California passes rent cap bill

a reply to: Edumakated

I can't afford it .. so the government needs to step in and provide it for me.

originally posted by: OccamsRazor04
a reply to: Edumakated

I can't afford it .. so the government needs to step in and provide it for me.

"I am too irresponsible to live within my means.. so the government needs to step in and provide it for me."

There fixed it for ya.

originally posted by: Edumakated

originally posted by: JAGStorm
www.mercurynews.com...

In a dramatic victory for tenant advocates, the California Assembly narrowly passed a statewide rent-cap proposal on Wednesday night amid mounting pressure for lawmakers to protect renters from the steepest of increases in a hot rental market.

I find this such an interesting topic. Rent caps. Why should the government get involved?
Don't landlords have the right to profit? Anyone that thinks this is going to help renters is silly. All landlords will do is price high from the start!

I have a better solution, if you don't like high rents MOVE. Remember when that actually worked and was what people did?

All it will do is further restrict supply of rental units and drive rental prices up even further. Gee, I don't know... it isn't like we don't have a real life case study of NYC to see what it does to rental prices.

If landlords can't charge market based rents the stop upgrading properties, so the properties will fall into disrepair.... again, see NYC. Because of the rental caps, tenants never want to move and this restricts supply again. Again, see NYC where you have people living in apartments paying like $1000/mo for units that should be renting for like $10,000/mo. They never move or game the system passing apartment down to their kids. Some of these people are wealthy too. I think Congressman Charles Rangel was in on that scam for decades.

Charles Rangel Rents 4 Below Market Apartments

This forces the market to focus on properties that aren't restricted which makes things even more expensive for those who can pay market rates. The problem just continues to feed on itself.

Rents in California have a much bigger problem associate with them. High rise buildings aren't allowed because of state wide ordinances to preserve city skylines. This makes it very hard to create new developments in a city and house greater numbers of people. As such, the only thing that can be done, is to build out instead of up.

Changing this, is literally the only thing that can start to get Californias out of control housing prices back under control. The problem is, the policy was originally pushed for, and is maintained by property owners because it massively increases the value of their homes.

originally posted by: CajunMetal
So to answer your question: what was once a home we were qualified to rent based on our income became a home that cost 200% more to live in. We Raised a family there..established careers there.

A friend of mine was living in San Francisco 8 years ago. His 1 bedroom apartment was $2000/month. Today, the exact same apartment is renting for $5300/month.

a reply to: Aazadan

Yes, I agree. I forgot to bring up the restrictive building codes.

a reply to: Edumakated

Yes, unfortunately it's something of a regulatory capture issue. Those who are invested in real estate like the effect it has had on the value of their property, and they lobby state and city governments to keep those policies in place.

Now, it's not the only contributor as without those policies in place the LA market would probably look more like the Chicago market, and San Francisco would probably be closer to NYC, but it's still a big difference.

Then in NYC currently, you have the issue that landlords are incentivized to keep a certain number of their units empty because they can deduct the full value (plus depreciation for some off reason) of an empty unit from their taxes, and always at that years rates. So, keeping 1/3 to 40% of units empty effectively gets a landlord out of paying any taxes. This lines up with how things work out in practice since about 1/3 of units in NYC are empty at any given time.

originally posted by: OccamsRazor04
a reply to: okrian

Once the lease is up they should be able to evict for any reason. If you have freckles and they don't like it.

Doesn't that force people to always be in a lease? That would be bad since it significantly restricts mobility. Most people can't afford to break a lease, owe the entire remainder of the lease, plus penalties, and legal fees any time they get a new job and need to move. Employers do not give a damn about your lease schedule for when you may be able to move and get a new job.

originally posted by: Edumakated
If you think it is too expensive, you move to where the cost of living is cheaper. No one is entitled to live in any area they cannot afford.

Outside of a handful of small towns where minimum wage is still realistic though, rents aren't affordable anywhere.

Today the suggested guideline by financial planners is 40% of your income goes to rent (usually with a roommate). 10 years ago it was 30%. 20 years ago it was 20%. 30 years ago it was 10%. 40 years ago it was 5%. Mortgages have seen similar climbs in suggested percentages that should be paid.

Housing prices have risen at a rate well above that of wages, but not paying them simply isn't an option. Most cities have criminalized homelessness so you have no option other than to rent/buy, usually at a rate well above that which you can comfortably afford.

