Real Estate Crash thread

[Buster Highmen]

I think the STR tax is a feint: it doesn't solve the problem, is a minor irritant to the investor class, pads the town coffers and has an added bonus of throwing a few meaningless crumbs to the folks that are trying to climb into home ownership.

Maybe a minimum wage for employees at businesses whose profits are more than ?x the local average income? There's got to be a better levelling mechanism that doesn't kill the truly small business.

[XXX-er]

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?

This is not rocket biology, if you tax the fuck out of an STR to the point it is no longer making the owner any money they will do something else

the GF had a property that happened to be REALLy only good for an STR but I think most rentals are not this

[Foggy_Goggles]

Right, but what is that number? And how you gonna implement it? And what are you gonna do with the money?

[BCMtnHound]

Right, but what is that number? And how you gonna implement it? And what are you gonna do with the money?

Well, in BC these are provincial tax and regional/city tax. Prov general coffers go mostly to healthcare and education. Regional and city goes to infrastructure and permitting/LE.

Implementation is above my paygrade. Until I retire at least.

[Buster Highmen]

Taxing the shit out of STRs or properties in general will only lower returns so far so that smaller investors have to leave but the big guys who can get by on minimal profits spread over enormous portfolios will stay in the game. I don't think that fixes the problem and in fact might accentuate it.

In any case,tt doesn't really fix the underlying problem of housing being increasingly unaffordable.

I was a rocket scientist with a top secret clearance, but never wrote guidance algorithms for rocket amoeba. So I could be wrong.

[neufox47]

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?

I think second homes are at least as bad. Simple solution is to give a significant tax break if it’s your or your tenants primary home and sole residence. Everyone else pays the high rate.

[J. Barron DeJong]

I think second homes are at least as bad. Simple solution is to give a significant tax break if it’s your or your tenants primary home and sole residence. Everyone else pays the high rate.

I don’t have strong feelings about which should have a higher tax rate, but if I have the choice i’d rather live next to a second home than an STR, so taxing STRs at a higher rate helps with that aspect at least.

[dunfree]

I think second homes are at least as bad. Simple solution is to give a significant tax break if it’s your or your tenants primary home and sole residence. Everyone else pays the high rate.

doesnt France use an owner tax + resident tax system? Just add a short term resident tax on top.

[Mazderati]

Boston has something similar where property taxes are assessed at discounted rates for primary residences.

I'd rather see STRs bans than creative tax structures.

[yeahman]

I'd rather see STRs bans than creative tax structures.

Exactly. Or start enforcing zoning laws that already prohibit commercial enterprises in residential neighborhoods.

[Dantheman]

Hood River was way out in front on the STR issue. IIRC, you can STR your primary residence up 3 months per year. STRs totally banned for anything not a primary residence.

[climberevan]

Exactly. Or start enforcing zoning laws that already prohibit commercial enterprises in residential neighborhoods.

Yeah, this. Why not just acknowledge the reality that these STRs are just little hotels and treat them accordingly WRT tax & zoning?

It's the same with Uber--eventually the chickens are coming home to roost and it's becoming basically a taxi company, with the attendant regulations and costs. These kinds of things can seem cheap for a while because some of the costs are hidden or being paid by the commons, but eventually it has to pencil out.

[spanky]

I think second homes are at least as bad. Simple solution is to give a significant tax break if it’s your or your tenants primary home and sole residence. Everyone else pays the high rate.

Conversely, a (seldom occupied) second homeowner pays taxes but doesn’t use government services like a full time occupied home (be it a primary residence homeowner or STR/LTR). Less strain on schools, police/fire/ems, utilities/infrastructure, etc.

[XXX-er]

The town could always fuck with the STR LL by making them pay a license or SFT or more likely ban the STR where the LL is not also a resident of the STR

Locally the town is now just getting around to dealing with the STR file by first surveying STR LLs so a buddy posts on FB don't fill that thing out , they can't tell us what to do with our homes !

Kinda dumb statement cuz if buddy isnt in the process he won't have any input, also for years the town has already been telling him what he can / can't do they are called zoning bylaws and its real easy for the town to find out who is running an STR by just looking on AIRBnB or Booking.com but buddy has just built this new STR so he doesnt want the town fucking his gig up but he already told them by advertising that he has an STR

my take is if you are running an STR in yer home/ basement suite with adequate parking ect OK its not much different than an unobtrusive LTR

BUT if you are running 6 STR's or renting out an entire house or your STR gets complaints to the town maybe you are a probelm and deserve whatever fuckery the town thro's at you?

You advertised an STR so now the town knows you have a suite so even if you convert to LTR they know, whereas a good LTR can just fly under the radar fo ever if nobody complains

[anotherVTskibum]

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?

Honestly, as a mountain-town resident, I'd prefer to see more actual condo and hotel developments instead of single-family homes that are clearly going to end up as vacation housing of one sort or another. Among other reasons, when the bed base here was more condo and hotel-driven, more of the tourists were eating at restaurants and hanging out at bars...and we had more of both and more hours at the latter. A significant portion of the Airbnb renters bring their own F&B supplies and hang out at the McMansion, because why not when it's got a ton of space, a hot tub, and whatnot?

And to the other point: yes, if a place is available for STR and is not owner-occupied as the owners primary residence, it should be subject to the same regulations as any other commercial lodging establishment, whether those are tax-related, fire safety, or whatever else.

[Foggy_Goggles]

STRs as zoning violation makes sense to me. But remember both locally and nationally, the conversation is simply lip service to an "engineered solution" that actually does nothing to make housing more affordable because the ruling elite don't actually want affordable housing.

They want what they have, plus more, while feeling good about themselves and, hopefully, keep the masses fighting against ourselves while not getting to restless.

