Gritsngravy
Superstar
Wasn’t banks and hedge funds the main buyers of homes for the last three four years?
And when the crash happened in 08, wasn’t they also purchasing a lot of property after that?
Why rent is so expensive and black homeownership is so low
- Thread starter yung Herbie Hancock
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And when the crash happened in 08, wasn’t they also purchasing a lot of property after that?
So the bills for landlords have stayed the same? Landlords took the biggest Ls in history during the pandemic. That didn't affect them? you think every landlord is rich, right?
They own less than 5% of housing stock.
They should own 0%, but their role in prices going up is inflated. The main cause is simply supply << demand, and demand is being driven by way more individual actors than by hedge funds.
Black Homeownership is low because of racism. Government Racism, Business Racism, Organized Citizens racism, and individuals racism (including White and non-Blacks)
Rent is expensive because
- Black folks did not get their 40 acres
- Black folks did not largely participate in the land grabs during American expansion
- Blacks that did own their land, were preyed upon by local whites and local institutions
- Black income is low because
- black education has been low
- black access to blue collar jobs has been low, or very circumscribed by whites, and by unions.
- Banks did not historically loan to black people
- Banks did not historically loan on houses in black neighborhoods
- Banks still discriminate against Black people with the exact same income and credit
- Black income is still low relative to others, for doing the same work, and having the same education - and that's even if we get past the previously HUMAN resume screening, which has only been exacerbated by algorithms
- Because of the general black economic life in the country - a lot of "intra and inter-generational wealth transfers are not happening, or are happening too soon"
Rent is expensive because
- Housing is White America's greatest source of wealth
- everything must be done to preserve housing value
- even though as I've mentioned time and time again - nursing homes eat up most of the value, and most generational wealth is like 50K
- everything must be done to preserve housing value
- Zoning is pro-SFH, and informally pro - white single family houses
- Developers can't build apartments
- Greedy developers can't make a great profit building "affordable" income apartments.
- Government lacks the capacity and the will to build social housing like Austria or Singapore.
- Building Codes and Zoning laws increase cost to build
- By not letting Black people in the trades on a generational level - they have boosted the wages of white trades people (and the cost of doing anything construction wise)
- America hasn't been building nearly enough housing in places where houses are needed
- because of largely white profiteering during the World Financial Crisis - specifically Wall Street making derivative bets on the housing market - which dwarfed the actual housing market losses by 4x
Gritsngravy
Superstar
Where you getting that percentage from
Landlords didn't ruin the economy
But I have very little sympathy for landlords, especially the ones that got "ruined" by COVID. It's a business, just like others that either went under or thrived due to the pandemic. Unless you were highly leveraged, depending on rental income to stay afloat, you were fine. And that's the reward/risk with leverage: awesome during the boom, horrible during the bust.
Lawmakers introduce bill to ban hedge funds from buying houses
Democrats push bill to take Wall Street out of housing.
ny1.com
3.8% according to this link.
You can make the "what do you really own" argument for nearly anything.
Of course you have to pay property taxes, unless you plan to constantly pave the roads leading to your property, maintain the water mains, fix the traffic lights, bring your own garbage to the landfill.
The property tax argument is such a lazy, intellectually dishonest one. I hate having to pay property taxes, but it's much better than the alternative.
I think the point is that there is no free lunch when it comes to housing, and whether you rent or buy, you'll always pay for housing until you die. Even after the mortgage is paid off.
iceberg_is_on_fire
Wearing Lions gear when it wasn't cool
One of the greatest unintentional side effects of my career in being an accountant is that I've been able to give black people sound financial advice and to be viewed as credible.
Many a time I've talked about home ownership, write offs, etc. A lot of our issue is that we simply just don't know what's out there.
Many a time I've talked about home ownership, write offs, etc. A lot of our issue is that we simply just don't know what's out there.
Vandelay
Life is absurd. Lean into it.
Omg, disaster!!! Too many apartments on the market! We're doomed!
(We = property speculators)
To quote the bytchass that helped fuel this trend..."There is a simple answer, but not an easy answer".
We could build more, but cities...all the "in demand" cities aren't zoned properly for this new influx of people. Zoning isn't just the type of property you build in an available location, it's the plumbing, size of the building, available units, parking, traffic, school proximity, waste management and a bunch of other things.
Housing is cheap in certain places, but the infrastructure, commute, and job availability is probably absolute shyt.
Landlords didn't ruin the economy
But I have very little sympathy for landlords, especially the ones that got "ruined" by COVID. It's a business, just like others that either went under or thrived due to the pandemic. Unless you were highly leveraged, depending on rental income to stay afloat, you were fine. And that's the reward/risk with leverage: awesome during the boom, horrible during the bust.
Lawmakers introduce bill to ban hedge funds from buying houses
Democrats push bill to take Wall Street out of housing.
3.8% according to this link.
That 3.8% that hedge funds owns is a lot or a little depending on your perspective. But I'm willing to bet most of their holdings are in cities that are housing constrained and probably have done the math to hold the properties they have hostage to maximize their revenue, fukking over everyone else in that neighborhood/metro area.
People won't be happy with my solution, but I think they should rezone and expand the municipality to absorb nearby suburbs. You not only allow for more zoneable area, but you increase the tax base to be able to support the municipality; if I'm not mistaken Houston and Phoenix have done this a number of times over the years...and it's why their population keeps creeping up despite both "cities" being really just big ass suburbs.
