There's quite a few drops in the Columbus metro but they are small -- 5 percent at most. Mostly in the Uncool Crescent where people overshot since much of it is too far from white-collar jobs.

Devastating

 

 

Reasons I will not be leaving my place anytime soon. For a similar monthly payment I'd have to significantly reduce my quality of life. I'll just hold onto my equity for the time being and future jmicha can have access to it.

Not sure why Wells Fargo is hassling me to refinance right now lol.  Do they think rates will be 7 or 8% I really doubt that.                

Rates will certainly continue to rise, but it could be banks just need those refinance fees. Cash and institutional buyers are bypassing the conventional mortgage process, which isn't helping Wells Fargo. Combine that with a lot of people simply unable to afford homes, and I can see some desperation in their quieting lending departments.

 

If banks are not making loans or refinancing, they're not really making money.

Refi loan officer workload is right up there with car washes as far as unpredictability goes

Worse market for housing affordability in 40 years

 

As with the subjects I covered in my article posted in the Cleveland Housing Market, note the difference in the housing markets West vs. the East....

 

 

Wouldn't it be interesting if they held a recession for the USA but the Great Lakes cities refused to attend?

______

 

Fed’s housing market ‘reset’ has officially set off the second-biggest home price correction of the post-WWII era

Lance Lambert

Tue, November 29, 2022 at 7:19 PM

 

Among the 20 major U.S. housing markets tracked by Case-Shiller, the home price decline ranges from just -0.55% in Atlanta to -10.4% in San Francisco. (Chicago and Cleveland remain at their peak 2022 price).

 

https://finance.yahoo.com/news/fed-housing-market-reset-officially-001953434.html

2 hours ago, KJP said:

Wouldn't it be interesting if they held a recession for the USA but the Great Lakes cities refused to attend?

______

 

Fed’s housing market ‘reset’ has officially set off the second-biggest home price correction of the post-WWII era

Lance Lambert

Tue, November 29, 2022 at 7:19 PM

 

Among the 20 major U.S. housing markets tracked by Case-Shiller, the home price decline ranges from just -0.55% in Atlanta to -10.4% in San Francisco. (Chicago and Cleveland remain at their peak 2022 price).

 

https://finance.yahoo.com/news/fed-housing-market-reset-officially-001953434.html

https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20221129-1458251/1458251_cshomeprice-release-1129.pdf

 

Here's the full report link.

 

Cleveland and Chicago are technically off of their peaks, but just barely.

 

What's interesting to me is the comparison to Detroit and Minneapolis, which are both plunging more steeply than Cleveland and Chicago. Here's the table (not seasonally adjusted):

 

 

Hard for me to imagine we totally avoid a recession here, but you can see how much worse it's trending out west. San Francisco looks to be one month away from net negative 1-year change.

2 hours ago, KJP said:

Wouldn't it be interesting if they held a recession for the USA but the Great Lakes cities refused to attend?

______

 

RSVP cannot attend

7 minutes ago, Clefan98 said:

 

RSVP cannot attend

 

We have a thing.

Our net 1-year change looks to be generally in the middle of that pack, though (if you sorted by the last column).  Also, we were already very affordable pre-pandemic so we had less room to drop and more room to rise to be comparable to other cities the size of the 3Cs.

Hate to say it, but give it time.  Cleveland never misses a good recession party.  In fact, we've a reputation for being the ones passed out in the bathtub after everyone else leaves.

9 minutes ago, X said:

Hate to say it, but give it time.  Cleveland never misses a good recession party.  In fact, we've a reputation for being the ones passed out in the bathtub after everyone else leaves.

 

Past performance is not indicative of future results. And there are lots of fundamentals to suggest something different is happening this time. In some ways, it reminds me of the early 1990s when California was taking a beating but NE Ohio came through that recession in pretty good shape. Indeed, this time, it seems that there is a causational correlation between California (and the West's) losses and Cleveland's gains. In other words, one outcome is occurring because of the other.

27 minutes ago, X said:

Hate to say it, but give it time.  Cleveland never misses a good recession party.  In fact, we've a reputation for being the ones passed out in the bathtub after everyone else leaves.

Wow, I'm way more optimistic than this. I actually think we're positioned pretty well. Our labor force is very healthcare centric, more than ever before. And healthcare is pretty recession-proof. There's also lots of looming onshoring that we're going to get some of. And we're decent off fiscally because the city and state both used covid funding to pay down debt. We also haven't had much time to anchor property tax expectations based on unrealistic home valuations, which some markets have. A housing market that goes up 5% then down 5% is not the same as one that goes up 25% then down 25%.

