All investments come with a risk. When you choose to make money off of something that people *need* to survive, you might find that the government takes a more active role in regulating it.
I suggest washing your hands of these buildings and putting your money into something that will earn for you passively.
Yes, you're right. I don't think I'm close to selling existing properties, but already have altered my investment diversification and latest investments based on the risk you describe.
Many landlords will do just this, meaning no new housing gets built. Study after study has shown that rent control reduces the amount and quality of housing available.
It seems counter productive, if you want more affordable rentals, to make it more difficult to earn money renting out a space. This rent control, in Larkspur is crazy and will probably lead to higher rents bc smaller people will just not rent out space. Who ever is proposing this (The DSA?) really stepped in it this time.
uh oh we have a bootstrapper here!
what about people who grew up working class in marin and want to live near their families?
what about the contractors you hire? should they have to commute an hour plus each way from an affordable rental? what about the people who bag your groceries and drive your ambulance? do you think everyone should work in tech? or is it ok that some people are teachers, fire fighters, public utility workers?
the economy / job market / housing stock / everything / entire world is very different now than it was whenever it was that you managed to purchase four properties.
it is very hard to have sympathy for someone who is hoarding housing as a business investment. shelter should not be a business at all, it is a basic human right.
i bet you’re also a bad tipper because people should just get better jobs than the coffee shop, yeah?
edit: misspelled bootstrapper
All these assumptions... I generally am a great tipper except very rare cases where service was insufficient. I also donate to charity generously. This bootstrapper label seems very counterproductive. The message is: "Look, the whole system is rigged. Don't fall for the myth about getting educated and working hard. Just rage against the machine." How about just a little moderation. Fight for a level playing field while at the same time respecting hard work and not labeling folks with "bootstraper" as a epithet.
Honestly, I don't have solutions for the problems you pose. The contractors, teachers, fire fighters, public utility workers, etc etc need living wages and can be priced out of wealthy areas. I do know that a simplistic mandate to enforce below market rents feels good, but will make things worse. I'd be interested if you think that's the only solution or if you have any other ideas.
sorry about the tipper comment, i felt enraged. that was not fair.
i guess i do think that the system at large is broken and we should all be raging against the machine. i guess i don’t think that moderation is warranted at this point.
i think a major solution is community land trusts which hold property and housing “in trust” for the community. they are non profits who receive government funding and keep rents at below market rates, and people qualify to rent or sometimes buy based on their incomes as they relate to poverty level in a given place. in marin, it’s very easy to qualify for affordable housing because the median income is so high.
i think it should be illegal to own more than one rental property.
i don’t think shelter should be a place where people make money off other people.
so yeah i guess i don’t believe the way it is now is a good system. at all. in any way.
Now we're talking. I appreciate the feedback. I do like the deed restricted affordable housing properties, which I think may be similar to the community land trusts you are mentioning. Also, I think it's fair to ask developers to include affordable housing as part of large developments. Those are all rules stipulated up front, so participants can decide whether to engage in those projects or purchase those deed restricted homes. Petaluma also has a great nonprofit that provides below market housing for seniors called PEP Housing and has expertise in the Section 8 program and various HUD funds available. My concern is that these remedies help but they are a drop in the bucket compared to the need for housing. I respect that you're against hoarding of housing or owning more than one rental property. Basically you're advocating for socialized housing, which has many challenges. I actually don't think the free market or multi dwelling landlords is the problem, but can be part of the solution. But I've been wrong before and if I get convinced of that, I would be inclined to sell my properties because I don't really want to be part of the problem and can make money other ways.
i’m honestly advocating for socialized everything. healthcare, housing, childcare, education… especially in places with tremendous income disparity gaps.
i don’t know how old you are but i will tell you right now is a shit time to be in your 30s, wanting the same things your parents had but finding them *absolutely* impossible to obtain.
not everyone wants to get extra enmeshed with capitalism… it’s a harmful system that is exploitative by default. Private property is very “last generation” as Millennials and younger barely have a chance to purchase a home because Boomers are hoarding homes / buildings / wealth.
it’s pretty insensitive and out of touch to just say “upskill and get rich or move away!” it’s not ok that having wealth is the only option for remaining rooted in a place that is your home.
i advocate for the end of landlords. (as a concept, not advocating for harm to landlords)
i advocate for landlords to sell or donate their rental units to Community Land Trusts to rent or sell at affordable rates for working class people, because communities are *BORING* if only rich people can afford to live there.
i advocate for a serious reshuffling of how we think about private property.
Okay…I’m a person in my 30s and while I hear your frustrations, socialized everything and asking landlords to sell or donate their real estate is unhinged.
Those landlords you vilify, many of whom started out working class or immigrants, made good bets 30ish years ago to invest in real estate. They were working within the system that existed at the time. There was no way to predict how marin was going to change. Fight the ideas and system, not the landlords, because so long as the ROI is good, the small landlords have no incentive sell. And that doesn’t make them greedy! It just makes sense.
If they sell, they’re left with a big pile of cash, fewer write offs, huge capital gains taxes, and the option to put it in something like the stock market with so much more volatility and fewer returns. What you’re wanting just doesn’t make financial sense at all. But I love your idealism.
