I used to live in Kansas City. And for over 5yrs, I lived on the Plaza, one of the city's nicer, more urban neighborhoods. The Plaza felt like "real" city living due to density; lots of...
I used to live in Kansas City. And for over 5yrs, I lived on the Plaza, one of the city's nicer, more urban neighborhoods. The Plaza felt like "real" city living due to density; lots of mid/high-rise apartments and condos. Very walkable with restaurants, cafes, shopping, nightlife, museums, parks, now the Streetcar, etc.
Which means it commands higher rents than many other parts of town.
The place where I (and my brother) lived was older. It was a mid-rise apartment building was from the 50s or even 40s. But it likely had some renovations in the 10yrs prior to us moving in. So it was mostly alright.
More importantly, however, there were also a lot of new apartments and condos going up all around us. "Luxury apartments." Many of which opened up while we lived there. And something interesting happened: our rent went down. Every time my brother and I signed a lease -- sometimes 12mos, sometimes even 6mo -- we successfully argued for lower rent or for the rent to stay the same. At the beginning, it was like $1500/mo. By the end, just over $1300/mo. So far, that's the only place I've lived where that's happened. Repeatedly.
I think that's likely because of all the new apartments around that were definitely asking for higher rents. If the place we lived at wanted tenants, they were going to have to either make some serious improvements/investments or compete on price. And they chose the latter. It's not like my brother and I couldn't afford those new places. We likely could've, but we didn't want to. But maybe other tenants made that decision to literally move across the street for something newer and nicer. Which opened up new opportunities for those "upgrading" to where we lived.
I just checked if that place had any similar units to ours available; which they did. And the price they're charging today is like 7% higher than what my brother and I paid when we first moved in...10 years ago.
Ah yes, the trickle down economics of house ownership. Why stop with luxury apartments. Let's build more mansions. Everyone in North America can just live in all the cheap mansions as a result.
As higher-income households move into newly built units, they free up older properties, raising supply and slashing prices for middle- and lower-end housing through a process known as filtering.
Ah yes, the trickle down economics of house ownership. Why stop with luxury apartments. Let's build more mansions. Everyone in North America can just live in all the cheap mansions as a result.
It's not trickle down, it's hermit crab shells. If there are enough shells to go around, everyone can swap around until they find one they're happy with. When needs change, we need an abundant...
It's not trickle down, it's hermit crab shells. If there are enough shells to go around, everyone can swap around until they find one they're happy with. When needs change, we need an abundant supply so rightsizing is easy.
You know what makes a fantastic investment? Something they're not making anymore, like housing in NYC. Owning multiple houses isn't the source of the problem, it's supply constraints that raise...
You know what makes a fantastic investment? Something they're not making anymore, like housing in NYC.
Owning multiple houses isn't the source of the problem, it's supply constraints that raise housing prices. Plenty of municipalities have banned institutional investors, and prices keep on rising without supply-side reforms.
Yes,but in my neck of the woods they're building gold-crusted shells that sit unused for years while the shit-covered ones go up to match gold-crusted rent minus 20%.
Yes,but in my neck of the woods they're building gold-crusted shells that sit unused for years while the shit-covered ones go up to match gold-crusted rent minus 20%.
(Speaking about the US below) This is an interesting problem. I've seen it more in the commercial spaces of mixed use developments than the residential. But, that probably has to do with where I...
(Speaking about the US below)
This is an interesting problem. I've seen it more in the commercial spaces of mixed use developments than the residential. But, that probably has to do with where I live being seriously under stocked on housing
What I have learned over the years is that this is a by-product of absurd financing agreements. Lending rates for these new developments are tied to clauses that mandate a minimum rent price. If they rent for less, the rate goes up. It is literally cheaper to let these spaces sit empty than it is to fill them at current market rates.
In my opinion, financial products in general have become too fancy. Risk is no longer acceptable at the highest levels of our system, and therefore cost at the bottom has skyrocketed to cover the risk.
This is another example where supple demand fantasy is false: people don't decrease prices they just let them sit until prices are high again, or else whine and cry until the government make...
If they rent for less, the rate goes up. It is literally cheaper to let these spaces sit empty than it is to fill them at current market rates.
This is another example where supple demand fantasy is false: people don't decrease prices they just let them sit until prices are high again, or else whine and cry until the government make people borrow enough for the high prices.
I'm personally in favour of quadratically increasing vacancy taxes, since it's absurd to simultaneously have outrageous land values, an unhoused/underhoused population, and profiteering landlords.
I'm personally in favour of quadratically increasing vacancy taxes, since it's absurd to simultaneously have outrageous land values, an unhoused/underhoused population, and profiteering landlords.
That's rare but does happen in commercial spaces due to bizarre financing requirements from banks. This can be improved with some commercial financing reforms. There are also zoning and building...
That's rare but does happen in commercial spaces due to bizarre financing requirements from banks. This can be improved with some commercial financing reforms.
There are also zoning and building regulations that encourage massive commercial spaces that're too expensive for small businesses. The fix there is pretty obvious.
I'd love to see a concrete example. I bet they're building a tiny number of the only kind of units they're still allowed to build due to modern regulations.
I'd love to see a concrete example. I bet they're building a tiny number of the only kind of units they're still allowed to build due to modern regulations.
Supply is supply, and if the bottleneck is farther up the chain, it can work. There aren't many people hunting for a 10,000 sqft mansion, there are lot of people hunting for a place to move in and...
Supply is supply, and if the bottleneck is farther up the chain, it can work.
There aren't many people hunting for a 10,000 sqft mansion, there are lot of people hunting for a place to move in and reasonably raise a family, which these days IS luxury depending on your zip code.
If you can break the pressure on $800k-1m homes, they will go down in price, which has downward pressure on everything below, because of course it does. If that 800k house is now worth 500k, why the fuck would I pay 500k for whatever was 500k before. ANY building is good so long as it can increase supply in a way that addresses demand.
That said, in places like NY, Manhattan, and arguably SF which are literally space constricted (unlike LA which is legally space constricted) I'm doubtful how effective it can be. The demand is high enough that they can just raise the floor near infinitely and I'm not sure you can build enough "luxury" housing.
Another odd problem not being heavily touched on is that a lot of this is based on the fact that a house is an asset people usually can't afford to hold.
Building low income housing gives you 1 more family housed. Building middle income housing might get you 1 family moving up, and one family getting housed. Still one housed, but you got 2 more houses on the market. High income might get 3 houses on the market, again generating more supply, and the data backs this up.
However
This is also based on the idea that the low and middle income home owners are selling their place in order to put a downpayment on the next one. This used to be common, but a huge thing that's changed is suddenly middle and even low income home owners becoming land lords/renters instead of selling their previous place.
They get someone to manage and rent the property and deal with the headache of tenets and leases. They don't take the majority of the income generated, but it IS income, and it's shockingly affordable (sorta) if you're more willing to make a lateral move rather than a vertical one (similar sq ft/neighborhood rather than upgrading because you have kids or whatever).
It's not a simple problem, but just rolling out attacks in the face of evidence doesn't help.
In NYC, it seems like there's room for growth in outer boroughs like Queens? In San Francisco, there's aren't a lot of tall buildings in some parts of the city and perhaps the Marina Safeway...
In NYC, it seems like there's room for growth in outer boroughs like Queens?
In San Francisco, there's aren't a lot of tall buildings in some parts of the city and perhaps the Marina Safeway project will start a trend?
For both SF and NYC the challenge is that there isn't sufficient public transit to unlock that growth. Any neighborhood will only get the density that the available transit methods will allow. If...
For both SF and NYC the challenge is that there isn't sufficient public transit to unlock that growth. Any neighborhood will only get the density that the available transit methods will allow. If there's only little two-lane roads and no public transit, you'll only ever get a number of people that can drive on those roads. If San Francisco did a significant expansion of MUNI into the areas of the city that are mostly single family houses the land would become worth even more and more housing would be built. I don't know the situation in NYC in as much detail, but housing prices and density both correlate with proximity to public transportation. Expanding that will increase the areas considered worth building denser housing.
