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In These 13 US Cities, Rents Are Skyrocketing
Seven years ago, the American homeownership "dream" was shattered when a housing bubble built on a decisively shaky foundation burst in spectacular fashion, bringing Wall Street and Main Street to their knees.
In the blink of an eye, the seemingly inexorable rise in the American homeownership rate abruptly reversed course, and by 2014, two decades of gains had disappeared and the ashes of Bill Clinton’s National Homeownership Strategy lay smoldering in the aftermath of the greatest financial collapse since the Great Depression.
In short, decades of speculative excess driven by imprudence, greed, and financial engineering and financed by the world’s demand for GSE debt had come crashing down and in relatively short order, a nation of homeowners was transformed into a nation of renters.
It wasn’t difficult to predict what would happen next.
As demand for rentals increased and PE snapped up foreclosures, rents rose, just as a subpar jobs market, a meteoric rise in student debt, tougher lending standards, and critically important demographic shifts put further pressure on homeownership rates. Now, America faces a rather dire housing predicament: buying and renting are both unaffordable. Or, as WSJ put it last month, "households are stuck between homes they can’t qualify for and rents they can’t afford."
We’ve seen evidence of this across the country with perhaps the most telling statistic coming courtesy of The National Low Income Housing Coalition who recently noted that in no state can a minimum wage worker afford a one bedroom apartment.
In this context, Bloomberg is out with a list of 13 cities where single-family rents have risen by double-digits in just the last 12 months. Note that in Iowa, rents have risen more than 20% over the past year alone.
More color from Bloomberg:
Landlords have been preparing to raise rents on single-family homes this year, Bloomberg reported in April. It looks like those plans are already being put into action.
The median rent for a three-bedroom single-family house increased 3.3 percent, to $1,320, during the second quarter, according to data compiled by RentRange and provided to Bloomberg by franchiser Real Property Management. Median rents are up 6.1 percent over the past 12 months. Even that kind of increase would have been welcome in 13 U.S. cities where single-family rents increased by double digits.
It’s more evidence that rising rents have affected a broad scope of Americans. Sixty percent of low-income renters spend more than 50 percent of their income on rent, according to a report in May from New York University’s Furman Center. High rents have also stretched the budgets of middle-class workers and made it harder for young professionals to launch careers and start families.
"You’re finding that people who wouldn’t have shared accommodations in the past are moving in with friends,"says Don Lawby, president of Real Property Management. "Kids are staying in their parents’ homes for longer and delaying the formation of families."
And for those with short memories, we thought this would be an opportune time to remind you of who became America's landlord in the wake of the crisis...
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you read zh and you're really *THAT* ignorant about how the market works?
landlords are no more greedy bastards than tenants are. landlords charge as much as they can get away with. tenants pay as little as they can get away with. if there's too many rental units (oversupply), rents go down. if there's too many tenants (high demand), rents go up.
landlords on the whole do not "screw" anyone - they offer a property for rent. if you don't like the deal, go somewhere else.
don't be such a whiny loser.
What happens when assholes print money and inflate asset classes?
Those assholes are the govermnent. The assholes who institute rent control are also government.
yes, what freedom guy says, above - it's the government that prints dollars, not landlords, not your grocery store, not the taxi driver
Poaster, you need to be more specific. The fact that the fed's rate is still roughly zero has very little to do with individual investors and being a landlord. I am speaking from direct (and current) experience.
Of course it helps companies that have access to that money at ~0% rates.
You really think free markets exist? Grow up. The state runs everything. In case you have not noticed, the Fed has been propping up the stock market since 2008. That said, local governments are part of the market (it is not a "free" market), and rent control is a kind of limit up or limit down. Renting is not like buying an apple or a can of soda pop. There are important legal implications involved depending on where one lives. People can not easily up and move, such a view is the view of the landlord, a capitalist pig wannabe. Many people have children in schools, many are being made homeless by doubling and tripling of rents. I would be happy if the state (as a major component of the market) instituted rent control and allowed rent increases at only the CPI. Landlords can submit a letter wanting increases beyond the CPI which may be granted if warranted.
go back and re-read: you're the one who used the term "free market", i did not.
you don't need to expound on how the corrupt legal system works regarding landlords and tenants, i'm well aware of the facts.
