Moral imperative for a housing crash... and permanent devaluation

[ygolo]

The "fuedaluzing impact" of "land banking":

San Francisco home crashes more than 60% in value after listing says buyers must wait decades to move in

"Tenant's current lease appears to grant tenants strong long term rent rate amount restrictions, unconventional method of rental payment, and possible occupancy rights until 2053."

fortune.com

 

[ygolo]

https://www.visualcapitalist.com/the-growth-in-us-house-prices-by-state-in-2024/

 

[ygolo]

https://www.fastcompany.com/91152262/housing-market-affordability-stretched-3-percent-of-renters-can-afford-to-buy-some-markets

Percent of renters who can afford homes:

1. San Diego (2.6%)
2. San Jose (2.7%)
3. Los Angeles (2.8%)
4. San Francisco (3.7%)
5. Salt Lake City (3.8%)

 

[ygolo]

https://www.visualcapitalist.com/mapped-the-10-u-s-states-with-the-highest-cost-of-living/

The map shows average cost of living. I put it in the housing thread, because for most people that's the biggest component. The numbers seem too low, but they average across the whole state. Maybe something else is going on too.

 

[ygolo]

Newsom Signs 2 Bills Aimed at Solving California’s Housing Crisis | KQED

One bill focuses on short-term solutions through hotels used as shelters, while the other attempts to create more affordable housing in junior ADUs.

www.kqed.org

 

[ygolo]

https://www.fastcompany.com/91204519/affordable-housing-lihtc-protections-expire

 

[ygolo]

UCLA lecturer says he’s homeless due to low pay

In a now-viral TikTok video, Dr. Daniel McKeown, a lecturer at UCLA, claims low pay has left him homeless, shocking many of his followers. “Hi everyone, my name is Daniel, and I’m an astrophy…

www.kron4.com

When 70k/yr is too little to live, maybe your location is too expensive?

If a lecturer can live there, how are the TAs doing, you think?

edit: He's listed as lecturer not a professor. That standing in academia is also has some things that need addressing, but a matter for a different thread.

 

[SensEye]

Sounds like he is just whining for a pay raise.

Also, don't be fooled by the misleading headline. Dude is NOT homeless. He's paying $2500/month rent. “Technically, I am homeless. I do not have a place of my own. I’m not on any lease,” he says. Renters don't own their place kind of by definition. Not sure why he has no lease, landlords usually insist on one.

I think UCLA and the surrounding area is a costly place to live. He should consider a finding another job in a lower cost city or at maybe enduring a longer commute.

 

[ygolo]

Sounds like he is just whining for a pay raise.

Also, don't be fooled by the misleading headline. Dude is NOT homeless. He's paying $2500/month rent. “Technically, I am homeless. I do not have a place of my own. I’m not on any lease,” he says. Renters don't own their place kind of by definition. Not sure why he has no lease, landlords usually insist on one.

I think UCLA and the surrounding area is a costly place to live. He should consider a finding another job in a lower cost city or at maybe enduring a longer commute.

The exact quote:
"McKeown says his rent was $2,500 a month. "

The tense matters. He may be squatting or couch-surfing, but he doesn't have a lease. Still, it is only part of the story.

In most places, $70,000/yr is a lot.

The point is that rent in that area is now $3,700/month, which is $44k/year. Thus, the qualifying income for that area becomes $111k/year. He is asking for $100k/year.

You can call it whining if you want.

But if the qualifying income for a lease is more than a lecturer's salary at the most prominent university in the area (and even above his proposed raise), I say the rent is too damn high.

edit: He's listed as lecturer not a professor. That standing in academia is also has some things that need addressing, but a matter for a different thread.

 

[SensEye]

But if the qualifying income for a lease is more than a lecturer's salary at the most prominent university in the area (and even above his proposed raise), I say the rent is too damn high.

On that I agree. However, such is supply and demand. As you mention the average rent in that area is even higher. I couldn't afford to live there either. Obviously, there seem to be enough folks who can. Wealthy parents sending their kids to UCLA or very high wages in that area of LA I suppose. High rent in most of LA from what I can see (mega cities generally have high housing costs).

In this light, I suppose his request for a $30K pay bump is not that unreasonable. Now that's been denied it will be interesting to see what he is going to do. I would leave LA vs being homeless though. I presume a PHD in physics would make one generally employable, although I have no real idea of the market demand for physicists.

 

[ygolo]

On that I agree. However, such is supply and demand. As you mention the average rent in that area is even higher. I couldn't afford to live there either. Obviously, there seem to be enough folks who can. Wealthy parents sending their kids to UCLA or very high wages in that area of LA I suppose. High rent in most of LA from what I can see (mega cities generally have high housing costs).

In this light, I suppose his request for a $30K pay bump is not that unreasonable. Now that's been denied it will be interesting to see what he is going to do. I would leave LA vs being homeless though. I presume a PHD in physics would make one generally employable, although I have no real idea of the market demand for physicists.