Here in the tourist towns, at least we have turned a corner and are now calling it "workforce housing". The veneer of the Up Valley it literally defined by ever increasing property values. We have 4th of July Fireworks sponsored and paid for by Realtors. Think about that.

While, as mentioned above, Realtors love transactions. So if a "buyers market" there will be a bump in commission checks but if it looks like catching a falling knife, look out below. Long term, most don't want to see 6 figure losses to property values. Brokers, by definition, talk up the current options. It is their job. The are not fee based real estate advisers, "I don't think you can afford it. You should wait 5 years or not buy" says absolutely no one.

https://www.realtor.com/realestatean...il/M9015711035

https://www.realtor.com/realestatean...il/M9015711035

Do we talk about now the Town of Granby purchased this failed golf coarse development, sold it to a develop for affordable housing. Said developed goat fucked the situation, carved out a bunch of for profit RV Park, STR tiny homes, bowling alley, swimming pool, clubhouse and so on. Any is now rolling in all those costs to this shit box "Park Model" community with $250 month water and sewer costs, mega high HOAs and so on. An now they are being marketed and second homes. "Amazing opportunity, you can own a trailer at the corner of 34 and 40" because they are now not affordable.

[byates1]

Sweet blog. Pretty spot on.

[XXX-er]

In spite of not enough LTR accommodation a buddy of mine just had the LTR in her basement disallowed by the town, buddy had to pull the breaker for the stove so its no longer possible to cook down there and show the town bylaw guy it was removed . A nice house in a nice development ( wrong place for an LTR ?) not a bad secondary suite build so how did that happen asks I ? Buddy said well the tennant had those 3 dogs and buddy has a dog which makes 4 dogs which is I think 1 too many someone complains and thats the end of the LTR, I don't think its hard to create a problem and have the town come after you ?

I don't really know if there is a thing called rocket biology but it sounds like a thing

I think RE agents don't really care if prices go up or down cuz it would be a small part of the fees, they just want it to move

[Core Shot]

^^^ around here ADU is easy. Almost by right.
One way around that is not to have a basement apartment with an oven. Which is easy. A countertop two burner induction stove an air fryer countertop is easy to cook with.

[XXX-er]

your takaway was suposed to be pissing off your neighbors if you are not strictly following the town bylaws is not a good idea be it an STR or an LTR and once the town knows you are running an illegal rental they can fuck with you

but you are after all coreshot

a fucktard to the end apparently

[yeahman]

What the fuck kind of renter has THREE dogs? Use your head. One dog, maybe, if you're trying to rent.

[XXX-er]

I know ^^ right, 3 dogs is not a good way to run under the radar, my buddy should not have rented to her and even worse

renting to a lawyer

[Kevo]

In Teton Valley, ID, I think we are beginning to see STR owners trying to rent long term, which *might* be an indicator that the STR gold rush is subsiding.
Anyone else have insights on this?

There is a prolific STR on my street that just went up for sale. It had been booked out quite often as best I could tell.

It was bought new and immediately turned into an STR in 2022.

Currently for sale for ~$1.2mm, which is likely within 10% of what they paid for it in

...and the $1.2mm STR on my street that I mentioned here went under contract in less than a week. Stuff is very much still moving here.

I have a feeling that if a nationwide slowdown happens we'll follow the trend but likely lag by a bit from a timing standpoint.

Are CO mountain towns still showing signs of slowing? I remember someone mentioning that Summit had cooled down.

[singlesline]

I think the Maui STR rate is close to the Hotel rate (slightly higher) which seems fair to me...they are mostly just underegulated hotels.

STRs also aren't legal everywhere and require a permit. They generally have to be in areas with hotel/commercial zoning, historic business districts, etc. So it is relatively easy to get a STR permit for your condo that's sandwiched in between the Sheraton and the Hilton...hard to get a permit for your house in a local neighborhood that's not by the beach.

Yes these areas need tourists to survive, but there are a lot of benefits to being able to manage where and how the tourists stay. Hotels are designed for high turnover, they can plan around the traffic and parking, etc.

I think second homes are at least as bad. Simple solution is to give a significant tax break if it’s your or your tenants primary home and sole residence. Everyone else pays the high rate.

I think second homes aren't as bad. First, there's way less incentive to buy them without rental income. Even with appreciation, most owners lose money after accounting for taxes, interest, maintenance, and opportunity costs. You buy them because you want a vacation home and have money to spare.

STRs invite people to gobble up housing stock to make a profit (beyond the profit you can make just being an ordinary landlord). This also leads to them buying up properties that wouldn't normally be appealing to a vacation home buyer (but might be appealing to a local resident).

True, second home owners aren't spending as much money in the local economy as 100 different guests visiting throughout the year...but they do still spend some money (and often let family/friends use the place which adds a bit of spend). They also tend to care more about the area and neighborhood. I'd much rather have a second home as a neighbor than an Airbnb. Airbnb has lots of negative externalities (noise, parties, lack of care, lack of upkeep)...rich second home owners make pretty decent neighbors.

And if the policy goal is tourist spending...then just permit and build more things actually designed for tourists (hotels, resorts, rental cabin developments, etc.).

[singlesline]

Also, it is worth noting that Maui also has a fairly restrictive definition of STR--anything less than a 180 day initial lease is called an STR. The other islands only have a 1 month minimum.

In my town they have a 1 month minimum (unless you own in certain areas or have a coveted STR permit) and IMHO that's not a huge impediment. Plenty of people looking to spend a month in Montana in a furnished place...and few locals/workers looking to rent a fully furnished vacation home a month at a time.

Also plenty of people willing to sign a "1 month" rental for their 1-2 week vacation and at least a few shady operators willing to stack multiple "1 month" leases in the same month and just trust that the guest will vacate on time.