Real Estate Crash thread

[alpinevibes]

Can you airbnb a room, or just long term rent a room, in your subsidized condo? Seems like an easy way to cash in on the true valley of that subsided condo.

I don't like subsidized housing in general for the arbitrary winners and losers in creates. My cousin in law is a techy in San Francisco who has founded a few companies and has stock options worth millions. He went several decades refusing to move from his rent control apartment. He legitimately needed rent control when he started (I guess, but his Dad is a doctor). I don't know if he had to continue to prove he was poor but even if he did, he would just craft his salary in stock options rather than cash to keep himself poor enough to qualify. It seems like such a flawed system. Rent control is illegal in WA.

My preference is just to build, build, build market rate housing. Any housing. Eventually, the supply should be so high that demand goes down.

No short term renting allowed, strictly forbidden and actively enforced. You can rent a room to someone long-term, but technically the renter has to apply through the system to be eligible. You can apply to sublet your place for a year at a time for specific things - grad school, family needs, medical, etc. You can cover your total monthly costs (mortgage, HOA, util, ins), plus ~$100/mo.

I think it subsidized housing depends on the market and how it's regulated. Here they do a pretty damn good job and the winners/losers reality is not that egregious of a reality - you either get lucky and/or figure out how to make it work, or you move away from the ski town fantasy.

I also know a big-money SF finance guy who holed up in their rent-controlled place for years while they remodeled a free market, multi-million dollar property AND their place in Tahoe. Dude was such a bitch complaining about the restrictions and issues with his rent-controlled place, as he was quickly raking in high six figures and is now making solid seven figure money.

[altasnob]

A major reason I dislike subsidized housing programs like Aspens, where you literally have to win the lottery, is it makes Americans dislike subsidized housing programs in general. It's basically like our solution to low income housing and poverty is we say everyone with a last name that starts with a K gets a free house and the rest of you just have to figure it out. How unfair is that?

[AdironRider]

I think working in the right direction is helpful, even if [when viewed in a vacuum] your cost per sq ft is inefficient compared to other markets. You can't really change that imbalance unless you have If you have funding sources that are ongoing and sustainable. In APCHA's case: a tax on sold free-market houses that goes into a large fund to continuously build housing.

#2 is certainly not an issue here. You have 30-70+ families in a lottery for any unit that comes up in the system. Out of 1652 owned units in APCHA, ~1200 are condos with shared walls, etc. Sure - we all want a SFH eventually but even subsidized here they are $500k-$2M. We paid $262k last year for our 1700sq ft 3bd/2ba. It's been a huge help for our family and I doubt we'll really be able to "move up" from it as time goes on.

I remember reading that Aspen is having issues with people retiring in units and it is basically working as just another road block to the housing issue, where now people are getting subsidized retirements and the worker housing problem is still there.

I'd be interested to hear your thoughts on the matter.

[Percy Rideout]

A major reason I dislike subsidized housing programs like Aspens, where you literally have to win the lottery, is it makes Americans dislike subsidized housing programs in general. It's basically like our solution to low income housing and poverty is we say everyone with a last name that starts with a K gets a free house and the rest of you just have to figure it out. How unfair is that?

The vast majority of the APCHA ownership inventory is category 4 and RO, and if you read between the lines, those are the locals with good jobs that need the least help, yet have outsized representation within the system. 62% of inventory is dedicated to these top earner categories. Better yet, assets are never checked once you have bought in the system. Look at the link below. You can see exactly who lives in the really nice places. Real estate agents that make consistent 7 figures a year, doctors, partners in accounting firms, local builders, ETc. All very successfull. These people can still buy free market in 2023, but why would they under current rules?

Just wait until you hear how easy it is to transfer this APCHA inventory down to your progeny in perpetuity. It's the classic "i got here first, so im keeping mine" mentality that the Boomers popularized, and hopefully dies with them.