The strategy for housing these days is basically as follows: Buy something cheap, make a couple years of payments, and then sell it once it has appreciated. Pay off your loan, use the rest of the equity you had from the appreciation to buy a nicer house, and with the same monthly payment that you had previously. Repeat every 3-5 years, and after 20 years you end up with a fully paid off mansion, for essentially the original purchase price of your starter home. It is not sustainable, and even if it were, it gets more expensive for each successive generation to execute that strategy.

a reply to: Aazadan

If you don't like it move to where it's affordable. I had a 1600sqft house in a great city in a great neighborhood, where other people were complaining about housing prices, and I was making considerably less than 2 people on minimum wage.

a reply to: Aazadan

No, they can buy a house. After I graduated college I rented for 1 year, then bought a house. I was making complete crap money.

originally posted by: OccamsRazor04
a reply to: Aazadan

If you don't like it move to where it's affordable. I had a 1600sqft house in a great city in a great neighborhood, where other people were complaining about housing prices, and I was making considerably less than 2 people on minimum wage.

Like where? Most jobs that pay well are not located in areas with inexpensive housing. Thus, to have it both you need to add a long commute to your day which is equally unsustainable, since every new house built is slightly further away from the business districts than the previous house, and in a place like California where there is literally 1 home sale of an existing home for every 100 new homes built and sold, buying something that is already there isn’t an option.

Also, I find it quite doubtful you bought a home comfortably on less than $14.70 per hour (or less), as that’s $30,576 per year, about $27,000 after taxes, which would mean that at what used to be considered a sane budget for a home you would have been making 3 mortgage payments plus a savings payment, at 10% of your income meaning $2700 a year to your house, or a mortgage payment of $56.25 per month. You weren’t doing that were you? Thus, you did not make a responsible financial decision in purchasing your home. It may have worked out for you, but no sane financial planner would have recommended what you did if it were at all possible for most people to make responsible purchases of homes these days.

originally posted by: OccamsRazor04
a reply to: Aazadan

No, they can buy a house. After I graduated college I rented for 1 year, then bought a house. I was making complete crap money.

Just because a bank offers you a loan to buy a house doesn’t mean it’s a good idea to do so.

People making $10/hour are qualifying for $500,000 home loans these days. In many areas you can actually make significant amounts of money by taking 0% down interest only home loans, making payments for a couple years, and then selling and pocketing the equity.

The housing market is complete and total insanity right now, and more screwed up than it was in 2007.

originally posted by: CajunMetal

originally posted by: JAGStorm
www.mercurynews.com...

In a dramatic victory for tenant advocates, the California Assembly narrowly passed a statewide rent-cap proposal on Wednesday night amid mounting pressure for lawmakers to protect renters from the steepest of increases in a hot rental market.

I find this such an interesting topic. Rent caps. Why should the government get involved?
Don't landlords have the right to profit? Anyone that thinks this is going to help renters is silly. All landlords will do is price high from the start!

I have a better solution, if you don't like high rents MOVE. Remember when that actually worked and was what people did?

You don’t have a clue about what you’re talking about.

Landlords are allowed to increase rent each year here by a fair amount w existing rent control laws. But those laws don’t cover certain properties like single family units.

That means landlords like the one my family had could decide to raise rent by $800 all of a sudden (this happened) instead of the annual percentage rent control allowed.

So, as people move to town making bank at google or whatever, landlords like mine see $$$ and decide to raise rent to make you move. Once you’re out they can raise it again for the next tenant. This happened to us.

So to answer your question: what was once a home we were qualified to rent based on our income became a home that cost 200% more to live in. We Raised a family there..established careers there.

What happens then is that you are FORCED to move, and with other landlords doing the same thing you are faced with being uprooted to move to an affordable STATE let alone an affordable apt or something nearby (which there isn’t). So you loose your job and your home.

By all means landlords should make a living but please educate yourself.

This has essentially happened to me in Richmond, Ky because of EKU. These new property owners jack up the rent near colleges and universities because 4 tenants sharing a $700 dollar rent can more easily afford it rather than single income individuals. Rent, mortgages, utilities have been on the rise without the increase in income rising along side it.

Rent cap... hell yes. Stop these money gouging idiots.

originally posted by: Aazadan

originally posted by: OccamsRazor04
a reply to: Aazadan

No, they can buy a house. After I graduated college I rented for 1 year, then bought a house. I was making complete crap money.

People making $10/hour are qualifying for $500,000 home loans these days.

Your claim is absolutely preposterous. I make 55k a year and couldn't get 85k for a mortgage. Stop your stupidity.

originally posted by: EternalSolace

originally posted by: Aazadan

originally posted by: OccamsRazor04
a reply to: Aazadan

No, they can buy a house. After I graduated college I rented for 1 year, then bought a house. I was making complete crap money.