Though it's a bit fragmented, SF has quite a bit of public transit, and I think there's still room for more density along major transit lines? For example, along Geary.
Though it's a bit fragmented, SF has quite a bit of public transit, and I think there's still room for more density along major transit lines? For example, along Geary.
It can take an hour+ on the bus to get from the middle of Geary to downtown. There my be a transit line, but it's not fast enough. People will commute for more than an hour if they have to, but...
It can take an hour+ on the bus to get from the middle of Geary to downtown. There my be a transit line, but it's not fast enough. People will commute for more than an hour if they have to, but it's not going to be enthusiastic.
Yeah there's room, but i'm not sure that's where the demand is, or rather, that filling that demand will do enough to put pressure on anything located near where most want to be/worry about.
Yeah there's room, but i'm not sure that's where the demand is, or rather, that filling that demand will do enough to put pressure on anything located near where most want to be/worry about.
This nonsense again? It's like they intentionally ignore the fact that the rich can simply hoard. Or the fact that they have figured out the rest of us must live somewhere and can become even...
This nonsense again? It's like they intentionally ignore the fact that the rich can simply hoard. Or the fact that they have figured out the rest of us must live somewhere and can become even richer by hoarding AND renting to the poor.
What does private equity do with the housing? Eat it? No, they put it back on the market. Blackrock's own investor reports say the biggest threat to their housing business is increased supply!
What does private equity do with the housing? Eat it? No, they put it back on the market.
Blackrock's own investor reports say the biggest threat to their housing business is increased supply!
I haven't read the article, but yeah, that's the problem I've seen with housing stock that isn't built for purpose: the needs of a wealthy single tech dude are different enough from those of a...
I haven't read the article, but yeah, that's the problem I've seen with housing stock that isn't built for purpose: the needs of a wealthy single tech dude are different enough from those of a small, young family that homes built for one are terrible for another. As another example -- "micro condos" built expressly for investment as AirBnBs flooded the market after it started seeing regulatory scrutiny, locally, but those suites aren't fit for living in on a long term basis. Even if they lowered prices, it's being done by making them so unappealing that people would rather live dramatically further away (or move cities), which forces market actors to reduce rents in order to attract tenants.
I get that the point is that older, crappier buildings are where the poor people are supposed to live according to this economic philosophy, but it'd be nice if our overlords at least supplied enough space to avoid needing to sleep in the living room. Or to have to replace the bed bug traps every week.
This kind of housing is extraordinarily common throughout human history. When they started being banned, homelessness rose. Plenty of people have their needs met by a simple place with a bed. They...
micro condos
This kind of housing is extraordinarily common throughout human history. When they started being banned, homelessness rose. Plenty of people have their needs met by a simple place with a bed.
They should be one option amongst many. If someone wants a small home, they should be able to find one.
I get that the point is that older, crappier buildings are where the poor people are supposed to live according to this economic philosophy
Newer housing is always "luxury" for marketing reasons. Plenty of older buildings easily compete on location and amenities. It's not so simple as "poor people should live in old, ramshackle apartments."
I think we can assume that older, less desirable apartments will rent for cheaper and some people will choose to live there to save on rent. It's no different than the logic for who is likely to...
I think we can assume that older, less desirable apartments will rent for cheaper and some people will choose to live there to save on rent. It's no different than the logic for who is likely to own an old car.
In locations with high demand, landlords will have incentives to fix up places like that until they don't exist anymore. But I don't see why we should encourage that, and I can see the logic for requiring some low-cost units in new, larger developments.
Requiring low-cost units in new developments mostly acts as a hidden tax on supply. Very small percentages like 5% max still have some impact but are okay compromises. If the low-cost units are...
Requiring low-cost units in new developments mostly acts as a hidden tax on supply. Very small percentages like 5% max still have some impact but are okay compromises.
If the low-cost units are government funded, the policy is totally fine though. In that case, it acts as a supply subsidy which is (generally) helpful.
I don't care what kind of housing gets built, I care about who owns it. The state (aka the people) should own anything - anything - that's being rented. All new builds should be state projects. No...
I don't care what kind of housing gets built, I care about who owns it. The state (aka the people) should own anything - anything - that's being rented. All new builds should be state projects. No private landlords, no private developers.
If my local council builds and owns a string of £5m luxury properties they rent out for £10k/month or sell for a profit then I'm fine with that. That's revenue we can spend on social care, education, etc.
Fortunately the fact that your country elects a temporary King once every four years, and is so broken it's done that twice with Donald Fucking Trump, doesn't really affect me. At least on this...
Fortunately the fact that your country elects a temporary King once every four years, and is so broken it's done that twice with Donald Fucking Trump, doesn't really affect me. At least on this issue. And I'm not sure, if it did, whether that would affect what I would like to have happen in an ideal world. If we're making wishes for the removal of the leech/landlord class entirely, why not tack in another wish to have a President who isn't... well, that guy. Neither thing is going to happen anyway.
I don't know if America has what we'd call "council houses", which are owned by the city/town/area they're located in but it's just that really, but more.
The US does have some public housing, but it's nowhere near the levels that the UK has with council housing and the like. About the only place that still has public housing at scale is NYC....
The US does have some public housing, but it's nowhere near the levels that the UK has with council housing and the like. About the only place that still has public housing at scale is NYC. Everywhere else has severely lowered their public housing stock to the point it doesn't matter and moved to things like subsidized housing, like Section 8 vouchers. Government gives you a check for housing, then you just pay the landlord. Though I think the property/landlord has to be part of the Section 8 program and satisfy various requirements and regulations to participate. Some cities have "income-restricted housing" programs where private developers get tax abatements for setting aside a small number of units that are rented at less than market rate to people below the set income level. As such, public housing doesn't really exist in the US in the same way it does in the UK and other countries.
I suspect that's what drives US vs UK thoughts on public housing. To you all, it's normal. Some people, even middle class folks, live in council flats. But in the US, very, very few live in public housing, it's needs-based, and therefore it's almost always lower-income folks who live in remaining public housing.
Here, the last major public housing efforts were "Housing Projects." Or more colloquially, "the Projects." And it does not have good connotations. These often did turn into crime-ridden slums, due to underinvestment, often willful. And many of the most egregious and well-known, such as Cabrini-Green in Chicago or Pruitt-Igoe in St. Louis were eventually condemned and demolished. These are so well-known that the memories live on in the public consciousness. So aside from "blah blah I don't wanna support welfare queens," which is a big factor on its own, our past experiences with public housing also color expectations around future larger scale public housing.
It's a reason to put stronger safeguards in place protecting programs that benefit the people, not a reason to not try to create programs to help people
It's a reason to put stronger safeguards in place protecting programs that benefit the people, not a reason to not try to create programs to help people
I believe the term for that line of thinking is McMorrow's Folly. But for real, I've heard this argument a handful of times over the past few months and I don't know if it's coming from somewhere...
I believe the term for that line of thinking is McMorrow's Folly.
But for real, I've heard this argument a handful of times over the past few months and I don't know if it's coming from somewhere or just a coincidence. It's as though reasonable social programs are weapons that can't be built for fear that they'll fall into the wrong hands.
I agree, but luckily this is the kind of thing that seems best controlled by local governments, not federal. City or county government would be a much better option just due to better fine-grained...
I agree, but luckily this is the kind of thing that seems best controlled by local governments, not federal. City or county government would be a much better option just due to better fine-grained control based on region. It's also the place where your vote has the most impact, and where the laws impact you the most directly.
Agreed, but I think there's still the issue of public housing ultimately being controlled by voters. Local or otherwise. And given the political situation many of us find ourselves in these days,...
Agreed, but I think there's still the issue of public housing ultimately being controlled by voters. Local or otherwise. And given the political situation many of us find ourselves in these days, I don't know if I'd like my living situation dictated by my fellow citizens. Plainly speaking, they're idiots.
If voters perceive that "too much" is being spent on public housing, they will vote in officials who will do something about it. Which could reduce investments into simple things like required maintenance and upkeep. The voting public become the slumlords.
