When private equity buys your apt complex

[Beezle2]

I think people care but things also get more expensive as time goes on. You cannot run yourself into the red taking care of someone that didn't take care of themself.


The lack of affordable housing is a super interesting rabbit hole to go down. The way we have built in the US is the root of the problem and no one wants to allow it to change because homeowners are invested in keeping the status quo. Everyone claims to support affordable housing/section 8 until it's being built close to them.

That it is assumed he didn't care for himself makes some people feel better maybe. That a lot of us are closer to having no affordable place to live than anyone wants to think about makes me care about how he got there.

 

[Beezle2]

NIMBY is very strong where I live so I get it. I don't think it's about not supporting it but let's get real when you rely on it for any particular population just to get into housing of any sort you've got a larger issue than NIMBY and building more section 8 or public housing won't solve that problem in the least.

And to point out the obvious affordable housing does not mean public housing or section 8 housing. It means the price points are where a wider variety of people can afford it. Some include housing where it's meant for either multi-generational or non-related persons to live together. We for the large part still consider that "nuclear" family when building housing.

It is my dream to live in a tiny house in a little pocket neighborhood, it could be SO cute. I'm not sure if anyone could ever get the go ahead on that but I bet it could be popular.

 

[Beezle2]

I was speaking about the PP who owns single family homes as rental properties. That's a different situation than private equity firms scooping up any and all properties raising prices as they did in your situation. The New York Times editorial board has an opinion piece on this topic today. It's titled, "Americans Pay a Price for Corporate Consolidation". Companies are getting bigger, consolidating power pushing out smaller players. It makes everything from airline tickets, to veterinary care....to rent, increasingly expensive.

As for where I live...it's a nice little town in NJ, but yes, it's expensive to live here and most of the northeast for that matter.

I listened to a good article on the private equity issue not long ago and it felt personal as we were going through it. Someone else here mentioned the vets office and small clinics having been bought up also. It is going to become even more of a problem. I'll look up the article you mentioned. We used to visit NJ when my SIL lived in Basking Ridge..it really is another world from we little mid western town folks. She retired down to FL and is now freaking out about getting insurance for her house. It is tough all over everywhere.

 

[LuvOrlando]

Property markets in the us are being raided in an unsettling way, OP your story is not unusual.

First, there was 2008 where millions signed up for loans they couldn't afford. Then when people couldn't pay the gov paid the banks with American citizen tax money leaving American citizens s high and dry still owing the banks and unable to get their equity out of the property due to a credit squeeze plus foreclosure rules and 2008 new bankruptcy laws.

Today, property owners in cities everywhere are using some sort of rent defining software (which I can't quite figure out how it isn't collusion and a monopoly violation) that defies logic and market reason. This softwares data set is forever pushing rents up beyond what the markets can bear, resulting in the enterprises taking on losses in vacancies so the rent on paper stays high, presumably justifying their valuation despite vacancies. First consumer thought is OK, buy a home, but the obstacle there is unnecessary rising interest rates on mortgages and an early 2023 banking crisis that depleted money held in reserves for lending purposes, leading to a credit squeeze. Now, in addition, we have Insurance businesses bowing out of many markets making home ownership there impossible. as you can't get or keep a mortgage without insurance which is likely leading to a ton of trouble. I didn't know there was also a squeeze with trailer parks, mentioned in this thread, that is very troubling.

There are also massive problems with commercial properties that would rent to businesses where this software driven rent collusion behavior has lead to rents too high for the markets. This leads to loss of tennents, leading to what appears to be a giant tidal wave about to hit as rents come due and businesses either default or just leave creating giant voids in tenancy, tax base and occupancy spending of missing workers. It is happening in cities everywhere.

Not quite sure what is going on with property markets but it is not good and we are all learning why monopolies are a hazard to the entire system. Also not sure who should be stepping in to enforce market stability but it is not happening - and so I watch.

A regular human landlord would recognize a vacancy bad and adjust price down to match to fill the space.

Not good, no not good at all.

 

[Mackenzie Click-Mickelson]

It is my dream to live in a tiny house in a little pocket neighborhood, it could be SO cute. I'm not sure if anyone could ever get the go ahead on that but I bet it could be popular.

We have tiny homes here (it's own little small neighborhood of about 50 homes) but it's been built for veterans battling homelessness with the goal to eventually lead to permanent housing elsewhere.