Add in the coming retirement wave of said Boomers who have no backup plan besides being entombed in their 4 bedroom units (they are empty nesters with sometimes 3 unused taxpayer subsidized bedrooms), and APCHA is going to have a come to jesus moment sooner than later.

https://aspenjournalism.org/inventor...rship-housing/

[Toadman]

FWIW the map of it they have on there is the wrong house, this one doesn't go down to the water. https://westportma.mapgeo.io/dataset...3_59_0&zoom=18

Well, damn, they overpaid then!

[ötzi]

Right?

[altasnob]

You can see exactly who lives in the really nice places. Real estate agents that make consistent 7 figures a year, doctors, partners in accounting firms, local builders, ETc. All very successfull. These people can still buy free market in 2023, but why would they under current rules?

Holy smokes. You weren't kidding. I googled the guy who is living in subsidized housing valued at $1.8 million. He's some kind of real estate developer finance guy boasting about managing $150 million in assets.

https://www.linkedin.com/in/andrewcp....google.com%2F

[goldenboy]

#2 is certainly not an issue here. You have 30-70+ families in a lottery for any unit that comes up in the system. .

It's wild how different it is up on that side of the Elks. Down here, everyone wants "more affordable housing!", but no one actually buys. A unit here just went under contract after being on the market for 4 months. There certainly wasn't a lottery with 50 people all trying to get it. You only have to live here for a year, too- not 4 or 5 like Joey mentioned.

[funkendrenchman]

I remember reading that Aspen is having issues with people retiring in units and it is basically working as just another road block to the housing issue, where now people are getting subsidized retirements and the worker housing problem is still there.

I'd be interested to hear your thoughts on the matter.

It’s an issue but I think forcing out people that have lived/worked here for 20,30,40 years is simply wrong.

There are other solutions. Just recently there was an article in the paper about suggesting that retirees could be bought out at close to the cost of building a new unit - currently close to $1.2 million, if they chose to.

[funkendrenchman]

The vast majority of the APCHA ownership inventory is category 4 and RO, and if you read between the lines, those are the locals with good jobs that need the least help, yet have outsized representation within the system. 62% of inventory is dedicated to these top earner categories. Better yet, assets are never checked once you have bought in the system. Look at the link below. You can see exactly who lives in the really nice places. Real estate agents that make consistent 7 figures a year, doctors, partners in accounting firms, local builders, ETc. All very successfull. These people can still buy free market in 2023, but why would they under current rules?

Just wait until you hear how easy it is to transfer this APCHA inventory down to your progeny in perpetuity. It's the classic "i got here first, so im keeping mine" mentality that the Boomers popularized, and hopefully dies with them.

Add in the coming retirement wave of said Boomers who have no backup plan besides being entombed in their 4 bedroom units (they are empty nesters with sometimes 3 unused taxpayer subsidized bedrooms), and APCHA is going to have a come to jesus moment sooner than later.

https://aspenjournalism.org/inventor...rship-housing/

If you had the money to buy free market, why would you buy a house next to the ABC which sees almost no real appreciation? I think most people there are truly on the fence between the middle class and the $20 millionaires that can afford a free market house.

[funkendrenchman]

Holy smokes. You weren't kidding. I googled the guy who is living in subsidized housing valued at $1.8 million. He's some kind of real estate developer finance guy boasting about managing $150 million in assets.

https://www.linkedin.com/in/andrewcp....google.com%2F

He manages assets. He doesn’t have said assets. He is who these houses were built for - high earning professionals who can’t afford your $5-10 million free market home.

[anotherVTskibum]

He manages assets. He doesn’t have said assets. He is who these houses were built for - high earning professionals who can’t afford your $5-10 million free market home.

Whether or not someone managing that amount of assets makes enough to afford free market housing, I think that's an important point. Entry level jobs can often be filled by people willing to live with roommates, in cheap apartments, etc, but to have a viable community you also need housing that working professionals, some of whom have or want to have families, find acceptable. Workforce housing in many places tilts more towards the first group, but having good options for those who stick around and work their way up is important, too.

