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You guys are ignoring the real one... remove that California rent protection thing. If rents can adjust at real rates, then things will change a little. Not enough to correct a real estate bubble, but the poor starving landlords will get more money!
You guys are ignoring the real one… remove that California rent protection thing.
I wonder where this myth of "California rent protection" comes from.
Speaking of rent protection, in New York City, their rent control laws come up for renewal once every century or something.
I remember last time it came up - the usual argument: if there wasn't rent control, the Market would build more housing to maximize profits.
Funny - rent control hasn't gone away, and there's been a building spree.
What a crock.
Rent control does not apply to all units in NY. So if you build units for upper income renters, they are exempt from the controls. These are what the builders want to build.
In order to encourage the construction of less expensive housing the city of NY provides a large tax abatement for newly constructed buildings that qualify with rent controlled units.
We could just have the government buy up apartment buildings via eminent domain. But then instead of renting them out as housing, the units could just sit vacant or be turned into schools.
Also, laws could be modified so that anyone in California who currently owns a house but rents the property to tenants for more than two consecutive years will lose their Prop 13 tax protections. Which is only fair, as Prop 13 is meant to protect you from being priced out of your house, not from being priced out of your cash-generating investment property.
With most of the cheap house rentals off the market, that will cause rents in good neighborhoods to skyrocket. The displaced tenants will have nowhere to go, since most of the good apartments will have been knocked offline. Prices will eventually climb to where current FB's with no Prop 13 protection can rent out their underwater properties for a small profit every month. This in turn will push the earth back under the housing bubble, since the houses will stabilize to 3.5x to 4x yearly rental income. As long as credit remains cheap, the FB's can take a small loss and move on with their lives. Prices will remain stagnant in the Bay Area for a long time, and taxes will go up to support the new infrastructure.
But just think of the converted apartment buildings providing more space for schools, social outreach programs, Christian Scientology seminars and all other sorts of useful government services. People can form quilt knitting clubs, blogaholics anonymous support groups and soon the whole of Silicon Valley will be transformed. Most people will own their homes, pride will climb steadily, crime will fall to zero and people will finally form... *wipes tear from eye*... a community.
And isn't that the American Dream (tm)? In the words of a brilliant politician: "Aye considdur zuh problum... TORMANATED!"
NY city mostly has Rent Stabililization, where rent increases are controlled. A vacant unit becomes deregulated if the free market rent exceeds $2,000 (maybe a little more now). A Stabilized unit can become deregulated if the tenant has annual income of more than $175,000.
If your income is below $175,000 and the rent is less than $2,000, and the unit is your primary residence, then the unit stays subject to rent regulation.
Maybe Shannon Hermes can save the REIC.
She's a millionaire from Youtube. What was her role? Receptionist and office admin.
http://www.marketwatch.com/news/story/youtube-acquisition-making-millionaires-outside/story.aspx?guid={B2BA449E-0571-4E7F-B61C-8D427F1C718F}
You're all thinking too small. The answer is securitization. If David Bowie can do it (http://en.wikipedia.org/wiki/Bowie_Bonds), so can every renter in the country. Dedicate your future income to fund the payments on your very own bond issue (JBR Series XLVIII, available in tranches from A to ZZZ), sell them into fixed income portfolios across the country, and stick a wad of cash in your pockets TODAY.
Then bid up the rents on everything, because you can't be a JBR if you don't rent.
Errr, I'll be taking my wad offshore. Does Paraguay have an extradition treaty?
There is an easy solution, that doesn't involve bitter renters. The government should start investing in real estate. Instead of selling bonds for 1 trillion, the goverment could just buy 2 million houses, 500K each. The government would first get an instant cashback, then it would rent the houses, and within a year when the price of the houses doubles, the government would cashed out the equity. Everybody would be happy, even the renters, because their rent would go down with so many rentals on the market. Without a need to sell the bonds the government doesn't need to offer atractive rates and therefore the interest rates could go down, which would start a new healthy boom.
BA reminds me of the Spanish empire circa 1650. Venture capital = new world silver. All the money flowing in from the outside actually caused hidden inflation and caused most inhabitants' quality of life to suffer.
"push the earth back under the housing bubble" LOL!
Believe it or not we're gonna see a lot of that over the next few months.
"Pick a payment option rents"
And w h y...... not!