But really these small neighborhoods would be great all over IMO

 

[Beezle2]

We have tiny homes here (it's own little small neighborhood of about 50 homes) but it's been built for veterans battling homelessness with the goal to eventually lead to permanent housing elsewhere.

View attachment 788167

But really these small neighborhoods would be great all over IMO

Something a little more cozy.

 

[LuvOrlando]

We have tiny homes here (it's own little small neighborhood of about 50 homes) but it's been built for veterans battling homelessness with the goal to eventually lead to permanent housing elsewhere.

View attachment 788167

But really these small neighborhoods would be great all over IMO

Love love love this!

It would be amazing if municipalities would peel back property laws about how many residences could be on a property so that families could consolidate. IF this were to happen and subsidies would be grated for mini homes then families everywhere would put them in for modest rent and the housing crisis would just vanish, poof. Up here in Mass they want people to take in immigrants to help, I would not take a stranger under our roof but would on my land.

 

[tvguy]

Love love love this!

It would be amazing if municipalities would peel back property laws about how many residences could be on a property so that families could consolidate. IF this were to happen and subsidies would be grated for mini homes then families everywhere would put them in for modest rent and the housing crisis would just vanish, poof. Up here in Mass they want people to take in immigrants to help, I would not take a stranger under our roof but would on my land.

They changed the law in California to do that. The legal name for those residences is ADUs (auxiliary dwelling unit) but most folks call them Granny Flats. There are even companies that have the blue prints all drawn up, and will come build them on your site*. Here in Sacramento the city has changed the law to allow these in older neighborhoods that are build with alleys. They have given the alleys names and will assign you an individual address for the ADUs as they are built. A former co-worker owns a duplex that was built in 1890 and he remodeled the duplex and built two ADUs in the backyard that he will rent out. In his case, I think he is looking for single higher income professionals as tenants, not lower income residents.
I'm not opposed to this, but would not me my cup of tea as a living situation. There areas tend to already be way too densely populated with tiny single family homes and tiny duplexes with no parking except on the street. My friend did design the ADUs to each have one paved off street parking spot each, but the folks in the duplex up front are left to fight for on the street parking.




* https://lp.anchoredtinyhomes.com/ne...5&ad_group_id=125172656135&ad_id=663860355315

 

[LuvOrlando]

They changed the law in California to do that. The legal name for those residences is ADUs (auxiliary dwelling unit) but most folks call them Granny Flats. There are even companies that have the blue prints all drawn up, and will come build them on your site*. Here in Sacramento the city has changed the law to allow these in older neighborhoods that are build with alleys. They have given the alleys names and will assign you an individual address for the ADUs as they are built. A former co-worker owns a duplex that was built in 1890 and he remodeled the duplex and built two ADUs in the backyard that he will rent out. In his case, I think he is looking for single higher income professionals as tenants, not lower income residents.
I'm not opposed to this, but would not me my cup of tea as a living situation. There areas tend to already be way too densely populated with tiny single family homes and tiny duplexes with no parking except on the street. My friend did design the ADUs to each have one paved off street parking spot each, but the folks in the duplex up front are left to fight for on the street parking.




* https://lp.anchoredtinyhomes.com/new-anchored-property-analysis-estimate1676404975726?utm_source=adwords&utm_medium=&gad=1&gclid=CjwKCAjwxaanBhBQEiwA84TVXL6s9uCkJ6bJoJT9Z8TcZewcNtSQE82lQLpmzkr36QveLTlL6mlF1BoCIosQAvD_BwE#1 ADU Contractor In NorCal&utm_campaign=Greater Sacramento ADU Campaign&utm_content=adu contractor&utm_keyword=adu contractor&utm_matchtype=b&campaign_id=13892041895&ad_group_id=125172656135&ad_id=663860355315

Well that is brilliant! I hope it catches on, more paying taxes is always better.

 

[Robbie Cottam]

The house market in the country is where it is because of interest rates.

The fair rental price for one of my houses has almost double in 24 months…

Those who can afford to buy, may not want to at 6 to 8 percent….. so they rent

Those who can’t afford to buy have to rent….

Much like the biding wars over purchasing the houses, because we had more buyers than house….

We now have more renters than rental….

This problem is not going away anytime soon

 

[barkley]

I was paying $660 for my 1 bedroom apartment in 2012,

i was paying $950 in 1990 it was considered very low for the area i lived in-had no central heat or air, no laundry facilities, no parking but was less expensive than anyplace else (at least it was safe).