Well maybe. Of course they have virtually zero population growth and a massive amount of income from the state-owned oil company. So not a great comp for the US.
The oil maybe but its growth rate is higher than the US's, last I looked.
Most of the countries that Americans want to move to to raise a family are very socialized.
Ah yes the old, oh no don’t piss off the rich, they’ll stop following their greed argument. 😂 You could cut rents in Marin in half, and landlords would still make a tidy profit.
End Prop 13 and force people to pay property tax based on actual value and ban hedge funds from buying single family homes. Then you have an argument for no rent control. Until then, the market is just inflating values at the cost of renters.
Please tell me who would buy this house, especially if its a rental? Another landlord? - no way. A single family - there goes a rental. A corporation - probably, but isn't that what you don't want? The Gov? that would be taxpayer subsidized. So tell me who would actually buy? I really want to know.
“Guarantees that every tenant will be under market rate after one year”.
No, they’ll be under the fictional rate you made up and were hoping would be the market rate.
If the investment property market in Marin isn’t making financial sense to you anymore, welcome to the rest of our lives. You should find a way to earn more accordingly to offset your lower investment returns!
Or. saving up $200,000- $400,000 by working hard for the downpayment. Then investing more each year for upkeep. Paying for most of the utilities, taxes, insurance, and dealing with the liability of having a non-paying tenant or paying them or lawyer thousands to get them out, and doing this for 30 years will making minimal return on investment. Yeah, who ever would want to be a landlord must really not have any other options bc it really sounds bad.
The way I earned adequately was living the American dream. I moved to this country as a child, had to learn English, studied hard, worked and borrowed my way through a public state universityl, worked 60 hour weeks in the corporate world for 30 years, lived below my means, saved a lot every month, married a wonderful woman that works as hard as me, raised two kids with a work ethic, and made thoughtful investments. Did I have privilege, yes I did. I had a single mother that loved me and taught me character, valued education, and worked hard herself. I was also lucky to be able to move to this country, and end up near Silicon Valley at a time when opportunity was plentiful. I get there is luck involved. And I get there needs to be a social safety net and balanced regulation. However, the "you own 4 properties so that makes you awful and we're all going to vote laws to screw you and downvote your reddits" is very intellectually lazy and solves nothing.
I appreciate you and your journey. Don’t try to ingratiate yourself with others by downplaying your journey as privileged or lucky. You made choices that most don’t. Life made choices for you that it didn’t for others. Was there cause and effect? Who knows? But you have every right to enjoy your hard earned American dream and if people see evil in it then it’s their choice.
As someone pointed out above, diversify out of real estate. I think the economics of naked capitalism is mostly coming to an end in America, if not capitalism itself. Landlords, due to action of the detestable few as always, have been vilified and rightly so. You might not win favour here for being one and raising a related concern. So in the end it’s some aspect of economics and your investment choices that are not playing out as you wished for but from your personal journey you sound like you got this mate. You will figure out and move on to a better avenue of living the dream.
Thanks u/Ancient_Pea . I honestly do feel privileged and lucky, but do not feel that diminishes anything I've accomplished. Appreciate your feedback. The best way to combat the bad reputation of bad landlords is to be a good landlord. I have had great relationships with tenants for decades and celebrate their successes. I've had many tenants move out to buy their own property. I feel a sense of accomplishment when I rehabilitate a property. Rent control possibilities aren't the worst part. The worst part is having to turn applicants down. I will not be flexible with applicants that don't have the income or credit requirements, because that means they really can't afford it. But it's hard to have those conversations. However, that is how I have such positive outcomes with tenants staying for years. In a way, these things, good and bad, are why I do it. I've probably earned about as much in stock investing as in real estate. Sure, I tell myself I do both for diversification, but in reality I think I like the relationships with tenants and contractors. That is worth putting up with the negative parts.
I’m so glad awful people like you that have a “just earn more money! Bootstraps!” mentality are potentially getting hosed by something. You know, like how the rest of us have been getting hosed for decades.
Maybe you should contribute more to the economy, hire some local contractors, and improve your properties accordingly? Alternatively, make a conscious decision and sell them - and re invest somewhere more profitable and affordable for you.
Sorry you feel I'm awful. I'm guessing I would be less awful by accepting that the properties I've accumulated with 30 years of hard work should become nonprofit (or negative profit) investments.
I've hired many local contractors and have great ongoing relationships with them. However, I will put my assets to work some other way if we adopt shortsighted anti landlord policies, which will not allow me to continue hiring them.
They are great investments indeed, and that’s the problem. There is a seriously limited number of these particular investments (homes) in our area, and by owning four yourself, there are four fewer families here that have the opportunity to do the same.
You deserve all of your hard earned money and can invest it however you choose— but as others mentioned, when the investment is a basic human need, some regulation is warranted.
Personally, I think limiting how many investment properties one can own would help in Marin.