Just a few of the MANY gems posted here, certainly has my vote for "Best New Thread in '07"!
justme,
How about tucking a couple of giant prawns or some stew meat into the curtain rods at open houses? It might take a while to find the source of the decay odor.
"Gee, the house is pretty, but there's that eerie, death odor."
justme,
How about spray painting some dry rice grains black and scattering them around, rodent pellet dropping style, at open houses?
In the UK they had a scheme where the county councils would buy half a house with someone who could not afford to buy the whole house - and then the council would collect rent on their half (subsidized) and then the family has the right to buy the rest of the house at a later date when they can afford it (scrapped back in the 80's).
I hear fish in the air vents is a common revenge for departing tennants who are not happy.
Isn't force feeding their alligator of a specuvestment punishment enough? This thread has taken a sinister turn (and I like it) :)
Crab shells left in the garbage overnight are downright PUNGENT just by morning! I mean STINKY! You have to take a deep breath (in an unaffected area) and sprint to the g-can, nasty.
justme,
When FB "financial strategies" are applied to rentals you've got to admit, it really exposes them for the folly they truly are! SP's "pick a rent payment" midnight move-out on the 27th day of the 11th month is gonna be tough to beat though!
O.K, how about a 40-50 or 100 year lease (or other blatantly ridiculous and contorted "arrangement") that tests the bounds of human longevity?
You know (just to get the payments "affordable")?
Re-define "affordable rents" as 89% of gross income?
Half a block down the street a chalk outline of a body, a bit of police tape and some gauze 1/2 hour before an open house.
A few bullet shells scattered on the block.
A pile of poop (with nearby crumbled toilet paper so nobody will mistake it for the dogpile it actually is) near the bushes makes a home less inviting.
'Vomit' on the sidewalk just before the open house. (My vomit recipe in middle school was a can of fruit cocktail, a bit of water and some cheap yogurt blended for about 2 seconds in the food processor. Add vinegar for a piquant odor at last minute).
Bad clams tossed behind bushes 2 days before open house or brokers tour.
Broken malt liquor bottles in neighborhood. Make sure to combine with emptied car ashtrays (pick this up after use so the butts don't go down the storm drain and out to the beach).
SFWoman,
Just give Surfer X the address and I'll pick him up as soon as I clear bail!
Dinor,
They have that in the UK already - called lease-hold and usually for 99 years or so. You basically have to look after the property and pay all taxes, and all upkeep - i.e. new roof etc, but at the end of 99 years it reverts back to the owner. Lease-holds can be sold on, but are generally cheaper than buying free-holds of course the closer to the end of the term, the cheaper the lease-hold is to buy.
One case where the owner would not renew the lease-hold or sell the land to the current lease-holder led to the lease-holder demolishing the house (as they had built it) so that the owner would not get any benefit from the added value of an existing property on the land.
Claire,
Aren't the leaseholds held by people like the Duke of Westminster for the most part?
I have seen them for sale with things like '354 years left on lease' or '26 years left on lease.' I'd be nervous buying one with little time left.
Claire,
Thanks for sharing that. I've never been to the UK but how different is the trend we're currently on here? Leslie Appleton-Young assures us neg. am/exotic loans "are here to stay". At least the way the "Brits" handle things there's no illusion of "ownership". I just wish we could be more up front about it.
Someone here kidded (half-way) that "rent2own" might be the wave of the future. Look for more "creative" lease arrangements and "just take over my payments" real soon!
HARM,
Some day you have to alphabetize that bubble glossary; it is starting to get quite huge!
Your assignment: How can the REIC and banksters create enormous new debt vehicles for renters, capable of inflating rents as high as house prices, thereby cancelling the rent-vs.-buy imbalance –without having to resort to any of that pesky wage inflation?
Don't give them any ideas!
justme Says:
I have to say, this is one of the most dangerous threads I have seen.
Wow. I am... truly... honored. :cool:
SFWoman,
You're a gem! Those are some wonderful suggestions. Not that I'm writing any of this down and actually --you know-- planning on actually doing them or anything. Why, that would be downright unethical...
