OT: Rent inflation - what's the cause?

[zap]

Originally Posted by ripvanrando

Rent increases are merely a reflection of government's policy errors.

In some area's this might be the case. But in general I believe it is simple supply and demand. It sure as heck looks like a lot of people are moving and with housing shortages many are forced to rent.

In my neighborhood (Triangle NC) of 600+ houses, there are currently 0 houses for sale. Never seen that before. Builders are building like crazy further out. Sad to see...what was once quiet country roads through forests is now a canyon of single family homes and heavy traffic.

Not unexpected, I just didn't think development would be so rapid.

I also noticed that there are a number of large developments where builders are building rental homes. Single family and townhomes. I don't recall seeing such large communities of rental homes before.

[MikeD]

Originally Posted by ripvanrando

Russia and Saudis agreed to cut production in 2016 and they actually cut more than agreed. During that time, US increased oil production substantially and we were a net exporter of oil. Those are facts.

Today's demand is equal to the 5 year average. Another fact.

I said it in the Spring on this board, this is 1978 stagflation deja vu.

Rent increases are merely a reflection of government's policy errors.

Russia vs Saudi oil war was in 2020 https://en.wikipedia.org/wiki/2020_R..._oil_price_war

[merlinmurph]

Originally Posted by AngryScientist

I know many people, some being boomers and others much younger these days who rent and would not even consider buying a typical residential house.

To them, the idea that they dont have to cut the lawn or worry when the roof leaks or the boiler blows up is golden.

Which is why a lot of empty nesters sell their large home and buy a condo/townhouse. You can leave it for extended periods and not worry about the lawn, snow, maintenance. One downside is HOAs.....

Murph - townhouse owner for 25 years

[sjbraun]

Last week in Tucson, investors who raised money through a crowd-funding mechanism for real estate speculation purchased a block of 50 single family homes for $14,500,000. Their announced plan is to offer them as rental units.
When we sold our home last year, we briefly (like for a nanosecond) thought about renting it instead of selling. The Zillow estimate for renting was roughly twice our mortgage payment. But in the end, we didn't want the hassles of being a landlord.

[verticaldoug]

https://www.moodysanalytics.com/-/me...bility-act.pdf


An Assessment of the American Housing and
Economic Mobility Act of 2021
INTRODUCTION
The nation is struggling with an affordable housing crisis. There is not enough housing for sale
or rent in communities across the country. This means families must pay more for their housing,
renters have less to get by on at the end of the month, homeownership is out of reach for too
many, and those of modest means are forced to live farther from decent jobs. This has significant
economic and social repercussions. The American Housing and Economic Mobility Act of 2021
would help address this mounting housing crisis

[Clean39T]

Until 2nd (or more) homes, rentals, AirBnBs, and investment properties are heavily taxed and restricted by local ordinances, the “housing crisis” will continue. There is too much generational wealth inequality to build our way out of this problem.

[verticaldoug]

Originally Posted by Clean39T

Until 2nd (or more) homes, rentals, AirBnBs, and investment properties are heavily taxed and restricted by local ordinances, the “housing crisis” will continue. There is too much generational wealth inequality to build our way out of this problem.

You are beginning to see some of that here in the UK. Buy-to-Let is seeing various tax changes (higher capital gains, no mortgage interest offset versus income, etc)

A lot of what you see in the US is because of the massive shift in taxes in the past 30 years to favor capital over income.

[Black Dog]

Originally Posted by verticaldoug

You are beginning to see some of that here in the UK. Buy-to-Let is seeing various tax changes (higher capital gains, no mortgage interest offset versus income, etc)

A lot of what you see in the US is because of the massive shift in taxes in the past 30 years to favor capital over income.

True. Until all "income" is taxed the same there will be an ever growing gap in wealth between the very few and the very many.

[mhespenheide]

Originally Posted by Clean39T

Until 2nd (or more) homes, rentals, AirBnBs, and investment properties are heavily taxed and restricted by local ordinances, the “housing crisis” will continue. There is too much generational wealth inequality to build our way out of this problem.

I own a house in Seattle (technically Burien) with almost an acre of land. I'm looking to split the lot and build a rental property or two. As a teacher with a modest income, it's my only real shot at a reasonable retirement income.

If I can get the lot split for two additional units, I'd love to have my parents stay for a month or more at a time to see their grandchild grow up and then AirBnB it the rest of the time. I'll look to rent the second unit to tenants.

Am I automatically a jerk under this scenario? Should this be "heavily taxed and restricted"? I'm asking honestly, not rhetorically, here. I think of myself as progressive and recognize that I got astronomically lucky to have bought back in 2012. I'd be locked out of the market today.

[paredown]

Originally Posted by mhespenheide

I own a house in Seattle (technically Burien) with almost an acre of land. I'm looking to split the lot and build a rental property or two. As a teacher with a modest income, it's my only real shot at a reasonable retirement income.

If I can get the lot split for two additional units, I'd love to have my parents stay for a month or more at a time to see their grandchild grow up and then AirBnB it the rest of the time. I'll look to rent the second unit to tenants.

Am I automatically a jerk under this scenario? Should this be "heavily taxed and restricted"? I'm asking honestly, not rhetorically, here. I think of myself as progressive and recognize that I got astronomically lucky to have bought back in 2012. I'd be locked out of the market today.

Absolutely not a jerk. There's a need in the market, you can help fill it (and make some cash)--win-win IMO.

We've talked about Air BnB'ing the front section of our house for people who want to weekend out of the city close to Harriman for bike riding etc. (The only problem is I have to finish renovating the other end of the house first...)