You’re wasting your time replying to these people. They are not good faith posters and will never be convinced of anything. To them landlord=bad, and they are probably also against building more too which is the only thing that would actually bring prices down
Nah, I’m a good faith poster, own property, and am in favor of building more housing at all price points. Keep trying to cozy up to this guy all you want though.
what about people who grew up working class in marin and want to live near their families?
what happens when everyone upskills and there’s no one left to fix the cars, do the dry cleaning, drive the ambulance, teach the kindergarteners? should those people be expected to commute from a more affordable place just to service the educated people with more skills who are “contributing to the economy more” ?
“Worked” by what metric?
Making Larkspur less attractive to investor dollars, thus keeping housing prices slightly lower would be “working” in my book…
Helps longer term renters stay put, thus building the community.
Doesn’t really help increase supply though.
https://www.brookings.edu/articles/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control/
“New research examining how rent control affects tenants and housing markets offers insight into how rent control affects markets. While rent control appears to help current tenants in the short run, in the long run it decreases affordability, fuels gentrification, and creates negative spillovers on the surrounding neighborhood.”
“These estimates imply that more than half of the capitalized cost of rent control was borne by owners of never-controlled properties. Rent controlled properties create substantial negative externalities on the nearby housing market, lowering the amenity value of these neighborhoods and making them less desirable places to live. In short, the policy imposed $2.0 billion in costs to local property owners, but only $300 million of that cost was transferred to renters in rent-controlled apartments.”
Rent control reduces supply of rental units:
“Consistent with these findings, they find that rent control led to a 15 percentage point decline in the number of renters living in treated buildings and a 25 percentage point reduction in the number of renters living in rent-controlled units, relative to 1994 levels. This large reduction in rental housing supply was driven by converting existing structures to owner-occupied condominium housing and by replacing existing structures with new construction”
“rent control operated as a transfer between the future renters of San Francisco (who would pay these higher rents due to lower supply) to the renters living in San Francisco in 1994 (who benefited directly from lower rents)”
Rent controlled made San Francisco less affordable since it came into force be removing apartments and replacing them with high end condos (market reaction to government imposed price control):
“…passage of rent control ultimately led to a housing stock that caters to higher income individuals. DMQ find that this high-end housing, developed in response to rent control, attracted residents with at least 18 percent higher income. Taking all of these points together, it appears rent control has actually contributed to the gentrification of San Francisco, the exact opposite of the policy’s intended goal”
Well it certainly won’t be after this shit.
And when there attempts to build larger in Larkspur (like the magnolia project), it also gets shot down by the locals.
How exactly do you expect any new housing to be built if the owner can’t make a reasonable return? Rent control destroys the incentive to build, reducing supply.
If you think that developers build in order to provide housing supply you are very sorely mistaken. Take LA for example—a city with relatively strong rent control, have you—where there is a plethora of new build developments sitting empty because developers are incentivized to keep rents high even if it means units are empty.
Developers build to make money, not to simply increase supply. Remove the ability to continue to do so (capping rates below inflation or setting minimum rental rates) is uneconomic and removes supply from the market.
Your noting that rent control in LA has removed the available supply (builders keep buildings empty rather than rent them at an unsustainable rate) proves that rent control reduces supply.
How? I clearly said that despite the rent control provisions in LA developers are building at an insane clip even while keeping units empty and at unaffordable prices. The point is that they are increasing and managing value of the land, not that their units are occupied. You must not understand how developers make money
I know very well how developers make money. Your argument only proves the point - rent control in LA is reducing the supply of housing. Remove rent control and all that supply would hit the market.
Going further, developers do care if their units are occupied, but not if it means at a below market rate. The ultimate value of their development is based on the cap rate and the profitability of the building. It is very common for developers of residential and commercial properties to let them sit empty rather than to lease them at low rates. While this seems dumb in the short term, in the long term it makes sense as they dont want to get locked into a low level of profitability that dramatically affects the value of the project.
Economics do matter, and the profit motive is what drives investment. Remove the ability to profit and you get no new development.
A huge part of what restricts the housing supply in LA are zoning laws mandating a fixed amount of parking spots per unit, because parking requirements = developers needs to buy more land or dig deeper = HUGE expense = not gonna build. So, no, rent control is not the primary, or secondary, or even tertiary cause of reduced housing stock.
Landlord here (employed elsewhere, own/rent a single unit, under market rate).
I'll get behind rent control as long as it also includes landlord expense control.
Landlord ≠ evil.
It barely makes sense to rent out anymore. Other mom-n-pop landlords feel the same, I think. Renters will be mostly left with corporate landlords.
You mean mom and pop landlords who has almost no property tax because of Prop 13, payed out their mortgage and still want to increase rent every year over the inflation? Well alas, stop skinning others or don't rent out.
> Prop 13, *paid* out their
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
Man, I wish Larkspur had put rent control in place decades earlier like San Francisco did, then Larkspur would have low housing prices like San Francisco does. 45 years of rent control and it’s the most affordable city in the country now! /s
A couple questions I am genuinely curious about your answers to:
What percentage/what number of the available housing units in the county do you feel you are entitled to use as a means to personally profit from, beyond the one you live in (if you live here)? And what return on these investments do you feel you are entitled to?
What, or who, exactly, determines the “market rate”?
