Rents Hit Historic New High; Millions to be Evicted

Change the law to allow them in legally. Incenticise them that if they pay taxes through and ITIN plus a guest worker fee, stay out of trouble, pay, and can earn citizenship down the line. Truth is, millions already pay through an ITIN, and the people already pay sales tax and other taxes.

Incentives. Just like how you have to spend money to make money, sometimes you have to give something to get something.

Subsidies can be seen as investments. If the subsidies allow for more affordable houses, and subsequently increases the residents, which means more taxpayers, the investment will pay off.

Lol. If it works, would you still be complaining?

 

like I said, we haven’t caught up and aren’t close. When the Great Recession happened, housing starts all but stopped. And then demand was low after most were hit financially, so they came back even slower than they otherwise may have. And at that point, builders often had to go back through the site location work, permitting and build processes, so even when they started it was years out. we were many years behind, even getting back to average years wasn’t going to cut it, which we barely ever got to. Page 16 here shows the housing deficit has actually gotten worse over the last decade, not better. And it coincides with the price run up. https://www.upforgrowth.org/sites/default/files/2022-07/UFG_Underproduction_Report_Spreads_1.pdf

And those with homes were underwater in many cases so they weren’t moving and adding to inventory. Then the supply chain crunch slowed housing down again in the last few years. So yes, supply is still the single biggest issue in the market.
But I didn’t say it was only supply - cheap money with low rates, fattened bank accounts with the stock and crypto run ups driving up prices, eviction moratoriums tightening the market, Corporate rental purchases, people being more mobile with remote work now and all wanting to move to the same 2 or 3 places all go on the list too. Florida is part of that last one.
One other thing that gets overlooked, is that gen z, the largest cohort in this country, are very much in the middle of home buying age, and those that aren’t are flooding the rental market. So even if overall population stayed the same, demand was still going up in many places.

but anyway, time for bed.

 

I'm friends with a couple that have about 40 properties and they've been doing the same. They've claimed less of a headache and a lot more profit

 

I’m sure you can find some cities that still have them. But investors are leery of buying in large cities because they’re trying to protect working class.
For example….Orange County FL has prohibited STR. If you want to invest in a Disney/Orlando STR, you’ll have to be careful not to buy in the wrong neighborhood. Kissimmee in Osceola is ok but it really varies.

 

I dont have a link and admitted I am speaking from what I see, but Airbnb's are often in areas that attract tourists and people willing to spend pretty good coin for a night. Those arent usually areas that would solve the need for affordable housing.

But again. Its an investment for people. Regulating it or forcing it to be long term housing would be the most unAmerican thing ever. My income on the property would be cut nearly in half. I would lose control over the property. I would lose my right to have it for personal family and friends that travel in. Etc.

Its akin to saying that a chef who opens a restaurant with his money and work should charge McDonald's prices to help fight hunger.

 

Depends. Cities are losing that battle. In NC , cities have stopped doing that because of a suit filed by a family just a couple a few miles from me. (See above).

 

But they arent in areas where people who need affordable housing are likely living.

And why arent people complaining about hotels not renting rooms long term?

I mean basically all most Airbnbs are is a hotel room or suite.

 

Renters are much harder on a house according to most info we've read.

My Airbnb may only be full about 60-70% of the time. Thats a lot less use of the HVAC system for instance.

Also Airbnb guests are very concerned about their review scores and rating. Which is public for all to see.

Literally every single guest leaves our place spotless and just like they found it.

 

STR most certainly has a direct effect on affordable housing in Maine. Urban apartments above businesses have all been reimagined. Small houses in outlying neighborhoods as well. Many of the traditional affordable LTR are simply not available.

 

Seems as I mentioned above that it is area specific. But again I have to ask, what is a person supposed to do. You make an investment that in my area at least is almost zero risk. Why be forced to cut your income in half?

The housing crisis is much deeper than that. I see it first hand every day.

I mean here builders build spec homes knowing that STR owners will buy them, but in reality those houses would not be built if not for investors there to buy them.

So they dont contribute to the problem really.

Many of the airbnbs in the more urban areas here are in the large condos being build downtown or in 200 year old historic homes. Neither of those would solve the AFFORDABLE housing issue either.

The issue is much deeper. STR is a scapegoat.

 

The problems are deeper, I agree, but you're missing a lot of the causal relationships here.

Take your spec builder example. If STR of non primary homes wasn't a thing, those builders would be building something else. Something likely more efficient in terms of housing costs and materials usage.

 

That's really surprising because I just went to the Airbnb site and found hundreds of Airbnbs to rent in Orlando.