 

All that being said hard to see us missing the bullet completely if there's a major global downturn.

I don't know what my situation says about a possible downturn in the locsl real estate market but here's the scenario. When l bought a house in Lakewood at the end of October there were five offers in two days. It was bid up $12,000 over ask but l got it for the ask as l had cash. Good for me, right? 

 

Not so fast because l can't seem to sell my condo in Rocky River even though it's an historic building in a great location. I've already dropped the price and have had only one very low ball bid and negligible showings. Time of year? Rising interest rates or is it a sign of a real estate downturn? 

39 minutes ago, cadmen said:

I don't know what my situation says about a possible downturn in the locsl real estate market but here's the scenario. When l bought a house in Lakewood at the end of October there were five offers in two days. It was bid up $12,000 over ask but l got it for the ask as l had cash. Good for me, right? 

 

Not so fast because l can't seem to sell my condo in Rocky River even though it's an historic building in a great location. I've already dropped the price and have had only one very low ball bid and negligible showings. Time of year? Rising interest rates or is it a sign of a real estate downturn? 

That surprises me about your condo.  A friend of mine sold his very old Cleveland Hts condo this past month in about a week with multiple bids.  Fourth floor of an old building with no elevator and it really could use some work.  Got his asking price which I thought was high in the first place (what do I know).

Edited November 30, 20222 yr by Htsguy

1 hour ago, LlamaLawyer said:

Wow, I'm way more optimistic than this. I actually think we're positioned pretty well. Our labor force is very healthcare centric, more than ever before. And healthcare is pretty recession-proof. There's also lots of looming onshoring that we're going to get some of. And we're decent off fiscally because the city and state both used covid funding to pay down debt. We also haven't had much time to anchor property tax expectations based on unrealistic home valuations, which some markets have. A housing market that goes up 5% then down 5% is not the same as one that goes up 25% then down 25%.

 

All that being said hard to see us missing the bullet completely if there's a major global downturn.

Health care may not be hit that hard or at all as that industry has been so short-staffed for a long period of time.  Staffing issues were the reasons given by UH in the scaling back of services at the Richmond Heights and Bedford facilities.  What may suffer in health care is the administration side, especially with consolidations of facilities going on.

A love stats that blow up widely held assumptions

 

 

 

 

I agree with the first point (more homeownership does not equal more wealth).  Certainly in my own life, homeownership is an expense, not an asset-building strategy.

 

However, I'm wondering about the flow of argument or assumptions that led to Aaron Carr's second point/tweet.  I don't read that Carl Heastie (whose name I don't know) as arguing for increased single-family zoning, or even increased owner-occupied multifamily necessarily (e.g., high-rise condos in high-density areas).  I don't necessarily read anything specific into it, it looks like just a platitude or talking point to me.

The whole sentiment started on Twitter 5~ years ago when home prices got out-of-control in the big coastal cities where the media (and their Twitter-loving interns) is concentrated.  

 

If you give examples of people who you know who lost big money on their primary residence or rental properties, you are doxed/banned.  

 

These people are too young to remember the 2008/09 collapse and the push for minority home ownership, begun under Clinton, that was partly responsible.  

19 minutes ago, Lazarus said:

The whole sentiment started on Twitter 5~ years ago when home prices got out-of-control in the big coastal cities where the media (and their Twitter-loving interns) is concentrated.  

 

If you give examples of people who you know who lost big money on their primary residence or rental properties, you are doxed/banned.  

 

These people are too young to remember the 2008/09 collapse and the push for minority home ownership, begun under Clinton, that was partly responsible.  

I think what you saw in the 2008/09 housing crash and the Clinton era experiment making home ownership more easy for everyone was that the equilibrium for home ownership vs renters in this country is in that 65-67% range and the rest are renters. When the policies of the late 90s that led to the irresponsible no doc loans pushed ownership rate up to 69-71% range the new home owners were too marginal to afford the upkeep of the properties and were often buying inflated properties that carried high maintenance/repair costs without the financial means to make it happen (let alone pay the monthly mortgage and fees). 

 

Currently, homeownership rates are sitting around the historical equilibrium so any new efforts to try and push those rates up should be slapped down as irresponsible. 

