Wages and Poverty

[Revoltingest]

Here is a factcheck. Technically if you'd like it says the original claim was false but the underlying fact is true.

FACT CHECK: Are There More Than 633,000 Homeless People And 13.9 Million Vacant Homes In The US?

Perhaps a fair criticism of my statement. However in defense of it prior to the 1920's the most common job was subsistence farming in the US. Tenant farmers after slavery was abolished was the replacement of that "lost resource". The treatment of these people were not at an acceptable level. Many that were black and tenant farmers had it almost if not equally worse than when they were enslaved due to the quick and effective work of the antebellum of the south.

The late 1800's in Europe are the first apartments though the experiences are not necessarily equivalent to today's system. The 1920 in the US is when we started contracted renting as we see it today.

Vacant homes are often the result of government regulation.
When homeowners get the boot, it's a long process for lenders
to be able to sell the property with clear title. They could rent
them out in the meantime, but that poses some risk, & banks
aren't interested in complicating the process.
If they homes are livable, they do eventually get sold. So there's
nothing that stays off the market permanently. This problem
resulted from the crash that began in 2001. When the Twin
Towers fell, many businesses close or contracted, leaving
people with less income. It reached a noticeable climax
about half a decade later when lenders collapsed.

I do some mortgage lending, & I only lend to people who
I know well, & whose businesses I know well. The last
thing in the world I want is to take over a property by
foreclosure.

 

[Kfox]

That is possibly the most false thing I've ever read. Care to elaborate?

In 2007 when the recession hit, billionaires lost billions, millionaires lost millions, the middle class lost thousands, and the poor lost a trickle. Now at this point the gap between the richest and the poorest was severely reduced.

When the recession ended and the economy expanded to record levels, the billionaires got their billions back, millionaires got their millions back, the middle class got their thousands back, and the poor got their trickle back. Now at this point the gap between the rich and the poor was vastly expanded. So the question becomes; when were the poor better off? With, or without their trickle? I say; even though the gap between the rich and poor was greatly increased when the economy expanded, the poor were much better off during this time

 

[Shadow Wolf]

Oh, you mean someone in the skilled labor market.

If only that were always true.

 

[Kooky]

We private housing providers are better
landlords than government.

I'm doing fine in my subsidized apartment, and don't need a rent-seeking greedster mucking up my place,
thank you very much.

 

[Revoltingest]

I'm doing fine in my subsidized apartment, and don't need a rent-seeking greedster mucking up my place,
thank you very much.

Your IQ would jump 20 points if you rented from me.

 

[Friend of Mara]

In 2007 when the recession hit, billionaires lost billions, millionaires lost millions, the middle class lost thousands, and the poor lost a trickle. Now at this point the gap between the richest and the poorest was severely reduced.

When the recession ended and the economy expanded to record levels, the billionaires got their billions back, millionaires got their millions back, the middle class got their thousands back, and the poor got their trickle back. Now at this point the gap between the rich and the poor was vastly expanded. So the question becomes; when were the poor better off? With, or without their trickle? I say; even though the gap between the rich and poor was greatly increased when the economy expanded, the poor were much better off during this time

Actually during that time the vast difference between the rich and poor escalated. Though that was also a drastic event. Though every time in our history the larger percentage of wealth held by the top percentage has always meant the middle and lower classes suffered.

Drip unneeded if the top % doesn't have all the money in the first place.

 

[Friend of Mara]

Vacant homes are often the result of government regulation.
When homeowners get the boot, it's a long process for lenders
to be able to sell the property with clear title. They could rent
them out in the meantime, but that poses some risk, & banks
aren't interested in complicating the process.
If they homes are livable, they do eventually get sold. So there's
nothing that stays off the market permanently. This problem
resulted from the crash that began in 2001. When the Twin
Towers fell, many businesses close or contracted, leaving
people with less income. It reached a noticeable climax
about half a decade later when lenders collapsed.

I do some mortgage lending, & I only lend to people who
I know well, & whose businesses I know well. The last
thing in the world I want is to take over a property by
foreclosure.

A small part indeed. But there is the problem that housing is treated like stock for investment. Then on top of that we are building like crazy but none of it is affordable housing. Most houses are 2-3-400k on average that don't sell or are bought by corporations. So now we are stuck with a surplus of higher end living quarters that real estate tycoons are able to make a profit off of even without the need for renters and purely buy the increase in the value of the property.

This is why the dip in the market recently sent so many people in a panic.