I did not mention free markets in my initial post. I think you need to snort a few more lines.
Immaterial Value and Scarcity in Digital Capitalism
http://www.ctheory.net/articles.aspx?id=652
There is a simple solution to this problem.
Make it illegal to accumulate properties by companies. Individual investors may own say two or three buildings and no more. Then you will not have property hording and rising rents.
Furthermore, make property possession only allowed by citizens of the country, foreigners should not be allowed to own property, that will stop house prices rising.
The problem we are witnessing is wealth accumulation and how this accumulated wealth is attacking the asset classes that are in the poorer classes, which is wrong. Wealth accumulation should not be allowed to feed on poorer asset classes, but should be directed to compete within itself, that is what competition is all about, otherwise, you have a predatory market, which is supposed to be illegal!
But do you think the governments care about this? No, they don't. Because they are all corrupt, and foster this market on purpose for they financially benefit from it.
There are solutions to our problems, the REAL PROBLEM IS CORRUPT GOVERNMENT.
Companies like Blackstone, are practicing predatory market methods. Once upon a time, companies like Standard Oil in the US where broken up because of their predatory market practices, now they are protected by the government.
"Individual investors may own say two or three buildings and no more"
got any other "laws" you want to pull out of your ass, emperor pragmatism?
you rail against corrupt government, and, sure, government is corrupt, but then you say you want more laws? this is bullshit. more laws feeds the beast that is government, and gives more weapons for the government and those who own it to use, as well as those who have lobbyists and lawyers who can contort the law and use it for their own ends.
why do you think the country is so fucked right now? too many government "solutions".
if you don't like the fact that the disparity between rich and poor is growning and that the 0.01% owners of the country are stripping away the wealth from everyone else, maybe you should consider the causes, the mechanism by which they do it, like the federal reserve.
Restricting foreign ownership of property is an excellent law which serves to keep cost of living expenses down in many countries. USA is crazy to allow foreign ownership of homes and/or apartment buildings.
If you want rents to go down you have to let them go up, first. This causes more units to be built until demand, supply and incomes all level out.
Moronic leftists restrict supply by restricting prices.
It is also a matter of property rights. If YOU bought the land, put up the construction money, run all the financial hurdles it is up to you what you want to charge for your own property. No one will come to your aid if it falls through like Detroit.
If libs care so much they can pool their funds and build free housing...themselves.
When companies like Blackstone can hoard 60,000 units of residences you don't get a free market, the market is closed. By disallowing companies to own building blocks of apartments and streets and streets of houses, you are forcing the market to be open to more buyers, and when there are many buyers who don't have the capital to pay a lot for housing, the price of accommodation will go down.
People miss understand how the market works. The supply and demand concept does not work, never has. When the demand dries up, prices don't go down, prices actually go up, because those who own the resource need to make more money/profit from the smaller market. That is what is happening. So take away those who are hoarding, and you losen the suppy for the price of the resource will go down, because those many who will buy from those few, will lower the price because those many who will be buying can't afford to pay the price that the few (i.e the rich) can. This is what is going on in the real world...hoarding by the rich, and that is what is pushing prices up. Predatory market practices must be broken!
When you say "If YOU bought the land, put ....it is up to you what you want to charge for your own property", think about what you are writing, "YOU" is generally someone like Blackstone, they don't build with their money, they borrow money that they don't have and use leverage to make money, and the poorer people who can't borrow money like Blackstone can, are paid to suffer. This is corruption! Any body can make money if you had the connections that Blackstone has to be allowed to borrow billions when they don't even have the collateral to back the loan....you should check their balance sheet, its a mess.
FreedomGuy, you are not talking about Freedom, you are talking about protecting the plutocrats, and kleptocrats. If you read my past comments you will find I am a Classical Libertarian, I believe in Freedom, Liberty and Merit. To have this you need to have the laws equally applied to the lesser classes as to the higher classes. Finance is not applied equally between these two classes, thus, my comment about making it illegal to hoard housing, or any other commodity is to encourage multi competition. Hoarding is not competitive if it is predatory.