34 minutes ago, Gramarye said:

I agree with the first point (more homeownership does not equal more wealth).  Certainly in my own life, homeownership is an expense, not an asset-building strategy.

 

However, I'm wondering about the flow of argument or assumptions that led to Aaron Carr's second point/tweet.  I don't read that Carl Heastie (whose name I don't know) as arguing for increased single-family zoning, or even increased owner-occupied multifamily necessarily (e.g., high-rise condos in high-density areas).  I don't necessarily read anything specific into it, it looks like just a platitude or talking point to me.

As Warren Buffet pointed out, "your home is a place to live, it is not an asset"

 

At the same time, what home ownership does create is a forced savings account if people properly pay down the mortgage. there are lots of reports that lament the savings rate in the US as pathetic. Homeownership creates a forced savings, even if equity does not rise or rise faster than inflation in many cases. Oftentimes, if someone gets in a pinch and has to move or downsize, they may be able to pull out some equity on the sale of their house to help sustain them as they downsize. 

 

One of the biggest problems that happened during the housing crunch is people were too quick to treat their homes like an appreciating piggy bank and used equity lines to buy expensive toys or do major home improvements that were not necessarily prudent at the time.

18 minutes ago, Brutus_buckeye said:

 were often buying inflated properties that carried high maintenance/repair costs without the financial means to make it happen (let alone pay the monthly mortgage and fees). 

 

 

FHA inspections reduced this problem because it forced low-income buyers to purchase well-maintained homes.  Unfortunately, the changes under Clinton allowed low-income people to circumvent this very important feature of the earlier FHA process.  

 

Recently I heard an NPR story that accused FHA inspections of "discriminating against minorities".  Here we go again...

 

 

28 minutes ago, Brutus_buckeye said:

I think what you saw in the 2008/09 housing crash and the Clinton era experiment making home ownership more easy for everyone was that the equilibrium for home ownership vs renters in this country is in that 65-67% range and the rest are renters. When the policies of the late 90s that led to the irresponsible no doc loans pushed ownership rate up to 69-71% range the new home owners were too marginal to afford the upkeep of the properties and were often buying inflated properties that carried high maintenance/repair costs without the financial means to make it happen (let alone pay the monthly mortgage and fees). 

 

Currently, homeownership rates are sitting around the historical equilibrium so any new efforts to try and push those rates up should be slapped down as irresponsible. 

That bolded part is not true at all. Sub-Prime lenders that offered these type of loans were not regulated by the FDIC and had no obligation to the CRA requirements. FDIC regulated loans under CRA requirements had similar default rates to conventional loans.

 

The loans that had highest default rates were completely unregulated and those lenders fought against any kind of regulation. 

I wonder if the changing household demographics may also affect the advantage of owning vs. renting.

 

Being married with three kids, I can't really imagine renting because there's basically nothing I can rent that has 3/4 bedrooms and is even remotely as affordable as my mortgage.

 

But if I had no kids, the cost calculus for amount of space needed would be totally different.

2 minutes ago, LlamaLawyer said:

I wonder if the changing household demographics may also affect the advantage of owning vs. renting.

 

Being married with three kids, I can't really imagine renting because there's basically nothing I can rent that has 3/4 bedrooms and is even remotely as affordable as my mortgage.

 

But if I had no kids, the cost calculus for amount of space needed would be totally different.

 

More and more families are childless, though, and more and more individuals are single well into adulthood.  (Not endorsing that, just saying it's a fact.)

 

The fact that we were about to start having kids that was definitely among the top drivers for us to buy a house.  Not just because of the space and the lack of 3-4br rentals, but because we were about to start putting down roots in a neighborhood.  Owning did cost us more than renting in 2013, but seeing where rents in Akron have gone in the last 10 years (hard to believe we'll have had this house for that long), we've "profited" in the sense of rent increases that we've certainly avoided over that timeframe.  But that would have been less relevant to us if we'd planned or needed to sell the house (pay a realtor 6% off the top, etc.).

 

That said, I think the larger issue, though it might be outside the scope of this thread, isn't that changing demographics are affecting the advantages of owning vs. renting.  I think the causal relationship may be going the other way: the facts that (a) owning tends to be more prudent for families than for singles, and (b) owning is prohibitively expensive in lots of large cities are changing the demographics, rather than the changing demographics affecting the housing market.  People are delaying forming families and having children in part because of the barriers to homeownership.

