5 ms·

>I lived in an illegal rental to save up for a home, then decided to buy out-of-state properties and drive up the rent. I'm aware of how this will be perceived,

>I lived in an illegal rental to save up for a home, then decided to buy out-of-state properties and drive up the rent. I'm aware of how this will be perceived, but I want to feel good about myself despite knowing how what I'm doing hurts others. lol

refurb 5y ago
Drive up the rent? “We are renting to willing tenants at the fair market price.” Landlord’s cant “drive up the rent” any more than employees can be unfairly paid too much.
- dazc 5y ago
  Renting below 'fair market price' would be one way? In the UK we have a lot of private landlords - some have borrowed heavilly and are merely expoloiting their ability to obtain a mortgage where their tenants can not and are making marginal amounts of money in the process (often much less than if they simply invested what cash they have in a tracker fund). Some have inherited a property or are renting out buildings they bought twenty years ago where the amount of rent they charge is multiple times out of sync with their actual costs. So long as all of these people can say they are only charging 'fair market' prices then the problem persists.
- BirdieNZ 5y ago
  Land rent works very differently than most other markets because land is of limited supply. "Fair market price" is determined by what people who live in an area can afford to pay, rather than primarily supply and demand. Add to that restrictive zoning laws and you end up with a situation where most landlords are extracting significant economic rents from their tenants without needing to provide any extra service or quality of good to earn that rent.
  - refurb 5y ago
    I don’t disagree that zoning impacts prices, but it’s still “fair market price”, no? I choose to move to SF knowing that rents were absurd compared to other cities I could have moved to. But I choose to roll the dice on SF being the better choice. I get it that people who grew up in SF face a different choice - leave or not. But it’s still a choice for them.
    - HarryHirsch 5y ago
      Established landlords have friends on the local council, and can determine who gets a building permit. Prices are set by the two or three biggest players, who all know each other. That stuff happens all the time.
      - refurb 5y ago
        Sure, but someone still makes a decision “yes this rent is worth it” or “no I’ll go somewhere else”.
        HarryHirsch 5y ago
        With a greater supply the clearing price will be lower. That's a trivial statement. The real problem is elsewhere - by constraining supply landowners are inhibiting economic development. Newcomers have a choice, if accommodation is too high they'll go elsewhere, so economic growth in productive industries will take place elsewhere. Man, not too long ago I shitcanned a new job 4 days in over the insane housing prices. A good number of my colleagues had a sideline in Airbnb, that asset inflation machine. There's far too much capital sunk in real estate, where it could not be more unproductive.
    - BirdieNZ 5y ago
      If someone owned all the water in the world, then "fair market price" is whatever they choose to set the price at. That doesn't mean that as a society we should be comfortable with allowing one person to own all the water in the world.
  - ahepp 5y ago
    It sounds to me like you are describing a situation where supply is constrained, rather than one where the price is not set primarily by supply and demand. I feel this distinction is important because it could guide whether the solution is based on encouraging more capital investment to do things like increase density, or whether the solution is essentially to ban outside investment.
Ozzie_osman 5y ago
Here's a person who worked a working class job, lived frugally, saved up, took a few risks, and was able to buy a couple out of state properties. How this will be perceived? Very positively, at least by me. Good for them. We're not talking about a slumlord here.
- treis 5y ago
  The part you're missing is that they bought into one of the highest appreciation real estate markets ever. Yes they made smart moves, but this is mostly a story of falling ass backwards into wealth. Put them in almost any other city and the story doesn't end the same. And the cherry on top is that they use their new found wealth to deny others the opportunity they had.
  - Ozzie_osman 5y ago
    I'm missing what they did that denies others opportunity. Buying a couple houses in another state? And sure, any wealth story has some piece that involves luck and/or timing. Nothing wrong with that.
    - treis 5y ago
      >I'm missing what they did that denies others opportunity. Buying a couple houses in another state? Yes. The number of affordable fixer uppers in a place like Madison is effectively fixed. The two houses they bought means two fewer young people can climb onto the property ladder. >And sure, any wealth story has some piece that involves luck and/or timing. Nothing wrong with that. The wrong part is not having the self awareness to realize that they were lucky.