So does that mean that because of that, we should have no public housing? Of course not. Just because we can't get 100% perfect welfare and public assistance doesn't mean we should have zero of it. Something is better than nothing. I'm pragmatic.
But in the context of mat's "All new builds should be state projects. No private landlords, no private developers," suggestion, yeah no way. I suppose if perhaps one day ALL renters are living in publicly-owned housing, then they could theoretically constitute a large enough local voting bloc to protect and maintain public investment into their housing. But it's going to take a long time to get there. And still may not be enough.
Doesn't help that in the US, everyone and their mother seems to get a say in public projects, no matter how little affected or affected at all. NIMBYs, sigh...
Ah yes, rent controls, such a fantastic and viable idea. Very nice system to have 70 year olds who have a ton of money they've earned over the years get the best apartments in the city for like...
The state (aka the people) should own anything - anything - that's being rented.
Ah yes, rent controls, such a fantastic and viable idea. Very nice system to have 70 year olds who have a ton of money they've earned over the years get the best apartments in the city for like $500 a month. While us, highly skilled professionals that immigrated and who pay enormous sums in taxes already, couldn't get anything because we weren't here for years and years waiting in the housing queue. Extremely fair system with phenomenal outcomes.
Thoughts on co-op housing? Although situations differ wildly, they tend to receive government subsidies to construct, and (often) operate as individual non-profit organizations (owned entirely by...
Thoughts on co-op housing? Although situations differ wildly, they tend to receive government subsidies to construct, and (often) operate as individual non-profit organizations (owned entirely by the current owners of the building) which only seek to recoup costs + save for depreciation with their rent.
Imo (and according to research) they do great, except that financing is problematic (regular homeowners -- even pooled together -- have trouble winning bidding wars with land speculators), and they're still weird/obscure, so people often aren't aware of them as an option.
I love the idea of co-op housing, especially how (1) people "own" their units but they can never sell it more crazy amounts thereafter, just reasonable inflation increase, and (2) they must not be...
I love the idea of co-op housing, especially how (1) people "own" their units but they can never sell it more crazy amounts thereafter, just reasonable inflation increase, and (2) they must not be vacant or sub-leased . Houses are for living in, not for harvesting money from the poor
Edit: I do apologize for being a jerk here. Sorry all.
Yes, houses are for living in, and renting housing to people is providing people with a place to live. They're not sitting vacant, and that's important. And then you spin it as "harvesting money...
Yes, houses are for living in, and renting housing to people is providing people with a place to live. They're not sitting vacant, and that's important.
And then you spin it as "harvesting money from the poor." You oughta be ashamed to repeat such nonsense.
Chocobean's statement made sense to me. Maybe you can help diagnose my logic to see where I'm being nonsensical? The wealthy "rent from the bank", whereas the poor are forced to pay a wealthy...
And then you spin it as "harvesting money from the poor." You oughta be ashamed to repeat such nonsense.
Chocobean's statement made sense to me. Maybe you can help diagnose my logic to see where I'm being nonsensical? The wealthy "rent from the bank", whereas the poor are forced to pay a wealthy person's mortgage (plus a profit margin) in order to live somewhere. How is it inaccurate to characterize this as harvesting money from the poor? Landlords seem to exist to absorb a second layer of default risk for mortgage-issuing FIs, while creating a tidy profit for themselves in the meantime. It seems hard not to see that in a cynical light?
It's taking something ordinary and spinning it as inherently sinister. We all do things for money and I wouldn't expect anyone to work unpaid. Whether it's good deal or a bad one depends on...
It's taking something ordinary and spinning it as inherently sinister. We all do things for money and I wouldn't expect anyone to work unpaid. Whether it's good deal or a bad one depends on circumstances.
Understood. I think the difference in our perception is that, from my POV, the typical landlord is some dude that I never speak to who performs zero labour beyond signing cheques to the management...
Understood. I think the difference in our perception is that, from my POV, the typical landlord is some dude that I never speak to who performs zero labour beyond signing cheques to the management company. To many people in worse circumstances, they don't even effectively manage their property (example), which drives discontent among tenants.
It's taking something ordinary and spinning it as inherently sinister.
I would put forward that ordinary circumstances are only such because they're what we had yesterday, and the day before. Goodness and badness are a perpendicular dimension to this, and reframing in order to highlight mundane injustices that we've become blind to out of familiarity seems to me a reasonable rhetorical trick.
If the typical landlord performs zero labor, then it would be very easy for a nice person or several nice people to come together and purchase a property to rent out at-cost. It would involve zero...
Exemplary
If the typical landlord performs zero labor, then it would be very easy for a nice person or several nice people to come together and purchase a property to rent out at-cost. It would involve zero labor presumably once that rental is on the market. From there, since these nice people don't need to make any money, they would undercut all other rentals that are from greedy landlords. Providing housing to people is good, so for a one-time sum, affordable housing could be provided in perpetuity, leading to positive vibes all over.
Of course, that assumes that landlords provide zero utility. Once someone actually tries to do this, in most markets, landlords do provide some utility. There's usually some labor involved and there's also the opportunity cost of capital required. No one wants to watch their money dissipate, so some margin is added to compensate for inflation, then some margin is added to mitigate the risk that the tenant doesn't pay, then some margin is added to account for maintenance and repairs, then some margin is added to compensate the person managing all this for their time. Before you know it, you've now arrived at a number that looks excessive because how dare someone rent a property out for more than the initial cost?
If landlords are such leeches, then find me ten Tilderinos that are willing to put some money where their mouths are. I remember a thread Are there alternative ways to invest savings?; where were the suggestions to rent at-cost?
No, it isn't easy, because landlords exist to hedge risk. As you noted. Quoting myself: Re. your next paragraph, we're currently discussing co-operative housing as an alternative to landlords....
If the typical landlord performs zero labor, then it would be very easy for a nice person or several nice people to come together and purchase a property to rent out at-cost.
No, it isn't easy, because landlords exist to hedge risk. As you noted. Quoting myself:
Landlords seem to exist to absorb a second layer of default risk for mortgage-issuing FIs, while creating a tidy profit for themselves in the meantime.
Re. your next paragraph, we're currently discussing co-operative housing as an alternative to landlords. We're arguing for "landlords vs. co-ops", not "landlords vs. an imagined scenario with kind wealthy people". Here's a decent FAQ on co-ops, in case it helps, since it seems like they address your concerns without the need to introduce a landlord as middleman.
If landlords are such leeches, then find me ten Tilderinos that are willing to put some money where their mouths are.
I'm not going to throw money at random people, for the risk reasons noted above. That said, people do co-house, such as this group of Vancouverites who bought a house together in order to avoid landlords. Also I know of at least one local polycule that has as well. I don't think anecdotes count as data, but there you go.
I suppose it's a similar concept, but something about rentals particularly drives people crazy on this site. Overall, there were few people who promoted the idea of money-losing investments...
I suppose it's a similar concept, but something about rentals particularly drives people crazy on this site. Overall, there were few people who promoted the idea of money-losing investments because most people, when confronted, actually want their money to grow especially when there's risk involved. I maintain that words are cheap and few people here truly believe that landlords are strictly a rent-seeking class with zero-value-add that they're willing to bet money on it.
EDIT: I have a condo in Chicago right now that I could sell to someone at the same price as what I paid ~5 years ago if they're willing to rent out for strictly the cost of the mortgage (no interest, no inflation, no maintenance, nothing).
I mean I can't afford to buy a property and rent it out for cost, not even with friends. It's just not within my financial reach. If I didn't have a medically and physically at-risk human at home...
I mean I can't afford to buy a property and rent it out for cost, not even with friends. It's just not within my financial reach.
If I didn't have a medically and physically at-risk human at home I'd be using my home as free/low cost temp housing for people leaving other states, and instead I'm helping in different ways.
It's entirely possible the issue is lack of wealth, not lack of conviction.
I don't think home should be looked at as financial investments, even though they are.