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[alpinevibes]

I remember reading that Aspen is having issues with people retiring in units and it is basically working as just another road block to the housing issue, where now people are getting subsidized retirements and the worker housing problem is still there.

I'd be interested to hear your thoughts on the matter.

The retirement question (and coming wave) is tricky. The system was obviously designed for "working people" and has meager checks/balances to try to maintain that. But the lack of planning and foresight on the part of APHCA, to deal with retirement is frustrating. My understanding is that in the halcyon days of APCHA and the aspen rental market, the creation of the program wasn't so much a massively cheaper option to renting in town, but rather a means of securing people longer-term housing and building equity, with the idea that they'd eventually graduate to something free market. Obviously, in the ensuing years, the free market grew in cost so exponentially that for a vast majority of people that's not feasible in the upper valley. The other thing that has destroyed this possibility and any amount of balance with free market options is short term rentals. It has decimated long term rental options and ruined peoples ability to come live/work here and try to stay here.

But regardless of the past misses, APCHA needs to get creative with options now to entice people to turn over their units, move, rent rooms, etc. I agree with Funken that just kicking people out of their housing is not ok or equitable. But maybe housing developed in the future can be built with stricter guidelines to turn them over at retirement age and start to turn the ship back towards "employee housing?" I think the guidelines in place, currently, with what the reality is, are reasonable:

An individual who was a full-time employee/worker in Pitkin County for a minimum of ten years immediately prior to retirement age as defined in Part VIII of these Regulations, shall be allowed to rent and/or own such housing. An individual is allowed to retire at age 62 if they can document a 30-year work history with 15 of those years immediately preceding retirement age residing in APCHA housing

The vast majority of the APCHA ownership inventory is category 4 and RO, and if you read between the lines, those are the locals with good jobs that need the least help, yet have outsized representation within the system. 62% of inventory is dedicated to these top earner categories. Better yet, assets are never checked once you have bought in the system. Look at the link below. You can see exactly who lives in the really nice places. Real estate agents that make consistent 7 figures a year, doctors, partners in accounting firms, local builders, ETc. All very successfull. These people can still buy free market in 2023, but why would they under current rules?

Just wait until you hear how easy it is to transfer this APCHA inventory down to your progeny in perpetuity. It's the classic "i got here first, so im keeping mine" mentality that the Boomers popularized, and hopefully dies with them.

Add in the coming retirement wave of said Boomers who have no backup plan besides being entombed in their 4 bedroom units (they are empty nesters with sometimes 3 unused taxpayer subsidized bedrooms), and APCHA is going to have a come to jesus moment sooner than later.

https://aspenjournalism.org/inventor...rship-housing/

Correct, the majority of owned APCHA units are Cat4 and RO, but not that “vast at 62%” (and soon to be in 50’s when BG3 is done). But to counter your portrayal of a bunch of rich people hoarding affordable housing, the general reality for purchasing is not so egregious:

individuals making between $100,601 and $158,600 are eligible to purchase a Category 4 unit; income limits for this category reach up to $262,800 for a family of six. RO serves people who aren’t subject to any income limits but are bound for purchasing to a total asset cap of $2.4 million.

I know of pretty well off people "still" living in their APCHA unit. You're correct that there is no asset or income caps once you've purchased your unit. In Burlingame here, you have plenty of white collar professionals who bought in 15 years ago who now drive Audis and used Range Rovers. In general though, I agree with Funken: for most of these psuedo-rich APCHA owners, if they could afford something reasonable/to their liking in the upper valley to buy on the free market - they'd gobble it up. Many of their ilk have done so in Snowmass or hopped on the down valley train. But in the last five years, and especially post-2020: even those prices and markets have become massively tight and overpriced. With those slim pickings as the counter options, I'm not surprised that [since the rules allow it] people stay in their acceptable, cheap and ideally-located APCHA unit and put their money elsewhere. And I don't think there are many making consistent seven figures, at all.