The problem is you have these suburbs that don't want to be a part of the city. And I get their concerns (think Buckhead in Atlanta)...but fukk em...this is problem that's spiraling out of control that will wreck the entire economy if it continues to pace as it is.
The other solution has been seemingly untenable for black people. We need to think about marriage more and building legacies. It's how we build generational wealth for our people. But our marriage record has been shyt for 30-40 years and it's getting worse. As the years go on, I see why the ancients pushed for marriage. There's so many intangibles associated with marriage that promote a productive society.
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Then those cities would be on the hook for all that infrastructure - roads, water mains, sewer lines, etc - and the dense parts of the cities would further subsidize those suburbs.
A lot of these white suburbanites believe that property taxes rob from the rich and give to the poor - when in reality it's the other way around.
- Brexit
- Federal Monies go from Blue States to Red States
- So called Illegals pay more into Social Security than they take out.
- Government run like a business means the average person pays more
- Deregulation often means higher prices and worse service.
In DC - all them cute row houses in Dupont, Logan, Georgetown, Etc - need to be replaced by much more dense high rises.
NYC - Same could be said for a lot of Manhattan and BK.
Houston - they need to do a lot more infill in the city, specifically along transit routes. (let's not get into the ticking time bomb of climate change...)
But America has too much zoning and given property owners too much ability to stall development via the court system.
Coulda been had bullet trains, dense walkable cities, better integration, better infrastructure - except for the fact that "property rights" trump all - and a lot of them property rights are code words for "no blacks near me".
Vandelay
Life is absurd. Lean into it.
But there will be a bigger tax base, and if I'm not mistaken generally there's a bigger tax base per capita in the burbs than the city.
Help me understand the correlation here. I think the problem now is a lack of enforcement and accountability; I don't think it's a forgone conclusion if cities expand it's a net negative for the existing population. I see it bring some more parity to the already overt advantages the suburbs have been getting for decades. I think if the appropriate tax structure is in place, it will tax the rich more but those funds will be allocated appropriately if the right system and people are in place. (A lot of "if's" I know)
No argument from me here. Zoning is a necessary evil so you don't place a tire factory or a recycling center across the street from a school. But the moment housing turned from a necessity to an investment we fukked ourselves. People deserve a right to home ownership. I'm not advocating emminent domain, but the NIMBY's wield way too much power.
Bullet trains won't work in the US outside of 2 maybe 3 megaopolis's in the US. I can down a rabbit hole with this as I commute from Chicago to Milwaukee multiple times a month for work.
So when a suburb is built, it's not just the houses being built.
- New Roads
- New Water Pipes
- New Water towers
- New Sewage lines
The developer might pay that cost, or it might split it with the city. But typically once the developer is finished building out the neighborhood - they take their money and leave. The infrastructure is "donated" to the city.
The city then collects taxes from the houses and businesses in the area.
The property tax and local sales tax pay for infrastructure, city government, teachers, cops, firefighters - and their equipment and their retirement - etc.
So at first there's a good bump in city finances with these new developments - but then the real bills start coming due.
30-40-50 years down the line (which might be all of an adults life, but means nothing for a city)
- Roads need to be maintained
- Pipes need to be replaced
- Towers need to be built
Big Box stores don't pay that money either.
So the cities end up having to go to Wall Street and take out a loan (municipal bond). To cope with rising costs of aging infrastructure (and increased demand for city services) the cities will raise property taxes and sales taxes...
In theory a city could actually do the math of the lifecycle of the infrastructure and make that a part of zoning/when the approve annexation etc - but they have not in the past 70 years. They could start doing this for new places, but the city is made of mostly old places. And even then, you'd have new homeowners complaining about high taxes.
Strong Towns - the guy behind it - was a city engineer - and he figured that out this Ponzi scheme. The run down and dense parts of the city paid more taxes in than the rich suburban parts of the city. The taxes on current home owners to pay for infrastructure (and the employees) from now and until 30 years (along with inflation) would make most additions to the tax base untenable.
Agreed on changing a necessity to investment.
I am advocating eminent domain and many other things that would get me tossed out of The Coli Capitalist club. At the root of a lot of this conversation is politics, but a lot of it is racism.
The federal highway system doesn't work inside the US without MASSIVE subsidy. And that doesn't include the defense industry which is at the base of our "cheap" energy in the first place.
The conversation about Urban planning quickly spirals out past local taxation, and into domestic and foreign policy.
But since money is made up, the society can decide what is valuable. There is no invisible hand, institutional actors force a lot of decisions.
How long was the pandemic
? 12 to 18 months, the most? Even after Sept 2021, most landlords rebounded and gotten back all of their losses since the end of 2022. Landlords been 
ever since, and bounced back to the point where they made millions of people plunge into poverty.
This is common fukking sense. The reason why rent and housing is so high is because demand > supply. Flood the markets with new housing stock and prices on both rents and houses will go down.
But then existing homeowners and property owners who bought high are fukked, so that's why they oppose new building. "Preserve the character of the neighborhood"
Food for thought @Wiseborn as you finalize plans to kill landlords. Why not kill them inside by flooding the market?
Interest rates.
Powell said he's probably gonna cut them this year after that you can take all the mexicans in shelters in New York and move them around building houses.
But even then who has the money to buy? People have tons of credit card debt it will be a minute before the Bnaks are comfortbale enough to loan people money.
Everyone still remembers the Great recession and what caused it.