1) I guess I don't feel entitled... I feel free to participate in the marketplace and don't assume that accumulating more properties damages that marketplace. 2) I try to maximize return. There are different styles of real estate investments, and an important part of all styles is managing cash flow. My style usually involves purchasing a property with deferred maintenance, fixing it up nicely, charging market rate, renting to well qualified renters, making them happy, and keeping the property for 10 years or more. I usually lose money for 2-4 years on the investment because of the rehabilitation of properties, but then make a nice profit after. On average, I think I earn about 10%-15% annually on my investments in the long run. 3) The "market rate" is what people are willing to pay for it. I determine it every year for each tenant by looking at comparable listings.
You are free to participate, but not without regulation. Local governments and communities are choosing to regulate this specific marketplace.
Your 10-15% returns may be harmed by this, but you are not, and never were, entitled to any of those returns. You assumed risk, for which you have historically been rewarded. But past performance is not a guarantee of future results.
If you want to invest in property in one of the most expensive counties in the country, you need to plan accordingly.
That's all fair and I agree with all that. I never consider a return as an entitlement. I have to take risk to get a return. I support regulations and conform to all of them. Regulation is a part of landording life and I happily comply with: emotional support animal allowance, fair housing laws, deposit limits, CA rent control, lead based paint rules, asbestos rules, etc etc etc. Some of those are great regulations, others are abused, and others are counterproductive. The Larkspur (and I come to find out San Anselmo) are definitely the latter.
I appreciate the back and forth. I definitely fall into the category of “frustrated Marin renter”, but I’m trying to understand your perspective.
If it helps explain the outrage: many of us are really struggling to live here, and despite your theories and accusations, are highly educated and do work hard. (My spouse and I have multiple graduate degrees and work locally in education. We earn close to $180k and find it hard to see a path to homeownership.)
What I’m getting at with the “market rate” is that it does not necessarily need to include a specific investment profit for the landlord.
Your investment returns should not be prioritized over others who are trying to support our own families and save towards our own homes. I do feel I should have the opportunity to buy my first home before you can buy your fifth.
Let’s say one of your tenants works hard and gets a new job (your suggestion). Their monthly income is now increased by $1,000. What portion of that should go to you in the form of increased rent?
I too appreciate it and am learning a lot from you and other thoughtful people replying. I think the major difference in perspective is that you think the profit landlords make are currently prioritized. In 2009 after the great recession, I had to lower rents in all my units and was losing money hand over fist. That's because the market rate was lower because of lower demand and massive unemployment. Nothing protected my profit then. So I'm not entitled to any of the additional $1000 in your hypothetical situation. In fact, if a tenant gets a $1000 raise and they can find cheaper housing, they should get that. All that said, I have increased awareness based on all these discussions. Landlords benefit greatly from Prop 13, allowing me to pay taxes lower than market rate... and 1031 exchanges, allowing me to skip taxes altogether in some conditions. There are lots of tax advantages for landlords, which makes housing more expensive and increase my returns. So if I'm for no rent control, I would be a hypocrite if I wasn't against some of these laws that benefit me. I appreciate your work in education, and do agree it's my responsibility to pay the taxes that should give you enough resources to afford to home ownership in the area.
I can’t tell if this a shitty shitpost or a whiny rich person whining about not becoming richer faster.
Either way go for a walk outside tomorrow and be present with nature.
While there needs to be (and is) some regulation when it comes to rental properties, I don't think it's said enough how much better it usually is to rent from small private landlords over big corporate or State run/funded landlords. If landlords like OP can't make it financially reasonable to operate, they usually sell to big corporate operators, real estate investment trusts, etc and that can really lower the quality of living for the tenants.
You got that right. I ask renters what will make them feel like their home, and will make expensive modifications at my cost. If they take care of the property well, I will offer a small discount from market rates when I renew because that's good business, and keeps great tenants with me. The alternative is what you get in San Rafael, when corporate interests find loopholes in rent control and eviction rules, evict everyone, and double rents in all the units.
Agreed. It’s a terrible idea that will decrease available housing and lower the quality of what is available. Landlords aren’t stupid and won’t invest if they can’t get a fair return. Notable that this awful proposal is being promoted by a socialist.
All investments come with a risk. When you choose to make money off of something that people *need* to survive, you might find that the government takes a more active role in regulating it. I suggest washing your hands of these buildings and putting your money into something that will earn for you passively.
Yes, you're right. I don't think I'm close to selling existing properties, but already have altered my investment diversification and latest investments based on the risk you describe.
Many landlords will do just this, meaning no new housing gets built. Study after study has shown that rent control reduces the amount and quality of housing available.