[altasnob]

He manages assets. He doesn’t have said assets. He is who these houses were built for - high earning professionals who can’t afford your $5-10 million free market home.

I naively thought Aspen's subsidized housing was for lower paid essential workers, like teachers, nurses, and other municipal govy workers. I had no idea Aspen subsidized high income earners, like lawyers, all in the name of "the community." Step back and think about that for a minute. Aspen is subsidizing ambulance chasers. What a weird, weird, community this must create. Children look around the classroom knowing their families are "the chosen ones."

The other thing that has destroyed this possibility and any amount of balance with free market options is short term rentals. It has decimated long term rental options and ruined peoples ability to come live/work here and try to stay here.

The only reason short term rentals have obliterated long term housing stock is because for decades, communities like these have refused to build hotels to satisfy the demand from people who want to vacation there. And refused to build dense housing to satisfy the demand of people who want to live there. Basically, the community says we want some tourism, but we want to be able to cap the amount of tourist who are allowed to visit and live here. It operates like a modern day kingdom, the uber elites who can afford the free market, and their "chosen" buddies who are allowed to tag along. No one else shall pass through the gates. No wonder the slopes are so uncrowded there.

[rideit]

There are infrastructure considerations to too many hotels, condos, and higher density housing, such as power, wastewater, road and traffic, police and emergency services, etc, that are strained as it is. Just pointing that out.
I'm not saying they are insurmountable, but are certainly a factor.

[alpinevibes]

I naively thought Aspen's subsidized housing was for lower paid essential workers, like teachers, nurses, and other municipal govy workers. I had no idea Aspen subsidized high income earners, like lawyers, all in the name of "the community." Step back and think about that for a minute. Aspen is subsidizing ambulance chasers. What a weird, weird, community this must create. Children look around the classroom knowing their families are "the chosen ones."



The only reason short term rentals have obliterated long term housing stock is because for decades, communities like these have refused to build hotels to satisfy the demand from people who want to vacation there. And refused to build dense housing to satisfy the demand of people who want to live there. Basically, the community says we want some tourism, but we want to be able to cap the amount of tourist who are allowed to visit and live here. It operates like a modern day kingdom, the uber elites who can afford the free market, and their "chosen" buddies who are allowed to tag along. No one else shall pass through the gates. No wonder the slopes are so uncrowded there.

Gotta go ski with my kids, but this is all hyperbolic, hot-take sensationalism. As we’ve identified: the system isn’t perfect and doesn’t force people out as their financial realities improve, but it’s certainly not the picture your painting.

Have you been poking around the Red Ant blog or what?

[altasnob]

Have you been poking around the Red Ant blog or what?

I think people in Aspen don't realize how radical this housing program is. I live in what might be the most liberal metro in the US, which like Aspen, has an extreme high costs of living and lack of available land for new construction. A similar program, where high income earners are randomly chosen to get a hook up, would never fly here.

[JaytaeMoney]

In general though, I agree with Funken: for most of these psuedo-rich APCHA owners, if they could afford something reasonable/to their liking in the upper valley to buy on the free market - they'd gobble it up. Many of their ilk have done so in Snowmass or hopped on the down valley train. But in the last five years, and especially post-2020: even those prices and markets have become massively tight and overpriced.

I am a textbook example of "that ilk", gave up on trying to win a 3 bedroom 5yrs ago. Bit the bullet and jumped from APCHA to free market in SMV.

Given today's rates and property values, I wouldn't even sniff qualifying for a mortgage to buy my place nor would I be able to afford the down payment.

[XXX-er]

There are infrastructure considerations to too many hotels, condos, and higher density housing, such as power, wastewater, road and traffic, police and emergency services, etc, that are strained as it is. Just pointing that out.
I'm not saying they are insurmountable, but are certainly a factor.