5 minutes ago, Gramarye said:

 

People are delaying forming families and having children in part because of the barriers to homeownership.

 

 

Well plenty of people from wealthy families are still enjoying $100k+ weddings and gifted houses, but still not having many kids.  I know a fair number of wealthy couples who could afford to be the Family Von Trapp, including a singing nanny, but three kids seems to be the ceiling.  

 

 

Here's yet another hit piece from the NY Times re: the housing market:

https://www.nytimes.com/2023/01/12/realestate/black-real-estate-agents-discrimination.html

 

The national media has really glommed onto the "primary residence = wealth" narrative, and that African-Americans are poorer than White Americans primarily because of discriminatory housing practices.  Yesterday it was an article on the dearth of black appraisers, today it's the shortage of black realtors.  What will the NY Times sprinkle on us tomorrow?  

 

Unfortunately, I have the sneaking suspicion that all of this is being driven by a Silicon Valley attempt to subvert realtors, MLS, etc.  They're going to cloak their planned action (likely national legislation) as some sort of do-good act that works around the current system, which we are told is head-to-toe racist.  

 

I know a Korean-American realtor who moved from Cincinnati to San Francisco in the early 2000s.  She made much more money selling homes in the Bay Area than in Cincinnati because...the homes there are often 5X more expensive.   https://www.realtor.com/realestateagents/56ca2e75bb954c01006d1700

 

46 minutes ago, freefourur said:

That bolded part is not true at all. Sub-Prime lenders that offered these type of loans were not regulated by the FDIC and had no obligation to the CRA requirements. FDIC regulated loans under CRA requirements had similar default rates to conventional loans.

 

The loans that had highest default rates were completely unregulated and those lenders fought against any kind of regulation. 

 

In the Clinton and Bush II days liberals and other people who knew that at least some regulation is required in many industries didn't just have conservatives against them but also neoconservatives and neoliberals. Liberals, already weakened by the '80s, now had three significant factions insisting that regulation was bad. Clinton, both a neoconservative and a neoliberal that believed regulation was getting in the way of minority homeownership certainly got sucked into thinking he was doing a good thing for minorities and the whole shebang would have been framed that way if it worked as thought. Instead as we progressed on into the Bush years the lack of regulation that extended to all mortgages and the refusal to do anything about it while rich white guys got richer and richer in their perceived fantasyland of little to no regulation or enforcement. Even if the whole thing started as a seemingly noble way to increase minority homeownership, the results quickly became white people buying $500,000 houses when they could only afford $160,000 and nothing was done. In fact it sped up exponentially while rich guys counted their cash (that for many of them would all be lost after their greatest fantasy of no regulation came true) and shouted down any criticism while cursing anyone that cut off the cash early (most notably, the French).

 

Fact is, Black people buying $50K (at the time) houses in Driving Park, Madisonville or the Cleveland East 50s didn't bring the whole thing down since it didn't happen nearly as much as tribal tattoo Chad and Karen overbuying by $350K and overfunded yet underknowleged speculators overpaying for marginal overproduced suburban sprawl properties. But of course something rich white guys did to mess things up globally always has to be turned around and blamed on Black people greedily buying modest primary residences.

 

As far as FHA and VA regulations go, some of them have historically been a bit onerous, requiring some things to be a bit too new or spending too much time worrying about the positions of stairway handrails. While the idea of regulation is good so that someone doesn't buy a house with basically no roof the devil is in the details. The US government tends to make things like this hard to use so that they get used less -- which makes Republicans more likely to OK them.

1 hour ago, freefourur said:

That bolded part is not true at all. Sub-Prime lenders that offered these type of loans were not regulated by the FDIC and had no obligation to the CRA requirements. FDIC regulated loans under CRA requirements had similar default rates to conventional loans.

Certainly the lack of regulation contributed to the problem but you fail to properly connect the dots. The policies of the Clinton admin in the late 90s were designed to force Fannie and Freddie to increase the home ownership rate nationwide. While sub-prime loans existed before and served a purpose, the policies created to encourage home ownership forced these agencies, under pressure from the executive branch to get the homeownership rate up. They could not accomplish this under their current underwriting standards so they had to relax those standards and start accepting loans that would have been kicked back or not eligible for 30 year Fannie/Freddie financing only a few years prior. Fannie/Freddie then opened the spigot for the originating banks to start accepting these types of loans because their policies encouraged them. Furthermore, they put pressure on the banks to expand their lending to lower income neighborhoods to expand home ownership there and tick up home ownership rates. Initially, this led to a speculative bubble as there was a surge of demand for easy to get loans. With home prices rising, there was little concern about default because the collateral of taking back the home would make the banks and Fannie/Freddie whole on their guarantee to Wall Street.  In order to continue to satisfy this demand and the push from the government to get more loans underwritten, they relaxed their standards even more. 