People making $10/hour are qualifying for $500,000 home loans these days.

Your claim is absolutely preposterous. I make 55k a year and couldn't get 85k for a mortgage. Stop your stupidity.

I don’t know what to tell you, maybe the market is unfavorable where you are? Money is being given out like candy in most places.

I see you’re in Kentucky, given Kentuckys current lack of any sort of economy, maybe that’s why? Because I was referencing California. Though, I’m in roughly the same economic zone as Kentucky, and the banks are offering me enough to buy literally anything in the area I live in, not that I would because it’s all too expensive.

originally posted by: Aazadan

originally posted by: EternalSolace

originally posted by: Aazadan

originally posted by: OccamsRazor04
a reply to: Aazadan

No, they can buy a house. After I graduated college I rented for 1 year, then bought a house. I was making complete crap money.

People making $10/hour are qualifying for $500,000 home loans these days.

Your claim is absolutely preposterous. I make 55k a year and couldn't get 85k for a mortgage. Stop your stupidity.

I don’t know what to tell you, maybe the market is unfavorable where you are? Money is being given out like candy in most places.

I see you’re in Kentucky, given Kentuckys current lack of any sort of economy, maybe that’s why? Because I was referencing California. Though, I’m in roughly the same economic zone as Kentucky, and the banks are offering me enough to buy literally anything in the area I live in, not that I would because it’s all too expensive.

I'll tell you why, they see repossession and resale. Sue the buyer, foreclose and resale to someone just as unable to afford, repossess, rinse repeat.

Can you not see the insanity for what it is?

originally posted by: EternalSolace
I'll tell you why, they see repossession and resale. Sue the buyer, foreclose and resale to someone just as unable to afford, repossess, rinse repeat.

Can you not see the insanity for what it is?

That’s pretty much it. Like I said, the housing market is ridiculous right now. For as absurd as rents are, buying is an even worse idea which is why my comments in this thread were refuting the idea that people can just go buy a home, or if necessary buy in a cheaper area.

Renting is getting absurd too. I’m lucky I make 6 figures in a low COL area because I’m pretty insulated from outrageous rents (and even then, I’m not comfortable buying). In some places, people are now living 4 people to a 2 bedroom apartment, and still paying upwards of 30% of take home pay to rent.

originally posted by: Aazadan

originally posted by: EternalSolace
I'll tell you why, they see repossession and resale. Sue the buyer, foreclose and resale to someone just as unable to afford, repossess, rinse repeat.

Can you not see the insanity for what it is?

That’s pretty much it. Like I said, the housing market is ridiculous right now. For as absurd as rents are, buying is an even worse idea which is why my comments in this thread were refuting the idea that people can just go buy a home, or if necessary buy in a cheaper area.

Renting is getting absurd too. I’m lucky I make 6 figures in a low COL area because I’m pretty insulated from outrageous rents (and even then, I’m not comfortable buying). In some places, people are now living 4 people to a 2 bedroom apartment, and still paying upwards of 30% of take home pay to rent.

I was recently in the market for a new truck. Ill shame the dealership as Chrysler on Nicholasville Rd, Nicholasville, KY. They wanted to put me in a 27k dollar Silverado at a payment of over $700 dollars a month. The woman behind the sales and the bank stated that she pays over 1k a month for her vehicle payment and that and quote, "If you want a big boy truck, you've got a big boy payment".

Needless to say they lost a sale.

a reply to: EternalSolace

Last year I was considering getting a new car to replace my existing one. I drive a 2001 Ford Escape, it has no payments and costs about $3k/year in maintenance. So, I figured I want something that’s no more than $3500/year in payments for a 4 year loan (and at that price, only if it has a warrant on the major maintenance issues). That put my maximum price I was willing to pay at $14,000 (I would pay more for a shorter duration loan). The dealership kept taking that to mean that I was willing to pay much more in total than I was. Eventually I walked out on them.

For a good deal I’m not unwilling to pay more money, but they were offering me awful deals and wanted to charge me a premium price for them. Like the saleswoman you had, it’s great that she’s happy with a >$1000 vehicle payment but she’s making maybe $50k/year. That means she’s paying nearly 1/3 of her post tax income to just her car payment... a rate that’s even higher than what she should be paying for her house, and her car depreciates. It’s ludicrous.

they'll just find other ways to get that money, maybe even jack up initial prices or creating secondary fees that don't count as rent, maybe a few other things just to spite people for this ruling.