The issue in cities like LA (and SF is worse) is that only certain people can afford to live there. Can you imagine a barista who doesn't live with their parents living there?

This is also why you often have multiple couples living in a single space.

I used to share a townhome in SF with three other people who also live with their girlfriends. Then, the landlord raised the rent again, and I had to leave. Commuting 2.5 hours one way then became the norm for me. This was before the 2020-2021 craziness, which never came close to fully correcting.

 

[Tomb1]

The exact quote:
"McKeown says his rent was $2,500 a month. "

The tense matters. He may be squatting or couch-surfing, but he doesn't have a lease. Still, it is only part of the story.

In most places, $70,000/yr is a lot.

The point is that rent in that area is now $3,700/month, which is $44k/year. Thus, the qualifying income for that area becomes $111k/year. He is asking for $100k/year.

You can call it whining if you want.

But if the qualifying income for a lease is more than a lecturer's salary at the most prominent university in the area (and even above his proposed raise), I say the rent is too damn high.

edit: He's listed as lecturer not a professor. That standing in academia is also has some things that need addressing, but a matter for a different thread.

I don't think you're seeing the full picture. There's plenty of 1 bedroom apartments in Westwood for under $2,500.

los angeles apartments / housing for rent "westwood" - craigslist

los angeles apartments / housing for rent "westwood" - craigslist

losangeles.craigslist.org

The 3700 a month apartments are mostly 2-bedroom apartments. He can settle for a 1 bedroom apartment in Westwood while applying to other universities

If he is saying that he should be paid enough to rent a 2 bedroom apartment rather than a 1 bedroom apartment, that is absurd. He doesn't get to rent a 2 bedroom apartment in Westwood because he only makes 70,000 a year (and that's gross salary, probably much less after the IRS extorts him)... the day that landlords of 2 bedroom apartments have to set their rents to equal what people in Westwood pay for 1 bedroom apartments because one university professor/lecturer can't stomach down-sizing will hopefully be the day that hell freezes over.

 

[Tomb1]

On that I agree. However, such is supply and demand. As you mention the average rent in that area is even higher. I couldn't afford to live there either. Obviously, there seem to be enough folks who can. Wealthy parents sending their kids to UCLA or very high wages in that area of LA I suppose. High rent in most of LA from what I can see (mega cities generally have high housing costs).

In this light, I suppose his request for a $30K pay bump is not that unreasonable. Now that's been denied it will be interesting to see what he is going to do. I would leave LA vs being homeless though. I presume a PHD in physics would make one generally employable, although I have no real idea of the market demand for physicists.

The average rent in the area isn't higher for 1-bedroom apartments. There's plenty of 1 bedroom apartments renting under 2500.

The rents for 2 bedroom apartments are higher everywhere because there are a lot of married couples, families, that choose to rent instead of buy houses because of the interest rates and real estate prices....so these family units bring at least 2 incomes into the equation. The caveat is they are just waiting for the housing market to break. If interest rates and prices come down, I expect that they will run out and buy a house. Once that happens, the rents will have to go down.

It is an economic reality the good professor will just have to live with either until people start buying houses again, somebody decides to pay him 100k a year or he finds himself a profitable side hustle.

 

[SensEye]

Interesting. I was going by the rentcafe.com link provided in the article.

If what you are saying is true, that site has de-coupled average rent from average apartment size. They appear to be stating the average rent overall ($3700) and the average apartment size (941 sq. ft.) The relevant data I want is what is the average rent for the average apartment size?

I looked about the site a bit for their methodology for clarity, but nothing jumped out.

Misleading to say the least if the data has been de-coupled.

The other interesting thing I saw on that site is that fully 2/3 (66%) of residents in that Westwood neighborhood are renters. Goes to ygolo's comment re: what if your parents don't live there?

It seems that for the majority, they don't. This leads to the next inevitable question. Who owns all these rental properties? Are they ex homeowners who moved out but are still renting their properties? I'd have no problem with that as these types would have to compete with each other fairly when setting market rents. But if real estate corporations have being buying up all the properties and driving up rent through possible unfair business practices, I'd get suspicious.

Anyhow, the real estate bubble is a many headed beast when it comes what is driving this outsize price inflation. It does seem unsustainable to me, but it's been going on for quite some time now (i.e. 10+ years).

 

[ygolo]

I don't think you're seeing the full picture. There's plenty of 1 bedroom apartments in Westwood for under $2,500.

los angeles apartments / housing for rent "westwood" - craigslist

los angeles apartments / housing for rent "westwood" - craigslist

losangeles.craigslist.org

The 3700 a month apartments are mostly 2-bedroom apartments. He can settle for a 1 bedroom apartment in Westwood while applying to other universities

If he is saying that he should be paid enough to rent a 2 bedroom apartment rather than a 1 bedroom apartment, that is absurd. He doesn't get to rent a 2 bedroom apartment in Westwood because he only makes 70,000 a year (and that's gross salary, probably much less after the IRS extorts him)... the day that landlords of 2 bedroom apartments have to set their rents to equal what people in Westwood pay for 1 bedroom apartments because one university professor/lecturer can't stomach down-sizing will hopefully be the day that hell freezes over.