They changed the law in California to do that. The legal name for those residences is ADUs (auxiliary dwelling unit) but most folks call them Granny Flats. There are even companies that have the blue prints all drawn up, and will come build them on your site*. Here in Sacramento the city has changed the law to allow these in older neighborhoods that are build with alleys. They have given the alleys names and will assign you an individual address for the ADUs as they are built.

there has been talk for some time of doing that in the larger city near us but then some issues have been raised that (from what i know) are still being researched-

the older neighborhoods also have the very old water and sewage lines that were placed for homes to be within a specific distance to the existing streets-there are concerns that adding putting adu's in the back of these homes would put a stress on the lines and cause stress that could bring them down (an issue people have encountered with renovations on existing homes that entailed higher water pressure needs/additional sewage due to added bathrooms),

the alleys are not wide enough for snow plows or emergency vehicles to access so that makes for a safey concern,

parking-unless the primary home owner is willing to take on the cost/has the land available for additional parking ON their lot there is the concern that older neighborhoods that already have issues with parking shortages would be overwhelmed (as it stands during snowy months residents are supposed to alternate parking on the right and left sides of the street so snow plows can get through but there's not enough parking so many streets can go without plowing for days on end until the city steps in, starts towing, gets it cleared only to be in the same situation a few days later).


now, i live rurally and i know some folks that would consider doing adu's BUT the issue we run into here is-

a well for one's home can only provide so much and the cost is prohibitive to drill a second (that's IF you have sufficient water and pressure to accommodate it),

septic-all the homes around me were built with limitations on how many bedrooms/baths can be on their existing system. an adu that was hooked to a septic system would entail a larger piece of property than the adu would occupy, environmental studies ($$$$$$$$$) and the cost of creating the second system ($$$$$$$$$$$$$$$).


i don't know what the solution is but it will entail either private or public funds to address the horrific costs of the infrastructure.

 

[Mackenzie Click-Mickelson]

i was paying $950 in 1990 it was considered very low for the area i lived in-had no central heat or air, no laundry facilities, no parking but was less expensive than anyplace else (at least it was safe).

The last year of my lease where I went to college in 2010 the apartment I lived in it was $490 which included utilities (except for the electricity I mentioned). 30 miles east back in my metro that price point would have put you in a very unsafe neighborhood. I almost got an apartment for $550 but it was in the highest crime area in that city soooo I backed out. The $660 (from a different apartment than the college one) represented a break from market rent of that location which was about $800 or so (I got a deal for it being the last 1 bedroom and it came with a carport normally $60 per month back then, a garage was $100). My husband paid about $740 and his apartment was the exact replica (for real) of mine with exception to his kitchen had nicer cabinets but my apartment had crown molding otherwise identical but in different areas of the metro.

But none of those are realistic rents any longer which was what I was getting at and people can't keep up with how much it's costing. If people are struggling in my county the wealthiest in both my state and my metro (which includes counties in the state next to me) I can only imagine how the other areas feel.

I wonder what your $950 represents 30 years later but my guess is it more rapidly increased in costs in the last 5-10years.

ETA: I just looked up my old apartment and for a 1-bedroom the price is now up to almost $2,000...

 

[tvguy]

there has been talk for some time of doing that in the larger city near us but then some issues have been raised that (from what i know) are still being researched-

the older neighborhoods also have the very old water and sewage lines that were placed for homes to be within a specific distance to the existing streets-there are concerns that adding putting adu's in the back of these homes would put a stress on the lines and cause stress that could bring them down (an issue people have encountered with renovations on existing homes that entailed higher water pressure needs/additional sewage due to added bathrooms),

the alleys are not wide enough for snow plows or emergency vehicles to access so that makes for a safey concern,

parking-unless the primary home owner is willing to take on the cost/has the land available for additional parking ON their lot there is the concern that older neighborhoods that already have issues with parking shortages would be overwhelmed (as it stands during snowy months residents are supposed to alternate parking on the right and left sides of the street so snow plows can get through but there's not enough parking so many streets can go without plowing for days on end until the city steps in, starts towing, gets it cleared only to be in the same situation a few days later).


now, i live rurally and i know some folks that would consider doing adu's BUT the issue we run into here is-

a well for one's home can only provide so much and the cost is prohibitive to drill a second (that's IF you have sufficient water and pressure to accommodate it),

septic-all the homes around me were built with limitations on how many bedrooms/baths can be on their existing system. an adu that was hooked to a septic system would entail a larger piece of property than the adu would occupy, environmental studies ($$$$$$$$$) and the cost of creating the second system ($$$$$$$$$$$$$$$).


i don't know what the solution is but it will entail either private or public funds to address the horrific costs of the infrastructure.

