I listened to Slate Money’s bonus episode today. It was about the working homeless and the high costs of rent for the least able to pay rent. Here is the link to the transcript.
With vast numbers of people being deported, stands to reason there will be relief in the lower end housing market. As suggested before, if Muslims are deemed “anti-American” and deported, half of the housing stock in Dearborn, MI, will be vacant. And, as many Muslims are professionals, some of that housing would be pretty nice.
Steve
Probably be harder to find a doctor in Dearborn after the purge. {{ LOL }}
intercst
But there will be half as many patients too.
Steve
We really need to have something like those cheap “capsule hotels” in Japan someone can at least find a safe place to sleep on a minimal income.
intercst
1 Like
The NIMBYs would have them zoned out of the neighborhood. And there would be a lot of pushback to subsidizing public transit to the slag heap where they could be built, because “I want tax cuts, not socialism”.
Steve
1 Like
{{ Renting a home for millions is an unaffordable luxury }}
Actually, many people who can afford a $100,000/month rent, and/or buy a $20 million home are choosing to rent.
Home prices are so out of whack that renting is the sound financial deal unless you’re predicting Nvida-like real estate appreciation in the future.
Here’s a random $6.8 Million home in Beverly Hills with a market rental value of $6,600/month. It had been listed with a $48,000/month rental rate with no takers.
Could a middle-class family move-in and capture that low $6,600/month rental rate? Probably not. I’m sure there’s a $100,000 security deposit and a pretty stiff cleaning fee when you move out.
intercst
This is kind of hilarious. Most rental real estate investors try to get over 1% of value as a monthly rental price, they even call it “the 1% rule” in some circles. This one, according to zillow is 0.1%, LOL!
Of course, this isn’t really rental real estate. This is “trophy housing” meant for the very wealthy that “need” to live in Beverly Hills. They need that address for the status it provides. And there is much less status accorded to renters than to owners among the BH crowd.
Also, many trophy homes (this isn’t a particularly good example of one) hope for a movie producer to rent their home for a month or two at an absurdly high rate to use it to film a movie. That also makes the home a little more “famous” and might increase the perceived value somewhat.
1 Like
There may also be an effect from the big fires six months ago.
DB2
1 Like
SROs (single-room occupancy residential hotels) were the answer many years ago. Single Room Occupancy (SRO) units typically had shared bathrooms and often shared kitchens as well. SROs were often geared towards single individuals, including transient workers, immigrants, students, and those emerging from homelessness, who sought basic and budget-friendly housing.
Unfortunately, many of them were zoned out of existence.
Wendy
2 Likes
Undocumented workers have created their own form of SROs. They rent a 3 or 4 bedroom house, usually a relatively rundown one in a less than desirable neighborhood. Then they put (or build) 2 or 3 bunkbeds in each bedroom. That way a 3-bedroom house can house between 12 and 18 workers. And they share the two bathrooms and the kitchen. The rent might be $1200-$1800 a month, but it only comes to about a hundred bucks per worker. And because they have such low living expenses, they can send more money back to their families at home.
When I used to work regularly in Tampa, one of the sites I frequented was next to a neighborhood like this, and a few times I saw all the guys leaving a house and walking to the nearest bus stop. I assume they were getting the bus to go to a site where they would be picked up as day laborers by various contractors (roofing, framing, drywalling, etc).
4 Likes
But that wasn’t enough to get someone to pay $48,000/month to rent it.
intercst
When I was working in Exxon’s London office in the mid-1980’s, I had a coworker who had his New Jersey home turned into a migrant labor camp.
Exxon hired Merrill-Lynch to “manage” expatriate workers’ US residence while they were overseas. This guy’s home was in a semi-rural area with a lot of apple orchards. Merrill rented the place to a guy running immigrant labor for the nearby orchards.
Merrill then spent a fortune cleaning the place up.
intercst
Yes, the “1% rule” is the real estate investor’s goal. But the market decides the current rental rate.
Where I live, condos are currently getting a monthly rent of about 0.67% of recent sales, yet real estate investors are quickly buying units that come up for sale.
I don’t know what they’re betting on.
intercst
Here’s a random $1 million tract home in in a working class San Diego neighborhood.
The 1% rule would suggest a $10,900 monthly rent. Zillow puts the market clearing rent at $3,700/month.
This is happening all over California.
If I’m paying $3,700/month, I want to be closer to the beach.
intercst
1 Like
True, but I remember reading on this board that rents went up considerably in the LA area.
DB2
A few years ago when i lived in DC i rented a unit as part of a 3 unit rowhouse. My one unit was a 3 bdrm 3 bath 1800 sq ft
Fenced in back yard for the dogs (rare in dc). Rent was $4000 which i happily paid bc in addition to the yard and being a brand new build, the location was perfect (walkable to the main hospital, short drive to the other 2 - and everything else i needed and everyone else i spent time with was within 15 mins walk or drive).
At the time the owner tried to convinced to buy the unit. $1.2 million for my unit or 4 million for all 3. Im wondering now if he was actually making any money off of it. Renting seemed like a great deal tho. For comparison my buddies were paying well over 2 grand for a 1-2 bdroom apt depending on the amenties, many places charged even more.
Buying a rental property didnt really make sense with property values after covid, unless its an entire apartment building… then youre making a killing.
Yes, and one step further that I know of, the “managing tenants” actually paying the rent, managing the premises, and vetting all inhabitants, in one bedroom do “hot sheeting” with half time inhabitants having the right to sleep and use bathroom for only 12 hours a day….
Hot bedding (hot bunking?) only works for certain types of jobs. It’ll work for people who do shift work, one person works day shift, another person works night shift, and they use the same bed for opposite hours of the day. But it doesn’t work for agricultural or construction workers that all work at roughly the same time and all sleep at roughly the same time.
1 Like
Correct. Hollywood Studio jobs and aerospace jobs both did lots of shift work, and left a legacy lasting down to the present in older neighborhoods.
5 Likes