A hotelier buddy ( twice ) looked at buying the Glacier park lodge at the rogers pass summit looked at the books yadayada and he seen it all from the extra hassles cost and passed

Buddy pointed out he would need to buy 2 skid steers to handle the snow ( one spare) staffing would be a problem and he would never get a decent chef to work there

otoh the gift shop made 1.5million a year selling trinkets made in china TO chinese tourists

[AdironRider]

It’s an issue but I think forcing out people that have lived/worked here for 20,30,40 years is simply wrong.

There are other solutions. Just recently there was an article in the paper about suggesting that retirees could be bought out at close to the cost of building a new unit - currently close to $1.2 million, if they chose to.

That is fucking wild. So you subsidize their housing, then would buy them out at 1.2 million?

I cannot imagine paying someone over a million bucks after paying their freight for 30 years, but I guess if the community is behind it...

[funkendrenchman]

That is fucking wild. So you subsidize their housing, then would buy them out at 1.2 million?

I cannot imagine paying someone over a million bucks after paying their freight for 30 years, but I guess if the community is behind it...

Well, they are currently building new affordable housing at a cost of $1.2 million per unit. So spend 10 years approving and building more projects, or use what is already there?

It was actually an op ed. I haven’t heard that they are actually considering this.

[Toadman]

Just some RE notes for the month of January.

Rates down: since November, 30-year-mortgage rates fell from 7.3% to 5.99%, lowering the typical mortgage payment by $260 per month.
Sales are up: from November to December, pending home sales increased 2.5%, the first month-over-month increase since May.
Competition is stronger: in January, 37% of newly listed homes had accepted an offer within two weeks of their debut, faster than at any point since last July.

[fastfred]

N

Ski towns are certainly different, but the entitlement issue still exists. If people don't have to bear the actual costs they are going to want more and more. That is human nature.

yes very true everyone wants to move to a ski town have ski in ski out walk to downtown to party and only pay a couple hundred bucks for the room

someone already mentioned the hotel issue in scummit county in the 80's and early 90's a few hotels went up that were ugly as sin
so for a few years any hotel developer in any of the towns/county was put through the ringer by planning and zoning every hotel project post 1990 was shot down because god forbid we have hotels in a tourist economy no one wanted hotels because they thought it ruined the charm
go figure

so guess what you promote your town and tell people to come and visit so suddenly STR fills the void
ain't that how ecomics works?
then STR becomes the devil but people can't stop pimping the place

basic supply and demand says we need workers to help supply butt wiping of tourists
oh no (the probelem was already in the making, housing) we don't have anywhere for the snot wipers to live so lets blame STR but we need gapers to provide our basic income don't we? its a two way street

these small town politicians can't get out of their way because they want that money tit and they want low wage shitty workers to do shitty work so they can get rich
but guess what you can't have everything

as far as the debate subsidized housing it's a great thing it's not perfect and of course like anything you can easily find the stories about the 1% who abuse it
many of my friends have deed restricted housing
I could deed restric my house tomorrow and get a check for 150K just sign on the dotted line
but that sounds pretty fucking stupid
a buddy is buying an overpriced market house and deed restricting it to help with the down payment and cash flow I think he's fucking stupid but it works for him
what works for someone else might not work for you and its easy to shit all over someone who doesn't do what you do

I got lucky is all I have to say liar loan early 2000's twenty something kid who shouldn't have bought a house worked out well
bummer that won't ever happen again in anyones lifetime

[liv2ski]

I got lucky is all I have to say liar loan early 2000's twenty something kid who shouldn't have bought a house worked out well
bummer that won't ever happen again in anyones lifetime

That is the cool thing about getting older, there is always something lucky for you that makes the kids whine.

[Meadow Skipper]

That is the cool thing about getting older, there is always something lucky for you that makes the kids whine.

Heh. Yep.