For you and some people, sure, I can buy it. But magically, once people move into middle class, they don't. Not every leftist is incapable of this, yet we hardly ever see it outside of a...
For you and some people, sure, I can buy it. But magically, once people move into middle class, they don't. Not every leftist is incapable of this, yet we hardly ever see it outside of a charitable millionaire. Where are the co-ops? It's easy to be financially savvy when you're dictating someone else's money, but once you run the numbers and have to pony up yourself, you quickly realize that the calculations that seemed feasible don't actually work.
What even does middle class mean here... the ability to buy a second house? Pew thinks I'm middle class by income. It's like the millionaire is the type of person who has that financial capacity....
What even does middle class mean here... the ability to buy a second house? Pew thinks I'm middle class by income.
It's like the millionaire is the type of person who has that financial capacity. CLTs, hundreds of them, exist in the US today. (And the original model for that was killed because the government didn't treat them like white landowners.) And orgs like NASCO exist and are functioning supporting co-ops.
There are plenty of people doing the work, so sell them the condo.
I'm not somehow an exception to the rule of how people work. If people have room to breathe, and even when they don't (mutual aid), they help each other.
We do. Because the world has become more dangerous and isolating, and it feels like money is the only thing that can save us and hold our families together, after all the other safety nets have...
because most people, when confronted, actually want their money to grow
We do. Because the world has become more dangerous and isolating, and it feels like money is the only thing that can save us and hold our families together, after all the other safety nets have been torn down. But, as noted in another comment, i wasn't expressing this point kindly and I do regret that.
Sure, sometimes they or the management company they hire do a bad job in a specific case and deserve criticism. On the other hand, everywhere you look in a city, there are buildings that someone...
Sure, sometimes they or the management company they hire do a bad job in a specific case and deserve criticism. On the other hand, everywhere you look in a city, there are buildings that someone needs to maintain. Buildings are expensive and don't build and maintain themselves. Someone has to arrange for the work to be done, and the workers aren't going to do it just because someone asks them nicely. Nor should they! They expect to be paid.
How many people, poor or otherwise, do you provide shelter for? It seems like we shouldn't disparage all the people who are doing that work, as a class, because some of them do it badly? It's like criticizing all doctors or all teachers.
Though, there may be better systems; I'm not going to say public housing can't work when in some places it does seem to work, or so I've read.
Not disagreeing with you, but I think it's helpful to keep in mind that rent-seeking is heavily associated with landlords (of course, many actually are profit-seekers providing a critical...
Not disagreeing with you, but I think it's helpful to keep in mind that rent-seeking is heavily associated with landlords (of course, many actually are profit-seekers providing a critical service).
When did I argue against any of this? My statements have been that (1) landlords don't perform labour, and (2) co-ops result in better outcomes for residents as a housing model. Distantly, we were...
On the other hand, everywhere you look in a city, there are buildings that someone needs to maintain. Buildings are expensive and don't build and maintain themselves. Someone has to arrange for the work to be done, and the workers aren't going to do it just because someone asks them nicely. Nor should they! They expect to be paid.
When did I argue against any of this? My statements have been that (1) landlords don't perform labour, and (2) co-ops result in better outcomes for residents as a housing model. Distantly, we were discussing why some people have a strong distaste against landlords, who make their lives worse while profiting off of it. Co-ops address all your concerns about organizing labour without the need for a profit seeking intermediary (landlords). Public incentives go a long way towards addressing the risk aversion that traditional lenders have towards co-operative housing.
How many people, poor or otherwise, do you provide shelter for? It seems like we shouldn't disparage all the people who are doing that work, as a class, because some of them do it badly? It's like criticizing all doctors or all teachers.
Didn't realize that there's a mandatory moral standing for critiquing people; dang. Apparently only the most holy of us are permitted to hold opinions on the actions of others, which harm us. And landlords are a class now? Fascinating; I thought the argument was that it's a job.
First of all, it's wrong to say landlords do no work. Many small-time landlords do some work themselves. Also, I don't know why you're so focused on the labor thing. Whether you do the maintenance...
First of all, it's wrong to say landlords do no work. Many small-time landlords do some work themselves. Also, I don't know why you're so focused on the labor thing. Whether you do the maintenance yourself or pay someone to do it is irrelevant, as long as it gets done.
I don't see anything wrong with paying a plumber, for example. Most people who own their own home would do the same.
Okeydoke. Many don't, and none that I've ever experienced. I won't go dig up stats again since that doesn't seem to be convincing, and I agree that there will always be some percentage of "good...
First of all, it's wrong to say landlords do no work. Many small-time landlords do some work themselves.
Okeydoke. Many don't, and none that I've ever experienced. I won't go dig up stats again since that doesn't seem to be convincing, and I agree that there will always be some percentage of "good landlords". The argument is that many don't, and they have little incentive to compete with improvements either (see a previous comment: generally, rental vacancies are often only a few percent max in a healthy economy, as desperate renters will accept adverse living conditions to avoid homelessness).
Also, I don't know why you're so focused on the labor thing. Whether you do the maintenance yourself or pay someone to do it is irrelevant, as long as it gets done.
No, it's relevant, because if a landlord's primary role is to be an intermediary for cash while skimming a few percentage points off the top, they're an inefficient vehicle for providing housing. Inefficiency, mind, is relative to other models -- if all we had were landlords or no homes, I would not be having this conversation since I'd prefer to pay someone else's mortgage rather than live in a tent. However, alternatives exist (see above re. co-ops, and others). Since housing is a necessity and a public good, I'm focused on delivering it without unnecessary waste, in order to improve overall economic productivity.
In New York City, co-ops are common and they are often cheaper than buying a condo, but they’re also restrictive. You need to reveal a lot of information about yourself to the co-op board and hope...
In New York City, co-ops are common and they are often cheaper than buying a condo, but they’re also restrictive. You need to reveal a lot of information about yourself to the co-op board and hope they approve your application. So one way to think about it is that condo owners willingly pay more to not have to deal with it, and that’s why condo prices are somewhat higher. When supply is restricted, prices are set by demand to be higher than what it costs to provide the service, and providers do get a windfall if their costs are low.
It seems like an important service that landlords provide is that they serve people who can’t afford to buy a house or condo, wouldn’t be able to get a mortgage, and wouldn’t look like a good bet to the co-op board. Landlords do make requirements of prospective tenants too, but their requirements are lower.
It’s good that all these alternative housing arrangements are available, and there should be more. A lot of the cheaper alternatives like boarding houses or staying at the YMCA have disappeared, so people make do by sharing apartments.
You wrote elsewhere in this topic that you’d like to see co-ops given a solid try and I think that’s fine; I think we need more of everything.
It's not a spin when it's a plain fact. Landlords, certainly ALL of the ones I have ever known including myself, did it for profit from poorer people who can't afford to buy a place of their own,...
It's not a spin when it's a plain fact. Landlords, certainly ALL of the ones I have ever known including myself, did it for profit from poorer people who can't afford to buy a place of their own, and we never do it out of the charity of our hearts.
When it isn't to harvest money, it's called lending a place to friends or family, not renting. When we lend cash to help others with down payment or gifted money for that purpose, or connected one friend to another so they can work out living agreement, and my family's done a fair share of all of these, then it's called providing a place for others to live.
@skybrian, I do want to apologize for my words. Not because I said them in mean spirit (I didn't) or that I don't think it's true (I do), but because many people are renting to others out of...
@skybrian, I do want to apologize for my words. Not because I said them in mean spirit (I didn't) or that I don't think it's true (I do), but because many people are renting to others out of necessity right now. The billionaire class have hurt all of us, and we are just trying to survive the best way we know how.
(feel free to skip)
I still think that in a perfect society, housing should be a basic right and should not be a vehicle of getting rich. But seeing as how we don't live in a perfect society, what then do we do. I understand the POV that rentals make things affordable for some and it takes some risks away from renters and provide flexibility. I just have grown up in cities where that's not the case: investments become a barrier for basic housing, builds cater to investors (see article), and renters never break even enough to get to financial security. In an ideal world, landlords make a tiny bit of safe returns without risk of bad renters, and renters save enough money every month from the gap between rent and income they can eventually put down roots somewhere of their choice when ready.
