5 ms·

> I suspect, as in Vancouver, a lot of foreign-originated dirty money is getting parked in SF real estate, where the structures sit vacant. That's not the case

> I suspect, as in Vancouver, a lot of foreign-originated dirty money is getting parked in SF real estate, where the structures sit vacant. That's not the case. Vacancy rates in San Francisco are very low, at 3.6%: https://www.forbes.com/sites/erincarlyle/2015/04/16/san-francisco-tops-forbes-2015-list-of-worst-cities-for-renters/#4ec2bab362fa https://www.forbes.com/sites/erincarlyle/2015/04/16/san-fran... You can see this in the rent-to-buy ratios. While high in the Bay Area, it's nowhere near the out-of-control bubble levels of Vancouver and, to a lesser extent, Toronto. Housing prices are high in the Bay Area because people actually need to live here.

mchannon 8y ago
Those appear to be vacancy rates calculated from submissions by landlords, but what about absentee owners who don't want to be landlords? I don't think we're measuring the real figure of merit here.
- jimrandomh 8y ago
  There are plenty of companies that will take care of finding tenants, doing maintenance and generally handling landlord responsibilities, in exchange for a cut of the rent. Since the rent is quite a lot of money, it would be crazy to leave a building vacant unless you're planning to spend time in it.
  - jeffreyrogers 8y ago
    But people do it in high rent areas like London, NYC, and Vancouver.
    - eanzenberg 8y ago
      It doesn't make it any less dumb. It's the difference of ~80k / year for free you leave on the table.
      - mchannon 8y ago
        It's not dumb, and it's not for free. If you robbed a bank and had a nice big pile o' cash, how smart would you be to put it in a bank and collect interest on it? You jeopardize (or devalue) the asset by trying to play landlord. By leaping after $80k/year, you may cost yourself $500k/year appreciation in the asset.
        selectodude 8y ago
        >You jeopardize (or devalue) the asset by trying to play landlord. By leaping after $80k/year, you may cost yourself $500k/year appreciation in the asset. Unless your tenant literally burns the building down and you don't have insurance, I'm not sure how this works.
        hcknwscommenter 8y ago
        A building that would otherwise be subject to rent control or other tenant protections is worth less than the same building that is empty of tenants. By leaping after 80K/year you can massively decrease the value of an empty building, or a building that is likely to soon empty, or a building that can be condo converted without Ellis acting anyone.
      - s73v3r_ 8y ago
        The people who are doing this are the kinds of people who lose $80k in their couch cushions.
      - nradov 8y ago
        It's not dumb. Their goal is capital preservation, not income. And once a renter is in there they're extremely difficult to evict if the owner ever wants to move in or sell.
  - s73v3r_ 8y ago
    Usually that cut of the rent is pretty high. Like, almost all of it.
  - hcknwscommenter 8y ago
    It's not crazy. Plenty of people do that because they believe the property will appreciate in value at a reasonable clip, they will get a huge depreciation tax benefit, and they will not have to deal with tenants or wear and tear.
  - DrScump 8y ago
    it would be crazy to leave a building vacant Once a renter is in place (at least 31 days), it can be very difficult and expensive to end the tenancy (read up on the Ellis Act).
gdilla 8y ago
Vacancy rates are units that are un-rented or unsold. The problem is parking money (using real estate as a bank account and not actually living in the community) - popular in Vancouver and NYC. The condos are literally 50% dark all the time but not 'vacant' as in part of the avaiable housing supply. Drives up prices.
hcknwscommenter 8y ago
You are not accurately interpreting the statistics you cite. Vacancy rates do not take into account units that are bought and never put into the rental market.

mchannon 8y ago

Those appear to be vacancy rates calculated from submissions by landlords, but what about absentee owners who don't want to be landlords? I don't think we're measuring the real figure of merit here.

jimrandomh 8y ago
There are plenty of companies that will take care of finding tenants, doing maintenance and generally handling landlord responsibilities, in exchange for a cut of the rent. Since the rent is quite a lot of money, it would be crazy to leave a building vacant unless you're planning to spend time in it.
- jeffreyrogers 8y ago
  But people do it in high rent areas like London, NYC, and Vancouver.
  - eanzenberg 8y ago
    It doesn't make it any less dumb. It's the difference of ~80k / year for free you leave on the table.
    - mchannon 8y ago
      It's not dumb, and it's not for free. If you robbed a bank and had a nice big pile o' cash, how smart would you be to put it in a bank and collect interest on it? You jeopardize (or devalue) the asset by trying to play landlord. By leaping after $80k/year, you may cost yourself $500k/year appreciation in the asset.
      - selectodude 8y ago
        >You jeopardize (or devalue) the asset by trying to play landlord. By leaping after $80k/year, you may cost yourself $500k/year appreciation in the asset. Unless your tenant literally burns the building down and you don't have insurance, I'm not sure how this works.
        hcknwscommenter 8y ago
        A building that would otherwise be subject to rent control or other tenant protections is worth less than the same building that is empty of tenants. By leaping after 80K/year you can massively decrease the value of an empty building, or a building that is likely to soon empty, or a building that can be condo converted without Ellis acting anyone.
    - s73v3r_ 8y ago
      The people who are doing this are the kinds of people who lose $80k in their couch cushions.
    - nradov 8y ago
      It's not dumb. Their goal is capital preservation, not income. And once a renter is in there they're extremely difficult to evict if the owner ever wants to move in or sell.
- s73v3r_ 8y ago
  Usually that cut of the rent is pretty high. Like, almost all of it.
- hcknwscommenter 8y ago
  It's not crazy. Plenty of people do that because they believe the property will appreciate in value at a reasonable clip, they will get a huge depreciation tax benefit, and they will not have to deal with tenants or wear and tear.
- DrScump 8y ago
  it would be crazy to leave a building vacant Once a renter is in place (at least 31 days), it can be very difficult and expensive to end the tenancy (read up on the Ellis Act).

gdilla 8y ago

Vacancy rates are units that are un-rented or unsold. The problem is parking money (using real estate as a bank account and not actually living in the community) - popular in Vancouver and NYC. The condos are literally 50% dark all the time but not 'vacant' as in part of the avaiable housing supply. Drives up prices.

hcknwscommenter 8y ago

You are not accurately interpreting the statistics you cite. Vacancy rates do not take into account units that are bought and never put into the rental market.