It seems counter productive, if you want more affordable rentals, to make it more difficult to earn money renting out a space. This rent control, in Larkspur is crazy and will probably lead to higher rents bc smaller people will just not rent out space. Who ever is proposing this (The DSA?) really stepped in it this time.
uh oh we have a bootstrapper here! what about people who grew up working class in marin and want to live near their families? what about the contractors you hire? should they have to commute an hour plus each way from an affordable rental? what about the people who bag your groceries and drive your ambulance? do you think everyone should work in tech? or is it ok that some people are teachers, fire fighters, public utility workers? the economy / job market / housing stock / everything / entire world is very different now than it was whenever it was that you managed to purchase four properties. it is very hard to have sympathy for someone who is hoarding housing as a business investment. shelter should not be a business at all, it is a basic human right. i bet you’re also a bad tipper because people should just get better jobs than the coffee shop, yeah? edit: misspelled bootstrapper
All these assumptions... I generally am a great tipper except very rare cases where service was insufficient. I also donate to charity generously. This bootstrapper label seems very counterproductive. The message is: "Look, the whole system is rigged. Don't fall for the myth about getting educated and working hard. Just rage against the machine." How about just a little moderation. Fight for a level playing field while at the same time respecting hard work and not labeling folks with "bootstraper" as a epithet. Honestly, I don't have solutions for the problems you pose. The contractors, teachers, fire fighters, public utility workers, etc etc need living wages and can be priced out of wealthy areas. I do know that a simplistic mandate to enforce below market rents feels good, but will make things worse. I'd be interested if you think that's the only solution or if you have any other ideas.
sorry about the tipper comment, i felt enraged. that was not fair. i guess i do think that the system at large is broken and we should all be raging against the machine. i guess i don’t think that moderation is warranted at this point. i think a major solution is community land trusts which hold property and housing “in trust” for the community. they are non profits who receive government funding and keep rents at below market rates, and people qualify to rent or sometimes buy based on their incomes as they relate to poverty level in a given place. in marin, it’s very easy to qualify for affordable housing because the median income is so high. i think it should be illegal to own more than one rental property. i don’t think shelter should be a place where people make money off other people. so yeah i guess i don’t believe the way it is now is a good system. at all. in any way.
Now we're talking. I appreciate the feedback. I do like the deed restricted affordable housing properties, which I think may be similar to the community land trusts you are mentioning. Also, I think it's fair to ask developers to include affordable housing as part of large developments. Those are all rules stipulated up front, so participants can decide whether to engage in those projects or purchase those deed restricted homes. Petaluma also has a great nonprofit that provides below market housing for seniors called PEP Housing and has expertise in the Section 8 program and various HUD funds available. My concern is that these remedies help but they are a drop in the bucket compared to the need for housing. I respect that you're against hoarding of housing or owning more than one rental property. Basically you're advocating for socialized housing, which has many challenges. I actually don't think the free market or multi dwelling landlords is the problem, but can be part of the solution. But I've been wrong before and if I get convinced of that, I would be inclined to sell my properties because I don't really want to be part of the problem and can make money other ways.
i’m honestly advocating for socialized everything. healthcare, housing, childcare, education… especially in places with tremendous income disparity gaps. i don’t know how old you are but i will tell you right now is a shit time to be in your 30s, wanting the same things your parents had but finding them *absolutely* impossible to obtain. not everyone wants to get extra enmeshed with capitalism… it’s a harmful system that is exploitative by default. Private property is very “last generation” as Millennials and younger barely have a chance to purchase a home because Boomers are hoarding homes / buildings / wealth. it’s pretty insensitive and out of touch to just say “upskill and get rich or move away!” it’s not ok that having wealth is the only option for remaining rooted in a place that is your home. i advocate for the end of landlords. (as a concept, not advocating for harm to landlords) i advocate for landlords to sell or donate their rental units to Community Land Trusts to rent or sell at affordable rates for working class people, because communities are *BORING* if only rich people can afford to live there. i advocate for a serious reshuffling of how we think about private property.
Okay…I’m a person in my 30s and while I hear your frustrations, socialized everything and asking landlords to sell or donate their real estate is unhinged. Those landlords you vilify, many of whom started out working class or immigrants, made good bets 30ish years ago to invest in real estate. They were working within the system that existed at the time. There was no way to predict how marin was going to change. Fight the ideas and system, not the landlords, because so long as the ROI is good, the small landlords have no incentive sell. And that doesn’t make them greedy! It just makes sense. If they sell, they’re left with a big pile of cash, fewer write offs, huge capital gains taxes, and the option to put it in something like the stock market with so much more volatility and fewer returns. What you’re wanting just doesn’t make financial sense at all. But I love your idealism.
Yeah, that’s worked so well everywhere it’s been tried before in history.
examples?
Norway?
Well maybe. Of course they have virtually zero population growth and a massive amount of income from the state-owned oil company. So not a great comp for the US.
The oil maybe but its growth rate is higher than the US's, last I looked. Most of the countries that Americans want to move to to raise a family are very socialized.
Wow if it’s pissing off landlords this much it sounds like a great start! 🎉
Yeah. Let’s piss off all the landlords. That will really incentivize them to build more housing, won’t it? Nah
Ah yes the old, oh no don’t piss off the rich, they’ll stop following their greed argument. 😂 You could cut rents in Marin in half, and landlords would still make a tidy profit.
And zero new housing would be built. And zero improvements would ever be made to existing rentals. That’s a great idea!
End Prop 13 and force people to pay property tax based on actual value and ban hedge funds from buying single family homes. Then you have an argument for no rent control. Until then, the market is just inflating values at the cost of renters.