 

[Revoltingest]

A small part indeed. But there is the problem that housing is treated like stock for investment. Then on top of that we are building like crazy but none of it is affordable housing.

If it weren't affordable, we wouldn't build it.
But one person's affordable isn't another's.
So we have various government programs
addressing that.
Obviously, I wouldn't invest in rental property
unless I can make money. Doing it for free or
at a loss is unsustainable.

Most houses are 2-3-400k on average that don't sell or are bought by corporations.

Links?

So now we are stuck with a surplus of higher end living quarters that real estate tycoons are able to make a profit off of even without the need for renters and purely buy the increase in the value of the property.

Owning vacant housing is not profitable.
Increasing value is not dependable, even though it happens
in some markets at some times. One should make the
property pay while owning it. For example, land speculators
sometimes erect self storage units to earn money until a
developer buys it for a major project.

This is why the dip in the market recently sent so many people in a panic.

What is your real estate experience, if I may ask?

 

[Friend of Mara]

If it weren't affordable, we wouldn't build it.
But one person's affordable isn't another's.
So we have various government programs
addressing that.
Obviously, I wouldn't invest in rental property
unless I can make money. Doing it for free or
at a loss is unsustainable.

Indeed. However when treated as investment it is a loss until it is not. If I buy a thousand dollars of stock I have lost a thousand dollars. However there is the hope that in some years in the future I get a return. If I buy a 300k house and wait 5 years to sell it for 400k I have made a profit.

Links?

Average House Price by State in 2021 | The Ascent

Owning vacant housing is not profitable.
Increasing value is not dependable, even though it happens
in some markets at some times. One should make the
property pay while owning it. For example, land speculators
sometimes erect self storage units to earn money until a
developer buys it for a major project.

Then why has the housing market not collapse with so many buildings empty?

What is your real estate experience, if I may ask?

I have 10 PHD's in real estate from Harvard, Princeton, Brown and Cambridge.


EDIT.

Just for fun I looked into a calculator of how much income someone should have for the average house being built in 2020 and it was around 100k a year. But only 15% of Americans make that income. So something seems to be wrong.

 

[Curious George]

If it weren't affordable, we wouldn't build it.
But one person's affordable isn't another's.
So we have various government programs
addressing that.
Obviously, I wouldn't invest in rental property
unless I can make money. Doing it for free or
at a loss is unsustainable.

Links?

Owning vacant housing is not profitable.
Increasing value is not dependable, even though it happens
in some markets at some times. One should make the
property pay while owning it. For example, land speculators
sometimes erect self storage units to earn money until a
developer buys it for a major project.

What is your real estate experience, if I may ask?

That is blatantly untrue. Real property is a finite resource. The value of real property tends to increase over time (at a rate higher than inflation). Therefore purchasing land is profitable even without renters. People invest in land all the time. The issue with profitability that you are discussing pertains to the profitability from passive income. People, with sufficient resources, purchase land, bidding against those with less resources and then rent the property for the mortgage + calculated expenses + anticipated profit. In doing so, they take risk, but the risk of owning property is minimal given that the roi on real property over time is almost always profitable. This done en masse inflates the value of property as people chasing "passive income" continually bid against each other and renters who aspirations of home ownership. When a person chasing passive income outbids another this only increases the amount they must charge in order to obtain that passive income. When they outbid a renter with aspirations of home ownership, they take away the renters ability to live in that house; and, while the renter may have been able to afford the mortgage, they may not be able to afford the rent while continuing to save towards their goal of home ownership.

I think landlords are necessary. I think landlords provide value when they rent to those who do not want the liability of ownership for whatever reason. But, the large numbers of bad landlords trying to access immediate profit on a longterm investment is definitely responsible for some of our housing issues in thos country.

 

[Revoltingest]

Indeed. However when treated as investment it is a loss until it is not. If I buy a thousand dollars of stock I have lost a thousand dollars.

Not per GAAP (Generally Accepted Accounting Practices)
or the IRS. When I buy an investment, the basis (costs)
is an asset in my general ledger. No loss at all.

However there is the hope that in some years in the future I get a return. If I buy a 300k house and wait 5 years to sell it for 400k I have made a profit.
Average House Price by State in 2021 | The Ascent

But if you've kept it vacant, you'd likely have lost money
overall, even if you have capital gains.

Then why has the housing market not collapse with so many buildings empty?

I've already explained that it can take quite a while to
sell a property that's been foreclosed upon. But there
are other reasons. Detroit, for example, has had many
homes that became unlivable, & were abandoned.
Commercial properties or units within them might be
obsolete, or so specialized that it takes years to find a
compatible tenant or reconfigure it to be marketable.