Water and sewer distance aren't an issue since all the utilities are in the alley, so the ADUs on my former co-workers property are actually closer than the existing house. As the main house was built in 1893 I think all the utilities were installed long after the house was built. It may have had a septic system, but it has been on the city sewer probably for at least 90 years.
No snow here, but that would be an issue if we did since all the residents already occupy every available on street parking spot. Garbage day must be a nightmare since you have to put your cans out for automatic pickup. Looking at Google satellite view, it looks like the former residents of the duplex used the backyard for parking, so the ADUs have taken that away and there will be one paved parking spot for each of the two ADUs. So residents of the duplex in front are out of luck. And this is an area of town where you have to get a parking permit to park overnight on the street and to park for over 2 hours during the day time. You have to prove you live in the area to get the permit.

 

[kymom99]

My 1 bedroom apartment in 1989 was I think $175. That’s $471 in today’s dollars.

 

[barkley]

The last year of my lease where I went to college in 2010 the apartment I lived in it was $490 which included utilities (except for the electricity I mentioned). 30 miles east back in my metro that price point would have put you in a very unsafe neighborhood. I almost got an apartment for $550 but it was in the highest crime area in that city soooo I backed out. The $660 (from a different apartment than the college one) represented a break from market rent of that location which was about $800 or so (I got a deal for it being the last 1 bedroom and it came with a carport normally $60 per month back then, a garage was $100). My husband paid about $740 and his apartment was the exact replica (for real) of mine with exception to his kitchen had nicer cabinets but my apartment had crown molding otherwise identical but in different areas of the metro.

But none of those are realistic rents any longer which was what I was getting at and people can't keep up with how much it's costing. If people are struggling in my county the wealthiest in both my state and my metro (which includes counties in the state next to me) I can only imagine how the other areas feel.

I wonder what your $950 represents 30 years later but my guess is it more rapidly increased in costs in the last 5-10years.

ETA: I just looked up my old apartment and for a 1-bedroom the price is now up to almost $2,000...

despite complaints about the cost i think rentals are still very inexpensive in our region-my oldest pays (aprox 800 sq ft apartment w/1 bedroom and an in unit washer/dryer):

$970 rent
$45 water/sewer/garbage (no limit on water usage)
$70 private enclosed/locking garage.

 

[Mackenzie Click-Mickelson]

despite complaints about the cost i think rentals are still very inexpensive in our region-my oldest pays (aprox 800 sq ft apartment w/1 bedroom and an in unit washer/dryer):

$970 rent
$45 water/sewer/garbage (no limit on water usage)
$70 private enclosed/locking garage.

I was able to make a $490 apartment work with being paid under $8 an hour (under $6 for the first year). The $660 I was making $35k a year. Incomes and other costs all across the nation haven't kept up with the rents being charged and that's not hard to find info about.

The largest actual city in my metro where residents were surveyed last August and for 1 bedroom 49% of take home pay was spent on rent and utilities. 4 bedroom was 56%. Average Income from those in the survey was just over $11. HUD uses no more than 30% for the comfort range. IDK it wasn't about going back and forth here the burdens on those who rent is a well documented national issue. We'll always be able to find the exceptions on the DIS

 

[Beezle2]

despite complaints about the cost i think rentals are still very inexpensive in our region-my oldest pays (aprox 800 sq ft apartment w/1 bedroom and an in unit washer/dryer):

$970 rent
$45 water/sewer/garbage (no limit on water usage)
$70 private enclosed/locking garage.

That does sound very reasonable.

 

[barkley]

I was able to make a $490 apartment work with being paid under $8 an hour (under $6 for the first year). The $660 I was making $35k a year. Incomes and other costs all across the nation haven't kept up with the rents being charged and that's not hard to find info about.

