Put a hard stop to the purchasing of homes by corporations/businesses and people with no intention of living in them.
You should need proof of intention to live in the home within a reasonable amount of time after the purchase in order to make the sale. The flipping of homes for profit by those with cash and more money is a detriment to the market and the american dream for the rest of the population trying to get a foothold.
The problem isn’t necessarily flipping houses, if the ones doing the flipping really are improving the property and are able to refurbish old properties to be more appealing. If they put in the work, they deserve to make money off of that - but they only make their money if they sell.
The problem is corporations who buy up housing stock, with no immediate plans to resell. They view houses like a commodity, and if they constrain supply in certain areas they can artificially create profit. This profit, though, comes at the expense of everyone who is looking for a home at the time.
I think the solution is for localities to step in and crank up property taxes for residential units that are not either occupied or actively on the market. Once a company keeps a property off the market for a year, make it much more painful for them to hold it for another year.
House flippers are incentivized not to make good, long term, sustainable, or efficient home improvements. Their only incentive is to make a house more sellable upon initial inspection, house flipping is a bad practice I would argue far more often than not.
The problem is housing as an investment like a stock. They should be commodities.
house flipping is a bad practice
I spent the last year looking for a house to buy, and since it took me a year I got to see many of the shit-bucket houses I was looking at (since they were in my price range) get bought up and “flipped” - which usually amounted to just some paint slapped on everything and those fucking grey fake wood vinyl planks that everybody loves these days put down everywhere - and then resold for absurd prices. I respect people that do a good job of renovating houses, but most of these flippers aren’t doing that.
Inherently, flipping houses is about increasing the price of the home. This directly relates to the article by making more houses further out of range of more people.
Houses with issues might not be able to be financed by a mortgage. So a company/individuals will fix the issues, then resell the house to someone who can now get an FHA loan for it.
FHA loans have strict requirements on the condition of the house in order to give funding.
If someone does work on the house, they should get paid for their efforts.
Hard agree. Also they can slap a really big transfer tax on non-owner occupied as well.
Non-owner occupied properties already aren’t eligible for the capital gains exclusion. I guess we could make unoccupied houses subject to regular income tax instead of capital gains tax rates would further discourage empty houses. That, and higher property taxes would probably be enough.
All agreed except the localities bit. These smaller cities councilmen are too cheap to bribe. A $1,000 check will have them hanging on your every word. I’ve seen it with my own eyes. Probably best bumped up to state level.
But yes, we should ban corporations at some well-defined point. I mean, what if I incorporate myself? Now I can’t buy another house?
To add, the corps buying up housing are also the ones that have the most potential to back housing builders, but since they’re buying up stock to artificially decrease supply, then they’re deincentivized to support builders. I really wish these big corps had some sort of for each unit you buy, you must build a unit within the next 2 years.
Higher taxes is just a cost of doing business which is passed on to other tenants, be it long or short term rentals, even if housing stock is temporarily held - though I don’t disagree that such a vacancy tax is a good.
GP was right - forbid corporations from owning any residential property if 4 or fewer units and greater than four unless the building is wholly owned.
On the tax side, add a purchasing tax of 15-25%, 90% of which is rebated at closing for non-corporations who have not received the rebate in the previous 24 months. That targets flippers and property-bros willing to go naked on liability.
Rather than a hard stop, I think it would be a good idea to significantly increase taxes on real estate no one is actively living in, and use the proceeds to subsidize construction of new housing.
This seems to be the most reasonable. Disincentiivize multiple property ownership rather than outright ban it. The ones who can eat the cost will pay taxes and the rest will just bow out of the market.
But housing is a need and people will keep paying any price to not be homeless, this feels like it leads to massive corporations still owning all of them and paying large taxes they can eat short term and raise to massive prices of rent. Maybe they dump some stock but I’m just not sure it does much other than diversify smaller investors that used property for assets
Rather than a hard stop, I think it would be a good idea to significantly increase taxes on real estate no one is actively living in, and use the proceeds to subsidize construction of new housing.
An alternative is to replace property tax with a land tax. That way instead of penalizing people for building more housing, they are penalized for holding onto land that could be used to house more people (or whatever other use is in mind).
