Builders aren’t gonna be interested (right now) in that return without subsidies.
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Builders aren’t gonna be interested (right now) in that return without subsidies.
Right.Quote:
Originally Posted by Mustonen
Inflation ex-shelter over the past year is 2.13%, so right about target.
Housing inflation has remained high but an issue with housing is that more supply is needed but the high rates are a barrier to building more. Hopefully rates will get cut soon now that goods and services inflation is back to normal.
Right, and why would they be? It is just as much of a PITA to permit and build a $500k house as it is a $1.5mil house, but the 20% ROI is a lot more on the $1.5mil house.Quote:
Originally Posted by rideit
We need to make it easier to build small/cheap housing so it can be a volume play for developers. We need to make it 3x as hard to build and permit a $1.5mil house as it is to build a $500k house. I would say we should incentivize cheaper houses, but that just means subsidies which is a political hot potato. HOWEVER, if we de-incentivize new homes for the rich and wealthy, maybe more builders will turn to cheaper houses. Any house valued at over $1mil gets put to the back of the permitting pile, and has to pay fees up the wazoo, while houses valued under $500k get fastracked review timelines, inspection scheduling, waived fees, etc.
Something risky that might work as well is creating an incentive or way for builders to receive construction loans prior to permits. Right now, most larger construction loans are tied to the issuance of permits- the initial cash outlay for consultants and permit fees is provided by the developer... if they were able to use loans to pay for that (as risky as it may be), more projects could get built.
L.A. accidentally created a boom of ‘low-income’ housing construction (low-income here being less than $100k if I remember).Quote:
Originally Posted by californiagrown
Two policy changes triggered it: allowing more unit density if the construction is designated 100% low income, and fast-tracking permitting for low-income construction (six months guaranteed instead of the more typical ~5 years for new apartments.)
Those two changes were enough to get builders to change their plans from luxury apartments, no subsidies required - so much so that the mayor is apparently panicked about all the new construction and trying to rein it in some.
To clarify, LA is earmarking these "affordable units" for folks making less than $100k/year. Unclear what the actual cost of the units are, but it appears that the boom is mostly rental apartments, not owned apartments or houses. That said, it does show that developers will take a volume play if it makes as much sense as a luxury/high end play.Quote:
Originally Posted by J. Barron DeJong
You know what they say, "If you have to ask what the price is, you didn't do your DD."Quote:
Originally Posted by Foggy_Goggles
Since ya'll went macro econ, some things to think about.
Supply side - Hard dollar build costs are frequently more expensive that many understand. Cost of labor, 2x4s, energy code compliance, infrastructure and so on precludes what many consider affordable. Think 2bd/2ba apartments at $3k a month plus utilities. Inexpensive 1bd/1ba multi family at $2k month. Developers come to the table with these spreadsheets and they get lit up. "OK, fuck it, I'll build but $1million condos".
Living wage job - it seems the conversation always comes back to the cost of housing versus why can't people afford it. "The government" is +/- 30% of GDP. Lead by example. $75k to start for essential or career type jobs. Send the tax payers the bill.
Flat demand curve in desirable locations - income disparity is so high and the wealthy effect has been cranking for decade. There is infinite demand for $500k second homes.
Public Housing Policy - should not support second homes and STRs.
Interest Rates - Put your subsidy here. With all the talk about the printing press and manipulated rates, don't forget this option. Loan programs for qualifying individuals the 10yr minus something.
But all politically unpopular so we will just keep pointing fingers and fucking ourselves in the ass.
This should be a big one. Second homes that are not longterm rentals should be heavily taxed to subsidize the construction of new housing stock. I would like to see it in the form of a big tax that goes into a fund meant to subsidize the payment of Impact Fees that affordable projects need to pay.Quote:
Originally Posted by Foggy_Goggles
My opinion is that government and landlord, developer, builder, Realtor doesn't have a great track recorder. Nor does, on a large scale, picking winners via an "affordable process".
And, almost by definition, a large percent of voters will have a hit to their equity by any solution.
Sent from my Turbo 850 Flatbrimed Highhorse
There are now 481,000 new homes for sale in the US, the highest inventory since January 2008.
And ~30 million more people.
does that mean 481000 people " know what they have got " ?Quote:
Originally Posted by 4matic
when will some of them blink
For the first time since June 2021, it is now CHEAPER to buy a new house than an existing house.
The median new home is selling for $417,400 while the median existing house is for $419,300.