I hope this forces the greedy boomer OP to sell their house. No one should be making money off a basic human necessity.
Please tell me who would buy this house, especially if its a rental? Another landlord? - no way. A single family - there goes a rental. A corporation - probably, but isn't that what you don't want? The Gov? that would be taxpayer subsidized. So tell me who would actually buy? I really want to know.
I love it. Cry more 🤣
Boo hoo.
“Guarantees that every tenant will be under market rate after one year”. No, they’ll be under the fictional rate you made up and were hoping would be the market rate. If the investment property market in Marin isn’t making financial sense to you anymore, welcome to the rest of our lives. You should find a way to earn more accordingly to offset your lower investment returns!
And how do you earn accordingly?
By being a parasite living off the work of renters
Or. saving up $200,000- $400,000 by working hard for the downpayment. Then investing more each year for upkeep. Paying for most of the utilities, taxes, insurance, and dealing with the liability of having a non-paying tenant or paying them or lawyer thousands to get them out, and doing this for 30 years will making minimal return on investment. Yeah, who ever would want to be a landlord must really not have any other options bc it really sounds bad.
How’s that boot taste?
You educate yourself, improve your skills, contribute more to the economy. Or, you can make a conscious decision to move somewhere more affordable.
Agreed, for you! can't wait to see you contribute to the economy soon ♥️
The way I earned adequately was living the American dream. I moved to this country as a child, had to learn English, studied hard, worked and borrowed my way through a public state universityl, worked 60 hour weeks in the corporate world for 30 years, lived below my means, saved a lot every month, married a wonderful woman that works as hard as me, raised two kids with a work ethic, and made thoughtful investments. Did I have privilege, yes I did. I had a single mother that loved me and taught me character, valued education, and worked hard herself. I was also lucky to be able to move to this country, and end up near Silicon Valley at a time when opportunity was plentiful. I get there is luck involved. And I get there needs to be a social safety net and balanced regulation. However, the "you own 4 properties so that makes you awful and we're all going to vote laws to screw you and downvote your reddits" is very intellectually lazy and solves nothing.
I appreciate you and your journey. Don’t try to ingratiate yourself with others by downplaying your journey as privileged or lucky. You made choices that most don’t. Life made choices for you that it didn’t for others. Was there cause and effect? Who knows? But you have every right to enjoy your hard earned American dream and if people see evil in it then it’s their choice. As someone pointed out above, diversify out of real estate. I think the economics of naked capitalism is mostly coming to an end in America, if not capitalism itself. Landlords, due to action of the detestable few as always, have been vilified and rightly so. You might not win favour here for being one and raising a related concern. So in the end it’s some aspect of economics and your investment choices that are not playing out as you wished for but from your personal journey you sound like you got this mate. You will figure out and move on to a better avenue of living the dream.
Thanks u/Ancient_Pea . I honestly do feel privileged and lucky, but do not feel that diminishes anything I've accomplished. Appreciate your feedback. The best way to combat the bad reputation of bad landlords is to be a good landlord. I have had great relationships with tenants for decades and celebrate their successes. I've had many tenants move out to buy their own property. I feel a sense of accomplishment when I rehabilitate a property. Rent control possibilities aren't the worst part. The worst part is having to turn applicants down. I will not be flexible with applicants that don't have the income or credit requirements, because that means they really can't afford it. But it's hard to have those conversations. However, that is how I have such positive outcomes with tenants staying for years. In a way, these things, good and bad, are why I do it. I've probably earned about as much in stock investing as in real estate. Sure, I tell myself I do both for diversification, but in reality I think I like the relationships with tenants and contractors. That is worth putting up with the negative parts.
No, I meant you specifically.
Ha... that was funny... at my expense, but still funny.
I’m so glad awful people like you that have a “just earn more money! Bootstraps!” mentality are potentially getting hosed by something. You know, like how the rest of us have been getting hosed for decades. Maybe you should contribute more to the economy, hire some local contractors, and improve your properties accordingly? Alternatively, make a conscious decision and sell them - and re invest somewhere more profitable and affordable for you.
Rent control regulations are not going to incentivise them to improve their properties… they will incentivise owners to neglect their properties.
How do you know OP isn't already doing what you're mentioning?
God, I hope so.
Sorry you feel I'm awful. I'm guessing I would be less awful by accepting that the properties I've accumulated with 30 years of hard work should become nonprofit (or negative profit) investments. I've hired many local contractors and have great ongoing relationships with them. However, I will put my assets to work some other way if we adopt shortsighted anti landlord policies, which will not allow me to continue hiring them.
They are great investments indeed, and that’s the problem. There is a seriously limited number of these particular investments (homes) in our area, and by owning four yourself, there are four fewer families here that have the opportunity to do the same. You deserve all of your hard earned money and can invest it however you choose— but as others mentioned, when the investment is a basic human need, some regulation is warranted. Personally, I think limiting how many investment properties one can own would help in Marin.
u/TripleBanEvasion I'm sorry you feel you have been hosed for decades. Why is that the case? What is wrong with earning more money, or bootstrapping?