There should also be taxes on rental properties beyond the first to prevent the “hoard and rent” cycle
I disagree, because that would disincentivize housing. I think the price of housing is mostly just a function of how much of it is on the market. Wealth inequality is also a problem but should be addressed in other ways.
As an aside, the tax should also apply to commercial real estate so there is an incentive to convert offices to apartments.
Landlords don’t “scalp wealth”. The income they earn is from working their job. Just like anyone else who is self employed.
You’re essentially talking about decommodification of housing, which is the only correct answer. It is necessarily impossible for a house to be both affordable and a good investment, and the current status quo means that housing will be used as an investment. Whatever mechanism used to fix the housing affordability problem will require that housing no longer be subject to commodity market forces.
The value of a house should be in reduction of costs, not increase in real value.
When you rent, you pay for maintenance of your residence, some amount of furnishings, and the risk tht property owner takes in renting to you (i.e. the likelihood that you’ll destroy the property, fail to pay, etc).
When you own, you take that risk on yourself. You can choose to delay, DIY, or preempt repairs. You can choose what level of furnishings you have, and you are responsible for any loans or taxes due on the property. You don’t need to worry about unplanned vacancies.
Housing should keep pace with demand so property values stay roughly consistent with normal inflation. Unfortunately, cities tend to grow, making existing property more valuable.
When you rent, you also pay for the flexibility of being able to pick up and move in a short while if you get a new opportunity somewhere else, or just want to move for whatever reason.
Some people rent because they don’t want to worry about repairs, or mowing lawns, or any of that stuff.
They’d rather spend $3,500 taking a nice vacation than on a new furnace.
To add to that, put a limit on airBNBs and similar, you can only have one. Corporations are buying homes and small apartments for that too.
It’s gotten out of control. I would say one in ten houses in my neighborhood are airBNBs.
If you want to operate an airbnb in Berlin you need a hotel license (unless you actually live in the thing at the same time, or only do it for I think about a month a year, say when you’re on vacation). Long story short the city isn’t giving out any licenses in areas with high rent pressure, which is basically all of Berlin.
But those things are highly regional, there’s plenty of villages in the alps with an absurd amount of tourist accommodation compared to the number of regular inhabitants, but they also don’t have any industry but family farms and tourism. If you own something on Sylt and somewhere else you’re paying sky-high secondary residence taxes (rich fucks don’t rent they just buy holiday homes).
331.9 million (2021) US Population / ~142 million housing units in the United States (2021) = ~2.34 people average needed per dwelling to fully house everyone.
According to Statista: " The average American household consisted of 2.5 people in 2022. "
If people did not need vacation homes, and investment property… We appear to have enough housing for everyone already.
I’m working under the assumption hotels/motels are not included… there should be plenty of those to house people on vacation, and leaves plenty of room for the ultra wealthy to still have their vacation homes.
Sources: Statista, US Census, Google
ATL had a pretty good program at one point. If you made $60k, you could buy a $250k house with the requirement that you would be the primary resident for the first year.
What’s even better is that the comparables in the area were all $450k, so 3 years later, all of the homes got valued around $500-600k.
Make owning more than two homes illegal.
Give current owners/holders of more than 2 homes 20 years to sell any extra homes beyond those two, if they don’t, the extra homes automatically default to state ownership (and then are later sold to disabled, underemployed and low income people at a massive discount.
This would garantee a certain amount of deflation, which could be dolled out by the government as needed whilst resolving the housing crisis.
This situation has turned into a real cock for so many people.
The place I got my mortgage through sends out emails regularly with updates on my home value, current rates, and other assorted stuff. I originally bought this house at the tail end of 2020. It’s not the best house around, still needs work, but it had the room we needed, was in our budget (220), and the payment was low because the rate was great (2.75). Our original plan was stay here a bit, get rid of some debt, and then maybe try to find what we’d like to be our forever home, wherever that may be (we’re 44).
That idea went south in a hurry. What once probably wouldn’t have been worth sinking extra money into to fix, may now be the only choice. The aforementioned newsletter has a section where it shows what you could “save” at current rates by refinancing or taking cash out. The most recent one said I could “save” -$213400, meaning if we refinanced to take cash out to fix things up right now, it would cost us the entire price of the home yet again, on top of what the home and interest will already cost. Where a home in the 400’s was achievable before, our home in the 200s would nearly not be now.
