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I am sorry, but I don't understand this logic. The owner still has to make mortgage and property tax payments on an asset that is not yeilding anything. Sure th

I am sorry, but I don't understand this logic. The owner still has to make mortgage and property tax payments on an asset that is not yeilding anything. Sure the value may be growing but how fast is it growing if it is sitting empty. Empty building with no maintenance tend to wear down and often get graffitied and broken into - all of which involves further mitigation costs.

deleted 5y ago
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emodendroket 5y ago
I am not sure what societal benefit we're getting from bailing out failing landlords. It's not as though they're employing a lot of people, or any of the usual justifications we might have for propping up a failing business.
lumost 5y ago
Land is an easily leveraged asset. While an individual can only typically borrow 80% of the value, a bank/investment operation could easily leverage the land to 95%+. Given that property is returning 8% in competitive districts, all the landlord really needs is for the property to make better than 3% return to make money from ownership. Actually leasing the property or maintaining it simply adds costs to the arbitrage.
johnnyApplePRNG 5y ago
In this particular case, the owner has had full ownership of these properties for over 50 years. No mortgages necessary. The value of the properties have probably increased 10 fold above the rate of inflation in that timeframe. >Empty building with no maintenance tend to wear down and often get graffitied and broken into That's exactly the reason why they should be incentivized to get a proper tenant in there ASAP. I don't want to walk a downtown filled with barred windows and security guards behind every storefront.
notatoad 5y ago
>The owner still has to make mortgage and property tax payments they don't have to. if there is no demand for the property in its current state, they can redevelop to a use for which their is demand, or they can sell the property to somebody who will redevelop it.
colechristensen 5y ago
The logic is that you either lower the rent until a building is being used or sell the property to somebody who has a better idea for something to do with it. The idea is making it expensive to leave a building empty to force down rent prices and property values which is in the best interests of people who want to participate in the economy instead of collecting rent from it.

deleted 5y ago

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emodendroket 5y ago

I am not sure what societal benefit we're getting from bailing out failing landlords. It's not as though they're employing a lot of people, or any of the usual justifications we might have for propping up a failing business.

lumost 5y ago

Land is an easily leveraged asset. While an individual can only typically borrow 80% of the value, a bank/investment operation could easily leverage the land to 95%+. Given that property is returning 8% in competitive districts, all the landlord really needs is for the property to make better than 3% return to make money from ownership. Actually leasing the property or maintaining it simply adds costs to the arbitrage.

johnnyApplePRNG 5y ago

In this particular case, the owner has had full ownership of these properties for over 50 years. No mortgages necessary. The value of the properties have probably increased 10 fold above the rate of inflation in that timeframe. >Empty building with no maintenance tend to wear down and often get graffitied and broken into That's exactly the reason why they should be incentivized to get a proper tenant in there ASAP. I don't want to walk a downtown filled with barred windows and security guards behind every storefront.

notatoad 5y ago

>The owner still has to make mortgage and property tax payments they don't have to. if there is no demand for the property in its current state, they can redevelop to a use for which their is demand, or they can sell the property to somebody who will redevelop it.

colechristensen 5y ago

The logic is that you either lower the rent until a building is being used or sell the property to somebody who has a better idea for something to do with it. The idea is making it expensive to leave a building empty to force down rent prices and property values which is in the best interests of people who want to participate in the economy instead of collecting rent from it.