[StevePerkins]

> "There’s a lot of news about the big private equity funds buying up homes, but it’s actually the individuals who are driving most of it."

I realize there are a lot of "house flipper" shows on reality TV, but I don't buy this. I'm not receiving 20-30 phone calls and texts per week from "individuals" wanting to buy my house. I'm getting those calls from sophisticated commercial operations, who mask their phone numbers to include the same area code and first three digits as my own, etc.

Individuals aren't putting up "We buy houses! Guaranteed offer!" billboards every few hundred feet in my city.

I don't think that banks will even give individuals an endless series of mortgages. You can't declare rental income as "income" to qualify for mortgage loans.

[mcv]

I think there needs to be a strong fiscal disincentive against owning houses for investment. Houses need to be lived in, preferably by the owner. I'm all for a punitive tax on empty houses or houses with ridiculously high rent.

[tut-urut-utut]

One step forward would be to just disallow any tax deductions for renting. Next step, increase taxes on rented or empty housing.

In a few years, the market would settle with much more affordable prices for buying. But we still would have a problem that building new houses would stop to a halt due to low ROI, and renting market would heat again. For that, I'm not sure how to solve this.

[pmorici]

Wether a house is rented or owned by the person occupying it doesn’t effect the basic supply/ demand dynamics of the market. Punitive taxes on landlords isn’t going to cause housing prices to come down because the cause of high prices is a housing shortage. There is no indication supply is being artificially depressed by people letting houses sit unoccupied.

[BizarroLand]

There are more than 40,000 vacant homes in San Francisco, report says:

https://www.sfgate.com/bayarea/article/how-many-vacant-homes...

Took me less than a minute to search this.

[pandaman]

The report [1] the article is referencing is talking about housing units so it's not just homes but apartments (and possibly rooms that can be rented as a unit?). Furthermore, the very same report gives the distribution of the vacant units, of which only 21000 could be possibly considered "hoarded" (this is assuming nobody does repairs and renovations, all rentals go up for rent as soon as the previous tenants move out, there is no corporate housing, no housing is involved in legal proceedings and the buyers move to the new house on the closing day), which makes 5% of total housing in SF. Does not look like a huge hoarding problem to me.

[1] https://sfgov.legistar.com/View.ashx?M=F&ID=10441217&amp...

[shiftpgdn]

They already have this in Texas (homestead exemption) and Texas is one of the hottest markets for single family rentals. They are building entire suburbs that are rental homes only. Millennials as a group don’t want to live in apartments anymore because of the effects of Covid 19 causing people to be locked into their homes.

[StevePerkins]

Same thing in Georgia (punitive taxes on any residential property beyond your primary home), and Atlanta is still one of the hottest housing markets in the nation.

Just pass those costs on to your tenants.

[escapedmoose]

I don't think homestead exemption is big enough to realistically expect a broad shift in behavior.

[maxerickson]

Build lots of housing so that the market isn't demand driven.

[readthenotes1]

Have you seen the price of timber lately?

(I know a family that opened a concrete plant in 2016. They are now multimillionaires whereas before they were scrambling to keep afloat)

[hedora]

The important thing to remember about current timber prices is that our punitive lumber tariffs are the only thing protecting us from the red threat from the North.

Canadians sure are a crafty lot.

[closeparen]

Being able to rent a place to live is good, actually.

[escapedmoose]

But not nearly as good as being able to buy it (assuming the single-family, multi-year home that the author is describing). Communities need both options, but the current climate leans far too heavily toward renting in situations when buying would be better for everyone.

[Daishiman]

It's the opposite; mortgages are extremely cheap versus rent.

[escapedmoose]

You must be referring to monthly payments, which are one of the smaller hurdles in the path to homeownership.

[hansvm]

The usual argument I see for renting being good is that up-front barriers make home buying hard for a lot of people and that transaction costs make it impractical for short tenures. If those were independently solved somehow would renting still have notable advantages?

[closeparen]

* Other investments may outperform home equity, even taking into account imputed rent, especially if homes are sustainably affordable (read: have no return).

* Other investments may be less correlated with your earning potential.

* Risk of being underwater.

* Risk of an expensive, unexpected maintenance or repair item.

* Chores you are no longer paying for, you have to do yourself.

[duped]

Being unable to own a place to live is bad

[bognition]

> “You can't declare rental income as "income" to qualify for mortgage loans.”

You absolutely can, it is income after all.

All the banks care about is if the cost of the new mortgage is going to exceed your debt to income ratio.

[ryanianian]

> All the banks care about is if the cost of the new mortgage is going to exceed your debt to income ratio.

Not exactly. The underwriting process is very different for full-time residences versus investment/rental properties. Rates are usually higher, debt/income ratio must be lower, and appraisals and cashflow analyses include rental market considerations.

Given this it's entirely reasonable to assume the rift between mortgage products for investment vs residence to widen. If congresspeople want to do something about perceived imbalance between residence and income real-estate, they could change federal subsidies or underwriting requirements for income properties making mortgages for income properties much more expensive and/or harder to get.

(Just realized a peer comment said something similar.)

[Kon-Peki]

That's not what the article is saying. You buy a house as your full-time residence, live in it for a few years, and then buy another as your full-time residence. The previous one is rented out. As long as you wait a few years, the bank holding the loan on the previous house doesn't care. That original, owner-occupied rate is locked in for the life of the loan.

[frankbreetz]

This is definitely wrong in my city. Everytime something reasonable comes up for sales it sells in a couple hours and is back on the market in couple months with some cheap renovations for a ridiculous amount.

They buyer/seller is almost always listed as an individual and not a corporation.

[mooreds]

> You can't declare rental income as "income" to qualify for mortgage loans.

Depends. If you have a signed lease, some lenders will take some portion of that into account when considering lending you money.

[curiousllama]

No, but they consider a mortgage on a rental property with a signed lease separately from a mortgage on a primary/secondary residence.

They’ll def give an endless series of mortgages to an otherwise wealthy person who keeps paying them back by renting out the homes.

[dmitrygr]

> You can't declare rental income as "income" to qualify for mortgage loans.

You absolutely can. I did that. Bank was happy to consider money i make from renting out one of my houses as income when qualifying me for a mortgage for another.

[ryathal]

You can absolutely use rental income as income, the main thing is you generally need 1-2 years of experience running rentals. You can even use theoretical income from renting out a new purchase in some cases.

[jrs235]

>You can't declare rental income as "income" to qualify for mortgage loans.

You can, but [typically] not until you have a solid history (a few years) of that rental income and it will be lender dependent. You also can't typically use future/potential income from a property to qualify for a mortgage for THAT property but you could for a business loan. That business loan will have a much higher interest rate and likely require you to put up other collateral or personal guarantee.

[OJFord]

Wow, where's that?

[StevePerkins]

Atlanta. The Southeast is booming, and Atlanta in particular is turning into a tech hub. There may be less pressure in areas that are seeing net migration outflows, but I don't think the U.S. has enough housing to cover our population increases anywhere.

[powvans]

Can confirm. I live in Atlanta and am about to write letters like the one from the article to the owners of a couple dozen properties in my neighborhood that I’ve identified as suitable for my family. Just as discussed, I’m not planning to sell my current home.

PSA: For anyone thinking of moving to Atlanta, don’t. It’s horrible here, go anywhere else. Save yourself from doom! /s