This is my experience as a commercial real estate
broker, manager, developer, & investor.

I have 10 PHD's in real estate from Harvard, Princeton, Brown and Cambridge.

All theory, & no practice, eh.
I was just curious.
There's at least 1 other landlord on RF.

EDIT.

Just for fun I looked into a calculator of how much income someone should have for the average house being built in 2020 and it was around 100k a year. But only 15% of Americans make that income. So something seems to be wrong.

Source?

 

[Kooky]

If it weren't affordable, we wouldn't build it.

That truism that doesn't hold up to scrutiny or the plain facts at hand.
Enormous amounts of houses were built during the US real estate bubble that weren't affordable for the vast majority of Americans, far more than the market could carry, because these houses were sold as a relatively safe way to park investment money (which, of course, turned out to be a lie).

To this day, throughout the world, vast amounts of urban housing gets built primarily as an investment vehicle, as the rising costs of living in urban spaces drive up prices and thus make for tempting returns of investment (until the bubble bursts and leaves people to sit on luxury condos that nobody is going to buy in their intended price range).

Ironically, the collapse of the US housing market caused an even greater demand for these investment-focused real estate projects, as banks outside the US were being saddled with increasing requirements to acquire assets to counterbalance all the risky speculation they had been doing, with real estate as the prime target for these new investment requirements.

 

[Revoltingest]

That is blatantly untrue. Real property is a finite resource.

You're embarrassing yourself.
I've developed many properties.
And I'm the smallest fish in the pond.

 

[Revoltingest]

That truism that doesn't hold up to...

Says the guy who admits living subsidized housing.
When you gain some experience in the real world,
carrying your own weight, instead of depending upon
government largesse, then....only then may you
lecture me about the evils of capitalism.

Sometimes the ad hominem argument rings true, eh.

 

[Curious George]

You're embarrassing yourself.
I've developed many properties.
And I'm the smallest fish in the pond.

Are you suggesting that the value of land does not typically increase at a higher rate than inflation?

Developed? You bought the land and built the structures on that land where there were not preexisting structures?

That is not really acting as a landlord, rather a developer.

 

[Revoltingest]

Are you suggesting that the value of land does not typically increase at a higher rate than inflation?

You used the term "real property", which includes
improvements (eg, buildings) on the land. It is
very not the "finite resource" that you claimed.
I recommend that you do some reading about
real estate so that we could have a productive
discussion.

 

[Friend of Mara]

Not per GAAP (Generally Accepted Accounting Practices)
or the IRS. When I buy an investment, the basis (costs)
are an asset in my general ledger. No loss at all.

But if you've kept it vacant, you'd likely have lost money
overall, even if you have capital gains.



I've already explained that it can take quite a while to
sell a property that's been foreclosed upon. But there
are other reasons. Detroit, for example, has had many
homes that became unlivable, & were abandoned.
Commercial properties or units within them might be
obsolete, or so specialized that it takes years to find a
compatible tenant or reconfigure it to be marketable.

This is my experience as a commercial real estate
broker, manager, developer, & investor.

So in your explanation of why there are so many homes empty it is because of other reasons? Clearly this isn't the 1.3 million homes throughout the US.

Source?

With the numbers that I've already linked I just googled a calculator for determining expected income on a house purchase. Feel free to find another one that counteracts it.

 

[Revoltingest]

So in your explanation of why there are so many homes empty it is because of other reasons? Clearly this isn't the 1.3 million homes throughout the US.

The definition of "vacant" would affect the number.
I searched, & found one source that answers your query...
How Many Vacant Homes Are There in America? (2022 Update) | House Grail
Where I live, there is much remodeling & new construction.
Why?
Interest rates are low.
Demand is there.

 

[Curious George]

You used the term "real property", which includes
improvements (eg, buildings) on the land. It is
very not the "finite resource" that you claimed.
I recommend that you do some reading about
real estate so that we could have a productive
discussion.

Real property is the correct usage here. If you wanted to split hairs you could say that timber is a renewable resource and real property includes timber that is grown. Consider in this instance that you may be wrong.

It sounds like you are running from discussion and trying to latch onto my word choice as your reasoning. Landlords purchase own, lease and rent real property. There may be exceptions i.e. manufactured/mobile homes, but you wouldn't want me to think you were bickering now would you?

 

[Revoltingest]

If you wanted to split hairs...

I know the terminology.
Don't double down on ignorance.