New as in new constructionQuote:
Originally Posted by XXX-er
Builders still moving dirt for 100’s of new home lots around here.
missed the "new" bit but I think once they get going they gotta keep buildingQuote:
Originally Posted by 4matic
around here prices have cooled by maybe 15% from the last peak
figures i have seen say Canada is crazier than USA
That seems OK to me. Housing is housing and more availability of new rentals will lower pressure on the stock of condos/houses for sale.Quote:
Originally Posted by californiagrown
I think more places, especially mountain towns need tax policy like Maui county (not necessarily these exact rates, but conceptually)Quote:
Originally Posted by Foggy_Goggles
Attachment 495616
Owner-occupied and long-term leases get a discount.
Second homes pay a premium.
STRs pay a fuckton more.
Rates scale up for home values beyond the range of "normal" housing in the local market.
Certainly won't solve everything, but if you've got a $1m home, and it costs you an extra $9500 a year to STR it, maybe that's enough to convince you to put it back on the long term lease market for residents.
Maybe not on your ski-in/ski-out condo that you visit for a few weeks a year and get lucrative AirBNB rates the rest of the time...but maybe yes on that 3br house in town owned purely as an investment property by another resident.
edit: I'd also suggest a feature where once a tenant has been in a place for more than a year, the landlord gets to pay the Owner-occupied rate. Encourages stability and tenant-friendly behavior.
This thread is no place for sensical behaviors.
They actually do cost you something. I've bought our last 5 homes representing myself as the buyers agent. I've never had a listing agent bat an eye and in each case, we've reduced our offer price an additional 2.5-3% since the buyer won't have to pay that commission. Technically, you can't get paid a commission if you aren't licensed but you can get a price reduction or have them pay 3% in other costs. As easy as it is to research properties today, it would have to be a very complex property before I see any benefit in having a buyers agent. Hell, I've corrected several listing agents mistakes in a few transactions as not all Realtors are that good or have adequate math skills.Quote:
Originally Posted by Supermoon
That was my concern when I bought my commercial building for one of my businesses in 2022. I got a 5 year loan at 3.5% and calculated an amortization schedule to figure out what I'd have to pay each month to pay off the building in 5 years. Now one of my businesses pays that amount in rent to the business that holds the property so that it will be paid off by 2027 when my son turns 18 and takes over the business ('ll continue to collect rent from him while skiing everyday). I hope others were looking 5 years down the road when they locked in their low rates as those low rates allowed for massive paying down of principal vs renting the same building.Quote:
Originally Posted by Bronco
" There are 300 RE agents in this town and I trust a handful of them to write a contract "
of course I was quoting a lawyer bud and we don't like them either
I like it!Quote:
Originally Posted by singlesline
https://www.latimes.com/archives/la-...722-story.html
Im all high and shit doing myown research and let me tell you I have answers and I know
This guy.Quote:
Originally Posted by Red7
Same here. The building is crazy here in Bend. But all that building supposedly has turned Bend into a buyer's market.Quote:
Originally Posted by 4matic
https://www.realtor.com/realestatean...nd_OR/overview
Wow. That Maui tax chart is brutal.
I get the tax the rich. And try to stop STR std insanity. But wow. Then again it’s a small island with too many tourists. Wish I had bought a place in haiku or paia years ago. But then again I didn’t have the money.
How do they treat ohanas?
To me that’s the real worker solution. Give tax breaks to people that build long term affordable apartments on their extra land.
PS. House in Maui. Over three million. Hold in LLC as a long term rental to yourself. Save six bucks in taxes. Don’t think it isn’t happening.
I’ve never had a commercial mortgage that didn’t float. Other than Sba 504Quote:
Originally Posted by byates1
I try and only speak to what I know. I used to live in a pretty quite down valley neighborhood 10 minutes from the grocery and 20 minutes to the ski area. Now I live in a neighborhood with many STRs, second homes, remote workers and retirees.
These folks pay lip service to "affordable housing" until it is proposed in their backyard. Then the racist, classist, living in fear, world is on fire bullshit comes out. They go to the meetings and talk about their "quality of life" and "had they known when they bought their house". Chance is scary and these people don't want it. Anything that doesn't walk or talk I them is perceived as a threat.
Their Shangri-La is white service workers and government employees emerging from somewhere to meet their needs and then going back behind the curtain. So we get taxes and fees for affordable housing and then get housing that really isn't affordable. The average teachers salary in Colorado is about $55K. That don't buy shit.
Collectively, we get exactly what we want. We just don't speak to what that is. Those pulling the strings want the restaurants open 7 days a week, service employees that don't act like they hate them and public policy that perpetuates business as usual.