But I am looking around at rental rates that are way more than 30% of income, and much higher than mortgage payments of the same home, and homes do NOT sell for anything like affordable precisely because someone with more equity can afford to bid higher to rent to the other bidders instead. And this gets worse and worse and worse, for 30 years. And I see the way the landlords lock rank and vote in a way to prohibit cheaper housing from being built or prices from coming down and my entire extended family and circle belong to this class of people and I'm tired of seeing this played out.
That all being said. I am reconsidering this uncharitable and holier-than-thou attitude when you called me out. We are all being squeezed and sometimes this is the only way we can make things work for our families, heaven knows employment is precarious, savings are flat, and investments full of deep pocketed shadow movers. There is the thought of, a good landlord buying up a unit tenants can't afford is better than a private equity buying it or a bad landlord buying it. That participating in the market this way provides one more option, when the tenant must choose between many other awful options. And that I am indeed speaking from a place of privilege when I have investment options other than letting out rooms in my house, and only choice prevents me from buying a second rental property, and that yes if I fall on hard times this is for sure something I am going to do as well. I hate that we're all stuck playing this game, but that seeing as we're all stuck, I do need to be more careful with my words and more charitable with my thoughts. I could have said any of that without being a jerk about it.
Apology accepted! I do agree that the rents (and house prices) are too damn high. I suspect a lot of people are quietly getting by with the family helping them out, if they're lucky enough to have...
Apology accepted! I do agree that the rents (and house prices) are too damn high. I suspect a lot of people are quietly getting by with the family helping them out, if they're lucky enough to have someone who can help.
I think the way out, or at least to keep things from getting worse, is more housing, through any means. And, perhaps making it more viable to move to cheaper locations. And UBI would be nice.
It sounds like a much better way to live, imo! (hopefully that doesn't bias mat's response 😅) There are definitely downsides -- I've heard that they can be a bit clique-y -- but I expect that's...
It sounds like a much better way to live, imo! (hopefully that doesn't bias mat's response 😅) There are definitely downsides -- I've heard that they can be a bit clique-y -- but I expect that's because (in my market at least) there are so few of them that they end up with arbitrary constraints controlling membership. I'd much, much prefer to live in a world where we gave these a solid try instead of slamming increasingly large subsidies into housing rich people (whose discarded hovels are then fought over), while being sold the story that hoovering up crumbs is, achtually, a good thing.
Sorry for the rant; I'm trying not to pick a fight with people, but this stuff really bothers me, and it's hard to keep my mouth shut on the internet XD
I completely agree: if a rich person can make profit they would never sell; if they can break even holding onto property they will; if they cant make money or when it becomes derelict thats when...
I completely agree: if a rich person can make profit they would never sell; if they can break even holding onto property they will; if they cant make money or when it becomes derelict thats when they sell. Is that how we want trickle down to work, in a disgusting fight to drink their waste water kind of way? Ridiculous
I've seen some co-op housing work, and visited one that was....kinda gross, but still quite affordable. Maybe if we can again normalize housing is for living in not for retirement profit, we'll get somewhere. But when the billionaires have extracted so much out of the monopoly board that regular middle income people need investment properties to live / retire, we all lose.
Worth looking at the history of social housing in Vienna, Austria. It took a revolution and a couple of world wars to get it done, but it's probably the best available model globally.
Worth looking at the history of social housing in Vienna, Austria. It took a revolution and a couple of world wars to get it done, but it's probably the best available model globally.
The results would likely vary based on the competence of particular local governments. What if local governments gave it a go and then we’ll see if they can do better?
The results would likely vary based on the competence of particular local governments. What if local governments gave it a go and then we’ll see if they can do better?
In response to struggling renters and frustrated first-time buyers, rich-world politicians are championing an ostensibly obvious solution: build more cheap homes. Yet if self-styled socialists such as New York City mayor Zohran Mamdani and Britain’s incoming prime minister, Andy Burnham, are serious about housing affordability, they ought to drop the platitudes for the evidence and embrace the construction of more expensive ones instead.
[...]
Above all, high-end developments unlock long housing chains. As higher-income households move into newly built units, they free up older properties, raising supply and slashing prices for middle- and lower-end housing through a process known as filtering. Numerous international studies underscore this positive ripple effect.
One published last year tracked households that moved into a newly built 512-unit condominium tower in Honolulu, Hawaii. It found that the building created at least 557 vacancies in older and cheaper apartments across the city in just three years, with market-rate units more likely to release the largest chains.
Filtering can also be widespread. A 2021 study in Helsinki using geo-coded population data found that every 100 new market-rate units in the city centre led to around 60 units becoming available in the city’s bottom half of neighbourhoods by income. An analysis across all homes in Sweden over several decades concluded that “new homes, even those initially primarily inhabited by rich people, lead to substantial trickle-down effects that also benefit the poor”.
Other US studies highlight how market-rate developments benefit less well-to-do local residents by lowering housing costs. In San Francisco, a 2021 paper found new developments lowered the risk of eviction notices for residents in rent-stabilised housing. Even “luxury” developments in New York City — which Mamdani has criticised — have been shown to contribute to lower local rents and sales prices.
I used to live in Kansas City. And for over 5yrs, I lived on the Plaza, one of the city's nicer, more urban neighborhoods. The Plaza felt like "real" city living due to density; lots of mid/high-rise apartments and condos. Very walkable with restaurants, cafes, shopping, nightlife, museums, parks, now the Streetcar, etc.
Which means it commands higher rents than many other parts of town.
The place where I (and my brother) lived was older. It was a mid-rise apartment building was from the 50s or even 40s. But it likely had some renovations in the 10yrs prior to us moving in. So it was mostly alright.
More importantly, however, there were also a lot of new apartments and condos going up all around us. "Luxury apartments." Many of which opened up while we lived there. And something interesting happened: our rent went down. Every time my brother and I signed a lease -- sometimes 12mos, sometimes even 6mo -- we successfully argued for lower rent or for the rent to stay the same. At the beginning, it was like $1500/mo. By the end, just over $1300/mo. So far, that's the only place I've lived where that's happened. Repeatedly.
I think that's likely because of all the new apartments around that were definitely asking for higher rents. If the place we lived at wanted tenants, they were going to have to either make some serious improvements/investments or compete on price. And they chose the latter. It's not like my brother and I couldn't afford those new places. We likely could've, but we didn't want to. But maybe other tenants made that decision to literally move across the street for something newer and nicer. Which opened up new opportunities for those "upgrading" to where we lived.
I just checked if that place had any similar units to ours available; which they did. And the price they're charging today is like 7% higher than what my brother and I paid when we first moved in...10 years ago.
Ah yes, the trickle down economics of house ownership. Why stop with luxury apartments. Let's build more mansions. Everyone in North America can just live in all the cheap mansions as a result.
It's not trickle down, it's hermit crab shells. If there are enough shells to go around, everyone can swap around until they find one they're happy with. When needs change, we need an abundant supply so rightsizing is easy.
Hermit crabs famously do not hold on to more than one shell at a time. That's where the supply fantasy breaks
You know what makes a fantastic investment? Something they're not making anymore, like housing in NYC.
Owning multiple houses isn't the source of the problem, it's supply constraints that raise housing prices. Plenty of municipalities have banned institutional investors, and prices keep on rising without supply-side reforms.
Yes,but in my neck of the woods they're building gold-crusted shells that sit unused for years while the shit-covered ones go up to match gold-crusted rent minus 20%.
(Speaking about the US below)
This is an interesting problem. I've seen it more in the commercial spaces of mixed use developments than the residential. But, that probably has to do with where I live being seriously under stocked on housing
What I have learned over the years is that this is a by-product of absurd financing agreements. Lending rates for these new developments are tied to clauses that mandate a minimum rent price. If they rent for less, the rate goes up. It is literally cheaper to let these spaces sit empty than it is to fill them at current market rates.