refurb 5y ago

Drive up the rent? “We are renting to willing tenants at the fair market price.” Landlord’s cant “drive up the rent” any more than employees can be unfairly paid too much.

dazc 5y ago
Renting below 'fair market price' would be one way? In the UK we have a lot of private landlords - some have borrowed heavilly and are merely expoloiting their ability to obtain a mortgage where their tenants can not and are making marginal amounts of money in the process (often much less than if they simply invested what cash they have in a tracker fund). Some have inherited a property or are renting out buildings they bought twenty years ago where the amount of rent they charge is multiple times out of sync with their actual costs. So long as all of these people can say they are only charging 'fair market' prices then the problem persists.
BirdieNZ 5y ago
Land rent works very differently than most other markets because land is of limited supply. "Fair market price" is determined by what people who live in an area can afford to pay, rather than primarily supply and demand. Add to that restrictive zoning laws and you end up with a situation where most landlords are extracting significant economic rents from their tenants without needing to provide any extra service or quality of good to earn that rent.
- refurb 5y ago
  I don’t disagree that zoning impacts prices, but it’s still “fair market price”, no? I choose to move to SF knowing that rents were absurd compared to other cities I could have moved to. But I choose to roll the dice on SF being the better choice. I get it that people who grew up in SF face a different choice - leave or not. But it’s still a choice for them.
  - HarryHirsch 5y ago
    Established landlords have friends on the local council, and can determine who gets a building permit. Prices are set by the two or three biggest players, who all know each other. That stuff happens all the time.
    - refurb 5y ago
      Sure, but someone still makes a decision “yes this rent is worth it” or “no I’ll go somewhere else”.
      - HarryHirsch 5y ago
        With a greater supply the clearing price will be lower. That's a trivial statement. The real problem is elsewhere - by constraining supply landowners are inhibiting economic development. Newcomers have a choice, if accommodation is too high they'll go elsewhere, so economic growth in productive industries will take place elsewhere. Man, not too long ago I shitcanned a new job 4 days in over the insane housing prices. A good number of my colleagues had a sideline in Airbnb, that asset inflation machine. There's far too much capital sunk in real estate, where it could not be more unproductive.
  - BirdieNZ 5y ago
    If someone owned all the water in the world, then "fair market price" is whatever they choose to set the price at. That doesn't mean that as a society we should be comfortable with allowing one person to own all the water in the world.
- ahepp 5y ago
  It sounds to me like you are describing a situation where supply is constrained, rather than one where the price is not set primarily by supply and demand. I feel this distinction is important because it could guide whether the solution is based on encouraging more capital investment to do things like increase density, or whether the solution is essentially to ban outside investment.

Ozzie_osman 5y ago

Here's a person who worked a working class job, lived frugally, saved up, took a few risks, and was able to buy a couple out of state properties. How this will be perceived? Very positively, at least by me. Good for them. We're not talking about a slumlord here.

treis 5y ago
The part you're missing is that they bought into one of the highest appreciation real estate markets ever. Yes they made smart moves, but this is mostly a story of falling ass backwards into wealth. Put them in almost any other city and the story doesn't end the same. And the cherry on top is that they use their new found wealth to deny others the opportunity they had.
- Ozzie_osman 5y ago
  I'm missing what they did that denies others opportunity. Buying a couple houses in another state? And sure, any wealth story has some piece that involves luck and/or timing. Nothing wrong with that.
  - treis 5y ago
    >I'm missing what they did that denies others opportunity. Buying a couple houses in another state? Yes. The number of affordable fixer uppers in a place like Madison is effectively fixed. The two houses they bought means two fewer young people can climb onto the property ladder. >And sure, any wealth story has some piece that involves luck and/or timing. Nothing wrong with that. The wrong part is not having the self awareness to realize that they were lucky.