Its Friday, do you want to go get a beer at 2 after our bike ride? Next week, yeah that's the 4th, I ain't doing shit next week.
I try and only speak to what I know. I used to live in a pretty quite down valley neighborhood 10 minutes from the grocery and 20 minutes to the ski area. Now I live in a neighborhood with many STRs, second homes, remote workers and retirees.
These folks pay lip service to "affordable housing" until it is proposed in their backyard. Then the racist, classist, living in fear, world is on fire bullshit comes out. They go to the meetings and talk about their "quality of life" and "had they known when they bought their house". Chance is scary and these people don't want it. Anything that doesn't walk or talk I them is perceived as a threat.
Their Shangri-La is white service workers and government employees emerging from somewhere to meet their needs and then going back behind the curtain. So we get taxes and fees for affordable housing and then get housing that really isn't affordable. The average teachers salary in Colorado is about $55K. That don't buy shit.
Collectively, we get exactly what we want. We just don't speak to what that is. Those pulling the strings want the restaurants open 7 days a week, service employees that don't act like they hate them and public policy that perpetuates business as usual.
Its Friday, do you want to go get a beer at 2 after our bike ride? Next week, yeah that's the 4th, I ain't doing shit next week.
Is it though? Hawaii property tax rates are some of the lowest in the nation.Quote:
Originally Posted by Core Shot
Owner occupied rate is a fraction of of the rates where I am in Montana. On a $1m assessed value you're talking $7400 in taxes vs $1800 in Maui. Long term rental it is still only $3000 and second home is $5870 which by my math is still a lot less than MT.
Unless you STR it, you need to be non-resident with well over $3m home value before you even start to get close to a MT tax bill. If you occupy it, you will max out at like half the equivalent MT bill.
Maths are not CS's strong suit.Quote:
Originally Posted by singlesline
:fmicon:
brains are not CS's strong suitQuote:
Originally Posted by skaredshtles
Notice in the current MT Governors race all the ads against Ryan Busse are about his 2A history and nothing about GGs plans for his next term or how badly he and the GOP controlled state legislature totally fucked us on property taxes.Quote:
Originally Posted by singlesline
GOP gov, GOP state legislature... SURELY your property taxes went way down, right??Quote:
Originally Posted by Bunion 2020
After being savaged. I have no desire to sus the relative tax rates.Quote:
Originally Posted by singlesline
Just shocked that Maui tax is that cheap on a one million dollar property.
Carry On kicking me in the balls
PS. wtf Montana? Are you trying to beat Long Island?
Wait until you see how much they pay in TX for property taxes.
So, what do you guys think about STRs being taxed so much more heavily than non owner occupied second homes in that Maui spreadsheet? Yes, STRs cause plenty of problems, but at least the lights are on and renters go out to dinner and take surfing lessons and cleaners have a job to do, along with property managers. There are some economic benefits. But is a second home that sits empty 11 months a year better?
Is it the intent for high STR taxes to discourage investors from consuming inventory?
Across mountain towns, some responsibility of high home costs can be attributed to STRs and real estate investors, right?
I don't have a grasp of all the dynamics of high COLA in mountain towns, but I wonder if those STR investors are really dissuaded from investing due to taxes.
Str's worked too well. I was early on Airbnb. I rented my cabin in the Adirondacks for 6 years part time in the summer, slept in a tent, or van. Paid the fixed costs of my place for 8 years.
Buying multiple places just to run micro hotels is a great business. But it has drawn the ire of all these days. I think the present and looming regs are going to dissuade ppl from doing it.
Renting to locals sounds all wonderful until they are smoking penniless drunk scumbags.
Goldenboy had a point, those Airbnb ppl literally spend money everywhere in their stay.
I charged 35$ for cleaning and did it myself, dinging ppl for huge cleaning fees is a dick move. Almost everyone left my place spotless. I also only rented to small groups, usually 2, 4 max. No 12 jersey bros and 10 handles of Jack in my place thx.
High COLA Tourist Economies were not/will struggle w/o STRs. They compete with traditional lodging properties (hotels/motels/condo-tels) which pay much higher property tax rates, utilities, income tax and so on. Hotels are activity condominiumizing to get in on the greasy grift.
But no, it is unlikely that you can tax them out of existence. And no, there consumption of services staffed by employees who can't afford housing leading to the owners of said business lobbying for subsidized housing so they can continue to pay a sub-living wage is a circular dog shit argument.
The higher tax would just create more money for the local government to use to justify their own existence. I just drove though town. Its gridlock to to get in or out of the grocery store. We need less peak season tourists, more real infrastructure and a conversation about raising the wage scale.