In my opinion, financial products in general have become too fancy. Risk is no longer acceptable at the highest levels of our system, and therefore cost at the bottom has skyrocketed to cover the risk.
This is another example where supple demand fantasy is false: people don't decrease prices they just let them sit until prices are high again, or else whine and cry until the government make people borrow enough for the high prices.
I'm personally in favour of quadratically increasing vacancy taxes, since it's absurd to simultaneously have outrageous land values, an unhoused/underhoused population, and profiteering landlords.
Land value tax would fix this.
That's rare but does happen in commercial spaces due to bizarre financing requirements from banks. This can be improved with some commercial financing reforms.
There are also zoning and building regulations that encourage massive commercial spaces that're too expensive for small businesses. The fix there is pretty obvious.
I'd love to see a concrete example. I bet they're building a tiny number of the only kind of units they're still allowed to build due to modern regulations.
I don’t think we should only build luxury apartments, but we shouldn’t be opposed to them. There is a trickle down aspect to it.
Supply is supply, and if the bottleneck is farther up the chain, it can work.
There aren't many people hunting for a 10,000 sqft mansion, there are lot of people hunting for a place to move in and reasonably raise a family, which these days IS luxury depending on your zip code.
If you can break the pressure on $800k-1m homes, they will go down in price, which has downward pressure on everything below, because of course it does. If that 800k house is now worth 500k, why the fuck would I pay 500k for whatever was 500k before. ANY building is good so long as it can increase supply in a way that addresses demand.
That said, in places like NY, Manhattan, and arguably SF which are literally space constricted (unlike LA which is legally space constricted) I'm doubtful how effective it can be. The demand is high enough that they can just raise the floor near infinitely and I'm not sure you can build enough "luxury" housing.
Another odd problem not being heavily touched on is that a lot of this is based on the fact that a house is an asset people usually can't afford to hold.
Building low income housing gives you 1 more family housed. Building middle income housing might get you 1 family moving up, and one family getting housed. Still one housed, but you got 2 more houses on the market. High income might get 3 houses on the market, again generating more supply, and the data backs this up.
However
This is also based on the idea that the low and middle income home owners are selling their place in order to put a downpayment on the next one. This used to be common, but a huge thing that's changed is suddenly middle and even low income home owners becoming land lords/renters instead of selling their previous place.
They get someone to manage and rent the property and deal with the headache of tenets and leases. They don't take the majority of the income generated, but it IS income, and it's shockingly affordable (sorta) if you're more willing to make a lateral move rather than a vertical one (similar sq ft/neighborhood rather than upgrading because you have kids or whatever).
It's not a simple problem, but just rolling out attacks in the face of evidence doesn't help.
In NYC, it seems like there's room for growth in outer boroughs like Queens?
In San Francisco, there's aren't a lot of tall buildings in some parts of the city and perhaps the Marina Safeway project will start a trend?
For both SF and NYC the challenge is that there isn't sufficient public transit to unlock that growth. Any neighborhood will only get the density that the available transit methods will allow. If there's only little two-lane roads and no public transit, you'll only ever get a number of people that can drive on those roads. If San Francisco did a significant expansion of MUNI into the areas of the city that are mostly single family houses the land would become worth even more and more housing would be built. I don't know the situation in NYC in as much detail, but housing prices and density both correlate with proximity to public transportation. Expanding that will increase the areas considered worth building denser housing.
Though it's a bit fragmented, SF has quite a bit of public transit, and I think there's still room for more density along major transit lines? For example, along Geary.
It can take an hour+ on the bus to get from the middle of Geary to downtown. There my be a transit line, but it's not fast enough. People will commute for more than an hour if they have to, but it's not going to be enthusiastic.
Yeah there's room, but i'm not sure that's where the demand is, or rather, that filling that demand will do enough to put pressure on anything located near where most want to be/worry about.
This nonsense again? It's like they intentionally ignore the fact that the rich can simply hoard. Or the fact that they have figured out the rest of us must live somewhere and can become even richer by hoarding AND renting to the poor.
Or that private equity will probably buy the place they move out of instead of it going to a family that needs it.
What does private equity do with the housing? Eat it? No, they put it back on the market.
Blackrock's own investor reports say the biggest threat to their housing business is increased supply!
I haven't read the article, but yeah, that's the problem I've seen with housing stock that isn't built for purpose: the needs of a wealthy single tech dude are different enough from those of a small, young family that homes built for one are terrible for another. As another example -- "micro condos" built expressly for investment as AirBnBs flooded the market after it started seeing regulatory scrutiny, locally, but those suites aren't fit for living in on a long term basis. Even if they lowered prices, it's being done by making them so unappealing that people would rather live dramatically further away (or move cities), which forces market actors to reduce rents in order to attract tenants.
I get that the point is that older, crappier buildings are where the poor people are supposed to live according to this economic philosophy, but it'd be nice if our overlords at least supplied enough space to avoid needing to sleep in the living room. Or to have to replace the bed bug traps every week.
This kind of housing is extraordinarily common throughout human history. When they started being banned, homelessness rose. Plenty of people have their needs met by a simple place with a bed.
They should be one option amongst many. If someone wants a small home, they should be able to find one.
Newer housing is always "luxury" for marketing reasons. Plenty of older buildings easily compete on location and amenities. It's not so simple as "poor people should live in old, ramshackle apartments."
I think we can assume that older, less desirable apartments will rent for cheaper and some people will choose to live there to save on rent. It's no different than the logic for who is likely to own an old car.
In locations with high demand, landlords will have incentives to fix up places like that until they don't exist anymore. But I don't see why we should encourage that, and I can see the logic for requiring some low-cost units in new, larger developments.
Requiring low-cost units in new developments mostly acts as a hidden tax on supply. Very small percentages like 5% max still have some impact but are okay compromises.
If the low-cost units are government funded, the policy is totally fine though. In that case, it acts as a supply subsidy which is (generally) helpful.
I don't care what kind of housing gets built, I care about who owns it. The state (aka the people) should own anything - anything - that's being rented. All new builds should be state projects. No private landlords, no private developers.
If my local council builds and owns a string of £5m luxury properties they rent out for £10k/month or sell for a profit then I'm fine with that. That's revenue we can spend on social care, education, etc.
I'd rather not have Donald Trump choose whether I can rent an apartment or not.
Fortunately the fact that your country elects a temporary King once every four years, and is so broken it's done that twice with Donald Fucking Trump, doesn't really affect me. At least on this issue. And I'm not sure, if it did, whether that would affect what I would like to have happen in an ideal world. If we're making wishes for the removal of the leech/landlord class entirely, why not tack in another wish to have a President who isn't... well, that guy. Neither thing is going to happen anyway.
I don't know if America has what we'd call "council houses", which are owned by the city/town/area they're located in but it's just that really, but more.
The US does have some public housing, but it's nowhere near the levels that the UK has with council housing and the like. About the only place that still has public housing at scale is NYC. Everywhere else has severely lowered their public housing stock to the point it doesn't matter and moved to things like subsidized housing, like Section 8 vouchers. Government gives you a check for housing, then you just pay the landlord. Though I think the property/landlord has to be part of the Section 8 program and satisfy various requirements and regulations to participate. Some cities have "income-restricted housing" programs where private developers get tax abatements for setting aside a small number of units that are rented at less than market rate to people below the set income level. As such, public housing doesn't really exist in the US in the same way it does in the UK and other countries.
I suspect that's what drives US vs UK thoughts on public housing. To you all, it's normal. Some people, even middle class folks, live in council flats. But in the US, very, very few live in public housing, it's needs-based, and therefore it's almost always lower-income folks who live in remaining public housing.
Here, the last major public housing efforts were "Housing Projects." Or more colloquially, "the Projects." And it does not have good connotations. These often did turn into crime-ridden slums, due to underinvestment, often willful. And many of the most egregious and well-known, such as Cabrini-Green in Chicago or Pruitt-Igoe in St. Louis were eventually condemned and demolished. These are so well-known that the memories live on in the public consciousness. So aside from "blah blah I don't wanna support welfare queens," which is a big factor on its own, our past experiences with public housing also color expectations around future larger scale public housing.