I feel terrible for people having to try to achieve home ownership at this point, or probably for the rest of the decade. On the one hand, I understand how fortunate I am to have gotten in when I did, and to have a home period; on the other, like many, I’m now essentially trapped, which has the ripple effect of keeping both rates and prices high because most people aren’t going to trade a sub-3% mortgage for 7%+, assuming they can even find a place to go at this point.
Add in corporations branching out into a new area to do their level best to eliminate the concept of ownership for the majority of people, and politicians focusing on the more serious global issues like who goes in which bathroom, and my hope for the future couldn’t be squashed any further if you put it in a hydraulic press.
Real estate will crash, eventually. Hard to predict exactly when and why, but if history is any guide, a market crash eventually is practically inevitable. It could conceivably happen relatively quickly for any number of reasons, but crash it will.
That doesn’t necessarily mean it will become readily affordable - when real estate goes south, a lot of other stuff will be crashing with it. History books are full of monumental calamity. There’s no reason to expect that to change.
This time is different. The new business model isn’t selling homes - it’s single family rental.
I coordinate all development projects in one of the fastest-growing cities in the county, and 100% of new single-family projects proposed since 2021 have been build-for-rent.
Why sell someone a house when you can rent it to them forever AND increase the price every year.
Practically all housing development is financed with borrowed money against the property. Given the build-to rent model, the party at the end of the cashflow stream relies on rent checks being paid every month to remain solvent. When the rents stop being collected, at some critical point, some loan that is reliant upon that rental stream will default. When that happens, the properties are called in by the borrower and auctioned off at foreclosure.
Now yes, the major lenders, developers and speculators will spread their risk as much as possible by diversifying their portfolios and try not to be caught short by a problem in any specific market. But when there is a some kind of macroeconomic shock, ALL the markets will suddenly contract and be flooded with foreclosed properties and other rapidly depreciating assets. That’s more-or-less what happened in 2007. Massive liquidity injections and historically low interest rates supposedly saved us from a prolonged financial catastrophe then - but there were still a LOT of foreclosures. I also think we are still seeing that situation playing out today. Current housing markets are unsustainable in a climate of higher interest rates. This will all come crashing down, probably sooner than most people expect. When it happens, it happens fast - and of course the reasons will seem obvious with hindsight.
By the way, perhaps you’re being ironic - “This time is different” is the defining catchphrase when looking at historical financial crashes: https://www.economist.com/media/pdf/this-time-is-different-reinhart-e.pdf
The housing market isn’t going to crash. New homes aren’t going to flood the market and demand for homes will not fall. As long as we have a growing population the price of homes will also increase.
Yes, there is finite supply and ever-growing demand, however the price of real estate ultimately reflects both the buyer and lender’s confidence that the mortgage payment will be met. This can be affected not only by interest rates but by labor market conditions and other factors.
If there is a sudden surge in interest rates in response to some kind of inflationary shock, or the credit market becomes suddenly much more restrictive in terms of lending standards, then housing prices will most certainly fall, simply because the pool of potential buyers at a given price level is smaller.
When pressures on the housing market are coupled with leveraged loans on variable rates going upside down, people will begin dumping their real estate investments. These factors compound to cause a sharp reduction in price. In 2007-8 metro home prices declined up to 50% from their earlier peaks - but seem to have increased about 200% since the bottom, roughly, to where they are today That’s quite a considerable appreciation and seems unlikely to be sustained. Maybe I’m wrong - we’re just shooting the shit on Lemmy - but looking at what’s happened before, real estate seems overheated - but it may well keep on boiling for all I know.
And corporations will be right there to buy it all up and further make it worse.
It should be fucking illegal for corporations to own single-family homes, full stop.
Can’t people just, you know, build a home? People were capable of that previously, right? Or do you define a home as 2-story building with a basement, a standard outfit and quantity of utilities, set so-and-so far back from a road with a bit of lawn, with a certain acceptable set of roof options, a tasteful material selection and paint job, attractive siding, etc., etc.
What about mud huts with corrugated roofs for the American people? Maybe even connected to electricity, internet, and water + sewage.
