what would happen if we pegged rent? (1 Viewer)

Here is how you increase supply and lower costs:


End short term rentals of single family homes and condos


Reform NAR/MLS and end percentage based commissions.



i dont know much about most of the items you listed, but i do know a little about the two above... In the first item above, you are literally suggesting eliminating an entire industry.. it would be like saying “Get rid of Uber and all rideshare services”.. I mean, I realize these arent industries that have been around for 50 or 100 years, but they are still a major part of the economy, and they are legitimate sources of income for people who rent out homes and condos short term.


As far as the other item above, you are suggesting that an entire industry (real estate and agents) change their business model dramatically.. What, would you just pay an agent a couple hundred bucks to help you buy or sell a house? I think the things you listed are very easy to type on a message board, but not very realistic, to say the least.
 
In my area, we have Apple moving in (more than before), Tesla setting up, and all kinds of people emigrating from states where $80k/ year is poor and small houses cost $500k+. The average budget of home buyers here is an absurd $800k.

My house has, supposedly, doubled in value in the 10 years we've owned it ... 50% of that has been in the last 6-12 months. People are putting their houses up for sale and getting dozens of offers, many sight unseen, for much more than the original asking price.

I don't know about the rest of the country.
Heck i live in the woods of Bastrop County. Property has boomed big time. In 2014 bought 6 acres 29,500 cash. Put a small house cash for 60 something cash. Now it has a tax value of slightly above 300K
 
i dont know much about most of the items you listed, but i do know a little about the two above... In the first item above, you are literally suggesting eliminating an entire industry.. it would be like saying “Get rid of Uber and all rideshare services”.. I mean, I realize these arent industries that have been around for 50 or 100 years, but they are still a major part of the economy, and they are legitimate sources of income for people who rent out homes and condos short term.


As far as the other item above, you are suggesting that an entire industry (real estate and agents) change their business model dramatically.. What, would you just pay an agent a couple hundred bucks to help you buy or sell a house? I think the things you listed are very easy to type on a message board, but not very realistic, to say the least.
Air B&B is pulling hundreds if not thousands of properties out of the long term rental market in cities. That’s what hotels are for and why land is zoned. Air B&Bs sit vacant 20-23 days per month. This reduced housing stock raises prices. Cities need to push back on these non-owner occupied short-term rentals.

It’s the last thing on the list because it’s the most difficult. It takes almost zero more costs to sell a $200k house than a $600k house in hot HCOL markets where the average is 7 days listed. I literally see agent cell phone photos for 500k homes. However, the cost to the buyer/seller is 12k vs 36k because of the expected 6% agent fees. Add another 4-6% for taxes and closing and every house has to sell for 10-12% over purchase for the seller to break even. The buyer is ultimately paying these costs. The NAR/MLS forces the brokerage/agent structure. The percentage based fee for the service provided by most agents with a brokerage taking 30-60% is just dumb. NAR shouldn’t control the agents and the MLS. It’s a monopoly which explains the costs.
 
Here is how you increase supply and lower costs:
  1. Reduce permit costs and expedite reviews.
  2. Build term-limited public housing with enforceable removal policies.
  3. Enforce zoning, increase multipurpose, and encourage building vertically.
  4. End short term rentals of single family homes and condos.
  5. Expedite evictions.
  6. Increase vacancy property taxes.
  7. Encourage Co-Ops.
  8. Lower transaction/recordation taxes on single family.
  9. Reform NAR/MLS and end percentage based commissions.
The idea of capping the cost on private property is way off. ADUs and rent controlled units are just units subsidized by everyone else in a building. Section 8 is questionable for whether it inflates rents at the public’s cost.

Rents in some major cities are down double diget percentages. The suburbs are spiking from demand. We could see some leveling of the cost of living differences between communities which would be good for cities.

1. Yes
2. Don't know.
3. Mostly yes, but some areas have limits on vertical buildings. In DC building height is limited. I forget, maybe 6 to 10 floors. DC probably isn't the only place with those type of restrictions. Suburbs in some areas have those type of restrictions as well. Changing the building codes is easier said than done.
4. I just don't see that happening. It's a big business and a lot of people would fight that tooth and nail. I do think it would be a good thing though.
5. Harsh, yes, but true. The moratorium needs to end. A lot of your smaller sole owner, and partnerships are feeling the squeeze and would be forced to sell. Once the moratorium lifts, renters will be forced to either move out or pay up.
6. Not sure about other places, but in DC, vacant properties take a massive hit. When I owned a house in DC, somehow they thought it was vacant. I lost my homestead exemption and they jacked up the tax assessment x5. Got a bill in the mail saying I owed the District almost $30k. Talk about a heart attack when I saw that. I had to do to city hall (iirc) to get it cleared up. I'm sure other cities have similar rules.
7. Yes.
8. For sure.
9. Not sure how I'd change it or how much difference it would make.

It's been a while since I last looked, but if a home is rented or otherwise not owner occupied in DC, there is a bump up in the assessment, but I'm not 100% sure on that.
 
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That’s what hotels are for


”That’s what taxi cabs are for“ would be an argument someone might use if they didnt like Uber and Lyft.

I’m not saying there shouldn’t be areas where STR’s are permitted, and areas where STRs arent permitted.. perhaps that is a solution, and is already the case in some areas.



It’s the last thing on the list because it’s the most difficult. It takes almost zero more costs to sell a $200k house than a $600k house in hot HCOL markets where the average is 7 days listed. I literally see agent cell phone photos for 500k homes. However, the cost to the buyer/seller is 12k vs 36k because of the expected 6% agent fees. Add another 4-6% for taxes and closing and every house has to sell for 10-12% over purchase for the seller to break even. The buyer is ultimately paying these costs. The NAR/MLS forces the brokerage/agent structure. The percentage based fee for the service provided by most agents with a brokerage taking 30-60% is just dumb. NAR shouldn’t control the agents and the MLS. It’s a monopoly which explains the costs.


I agree with what Dave said above, I’m just not sure that it would make too much of a difference.. i think all it would do is put a lot of realtors out of business, or force them to subsist on much, much less.
 
”That’s what taxi cabs are for“ would be an argument someone might use if they didnt like Uber and Lyft.

I’m not saying there shouldn’t be areas where STR’s are permitted, and areas where STRs arent permitted.. perhaps that is a solution, and is already the case in some areas.

I agree with what Dave said above, I’m just not sure that it would make too much of a difference.. i think all it would do is put a lot of realtors out of business, or force them to subsist on much, much less.

I don’t think the taxi cab comparison works. Most cab systems were monopolies or commissions with set prices and every car was similar. Hotels are actively competing with each, boutiques, and traditional owner occupied B&Bs. Plus, Uber/Lyft have their own labor issues.

I’m not suggesting ending the long term rental of SFH. But it’s bad for communities to have SFH tied up vacant for 2/3 of the year while housing becomes further out of reach for its residents. I’m open to green and red zones for STR of SFH. Seasonal beach communities are a good example of those green areas. Good zoning contributes to good communities. Not every business with a license needs to operate in perpetuity.
 

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