It's a reason to put stronger safeguards in place protecting programs that benefit the people, not a reason to not try to create programs to help people
I believe the term for that line of thinking is McMorrow's Folly.
But for real, I've heard this argument a handful of times over the past few months and I don't know if it's coming from somewhere or just a coincidence. It's as though reasonable social programs are weapons that can't be built for fear that they'll fall into the wrong hands.
I agree, but luckily this is the kind of thing that seems best controlled by local governments, not federal. City or county government would be a much better option just due to better fine-grained control based on region. It's also the place where your vote has the most impact, and where the laws impact you the most directly.
Agreed, but I think there's still the issue of public housing ultimately being controlled by voters. Local or otherwise. And given the political situation many of us find ourselves in these days, I don't know if I'd like my living situation dictated by my fellow citizens. Plainly speaking, they're idiots.
If voters perceive that "too much" is being spent on public housing, they will vote in officials who will do something about it. Which could reduce investments into simple things like required maintenance and upkeep. The voting public become the slumlords.
So does that mean that because of that, we should have no public housing? Of course not. Just because we can't get 100% perfect welfare and public assistance doesn't mean we should have zero of it. Something is better than nothing. I'm pragmatic.
But in the context of mat's "All new builds should be state projects. No private landlords, no private developers," suggestion, yeah no way. I suppose if perhaps one day ALL renters are living in publicly-owned housing, then they could theoretically constitute a large enough local voting bloc to protect and maintain public investment into their housing. But it's going to take a long time to get there. And still may not be enough.
Doesn't help that in the US, everyone and their mother seems to get a say in public projects, no matter how little affected or affected at all. NIMBYs, sigh...
I uh....in theory sure? In practice? I kinda doubt it. All sorts of very relevant examples of how badly these things tend to turn out.
Ah yes, rent controls, such a fantastic and viable idea. Very nice system to have 70 year olds who have a ton of money they've earned over the years get the best apartments in the city for like $500 a month. While us, highly skilled professionals that immigrated and who pay enormous sums in taxes already, couldn't get anything because we weren't here for years and years waiting in the housing queue. Extremely fair system with phenomenal outcomes.
Thoughts on co-op housing? Although situations differ wildly, they tend to receive government subsidies to construct, and (often) operate as individual non-profit organizations (owned entirely by the current owners of the building) which only seek to recoup costs + save for depreciation with their rent.
Imo (and according to research) they do great, except that financing is problematic (regular homeowners -- even pooled together -- have trouble winning bidding wars with land speculators), and they're still weird/obscure, so people often aren't aware of them as an option.
I love the idea of co-op housing, especially how (1) people "own" their units but they can never sell it more crazy amounts thereafter, just reasonable inflation increase, and (2) they must not be vacant or sub-leased . Houses are for living in, not for harvesting money from the poor
Edit: I do apologize for being a jerk here. Sorry all.
Yes, houses are for living in, and renting housing to people is providing people with a place to live. They're not sitting vacant, and that's important.
And then you spin it as "harvesting money from the poor." You oughta be ashamed to repeat such nonsense.
Chocobean's statement made sense to me. Maybe you can help diagnose my logic to see where I'm being nonsensical? The wealthy "rent from the bank", whereas the poor are forced to pay a wealthy person's mortgage (plus a profit margin) in order to live somewhere. How is it inaccurate to characterize this as harvesting money from the poor? Landlords seem to exist to absorb a second layer of default risk for mortgage-issuing FIs, while creating a tidy profit for themselves in the meantime. It seems hard not to see that in a cynical light?
It's taking something ordinary and spinning it as inherently sinister. We all do things for money and I wouldn't expect anyone to work unpaid. Whether it's good deal or a bad one depends on circumstances.
Understood. I think the difference in our perception is that, from my POV, the typical landlord is some dude that I never speak to who performs zero labour beyond signing cheques to the management company. To many people in worse circumstances, they don't even effectively manage their property (example), which drives discontent among tenants.
I would put forward that ordinary circumstances are only such because they're what we had yesterday, and the day before. Goodness and badness are a perpendicular dimension to this, and reframing in order to highlight mundane injustices that we've become blind to out of familiarity seems to me a reasonable rhetorical trick.
If the typical landlord performs zero labor, then it would be very easy for a nice person or several nice people to come together and purchase a property to rent out at-cost. It would involve zero labor presumably once that rental is on the market. From there, since these nice people don't need to make any money, they would undercut all other rentals that are from greedy landlords. Providing housing to people is good, so for a one-time sum, affordable housing could be provided in perpetuity, leading to positive vibes all over.
Of course, that assumes that landlords provide zero utility. Once someone actually tries to do this, in most markets, landlords do provide some utility. There's usually some labor involved and there's also the opportunity cost of capital required. No one wants to watch their money dissipate, so some margin is added to compensate for inflation, then some margin is added to mitigate the risk that the tenant doesn't pay, then some margin is added to account for maintenance and repairs, then some margin is added to compensate the person managing all this for their time. Before you know it, you've now arrived at a number that looks excessive because how dare someone rent a property out for more than the initial cost?
If landlords are such leeches, then find me ten Tilderinos that are willing to put some money where their mouths are. I remember a thread Are there alternative ways to invest savings?; where were the suggestions to rent at-cost?
No, it isn't easy, because landlords exist to hedge risk. As you noted. Quoting myself:
Re. your next paragraph, we're currently discussing co-operative housing as an alternative to landlords. We're arguing for "landlords vs. co-ops", not "landlords vs. an imagined scenario with kind wealthy people". Here's a decent FAQ on co-ops, in case it helps, since it seems like they address your concerns without the need to introduce a landlord as middleman.
I'm not going to throw money at random people, for the risk reasons noted above. That said, people do co-house, such as this group of Vancouverites who bought a house together in order to avoid landlords. Also I know of at least one local polycule that has as well. I don't think anecdotes count as data, but there you go.
Fwiw, teaearlgraycold's suggested it, and I did., and I stand by calling it "potential for highest possible (non monetary) returns."
I suppose it's a similar concept, but something about rentals particularly drives people crazy on this site. Overall, there were few people who promoted the idea of money-losing investments because most people, when confronted, actually want their money to grow especially when there's risk involved. I maintain that words are cheap and few people here truly believe that landlords are strictly a rent-seeking class with zero-value-add that they're willing to bet money on it.
EDIT: I have a condo in Chicago right now that I could sell to someone at the same price as what I paid ~5 years ago if they're willing to rent out for strictly the cost of the mortgage (no interest, no inflation, no maintenance, nothing).
I mean I can't afford to buy a property and rent it out for cost, not even with friends. It's just not within my financial reach.
If I didn't have a medically and physically at-risk human at home I'd be using my home as free/low cost temp housing for people leaving other states, and instead I'm helping in different ways.
It's entirely possible the issue is lack of wealth, not lack of conviction.
I don't think home should be looked at as financial investments, even though they are.
For you and some people, sure, I can buy it. But magically, once people move into middle class, they don't. Not every leftist is incapable of this, yet we hardly ever see it outside of a charitable millionaire. Where are the co-ops? It's easy to be financially savvy when you're dictating someone else's money, but once you run the numbers and have to pony up yourself, you quickly realize that the calculations that seemed feasible don't actually work.
What even does middle class mean here... the ability to buy a second house? Pew thinks I'm middle class by income.
It's like the millionaire is the type of person who has that financial capacity. CLTs, hundreds of them, exist in the US today. (And the original model for that was killed because the government didn't treat them like white landowners.) And orgs like NASCO exist and are functioning supporting co-ops.
There are plenty of people doing the work, so sell them the condo.
I'm not somehow an exception to the rule of how people work. If people have room to breathe, and even when they don't (mutual aid), they help each other.