For banks like National City or Washington Mutual, they recognized the money that could be made by underwriting subprime loans in mass volumes. This was great fee income for these banks, especially since they could just sell the paper after closing. It was a great business, until the bubble burst and rates started to rise and people could no longer afford their properties. National City had to claw back a ton of loans that they underwrote which put them underwater. 

So Yes, while regulation was soft, and there are certainly more regulations today, a lot of it could have been avoided in the first place is the regulators at the time actually worked to enforce the regulations on the books instead of trying to arbitrarily pump up home ownership rates without qualified buyers. 

15 minutes ago, GCrites80s said:

Fact is, Black people buying $50K (at the time) houses in Driving Park, Madisonville or the Cleveland East 50s didn't bring the whole thing down since it didn't happen nearly as much as tribal tattoo Chad and Karen overbuying by $350K and overfunded yet underknowleged speculators overpaying for marginal overproduced suburban sprawl properties. But of course something rich white guys did to mess things up globally always has to be turned around and blamed on Black people greedily buying modest primary residences.

I would not necessarily stereotype it like this. There were a lot of people that contributed to the problem. Certainly, there were a portion of middle class white suburbanites who would buy a $300k home on a $15/hr wage or people with an inconsistent income based on commission. Certainly, a lot of developers, rehabbers, flippers, urban poor paid a role too. But most importantly, the biggest issue was the lack of gate keeping from the lenders and regulators at the time. There was still plenty of regulation to stop this but regulators were looking the other way because the edict was to drive up homeownership rates

51 minutes ago, GCrites80s said:

While the idea of regulation is good so that someone doesn't buy a house with basically no roof the devil is in the details. The US government tends to make things like this hard to use so that they get used less -- which makes Republicans more likely to OK them.

 

I haven't seen it in awhile but I do remember listings that included NO FHA in all-caps.  The FHA inspection + repair back & forth can take weeks or months.   A seller is going to take $200k all-cash offer versus a $220k FHA offer every single time.  

 

I remember being on the Florida Gulf Coast in 2006, seeing condo towers popping up, one after the other, in that region's various mediocre beach towns.  I remember wondering who was going to buy those units.  The answer was nobody until 2014 or 2015.  We haven't seen condo construction return to anything like previous levels in the 13~ years since the market hit rock-bottom. 

 

 

47 minutes ago, Brutus_buckeye said:

Certainly the lack of regulation contributed to the problem but you fail to properly connect the dots. The policies of the Clinton admin in the late 90s were designed to force Fannie and Freddie to increase the home ownership rate nationwide. While sub-prime loans existed before and served a purpose, the policies created to encourage home ownership forced these agencies, under pressure from the executive branch to get the homeownership rate up. They could not accomplish this under their current underwriting standards so they had to relax those standards and start accepting loans that would have been kicked back or not eligible for 30 year Fannie/Freddie financing only a few years prior. Fannie/Freddie then opened the spigot for the originating banks to start accepting these types of loans because their policies encouraged them. Furthermore, they put pressure on the banks to expand their lending to lower income neighborhoods to expand home ownership there and tick up home ownership rates. Initially, this led to a speculative bubble as there was a surge of demand for easy to get loans. With home prices rising, there was little concern about default because the collateral of taking back the home would make the banks and Fannie/Freddie whole on their guarantee to Wall Street.  In order to continue to satisfy this demand and the push from the government to get more loans underwritten, they relaxed their standards even more. 

For banks like National City or Washington Mutual, they recognized the money that could be made by underwriting subprime loans in mass volumes. This was great fee income for these banks, especially since they could just sell the paper after closing. It was a great business, until the bubble burst and rates started to rise and people could no longer afford their properties. National City had to claw back a ton of loans that they underwrote which put them underwater. 

So Yes, while regulation was soft, and there are certainly more regulations today, a lot of it could have been avoided in the first place is the regulators at the time actually worked to enforce the regulations on the books instead of trying to arbitrarily pump up home ownership rates without qualified buyers. 