I have friends doing it--it is a fair amount of work to do it right (and you do get jerks--a friend does an annual "worst guest" post on Facebook every year, which is only funny because you aren't the one who is paying for cleanup and repairs)-- but still worth it I think.

[jlwdm]

Originally Posted by sjbraun

Last week in Tucson, investors who raised money through a crowd-funding mechanism for real estate speculation purchased a block of 50 single family homes for $1,450,000. Their announced plan is to offer them as rental units.
When we sold our home last year, we briefly (like for a nanosecond) thought about renting it instead of selling. The Zillow estimate for renting was roughly twice our mortgage payment. But in the end, we didn't want the hassles of being a landlord.

At $29k per house those are going to be cheap rentals. Probably need a lot of work before can rent.

Jeff

[Clean39T]

Originally Posted by mhespenheide

I own a house in Seattle (technically Burien) with almost an acre of land. I'm looking to split the lot and build a rental property or two. As a teacher with a modest income, it's my only real shot at a reasonable retirement income.

If I can get the lot split for two additional units, I'd love to have my parents stay for a month or more at a time to see their grandchild grow up and then AirBnB it the rest of the time. I'll look to rent the second unit to tenants.

Am I automatically a jerk under this scenario? Should this be "heavily taxed and restricted"? I'm asking honestly, not rhetorically, here. I think of myself as progressive and recognize that I got astronomically lucky to have bought back in 2012. I'd be locked out of the market today.

No, you're not. But I'm guessing politicians would love to set you up as an example for why things have to stay as they are.. and thereby protect the interests that are lining their pockets.

There's no reason not to have progressive tax policy that targets specific outcomes based on wealth accumulation and overall income/means.

In this scenario, you're wearing the red-shirt:

[skitlets]

Originally Posted by mhespenheide

I own a house in Seattle (technically Burien) with almost an acre of land. I'm looking to split the lot and build a rental property or two. As a teacher with a modest income, it's my only real shot at a reasonable retirement income.

If I can get the lot split for two additional units, I'd love to have my parents stay for a month or more at a time to see their grandchild grow up and then AirBnB it the rest of the time. I'll look to rent the second unit to tenants.

Am I automatically a jerk under this scenario? Should this be "heavily taxed and restricted"? I'm asking honestly, not rhetorically, here. I think of myself as progressive and recognize that I got astronomically lucky to have bought back in 2012. I'd be locked out of the market today.

Not an apples-apples comparison, but I could've rented out my condo when I bought a SFH, but on principle sold it. Would you consider subdividing and selling?

[echappist]

Originally Posted by mhespenheide

I own a house in Seattle (technically Burien) with almost an acre of land. I'm looking to split the lot and build a rental property or two. As a teacher with a modest income, it's my only real shot at a reasonable retirement income.

If I can get the lot split for two additional units, I'd love to have my parents stay for a month or more at a time to see their grandchild grow up and then AirBnB it the rest of the time. I'll look to rent the second unit to tenants.

Am I automatically a jerk under this scenario? Should this be "heavily taxed and restricted"? I'm asking honestly, not rhetorically, here. I think of myself as progressive and recognize that I got astronomically lucky to have bought back in 2012. I'd be locked out of the market today.

The (obvious) answer is that until there's something to indicate so otherwise, of course you aren't a jerk by the virtue of being a landlord.

I personally have benefited from renting from reasonable landlords: I was a tenant at one place for four straight years, and I will have lived at my current place for three straight years by the time we move out next spring. The rent increases at both were quite reasonable (to the tune of $25/month/year), and I basically ended up paying a few hundred less per months below market rate.

But as you can tell from this thread, not all landlords (even the small-time ones) do this, and some will be glad to squeeze out all they could get, even if that means units go vacant (thereby helping neither themselves nor potential renters).

Frankly, the post to which you responded paints the picture with such a broad brush, such that it is rhetorically defective. In no world should small-time landlords, big time landlords (say at least 50 units), slumlords (e.g. Kushner Jr.), 2nd property owners, and AirBnB operators be all included in the same category. Sure, they all hold equity in a residence that's not their primary residence, but the similarity ends there.

[Clean39T]

Originally Posted by echappist

The (obvious) answer is that until there's something to indicate so otherwise, of course you aren't a jerk by the virtue of being a landlord.

I personally have benefited from renting from reasonable landlords: I was a tenant at one place for four straight years, and I will have lived at my current place for three straight years by the time we move out next spring. The rent increases at both were quite reasonable (to the tune of $25/month/year), and I basically ended up paying a few hundred less per months below market rate.

But as you can tell from this thread, not all landlords (even the small-time ones) do this, and some will be glad to squeeze out all they could get, even if that means units go vacant (thereby helping neither themselves nor potential renters).

Frankly, the post to which you responded paints the picture with such a broad brush, such that it is rhetorically defective. In no world should small-time landlords, big time landlords (say at least 50 units), slumlords (e.g. Kushner Jr.), 2nd property owners, and AirBnB operators be all included in the same category. Sure, they all hold equity in a residence that's not their primary residence, but the similarity ends there.

Broad brushes are inevitable in this medium..

If I were drilling down, I'd definitely split off corporate-owned AirBnB empires from individual owners renting a room in their house, or a tiny-house in their backyard. And the same between small time landlords with a single rental property they are planning to retire in, or similar. There's no objective reason these policies can't be tailored and targeted. And integrated with other policies designed at reducing wealth and income inequality.