isn't about can't... about too lazy... (Score:5, Informative)
I live in Ontario, Canada, and the rents in SW / Central Ontario are out of control, even for well off families. My family was renting a 4 bdrm, 4-bath house outside of Toronto for $2100 / month, 3-years later the landlords rose the rent to $2400. They forced us out through a bad eviction, and re-rented that house for $3600 a month! The utilities on average, including internet, were $650 a month, and that didn't include TV or phone service. Without factoring in any other expenses, you're already at $4250 / month, for a place to live with utilities and internet access, who can possibly claim that's affordable?
Grocery costs are insane, an average family could easily spend ~2k / month on groceries. Car payments, including gas, might average $500 / month, and if you have mobile phone service for 2 people, $200 a month? If we don't consider rent or utilities you might be $2700, and maybe that could go down to $1500.
Let's assume the household income is $66k / year, that would give you a take home of ~$1920 biweekly or $3840 / month. Try to find affordable and decent living conditions, which is rent + extras (Groceries, Phones, Car), for $3500 or less! Average rent in Ontario is apparently ~$2000 / month, and do you honestly think you can cover everything else for $1500? We need governments to step in and force rent / mortgage control!
Even mortgages are out of control! I know people paying $2k – $6k just for their mortgage payment because of massive inflation through. A lot of people say that to even be able to get a mortgage is a privilege, but at $2k – $6k you're not better off, and in a lot of cases much worse. My brother-in-law and my sister are paying NORTH of $4k / month, after a 20%+ down payment, and that doesn't factor in all the extras like grocery, and condo fees.
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And yet people continue to pay and demand that someone else do something about this.
They don't want higher development in their neighbourhood. They don't want gentrification. They don't want urban sprawl. The landlord can increase the rent because the market permits it. City taxes and rent control demand it. Look at your city budget over the last 10 years. Look at the expenditures. It's not magic. It's what we ask for. If the vacancy rate in Toronto was between 5 and 10% rents wouldn't increase past the cos
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What the government needs to do is step in and provide a hard control on increases, using some metric that makes sense. I'm not suggesting all rents should freeze at 2% increase per year, but for rent
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If two adults can't come up with $2k a month for rent... well they seriously need to try harder. I work in retail and pull down nearly 60k. Pay $1880 (includes water and pet rent) and I live alone. It's doable if you put in some basic effort. Family of 4, two adults should be able to pull down at least $80k a year.
Also, if you are making such poor wages, why did you go and have kids?
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If
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As for the 40% increase, they had to renew the mortgage and the new rate is 40% from their last rate. They put 20%+ down, so they didn't have to meet the absolutely stupid risk test, and well they can afford it, no one should have to roll the dice and risk increases that large.
I'm all for reasonable increases, but Ontario
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Municipal governments have the final say on what gets built. If you can't get a permit, you can't build.
Cities don't like low income housing because a) it provides less in tax revenue, b) the voters object to living next to high density "projects," for good reasons and bad, c) it provides less in tax revenue, and d) it provides less in tax revenue.
Plus, it provides less in tax revenue.
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Municipal governments have the final say on what gets built.
Not for much of Texas. I don't think Houston, for example, has any zoning laws. You can build what you want where you want and the city won't stop you.
However, the city of Austin does. I don't know if TFA was talking about Austin proper or the Austin metropolitan area.
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The City of Houston does not have zoning, but development is governed by ordinance codes that address how property can be subdivided. [houstontx.gov]
It's never so simple as "whatever you want." Sometimes, they just shift the authority to a different body and call it something else.
And that's one city only.
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The City of Houston does not have zoning, but development is governed by ordinance codes that address how property can be subdivided.
It's never so simple as "whatever you want." Sometimes, they just shift the authority to a different body and call it something else.
Thank you for the clarification. IANAL.
I was just reading an article about homelessness. That article, don't have a link, profiled a guy who was building tiny homes for homeless people. He had to build just outside the Austin city limits because Austin itself would not permit the development. The neighboring towns had little to no zoning and thus did not prevent him.
I'm sure the same story plays out in lots of ways all across the state.
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Stop being typical of this forum. Texas is the example. But this is happening ALL OVER NORTH AMERICA. In Vancouver BC which is the second least affordable city on the planet, the housing crisis is indeed a crisis. And the city is not backing the construction of high rise rental buildings which they can do, but keep giving permits to "luxury" high rise condos. Although 'luxury' is dubious. 600 sqare foot condos are selling for near 1 million dollars. Average house price is over 2.5 million dollars. The provi
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The city is letting them do it, with minimal regulations and rules. The idea was that more housing, even luxury housing, would make lower tier housing more affordable. But it's not happening. But eventually prices will go down. One of these centuries. Just wait for it... Wait for it...
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No city wants low income housing. They all want to tax the hell out of rich people instead.
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You do know that the ones that tell whether and where you can build are also the same that get funded by the people who park their money, yes?