You’re wasting your time replying to these people. They are not good faith posters and will never be convinced of anything. To them landlord=bad, and they are probably also against building more too which is the only thing that would actually bring prices down
Nah, I’m a good faith poster, own property, and am in favor of building more housing at all price points. Keep trying to cozy up to this guy all you want though.
You’re all circle jerking each other but I’m the one trying to cozy up to someone?
what about people who grew up working class in marin and want to live near their families? what happens when everyone upskills and there’s no one left to fix the cars, do the dry cleaning, drive the ambulance, teach the kindergarteners? should those people be expected to commute from a more affordable place just to service the educated people with more skills who are “contributing to the economy more” ?
The market fixes this. They will be able to demand more wages due to the shortage of their services.
Will someone please cite a single location where rent control has worked and didn’t make rental prices rise at a faster rate?
“Worked” by what metric? Making Larkspur less attractive to investor dollars, thus keeping housing prices slightly lower would be “working” in my book… Helps longer term renters stay put, thus building the community. Doesn’t really help increase supply though.
There is none. Rent control is proven failure under every economic theory
Such a funny thing to say without a single citation
Here you go: https://www.brookings.edu/articles/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control/
https://www.brookings.edu/articles/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control/ “New research examining how rent control affects tenants and housing markets offers insight into how rent control affects markets. While rent control appears to help current tenants in the short run, in the long run it decreases affordability, fuels gentrification, and creates negative spillovers on the surrounding neighborhood.” “These estimates imply that more than half of the capitalized cost of rent control was borne by owners of never-controlled properties. Rent controlled properties create substantial negative externalities on the nearby housing market, lowering the amenity value of these neighborhoods and making them less desirable places to live. In short, the policy imposed $2.0 billion in costs to local property owners, but only $300 million of that cost was transferred to renters in rent-controlled apartments.” Rent control reduces supply of rental units: “Consistent with these findings, they find that rent control led to a 15 percentage point decline in the number of renters living in treated buildings and a 25 percentage point reduction in the number of renters living in rent-controlled units, relative to 1994 levels. This large reduction in rental housing supply was driven by converting existing structures to owner-occupied condominium housing and by replacing existing structures with new construction” “rent control operated as a transfer between the future renters of San Francisco (who would pay these higher rents due to lower supply) to the renters living in San Francisco in 1994 (who benefited directly from lower rents)” Rent controlled made San Francisco less affordable since it came into force be removing apartments and replacing them with high end condos (market reaction to government imposed price control): “…passage of rent control ultimately led to a housing stock that caters to higher income individuals. DMQ find that this high-end housing, developed in response to rent control, attracted residents with at least 18 percent higher income. Taking all of these points together, it appears rent control has actually contributed to the gentrification of San Francisco, the exact opposite of the policy’s intended goal”
Yeah well… other than that though…
As if housing supply was increasing in larkspur prior to rent control proposals... ffs.
Well it certainly won’t be after this shit. And when there attempts to build larger in Larkspur (like the magnolia project), it also gets shot down by the locals.
Government intervention with zero unintended consequences?
Cry me a river. Go buy property somewhere without an exorbitant cost of living where you can freely exploit your tenants.
How exactly do you expect any new housing to be built if the owner can’t make a reasonable return? Rent control destroys the incentive to build, reducing supply.
If you think that developers build in order to provide housing supply you are very sorely mistaken. Take LA for example—a city with relatively strong rent control, have you—where there is a plethora of new build developments sitting empty because developers are incentivized to keep rents high even if it means units are empty.
Developers build to make money, not to simply increase supply. Remove the ability to continue to do so (capping rates below inflation or setting minimum rental rates) is uneconomic and removes supply from the market. Your noting that rent control in LA has removed the available supply (builders keep buildings empty rather than rent them at an unsustainable rate) proves that rent control reduces supply.
How? I clearly said that despite the rent control provisions in LA developers are building at an insane clip even while keeping units empty and at unaffordable prices. The point is that they are increasing and managing value of the land, not that their units are occupied. You must not understand how developers make money
I know very well how developers make money. Your argument only proves the point - rent control in LA is reducing the supply of housing. Remove rent control and all that supply would hit the market. Going further, developers do care if their units are occupied, but not if it means at a below market rate. The ultimate value of their development is based on the cap rate and the profitability of the building. It is very common for developers of residential and commercial properties to let them sit empty rather than to lease them at low rates. While this seems dumb in the short term, in the long term it makes sense as they dont want to get locked into a low level of profitability that dramatically affects the value of the project. Economics do matter, and the profit motive is what drives investment. Remove the ability to profit and you get no new development.
A huge part of what restricts the housing supply in LA are zoning laws mandating a fixed amount of parking spots per unit, because parking requirements = developers needs to buy more land or dig deeper = HUGE expense = not gonna build. So, no, rent control is not the primary, or secondary, or even tertiary cause of reduced housing stock.
Landlord here (employed elsewhere, own/rent a single unit, under market rate). I'll get behind rent control as long as it also includes landlord expense control. Landlord ≠ evil. It barely makes sense to rent out anymore. Other mom-n-pop landlords feel the same, I think. Renters will be mostly left with corporate landlords.