Sure… if you can procure the land, obtain all of the building permits that the city or county you’re building in requires, then build the house to code including passing inspection. There may even be municipality requirements. Like a minimum/maximum square footage, property set backs, easement rights, all kinds of things. Builders know all these things and can get permits pushed through because they’re applying for the same ones over and over without much deviation once they have set Floorplan. Doing all of that yourself, or trying to subcontract it out is a very large task and not easy by any means.
A lot of what you just listed are unnecessary homelessness-enforcement tools you couldn’t conceive of parting with.
Allowing a person to build themselves primitive shelter is offensive to you, to your friends, and to your family. A dangerous eyesore is what that sounds like to you. You have no intention to vote to allow it, and you have no interest in entertaining any kind of empathy for the caveman with tied hands.
Shelter is formalized, and you have no intention of dropping the formalities. You’d rather hire men to chase tent-dwellers around.
Sure. Depends on your situation, if you need to be in a particular place, or whatever else.
For my own situation, I would need to go really rural. Homes being built 20-30 minutes more rural than where I am are priced higher than my current home. I could move further out and build, but the tradeoff is construction not being a ton cheaper, and extending commutes to 1.5 hours each direction. I take care of my elderly mother, so fast access to medical services is also important.
I’d actually love to be more rural myself, I’m just stuck in a situation where getting everyone what they need dictates a certain radius, barring picking everyone up and migrating elsewhere entirely.
It’s more than homes. Groceries have rocketed up in price. Cars are also unaffordable. Business people crowing about how great the (phantom) economy is are going to be leaping out of windows by next year. That’s when “the economy” will catch up to the fact that if no one can afford to buy anything then there is no economy.
I live on social security disability, about 1100$ a month.
A combo meal at McDonald’s is 12$.
2 combo meals a day from a fast food restaurant would completely wipe out my budget. No money for rent. No phone bill. No water or electric money. No money for garbage removal. The idea of a car is laughable. There wouldn’t even be enough for a bus pass.
It’s been a real struggle. After all the inflation hikes of 2022, they only raised my payments 50$ a month.
They simply don’t care about the people voting for them more than the companies bankrolling their campaigns that earn their paychecks. It’s that simple.
I feel for you.
I’m in an average family earning average wages. Maintaining our standard of living is now at least $500 more a month, and that’s just from utilities, rent, and groceries (!). I’ve cancelled everything streaming aside from Youtube. We don’t eat out any longer, because that’s easily jumped at least $30 a meal for a family of four. Depending on your point of view, we were fortunate enough to have things we could cut back on that weren’t essentials.
I grew up fairly poor and by all metrics my family is better off, but it certainly doesn’t feel like it at times. I’ve had more month left at the end of my money more times than I’d care to admit.
I have no idea how those who were “just getting by” are continuing to do so.
Dang, sorry about all that. “More months left at the end of my money” really hits home for me, haven’t heard that expression before.
The only reason I’ve just been able to get by is because of friends and family, if I had any smaller of a safety net of people that care about me I would absolutely be on the streets. I’m not sure where you live, but the number of beggars has skyrocketed around me, and it’s not dirty crazy homeless people that just need help in general, it’s regular people out of work that are just trying to get money to pay their kids. People are selling 10$ roses on the sides of the highways to try to get by. There’s no affordable housing for anyone and the best jobs available still don’t pay much more than 50K a year. My boyfriend is a fully licensed mechanic and has about as much money leftover each month as a fast food worker in the '90s. Pays $1,400 in rent a month just to have a place to live (475sq ft), which is often nearly half of his income for the month.
I didn’t mental ramble so much with all those complaints, I think it’s just baffling in mind blowing how bad everything is and how little politicians and even companies seems to be noticing or caring about it. Citizens need money to give companies money. Eventually if people are only buying their necessities, companies won’t be able to make money. It just seems so unsustainable and I don’t know why more alarm bells aren’t being rang.
If it weren’t for my parents I couldn’t afford to live in this state as I live with them. Even as a homeowner, my mom is finding it hard to cope as homeowners insurance rates keep rising and the crisis is deepening as more insurers leave the state or stop offering new policies. I financed a used car back in 2022 for $8,500. I don’t think I’ll ever own a home here, not that I’d want to anyway, and as for cars I’m better off buying cheap and used.