:twisted:
DinOR
House prices in the UK are horrendously expensive. About 5 years ago you could only really borrow 3 to 3.5 times your salary with at least 10% down and you had to provide wage slips etc to prove your income (also 30 year fixed were being promoted because the interest rate was 3% - 6% historic lows), but things have changed and they have adopted a lot of the US lending practices and options. House prices have as a result shot up and I believe that they will have a crash, but "when" is the question.
However, a lot of people learnt their lesson in the 80's - a lot of people walked away from their houses then because interest rates were 13 - 18% and there was a high unemployment rate - house prices crashed then.
What was realized 20 years later was that those that held on now had houses that were worth a lot more (especially in London) and all the ones that walked away all regretted walking away because their property was worth so much more now! However, people forget that they just couldn't pay the mortgage - the lenders learnt to try and keep people in their properties, because they lost a lot of money by evicting everyone and selling the houses for a loss and to be more cautious about lending.
However, 20 years on people are forgetting what happened and it's coming around again!
DinOR :
Are you watching that NEW finding new depths ? Additional 12% already. Is this a record of some sort ?
Is this a preview of what is to come in subprime credit or am I over-hyping the news ? I think the investor sentiment can turn on a dime - everyone was jittery about this section of MBS and their worst fears seem to be coming true.
Not a good place for bottom fishing. It opened +ve and then the carnage started.
SF Woman,
Yes, leaseholds were generally created by the landed gentry probably in the 1700 - 1800's. Probably because a lot of estates were entailed and so could not be sold off?
Oh, and thanks to Claire as well (though the rat poison idea might be skirting the law and inviting trouble).
I would like to state that it was next door who put the rat poison in their roof space to kill the rats, before they realized the consequences - if anyone is thinking that we did it. We have rats in our roof so would never put rat poison down - don't want to deal with that, thank you!
You can always remove my post if you are concerned that some idiot would do it, although others alluded to much more risky things in the past - i.e (dare I say it out loud?) something to do with matches and their alligators.
I believe people have sold lease holds over here already right? I remember seeing some ads about a year ago about buying the house for 200-300000 and renting the land from the builders to make it more affordable - a bit like trailer parks - right?
And I bet there are some in Boston from the "old days".
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Please help the REIC and banksters! (for those unfamiliar with the term, please refer to the Housing Bubble Glossary).
They need our help. Signs their beloved mega-global housing/credit bubble is beginning to falter are now everywhere and unmistakable. No matter how low toxic-mortgage lenders lower "standards", it appears that they've exhausted their supply of typical FBs (innumerate 'tards and Marshall Reddick-worshipping specuvestors) and now they're even running short on falling-knife-catchers.
Sure, they're counting on a taxpayer-funded federal bailout of banks/lenders and GSEs --after all isn't that what taxpayers are for? They don't call it "Privatize profits, Socialize Risk" for nothing, do they? That's a gimme. Problem is, even with suckers like YOU footing the bill for some f***ing idiots' mistakes, there's still no way to avoid some pain for the industry players. Some toxic lenders have already gone out of business, while others are restating incomes/losses and teetering on the edge of insolvency --and this is only the beginning! Plus, lots of newly minted Realthwhores, fly-by-night mortgage brokers and hit-the-number appraisers are now facing unemployment.
This just will not do! Pain and negative consequences are for thrifty, responsible suckers like you --not the REIC!! Oh, the humanity... what to do, what to do?
Wait --I've got it!:
The biggest problem right now with maintaining that permanently high plateau is that rents cannot easily be inflated with debt, the way housing prices can. There is no such thing as a fraudulent cash-out refis, HELOCs or neg-ams for renters --they must pay their rent with real earned income and/or savings (yes, some people out there still have savings --can you believe it?!). Since renters must pay rent using real money vs. monopoly bubblebucks, there's no way to ignite crazy bidding wars on rentals. And global wage arbitrage is keeping wages firmly in check --no inflation happening there (crooked CEOs excepted, of course). Sadly, there's currently no way to funnel huge amounts of Fed/MBS/Chinese liquidity into the hands of renters, so they can bid rents to the sky.
And herein lies the solution: the REIC must create new debt vehicles for RENTERS!
Your assignment: How can the REIC and banksters create enormous new debt vehicles for renters, capable of inflating rents as high as house prices, thereby cancelling the rent-vs.-buy imbalance --without having to resort to any of that pesky wage inflation?
Discuss, enjoy...
HARM
#housing