We do. Because the world has become more dangerous and isolating, and it feels like money is the only thing that can save us and hold our families together, after all the other safety nets have been torn down. But, as noted in another comment, i wasn't expressing this point kindly and I do regret that.
Sure, sometimes they or the management company they hire do a bad job in a specific case and deserve criticism. On the other hand, everywhere you look in a city, there are buildings that someone needs to maintain. Buildings are expensive and don't build and maintain themselves. Someone has to arrange for the work to be done, and the workers aren't going to do it just because someone asks them nicely. Nor should they! They expect to be paid.
How many people, poor or otherwise, do you provide shelter for? It seems like we shouldn't disparage all the people who are doing that work, as a class, because some of them do it badly? It's like criticizing all doctors or all teachers.
Though, there may be better systems; I'm not going to say public housing can't work when in some places it does seem to work, or so I've read.
Not disagreeing with you, but I think it's helpful to keep in mind that rent-seeking is heavily associated with landlords (of course, many actually are profit-seekers providing a critical service).
Relevant SMBC: https://www.smbc-comics.com/comic/economist
When did I argue against any of this? My statements have been that (1) landlords don't perform labour, and (2) co-ops result in better outcomes for residents as a housing model. Distantly, we were discussing why some people have a strong distaste against landlords, who make their lives worse while profiting off of it. Co-ops address all your concerns about organizing labour without the need for a profit seeking intermediary (landlords). Public incentives go a long way towards addressing the risk aversion that traditional lenders have towards co-operative housing.
Didn't realize that there's a mandatory moral standing for critiquing people; dang. Apparently only the most holy of us are permitted to hold opinions on the actions of others, which harm us. And landlords are a class now? Fascinating; I thought the argument was that it's a job.
First of all, it's wrong to say landlords do no work. Many small-time landlords do some work themselves. Also, I don't know why you're so focused on the labor thing. Whether you do the maintenance yourself or pay someone to do it is irrelevant, as long as it gets done.
I don't see anything wrong with paying a plumber, for example. Most people who own their own home would do the same.
Okeydoke. Many don't, and none that I've ever experienced. I won't go dig up stats again since that doesn't seem to be convincing, and I agree that there will always be some percentage of "good landlords". The argument is that many don't, and they have little incentive to compete with improvements either (see a previous comment: generally, rental vacancies are often only a few percent max in a healthy economy, as desperate renters will accept adverse living conditions to avoid homelessness).
No, it's relevant, because if a landlord's primary role is to be an intermediary for cash while skimming a few percentage points off the top, they're an inefficient vehicle for providing housing. Inefficiency, mind, is relative to other models -- if all we had were landlords or no homes, I would not be having this conversation since I'd prefer to pay someone else's mortgage rather than live in a tent. However, alternatives exist (see above re. co-ops, and others). Since housing is a necessity and a public good, I'm focused on delivering it without unnecessary waste, in order to improve overall economic productivity.
In New York City, co-ops are common and they are often cheaper than buying a condo, but they’re also restrictive. You need to reveal a lot of information about yourself to the co-op board and hope they approve your application. So one way to think about it is that condo owners willingly pay more to not have to deal with it, and that’s why condo prices are somewhat higher. When supply is restricted, prices are set by demand to be higher than what it costs to provide the service, and providers do get a windfall if their costs are low.
It seems like an important service that landlords provide is that they serve people who can’t afford to buy a house or condo, wouldn’t be able to get a mortgage, and wouldn’t look like a good bet to the co-op board. Landlords do make requirements of prospective tenants too, but their requirements are lower.
It’s good that all these alternative housing arrangements are available, and there should be more. A lot of the cheaper alternatives like boarding houses or staying at the YMCA have disappeared, so people make do by sharing apartments.
You wrote elsewhere in this topic that you’d like to see co-ops given a solid try and I think that’s fine; I think we need more of everything.
It's not a spin when it's a plain fact. Landlords, certainly ALL of the ones I have ever known including myself, did it for profit from poorer people who can't afford to buy a place of their own, and we never do it out of the charity of our hearts.
When it isn't to harvest money, it's called lending a place to friends or family, not renting. When we lend cash to help others with down payment or gifted money for that purpose, or connected one friend to another so they can work out living agreement, and my family's done a fair share of all of these, then it's called providing a place for others to live.
I'm not ashamed of calling it what it is.
@skybrian, I do want to apologize for my words. Not because I said them in mean spirit (I didn't) or that I don't think it's true (I do), but because many people are renting to others out of necessity right now. The billionaire class have hurt all of us, and we are just trying to survive the best way we know how.
(feel free to skip)
I still think that in a perfect society, housing should be a basic right and should not be a vehicle of getting rich. But seeing as how we don't live in a perfect society, what then do we do. I understand the POV that rentals make things affordable for some and it takes some risks away from renters and provide flexibility. I just have grown up in cities where that's not the case: investments become a barrier for basic housing, builds cater to investors (see article), and renters never break even enough to get to financial security. In an ideal world, landlords make a tiny bit of safe returns without risk of bad renters, and renters save enough money every month from the gap between rent and income they can eventually put down roots somewhere of their choice when ready.
But I am looking around at rental rates that are way more than 30% of income, and much higher than mortgage payments of the same home, and homes do NOT sell for anything like affordable precisely because someone with more equity can afford to bid higher to rent to the other bidders instead. And this gets worse and worse and worse, for 30 years. And I see the way the landlords lock rank and vote in a way to prohibit cheaper housing from being built or prices from coming down and my entire extended family and circle belong to this class of people and I'm tired of seeing this played out.
That all being said. I am reconsidering this uncharitable and holier-than-thou attitude when you called me out. We are all being squeezed and sometimes this is the only way we can make things work for our families, heaven knows employment is precarious, savings are flat, and investments full of deep pocketed shadow movers. There is the thought of, a good landlord buying up a unit tenants can't afford is better than a private equity buying it or a bad landlord buying it. That participating in the market this way provides one more option, when the tenant must choose between many other awful options. And that I am indeed speaking from a place of privilege when I have investment options other than letting out rooms in my house, and only choice prevents me from buying a second rental property, and that yes if I fall on hard times this is for sure something I am going to do as well. I hate that we're all stuck playing this game, but that seeing as we're all stuck, I do need to be more careful with my words and more charitable with my thoughts. I could have said any of that without being a jerk about it.
I am sorry.
Apology accepted! I do agree that the rents (and house prices) are too damn high. I suspect a lot of people are quietly getting by with the family helping them out, if they're lucky enough to have someone who can help.
I think the way out, or at least to keep things from getting worse, is more housing, through any means. And, perhaps making it more viable to move to cheaper locations. And UBI would be nice.
It sounds like a much better way to live, imo! (hopefully that doesn't bias mat's response 😅) There are definitely downsides -- I've heard that they can be a bit clique-y -- but I expect that's because (in my market at least) there are so few of them that they end up with arbitrary constraints controlling membership. I'd much, much prefer to live in a world where we gave these a solid try instead of slamming increasingly large subsidies into housing rich people (whose discarded hovels are then fought over), while being sold the story that hoovering up crumbs is, achtually, a good thing.
Sorry for the rant; I'm trying not to pick a fight with people, but this stuff really bothers me, and it's hard to keep my mouth shut on the internet XD
I completely agree: if a rich person can make profit they would never sell; if they can break even holding onto property they will; if they cant make money or when it becomes derelict thats when they sell. Is that how we want trickle down to work, in a disgusting fight to drink their waste water kind of way? Ridiculous
I've seen some co-op housing work, and visited one that was....kinda gross, but still quite affordable. Maybe if we can again normalize housing is for living in not for retirement profit, we'll get somewhere. But when the billionaires have extracted so much out of the monopoly board that regular middle income people need investment properties to live / retire, we all lose.
Worth looking at the history of social housing in Vienna, Austria. It took a revolution and a couple of world wars to get it done, but it's probably the best available model globally.
The results would likely vary based on the competence of particular local governments. What if local governments gave it a go and then we’ll see if they can do better?
https://archive.is/u1qjN
From the article:
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