You are still missing the big picture here. The Fed's encouraged lending to low-income families and other marginalized groups. I agree. The Feds did this by using the CRA which regulated FDIC insured banks. Again, the default rates on these loans were similar to conventional loans. 

 

Subprime lenders have no requirements under the CRA. The lobbied for fewer regulations on their own accord. Sub-prime loans were highly profitable for these lenders and they did not want the gubment to impede their profits. These lenders were not acting out of any obligation to the community or governmental authority. 

1 hour ago, freefourur said:

You are still missing the big picture here. The Fed's encouraged lending to low-income families and other marginalized groups. I agree. The Feds did this by using the CRA which regulated FDIC insured banks. Again, the default rates on these loans were similar to conventional loans. 

 

Subprime lenders have no requirements under the CRA. The lobbied for fewer regulations on their own accord. Sub-prime loans were highly profitable for these lenders and they did not want the gubment to impede their profits. These lenders were not acting out of any obligation to the community or governmental authority. 

What you are missing is that prior to that, Fannie/Freddie had regulations and rules that they would not underwrite sub-prime borrowers. Because of the change in government policy they lowered the threshold and started accepting sub-prime loans and packaging them in securities with prime loans. I dont think you can blame the sub prime lenders for going after a new line of business that was now available to them. It was a policy of the government implemented by putting pressure on Fannie/Freddie to lower their underwriting standards to accept these loans. Fannie/Freddie complied, especially because they could make a lot of money themselves and offload the risk to the market. Further down the food chain, the other banks joined the party as well as the sub prime lenders because the chief gatekeeper pretty much encouraged those standards. 

 

Yes, sub-prime lenders may not have had the same requirements, but prior to the late 90s they were not allowed to play in the Fannie/Freddie playhouse. 

https://www.zillow.com/research/2023-hottest-market-31982/

 

Seems promising. Also--grain of salt.

Progressives urging Biden to enact nationwide rent control:

https://www.politico.com/news/2023/01/18/white-house-new-tenant-protections-00077686

1 hour ago, Lazarus said:

Progressives urging Biden to enact nationwide rent control:

https://www.politico.com/news/2023/01/18/white-house-new-tenant-protections-00077686

The high interest rates are causing more people to rent versus buy. There is already a shortage of residential units. A price control on rent would decrease construction of new rentals. We need more product on the market to lower costs...not rent control. This would be really bad for Cleveland!

4 hours ago, Lazarus said:

Progressives urging Biden to enact nationwide rent control:

https://www.politico.com/news/2023/01/18/white-house-new-tenant-protections-00077686

I would not take that seriously. Progressives have been whining about rent control for years, and they will continue to whine about it. 

There are 2 problems with it and Biden would never attempt to do this. Another Democratic president (maybe) but even then it does not overcome the second problem.

 

1) Economically speaking, rent control is an utter failure. There is no better way to encourage disinvestment in housing then to enact rent control Product that would otherwise be upgraded and updated gets band aided to the most minimal level to get the regulator off your backs. There is no new investment in housing because the return is not there. Rental housing becomes a slum.

 

2) legally speaking (and Biden understands this). The Federal government has no power to regulate rental housing. This is a state issue and not subject to the Federal Government's purview. Any attempt to do so would get slapped down by the courts, and there would likely be a lot of fairly liberal judges who would slap this down too. Biden already saw what would happen when he had his eviction moratorium struck down (which was also an illegal assertion of power when Trump tried to do it in 2020). Rent control is even more of a stretch, and that would get struck down in a hurry. 

 

 

10 minutes ago, Brutus_buckeye said:

I would not take that seriously. Progressives have been whining about rent control for years, and they will continue to whine about it. 

There are 2 problems with it and Biden would never attempt to do this. Another Democratic president (maybe) but even then it does not overcome the second problem.

 

1) Economically speaking, rent control is an utter failure. There is no better way to encourage disinvestment in housing then to enact rent control Product that would otherwise be upgraded and updated gets band aided to the most minimal level to get the regulator off your backs. There is no new investment in housing because the return is not there. Rental housing becomes a slum.

 

I'm not saying that doesn't ever happen, but it is a blanket statement that really isn't applicable in every case. 

26 minutes ago, Brutus_buckeye said:

Rent control is even more of a stretch, and that would get struck down in a hurry. 