I suggest you learn how things work before you open your ignorant mouth.
As for property rights....property rights are SINGULAR, that is they are supposed to protect the individual, that is a one-to-one person to land Right, not the hoarders, that is one owner -to- many properties! (Note: it is property that is supposed to have the Right, not the individual) If you give hoarders property rights, then you will end up having the rich from around the world buying all the property and the poorer people will end up with nothing. And your idea of allowing more building to go on? For how long? Go and take a look at other countries like Italy. 10% of all the entire residences in Italy are abandoned, why? Because the government keeps protecting the developers to build more and more unneeded buildings, the housing market in Italy and many other countries is a mess.
It sounds like to me, FreedomGuy, you own property and you think that is your way to wealth. Newsflash: Property should NEVER be a resource that should be used to make wealth, making wealth from property is wrong. As it is to make wealth form hoarding food, or water! The fundamental needs of people like housing, food and water, should never be manipulated by the few to get rich.....its dishonest and inhumane! I have no problem with people getting rich, but they shouldn't do it through predatory practices, that is preying on cornering the poorer segments of the market to enrich themselves, all because they have have lobbying power and corruptly manipulate the system.
A country's land owned by its citizenry, and its control and how it is owned should be decided by the ENTIRE population, not the few greedy corrupt lazy slobs who can't work but only steal from others, through land manipulation. Land manipulation is criminal and down right abominable.
IF YOU BELIEVE THAT LAND HOARDING IS GOOD, THEN YOU BELIEVE FOOD OR AIR HOARDING IS GOOD TOO. IT ISN'T. LAND HOARDING MUST BE MADE ILLEGAL, ALONG WITH FOOD AND WATER HOARDING.
LAND, AIR, FOOD, AND WATER ARE THE NECESSARY NEEDS OF EVERY HUMAN BEING, AND THEY MUST NOT BE ALLOWED TO BE HOARDED, THEY MUST STAY IN THE CONTROL OF THE PEOPLE AND THEIR WILL.
My last comment brings up an interesting question, does the entire land of a country belong to the Government or its People? I as a Libertarian, believe it belongs to the People!
You FreedomGuy, think it belongs to the Government, that makes you a communist! Shame on you!
why don't you re-read what you posted, and actually try thinking about what you wrote?
yes, in a free market, people do "hoard", for whatever arbitrary definition you want to come up with for that word. if you try to "disallow" hoarding, as you put it, then it's no longer a free market.
do you even understand what a free market is?
you claim to be a libertarian, but do you even understand what that means?
a libertarian does not support arbitrary, made-up laws, such as: "i think no one ought to own more than 2 or 3 houses because that's hoarding"
and nothing that freedom guy wrote indicates at all that he is a communist - quite the opposite, his statements are anti-communist.
assuming that you're not outright trolling, you seem to be a very confused individual.
If we dig a little deeper into the problem in our search for a solution, I submit that we END THE FED and Blackstone and others would never be able to accumulate enough money to actually distort these rental markets.
There you have it: Starve the Beast and END THE FED.
CP - I hate to break it to you but your thesis is wrong. When demand goes down, prices go down. I say this as a landlord and with 100% certainty.
Do you think it is wrong of me to buy an empty lot, pay for development to build homes, then rent those homes for as much as people are willing to pay? (keep in mind that if I didn't do this, there would be fewer homes available for rent and the effects of that scenario.) If you think that making wealth from property is wrong, who is going to invest/pay to build/develop any rental housing?
Your ideology is seriously flawed. You are a complete collectivist and most of what you spout is actually Communist. The land is not owned by everyone or the electorate. There are deeds to everything in America. That is who owns it legally and morally. It is their property bought with their (even corporate) labor.
At the far Left you have the supreme state and collectivist ownership of everything including the people. That is mostly where you are at. Their economics and yours sucks and is demonstrably untrue but that is the ideology. At the far right are libertarians and anarchists. Everyone owns themselves and what they produce. No one gets to vote on how you use your labor and property.