The largest actual city in my metro where residents were surveyed last August and for 1 bedroom 49% of take home pay was spent on rent and utilities. 4 bedroom was 56%. Average Income from those in the survey was just over $11. HUD uses no more than 30% for the comfort range. IDK it wasn't about going back and forth here the burdens on those who rent is a well documented national issue. We'll always be able to find the exceptions on the DIS

hud can set those comfort ranges b/c that 30% is the cap the renter is paying with hud making up the difference (that's why there have historically been years long waiting lists in some regions and the statistics for people getting off hud are terrible-my former clients knew the drill and purposely did everything in their power to never earn to the level they lost their 'certificate' from hud-can't blame them b/c it was devasting financialy). when i worked for social services the non hud homeless assistance program that paid for security deposits and last month's rent allowed for families to spend up to 80% gross income on rent (i just checked-in at least california that's still the percentage). it was and is a stupid and unrealistic formula for people to suvive on and we saw it increase homelessness b/c it was'nt sustainable for people to pay that much. people with previously steller rental records who had one bad situation entered a revolving door of year after year repeated homelessness (they were eligible to it once per year and we could set our calendars to the date they would walk in for help again).

for the record-the rent my oldest pays is a bit lower but on par with our regional amounts. minimum wage here is the highest (state wise) in the u.s. at $15.74 be it untipped or tipped but even fast food and other entry level jobs are starting at $17 or better. it's still not a pretty picture financially but it's a good deal better than driving less than 30 minutes across the state line where rents are higher AND minimum wage is only $7.50 (and as low as $3.35 for tipped positions).

 

[Mackenzie Click-Mickelson]

hud can set those comfort ranges b/c that 30% is the cap the renter is paying with hud making up the difference (that's why there have historically been years long waiting lists in some regions and the statistics for people getting off hud are terrible-my former clients knew the drill and purposely did everything in their power to never earn to the level they lost their 'certificate' from hud-can't blame them b/c it was devasting financialy). when i worked for social services the non hud homeless assistance program that paid for security deposits and last month's rent allowed for families to spend up to 80% gross income on rent (i just checked-in at least california that's still the percentage). it was and is a stupid and unrealistic formula for people to suvive on and we saw it increase homelessness b/c it was'nt sustainable for people to pay that much. people with previously steller rental records who had one bad situation entered a revolving door of year after year repeated homelessness (they were eligible to it once per year and we could set our calendars to the date they would walk in for help again).

for the record-the rent my oldest pays is a bit lower but on par with our regional amounts. minimum wage here is the highest (state wise) in the u.s. at $15.74 be it untipped or tipped but even fast food and other entry level jobs are starting at $17 or better. it's still not a pretty picture financially but it's a good deal better than driving less than 30 minutes across the state line where rents are higher AND minimum wage is only $7.50 (and as low as $3.35 for tipped positions).

HUD isn't making up the difference. You must not realize what I'm talking about.

HUD recommendations are for EVERYONE. It has nothing to do with public assistance and none of the people I was talking about in the survey were receiving assistance. They aren't living in public housing or section 8. They are talking about what rent they are being charged and what their income is.

This has absolutely nothing to do with social services programs.

For reference this is what I'm meaning: "The Department of Housing and Urban Development (HUD) determines that paying more than 50% of a household’s income towards housing costs represents a severe cost burden." The 30% comes from the government's definition of affordability: "The income required to “afford” that housing cost, using the federal and local standard of 30% monthly budget on housing expenses." Again we're not talking about making up the difference here. That's the standard for us all at least according to the government.

Although this is based on 2022 here's what they were discussing for that particular city "Last year, rent across the city increased 13%, and over 26% since 2020. In some zip codes, those rent increases were even more significant. Tenants and homeowners alike are worried about what this means for the future of the city. Tenants are severely cost-burdened and have nowhere to go."

ETA: Sorry don't mean to sound abrupt but for sure the conversations are crossing here.

 

[tinkerbellandpeterpan]

We live across the street from our landlord. He's wonderful. DH and I would love to move closer to work (45 minute commute), but it's not worth it. We would move from a 3 bedroom/3 bath house with a driveway to an apt complex where maybe we would have 2 bedrooms and 1 bathroom for about 1.5 to 2x our current rent. No thank you. You find a good landlord and just stay put. And from our experience when landlords find good tenants who always pay on time, maintain the property, handle minor repairs and report major issues before they become something crazy they want to keep us too. We are blessed we found the place we did 3 years ago and I would do anything to continue to stay here. It is scary though to be month to month and worry that you could get 30 days notice to find someplace else to go.