 

People don't need affordable housing in Austin or NYC? That is news to me, especially since I live in Austin and am constantly reading about the affordable housing crisis here. And I know numerous people who have had to move from Austin because of it.

 

I doubt it because of zoning issues and land.

At Habitat we deal with issues of land and zoning all the time. Valuable land in suburban areas (where all the subdivisions are built here) is very expensive and lower income housing isnt a lucrative strategy for a builder.

I'm not sure what the solution is. Maybe a limit on number of STR per owner? But a middle class person with a couple fixer uppers that they have poured money/debt and/or sweat into seems to be theirs for the using as they need.

 

Not only that but some folks have rented apartments in the tourist corridor and then in turn rent THOSE out as Airbnbs.

 

Did you check the terms? Is it monthly, or weekly? STR is definitely not allowed in Orange County. Everyone looks into Polk and Osceola for that reason.

 

That isnt what I said.

I'm saying look at the value on the STRs in Austin (property value wise). How many of them fall into a demo of affordable housing?

Again, I cant speak for that and I keep saying areas are different.

I'm not saying Austin doesn't have an issue. EVERY city has a problem.

I'm saying that Airbnb's arent often in the neighborhoods in those cities zoned for or likely to attract those in need of affordable housing. ( upscale neighborhoods, beach properties, historic homes, downtown high rises or simply ones like mine...out too far for public transportation etc )

A great example here is they build a massive low income housing development about 10 years ago. Beautiful. Looks like high income appartments. Hurricane Florence did major roof damage and they have been boarded up now for almost 4 years.

Another large community with 100's of apartments was damaged by Florence and razed. It sits as a huge vacant lot literally across the street from UNCW. (Wanna bet the housing authority sells that off and it becomes yet another fancy college apartment complex for the kids whose parents can afford for them to live in luxury like so many others have become here?)

In this town its not the mom and pop turning their fixer upper into a vacation rental that is the issue. Its the 1000's displaced by the storm and the land not being turned right back into what it was zoned for.

4 years later. 1000's of people.

It ain't the moms and pops man.

My guess is this is the story in many places. Money/politics/property values are the issue.

 

You're missing the trickle-down effect. Just using numbers pulled out of the air as an example, but say you have a family that can afford $1,000/month in rent. The upper-middle class area with a lot of STRs has low rent supply, so those who renting properties that would have been priced at $1,000/month are now renting at $1,100/month because they live in an area with high demand and low supply for rentals. They can easily find someone willing to pay the extra $100/month to rent their house.

This forces our family to rent in an area that is still decent, but not as nice as where they originally wanted to live. The increase demand from this family also means that in the area they are renting, it's likely the owner wants to squeeze a few extra dollars from his property. So, in a home that should rent for $900/month, he now charges $1000/month, and our original family happily pays it. It's likely their best option for the money.

Now, what happens to the family who can only pay $900/month top of their budget? And trickle this effect all the way down.

I live in Gilbert, which is a Phoenix suburb. Not quite as expensive and pretentious as Scottsdale, but a lot of families that can't afford Scottsdale end up in Gilbert. Both Scottsdale and Gilbert have been cracking down on STRs, usually using HOAs to come up with 30-day minimum rental rules. And it's because of the trickle-down effect. Scottsdale is a tourist destination city, especially in January (Waste Management Open Golf Tournament and Barrett Jackson Auto Show), through March (Spring Training Baseball). The rise in STRs in Scottsdale has help prices of houses and rent skyrocket in the area, as there is less supply of houses. This has caused more demand in Gilbert, which has caused prices of houses here to double or more over the last five years. Now, even houses in the lesser desirable areas of Phoenix are out of reach to many, because of the trickle down effect.

It's not the only issue with the housing crisis. But STRs are part of the problem. STR's lower the supply of housing, and even if most STRs are in high rent areas, once you price out a group of people from these areas, it puts downward pressure on all areas in the location.

 

So you guys really think if I buy an old house. Gut it with my money. Rebuild it with my sweat, that if I short term rent it which is better for the physical property wear and tear and often double the ROI, I should not be allowed to do that because of the trickle down impact?

Buying your house had a trickle down impact too. You probably contributed to housing values and comps increasing and at the very bottom someone who could have bought a starter house can now only rent one, which starts the very cycle you listed above.

The truth is unless we all lived in a one price fits all world that everyone technically has a butterfly effect on the market which ultimately may hurt the lowest earners.

All of that ignores the real problem.
Political corruption in zoning and land. allocation.