I pay 12 dollars for a gallon of milk at least, 6-7 dollars for bags of chips that are mostly air
Hawaii, 95 percent of our food is imports, the government is a colonial one, the megacorps own the entire islands land and industry, the military gets to do whatever the fuck it wants, Leech landlords raise rent, its a fucking shithole socioeconomically for anyone whos not inheriting blood money.
The only difference between a citizen and a serf is the right of ownership. This is the “freedom” people fought and died for. Welcome to Neo Feudal America where you will own nothing and you will be happy about it because complainers go to the gas chambers. Remember to go get your “Real ID” and passports because you are in the process of being tied to the land too.
Growing up, learning history, I always wondered how average people went from the freedoms of the citizens of Rome to feudal serfs barely more than slaves. I never thought I would get to learn first hand.
Americans would probably have a lot more freedom if they didn’t normalize getting into debt. You can save a lot of money if you never pay anyone interest.
Oh fuck off I missed owning a home because I was too afraid of debt. It’s impossible for most to save enough cash for a house outright especially with how insanely the prices inflate
The rapid inflation occurring right now is expected to slow down in the coming years. Over time it is highly probable you will catch up as long as you keep saving.
Can confirm, I only have a low rate mortgage and otherwise no debt. I bought my cars with cash, worked my way through school, etc, and I have a comfortable savings. We’re not rich, we just don’t piss away our money to interest.
Honestly, if you can avoid credit card interest and make an average income, you can probably afford a home by your 30s in most of the US.
I don’t think that’s even remotely the case for the vast majority of the workforce. It takes an incredible position of privelege to think otherwise.
For the average US citizen, they have a spare ~$200/month (see my comment history for context) the median US home price is $420,385 according to redfin. That means your closing costs (4%) + minimum down payment (3.5%) for an FHA loan would be (.075 * 420385) $31,528 which would take 157 months assuming you had no emergencies or extra expenses at all. Leaving you destitute to pay your mortgage on a home which will have inevitably increased in price since you started saving.
It’s a pipe dream for most US citizens, everyone has surprise expenses. People lose jobs, people buy things for leisure (what’s the point of living if you don’t?) Once they spend their 13 years of perfectly saved money to buy the average house, how do they afford the inevitable expenses? Save another 13 years to pay for another roof? Unfortunately now they have a mortgage which will be more expensive than their rent.
So I’m getting closer to 30 so I think this relates to me and my experience well to share.
I’ve been paid a pretty reasonable pay middle class+ generally just shy of that perfect $70,000 of legend on average. Managed to pay off my absurd credit card debt from college and stopped payments on my college loans. I don’t have a car I bile to get around and am generally frugal and had my company helping pay for a lot my stuff
I had about $11,000 pre COVID and that was practically all wiped out during the worst of it because Florida didn’t believe in unemployment. At which point I was 26ish.
I think pre COVID I may have actually managed to hit over $30,000 by early 30s enough to actually put down on a house.
I now make over $70,000 a year… I have saved about $2,000 this last year living the same frugal life, still no car, still no debt payments really… I don’t think your math works anymore. It’s so completely soul crushing now how fast I went from doing ok to being in a gutter.
When I hear about middle class people struggling to pay the bills, I’m always curious what their lifestyle looks like and where they are spending their money. Literally today I saw a news article that broke down a family’s monthly expenses like this:
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$1700 rent
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$800 payment for two cars
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$400 insurance
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$250 phone
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$60 internet
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food paid for with whatever’s left
The big thing that stood out were the cars. They obviously bought some brand new cars that they couldn’t afford. If they sold those and replaced them with beaters their budget would be solved.
The worst part is, the news article was trying to paint this example as proof that the economy is ruined and only new laws can save us.
The problem is there is inflation, high interest rates, house prices increasing rapidly, skyrocketing rent and wages staying stagnant. If you try to save money for 30 years in hopes of buying a home, it would be a difficult prospect currently. In my area, most of the friends that are renting are paying 2000+ in rent. I pay 1300 for my mortgage. If I had started saving when I bought my house, I still wouldn’t have enough and my house is now worth 3X what I paid for it. I don’t know where you are from but you clearly don’t understand the current situation in the US.