There are studios too. But by the time people have PhDs, they are well into having a family.

If you are advocating for a whole family to live in one bedroom, that's possible. But I hope you're not also someone complaining about people not having enough kids.

But, I think it's fairly reasonable to want space for a family when teaching at the most prominent university in the area.

Also, I don't know what it's like in Westwood, but in SF, the Craigslist properties are usually not what's advertised.

"One bedroom " is often make-shift walls inside a hallway shared with 6 other people in this apartment. The pictures look nice until you see the real place, and you realize that it's not lease or even sublease situation.

Edit: Also, Assistant Football Coaches make ~$400k, and there at least 3 of them on the UCLA payroll (names anonymous on UCOP). I realize there are fewer of them than there are lectures. Something is broken when tuitions are so high and employees also have to struggle to find ways to live.

I still say the cost of living (housing) is the highest leverage place to push in the system.

 

[ygolo]

The average rent in the area isn't higher for 1-bedroom apartments. There's plenty of 1 bedroom apartments renting under 2500.

The rents for 2 bedroom apartments are higher everywhere because there are a lot of married couples, families, that choose to rent instead of buy houses because of the interest rates and real estate prices....so these family units bring at least 2 incomes into the equation. The caveat is they are just waiting for the housing market to break. If interest rates and prices come down, I expect that they will run out and buy a house. Once that happens, the rents will have to go down.

It is an economic reality the good professor will just have to live with either until people start buying houses again, somebody decides to pay him 100k a year or he finds himself a profitable side hustle.

I'm not sure I followed everything you wrote here.

Is there enough housing families can buy there?

I get that often both partners work, and that a two income household can afford more. But job markets are tough in some places and if the other income is a local service job (grocer, barista), it'll help, but not a lot.

It's also a reality that people will fight for what they believe they need. If actors and dock workers can strike, so too can academics. He hasn't called for one yet, but I'm not sure how far we are from one.

If cost of living were lower, there'd be no need for even debating.

One issue we have is that a big city dollar is becoming worth very little compared to a national US dollar, but the exchange rate is 1:1. Certain types of jobs are only in big cities, and often particular ones.

 

[ygolo]

https://www.sfgate.com/realestate/article/what-happens-when-a-city-of-billionaires-goes-19861645.php

 

[SensEye]

https://www.sfgate.com/realestate/article/what-happens-when-a-city-of-billionaires-goes-19861645.php

Interesting article. Unfortunately another example of poor quality journalism.

Why? The biggest cash drains are reportedly a $2.1 million sheriff's contract, which has more than doubled in three years, as well as mandates to build 253 low-income housing units if city officials want to continue receiving government funds.

Housing prices in Portola Valley are still sky-high, with a median list price of $5.82 million in September.

Obvious questions:

1) What is the city's annual budget and is $2.1 million for the sheriff's contract that big an expense in the overall scheme of things? It sounds pricey, but that's not really relevant.
2) Why on earth do they need to continue receiving government funds (and how much are we talking about, btw?). With an average $5.82 million property value, can't they raise enough funds via property taxes? Every municipality I know calculates property taxes primarily based on assessed market value. These guys should be neck deep in property tax revenue. If they aren't property taxes are set way too low. Seems like an easy fix.

Alas, the reporter never thought to ask or inform readers about this kind of information, preferring instead to wander off into worthless anecdotes about Detroit.

 

[ygolo]

Interesting article. Unfortunately another example of poor quality journalism.





Obvious questions:

1) What is the city's annual budget and is $2.1 million for the sheriff's contract that big an expense in the overall scheme of things? It sounds pricey, but that's not really relevant.
2) Why on earth do they need to continue receiving government funds (and how much are we talking about, btw?). With an average $5.82 million property value, can't they raise enough funds via property taxes? Every municipality I know calculates property taxes primarily based on assessed market value. These guys should be neck deep in property tax revenue. If they aren't property taxes are set way too low. Seems like an easy fix.

Alas, the reporter never thought to ask or inform readers about this kind of information, preferring instead to wander off into worthless anecdotes about Detroit.

Some more information is in its linked article:

Portola Valley: Wealthy Peninsula town could soon run out of cash

Community is home to several notable tech billionaires and CEOs, including Reid Hoffman, co-founder of LinkedIn; Vinod Khosla, co-founder of Sun Microsystems; and John Donahoe, the current CEO of N…

www.mercurynews.com

The sheriff budget is about a quarter the budget.

But, I agree that the SF gate article was a bit thin, and indeed confusing.

I found it a bit funny that this event is happening at all. Your questions deepen the mystery.

 

[ygolo]

https://www.visualcapitalist.com/mapped-home-price-to-income-ratio-by-state/