You are a seriously confused leftist. I suggest me and the other ZH'ers get together and examine how you use your property. If we do not like it we will vote on how much you can own and what you can do with it, all the way up to confiscation. It will be for the common good, of course.
magnum:
i disagree 100%
if i own something, a piece of property or otherwise, why should some bureaucrat in washington get to decide who i can sell my property to? it's really none of their business. and i couldn't care less if the buyer is american, mexican, chinese, or anything else.
and the notion that the government should engage in some sort of social engineering based on someone's ideas of what prices for property ought to be, is a dangerous delusion. it damages personal rights, and damages economic rights.
So you don't like "too many government solutions"? What whould you prefer, anarchy?
Really stacking12321, you're being idiotic. As for considering the causes, I DID, YOU MORON! Hoarding of land as one! You to stupid to understand that, and how hoarding is being protected by the government. I referred to Standard Oil and that they did 100 years ago, by breaking it up. But you are too numbskull to know what that meant.
Read also my comment to FreedomGuy, below. Everything there applies to you too.
Really stacking12321, all you are doing is proving how much of an idiot you are with your inane commentry, how about you advancing some well thought out solutions, instead of mindless, ineptitude drivel, and thus advance the cause!
AT LEAST I TRY, AND ADVANCE IDEAS FOR DISCUSSION, WHICH I CAN'T SAY FOR YOU!
How many goons with shiny badges and guns will be needed to implement your "libertarian" property solution, Mr. Pragmatist?
your comments are not at all rational.
instead of an angry rant filled with insults and poor english, why don't you think before you post?
there's nothing wrong with "hoarding". or do you believe that there's no such thing as property rights? that human beings are just cattle, owned by their government, who should just do as they are told? that leaders of government will look out after peoples' best interests, if we can just elect the *right* president this time, or just pass this arbitrary law that you thought of? are you really that naive?
the real problem with you, though, is that you don't believe in freedom. you don't believe in the rights of people to stand up for themselves and live their lives as they choose. you can live your life as a sheep kept in a sheep pen, if you wish, i have no problem with your decision to do that - just look out when the time comes that the farmer decides he wants mutton stew.
and yes, i do believe in anarchy. anarchy is the government that i have chosen for myself. and yes, i am advancing it as a well-thought out solution, as you put it.
Wealth accumulation as you put it is a symptom not the cause. None of your solutions would be necessary if only centralized banking were abolished. Not to mention arbitrary "controls" rarely work as intended. Markets are rigged from top to bottom in multiple ways so trying to put up a dam in the middle of a rushing river just means the river finds a way around or blows everything out of it's way.
At the heart of manipulated markets, corrupt government and gangsters is centralized banking controlling the value of money (amongst many other CB issues). From which it all springs. You will always have manipulators, cheaters and flaws in any system but a foundation of stable money valuation springs more stable everything and spreads power not concentrating it as your "solution" would actually do. Central banking and their debt system strips power from populaces concentrating it in the gov/financial sectors. You propose to further strip power from the populace (realize or not) in the one market the average citizen can still prosper in despite the bubbles.
You peck around at symptoms shooting yourself and others in the foot while they centralize power even more, more, more, more, more. Until centralized banking is torn asunder, the patient (us) will continue to get sicker, sicker, sicker, sicker, sicker.
I'm with you on anti-trust/anti-monopoly controls. But the idea of a set property number per investor? No. Maybe a maximum percentage of rental housing in a given metro area.
No foreign corporate housing ownership? Good. Preventing individual foreign ownership? No.
A housing monopoly just isn't the big issue (yet). Maybe Blackstone has monopoly power in some states. IMO those state should address it if they so choose.
Much bigger monopolies are in play.
I am frankly shocked that there has been no outrage here (or did I miss it?) on the two big health insurer mergers in the works that would take us from 5 major insurers down to 3 if allowed to go through.
69.7% to 63% isn't even a 10% drop. Just sayin'.
"Weird Al" Yankovic - Money For Nothing/Beverly Hillbillies
http://www.youtube.com/watch?v=P4SDhrTPOiI (3:07)
Big Cities are death traps. If you want to survive (in the long run) get out of the city as fast as you can.
community redevelopment act... debt slaves or homeless... Irony/corruption public taxpayer owns GSE debt... http://www.bloomberg.com/news/articles/2015-07-01/fannie-mae-ceo-pay-rai...