Tell your friends to move in as roommates and instead of paying 2000 on rent, they pay 1000 each. Invest the difference.
Yeah I was raised to understand debt is for three things: education (as an investment and treated as such), mortgages, and cars (though I avoid car loans where I can).
I’d take education and cars off that list. With the price of college where it’s at, if you can’t afford it on your own, I think you should look for alternatives like community college or online courses. It’s better to get education in things you’re not passionate about than to attend college and get saddled in crippling student debt that not even bankruptcy can save you from.
I’m also against paying interest on cars because a reliable used one is still cheap enough for most people to pay cash. Brand new cars should be seen as luxury items.
But if you want something NOW, instead of saving up for it, you take on debt. People don’t have as much patience it seems, than in years past. Also society has become more reliant on convenience (which costs more) and being lazy than taking the longer route (which costs less overall).
But that’s the freedom in it, right? The ability to choose the more convenient, fun route than the longer, saver route. An “ant vs grasshopper” fable in real life.
It also feels good to smoke cigarettes and eat cheeseburgers. And there has also been a big marketing push for those. I don’t necessarily think people are and more impulsive, but they’ve been led to believe debt isn’t as harmful as it actually is.
It is more complicated than it first seems. The inflation rate is controlled within the way debt is handled and it is a way to tie together the politics of nations in order to bring mutual benefit and stability. It is not anything like an individual’s debt to an institution. The rate of inflation balances against the debt in a way that makes it irrelevant in the grand scheme of things. Talking about debt like it is a bad thing in the world of today is a major form of populist manipulation for conservatives. The whole point and purpose of the GOP is to prevent reasonable legislation from having the opportunity to pass. This is what the billionaires are funding. It isn’t about liberalism or responsibility or any bullshit like that. The only purpose is to continue keeping all of the legal loopholes open for exploitation. The USA has a tenth of the laws and protections of any other western nation. This is why there are 750 billionaires and a major homeless problem with most Americans unable to own a home or even most of their property any more due to DRM/neo-digital-feudalism. The GOP is a circus show leading the nation around to one side show after another simply to prevent anyone else from taking the stage. They have no morals, there are no limits. When the focus shifts away from them, they instigate another ever more outrageous event where the outcome is already secured well in advance. This is all about distraction, from the budget, to stealing fundamental human rights from half the population, to massive open corruption by the supreme court, to rocket Karen fighting for Putin, to DeSatan or the orange usurper, to book burning, and defunding education, it is all just a distraction so that no reasonable legislation has the time or opportunity to pass. This is how 750 people robbed the country blind.
It requires that you provide a lot of documentation to get something that qualifies as a RealID. Multiple documents showing your full name, birth date, SSN, and proof of address. And if you can’t provide that paperwork, no ID for you, get fucked. Maybe that doesn’t seem like much, you just need the RealID to fly on planes, right? But if you can’t get an ID you can’t get hired. You can’t drive. You can’t rent a place. You can’t vote in a lot of places.
And then you get the ugly Catch 22 where you can’t get a RealID because you’re homeless and jobless, and you can’t get a home or job because you don’t have any ID.
My dad helped an old friend he knew who he found out hard been homeless for a while. And realized how you can be unpersoned. The old guy had no living family, no supporting documents to prove who he was and as such couldn’t get an ID. Which meant he couldn’t get a bank account, or a job that wasn’t cash under the table.
The only difference between a citizen and a serf is the right of ownership.
Nope. Serfs were forbidden from moving out of where they lived.
I don’t really have any idea of owning a home for the rest of my life. Even making enough money to potentially get close seems impossibly out of reach.
I feel like I should just claim homes that are empty at this point.
You bought it as an investment but nobody is renting it since you’re letting your rentee pay your bills? Looks like this is my property now.
This is partially why “squatters’ rights” was a law. Live in a home for a certain number of years, and it’s legally yours if the “owner” suddenly shows up and tries to kick you out. It also had to do with banks selling property that people already owned, but that’s just another form of corporate skullduggery.
First time home buyers in the US don’t need any cash for a down payment or closing costs. You can roll it all into the mortgage. This is how the majority of first time homebuyers get started. You just need a good credit score and enough income to qualify for the mortgage - which is impossible in some cities and easy on a McDonalds wage in others.