 

 

 

 

This seems like another one of those reckless pushes coming from progressive leftists on Twitter.  Last fall, before Biden announced the specifics of his student debt relief plan (which of course is now tied up in the courts), I heard some guest on NPR who kept using the phrase when Biden erases all student loan debt.  I can hear that same guy in my mind saying when Biden enacts nationwide rent control.  
 

 

 

 

 

This is one of those instances where the progressive Left doesn't know quite enough about real estate to be able to discern in which instances lack of supply is causing the problem and in which instances people demand is more the issue. Columbus is more of a supply problem where as NYC is a demand problem. When it's a demand problem that's when rent control may be necessary. 

4 minutes ago, GCrites80s said:

This is one of those instances where the progressive Left doesn't know quite enough about real estate to be able to discern in which instances lack of supply is causing the problem and in which instances people demand is more the issue. Columbus is more of a supply problem where as NYC is a demand problem. When it's a demand problem that's when rent control may be necessary. 

 

They also don't understand that many landlords break even or lose money over the life of their investment.  That seems impossible when you're 23 years old and forking over $2,300 each month, but it's nevertheless often the case.  And it means that, to some extent, your housing is being subsidized by your incompetent and/or unlucky landlord.  

 

Recent expensive repairs to my rental property:

2021: $3,000

2022: $15,000

2023: $8-12,000 (estimated).  

 

So big losses for yours truly in 2022 and 2023.  

 

 

 

1 hour ago, surfohio said:

 

I'm not saying that doesn't ever happen, but it is a blanket statement that really isn't applicable in every case. 

if you look at the general consensus of economists and also the history of rent control in many cities, it has been deemed to be a failure as far as an economic policy to create more affordable housing and in fact it actually stifles the creation of additional housing. 

 

Now, of course, there will be some landlords that keep their properties better than others, but with rent control, it removes the incentive to keep up a property and continue to modernize it. 

Here is a good infographic on where each dollar of rent goes. Landlords are only earning $.09 on every dollar of rent on average. Not a huge sum by any means.

 

https://www.naahq.org/sites/default/files/naa-documents/dollar_of_rent_2022.pdf

It's literally one of the most agreed upon things within the field of economics:
https://www.igmchicago.org/surveys/rent-control/

 

21 hours ago, Lazarus said:

This seems like another one of those reckless pushes coming from progressive leftists on Twitter.

Actually, as someone who closely follows progressives in politics, this sounds like"gotcha" journalism -- an off-hand comment from a progressive that the media has run with, and Republicans have jumped on board pointing fingers -- rather than a policy being pushed by a broad coalition of progressive groups. 

 

There is no one progressive group, it's a coalition of groups that don't always see eye to eye.  And while affordable housing is an issue that a lot of progressive groups are asking Congress and the President to give more attention to, rent control is not a popular solution to that problem.  (Yes, Bernie Sanders likes rent control.  But imho Bernie's ability to build a consensus around rent control, even in Congress, to pressure the Democratic congressional leadership on that issue is pretty weak.)  Consequently, this all seems like a lot of noise without any substance behind it.  I don't foresee any such bills coming to the floor for a vote in either house of Congress.

17 minutes ago, Foraker said:

Actually, as someone who closely follows progressives in politics, this sounds like"gotcha" journalism -- an off-hand comment from a progressive that the media has run with, and Republicans have jumped on board pointing fingers -- rather than a policy being pushed by a broad coalition of progressive groups. 

 

I listen to NPR a fair amount and the guests and commentators often have really no idea how rental properties work.  I think this goes along with a general lack of personal finance knowledge.  People can complain that this "ought to be taught in schools", but few 17 year-olds are able to grasp it no matter how well it is taught, and those that do grasp it are going to become accountants anyway.  

 

There is a lot of emotion that goes into personal finance and investing, and you need to experience an incredibly unlikely sequence of events to understand why you must be conservative with money.   Most people need to experience a "rock bottom" moment in order to refocus their life around a pragmatic career and money plan.  

 

I don't get the sense that NPR people or the people online really experience that stuff themselves but rather surf on stories they've read or heard about.  

 

 

 

21 hours ago, Brutus_buckeye said:

Here is a good infographic on where each dollar of rent goes. Landlords are only earning $.09 on every dollar of rent on average. Not a huge sum by any means.

 

https://www.naahq.org/sites/default/files/naa-documents/dollar_of_rent_2022.pdf

What a groundbreaking finding by a group of landlords!