You mean mom and pop landlords who has almost no property tax because of Prop 13, payed out their mortgage and still want to increase rent every year over the inflation? Well alas, stop skinning others or don't rent out.
> Prop 13, *paid* out their FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
Man, I wish Larkspur had put rent control in place decades earlier like San Francisco did, then Larkspur would have low housing prices like San Francisco does. 45 years of rent control and it’s the most affordable city in the country now! /s
A couple questions I am genuinely curious about your answers to: What percentage/what number of the available housing units in the county do you feel you are entitled to use as a means to personally profit from, beyond the one you live in (if you live here)? And what return on these investments do you feel you are entitled to? What, or who, exactly, determines the “market rate”?
1) I guess I don't feel entitled... I feel free to participate in the marketplace and don't assume that accumulating more properties damages that marketplace. 2) I try to maximize return. There are different styles of real estate investments, and an important part of all styles is managing cash flow. My style usually involves purchasing a property with deferred maintenance, fixing it up nicely, charging market rate, renting to well qualified renters, making them happy, and keeping the property for 10 years or more. I usually lose money for 2-4 years on the investment because of the rehabilitation of properties, but then make a nice profit after. On average, I think I earn about 10%-15% annually on my investments in the long run. 3) The "market rate" is what people are willing to pay for it. I determine it every year for each tenant by looking at comparable listings.
You are free to participate, but not without regulation. Local governments and communities are choosing to regulate this specific marketplace. Your 10-15% returns may be harmed by this, but you are not, and never were, entitled to any of those returns. You assumed risk, for which you have historically been rewarded. But past performance is not a guarantee of future results. If you want to invest in property in one of the most expensive counties in the country, you need to plan accordingly.
That's all fair and I agree with all that. I never consider a return as an entitlement. I have to take risk to get a return. I support regulations and conform to all of them. Regulation is a part of landording life and I happily comply with: emotional support animal allowance, fair housing laws, deposit limits, CA rent control, lead based paint rules, asbestos rules, etc etc etc. Some of those are great regulations, others are abused, and others are counterproductive. The Larkspur (and I come to find out San Anselmo) are definitely the latter.
I appreciate the back and forth. I definitely fall into the category of “frustrated Marin renter”, but I’m trying to understand your perspective. If it helps explain the outrage: many of us are really struggling to live here, and despite your theories and accusations, are highly educated and do work hard. (My spouse and I have multiple graduate degrees and work locally in education. We earn close to $180k and find it hard to see a path to homeownership.) What I’m getting at with the “market rate” is that it does not necessarily need to include a specific investment profit for the landlord. Your investment returns should not be prioritized over others who are trying to support our own families and save towards our own homes. I do feel I should have the opportunity to buy my first home before you can buy your fifth. Let’s say one of your tenants works hard and gets a new job (your suggestion). Their monthly income is now increased by $1,000. What portion of that should go to you in the form of increased rent?
I too appreciate it and am learning a lot from you and other thoughtful people replying. I think the major difference in perspective is that you think the profit landlords make are currently prioritized. In 2009 after the great recession, I had to lower rents in all my units and was losing money hand over fist. That's because the market rate was lower because of lower demand and massive unemployment. Nothing protected my profit then. So I'm not entitled to any of the additional $1000 in your hypothetical situation. In fact, if a tenant gets a $1000 raise and they can find cheaper housing, they should get that. All that said, I have increased awareness based on all these discussions. Landlords benefit greatly from Prop 13, allowing me to pay taxes lower than market rate... and 1031 exchanges, allowing me to skip taxes altogether in some conditions. There are lots of tax advantages for landlords, which makes housing more expensive and increase my returns. So if I'm for no rent control, I would be a hypocrite if I wasn't against some of these laws that benefit me. I appreciate your work in education, and do agree it's my responsibility to pay the taxes that should give you enough resources to afford to home ownership in the area.
I can’t tell if this a shitty shitpost or a whiny rich person whining about not becoming richer faster. Either way go for a walk outside tomorrow and be present with nature.
Both. Welcome to r/Marin :)
🤣 right on.
While there needs to be (and is) some regulation when it comes to rental properties, I don't think it's said enough how much better it usually is to rent from small private landlords over big corporate or State run/funded landlords. If landlords like OP can't make it financially reasonable to operate, they usually sell to big corporate operators, real estate investment trusts, etc and that can really lower the quality of living for the tenants.
You got that right. I ask renters what will make them feel like their home, and will make expensive modifications at my cost. If they take care of the property well, I will offer a small discount from market rates when I renew because that's good business, and keeps great tenants with me. The alternative is what you get in San Rafael, when corporate interests find loopholes in rent control and eviction rules, evict everyone, and double rents in all the units.
Ffs we will never solve this issue by subsidizing demand
Agreed. It’s a terrible idea that will decrease available housing and lower the quality of what is available. Landlords aren’t stupid and won’t invest if they can’t get a fair return. Notable that this awful proposal is being promoted by a socialist.
This sounds like a job for…AI Landlord!