Steve Schwarzman and Larry Fink are exactly the same as "trains ran on time Nazi's justifies actions " demand any 401 or pensions be stripped from these Blackstone BlackRock criminals...
Cypress, Greece, student, loans, GSE to quote the ring leader "god's work"
I'M FROM THE GOVERNMENT AND HERE TO HELP.....
Something doesn't make sense:
Bond: 479137000
Homes: 3207
Term: 2 years (with possible extension)
That comes out to $6225 per home per month.
Unless they are using the rents from the 41000 homes, but the bond is secured by just 3207, which would make monthly average rent to cover: $486.93.
Avg home + renovation: $223,000
3207 homes x avg price 223,000 = $715,161,000
$479,137,000 / 3207 = $149,403 avg per home
$479,137,000 / $715,161,000 = 66.99% + 3-4% closing = 70% LTV
Buy the houses at 70% of ARV with bond money @ dirt rates, refi with your portfolio lender, cash out pay your bond off at 2-3% while collecting 5%+. Make a nice spread while paying back bond, then after that it's just typical debt carry through traditional means.
This is the cheapest hard money scam ever! Someone hook me up with 3% hard money rates, he'll I'll even take 6%, which beats the pants off typical hard money at 11-12% + points.
Iowa: The Best Place to Crawl Under a Rock State
or,
Iowa: The Witness Protection Program Funded State
I lived in Ames, Iowa for 6 years, so I'll explain what's going on there.
First, it's the location of Iowa State University, and post-2008 no one has been building student apartments. Meanwhile, the university is trying to maintain it's 6%/yr raise schedule by bringing in more and more students, since they are limited on how fast they can hike tuition. Students are told that if they can't afford anything, to just take loans (now you can even buy books with loan money; that year was the first time I saw a textbook go for $200). So you double the student population in a tiny college town with no new housing, and load those kids up with loan money, and you get the first side of the growth in people.
Second, Ames has a research park for companies that spin off from the university, and a few (WDesk, New Link Genetics, and Renewable Energy Group come to mind) have taken off. WDesk in particular was growing so fast they couldn't build office space fast enough to put all their workers in; they went from startup to ~1,000 people in all of 3 years. When you have multiple companies bringing in a couple thousand people to a town with about 50,000 people in it, it's a big deal. This is the second part of the growth in people.
So putting it all together, Ames's population is growing rapidly with no new housing in years, and most of these new people are bringing in (startup job or loan) money, so yeah, rents are skyrocketing. Des Moines is similar with the advent of 'silicon prairie' aka Silicon Valley ditching California.
Something not discussed are the Chinese students using their parents' money to buy housing and whatever else they can. In Ames we joked that if you saw a $100,000 luxury car cruising down the street, you can always win a bet that the person behind it is Chinese and under 25.
Most of the highest rent and home prices anywhere are near universities which are virtually all directly and indirectly government subsidized operations.
Leftists hate profits, corporations and high prices except in their own world. That is why they want the student loan gravy train to keep running and then forgive all the debt at taxpayer expense so they can start the whole process, again.
i'm not sure if that's true, that leftists hate profits.
i think they just hate *other* people to profit.
they like it just fine when they are the ones profiting.
Spot on. One fat middle-aged college administratror with an expense account = 20 people on welfare. 6 figure salaries, free lunches, and the right to push all kinds of people around.
L mike: Upvoted your post. I'm living in Ames now, and in my 22 unit apartment building ther are 4 or maybe 5 Mercedes SUV's belonging to international students. Your post pretty much summed up the situation here in Ames.
They are starting to put up more housing. A couple of multi-story (5?) luxury apartments right by the Memorial Union, more apartments out west, and ISU knocked down a couple of nearly 200 year old trees so they could put up another residence hall. Maybe they'll be able to get it done before the bubble bursts.
I saw those being put up just before leaving. It's too bad the old block had to go given its history, but it is what it is. The banks usually don't give out all the money at once so it'd be pretty awkward if ISU is left with half-built buildings just across the street.
Also, for part of the student loan issue, you remember how the rival bookstore went out of business? ISU pulled it off by first getting Dr. Quirmbach to pass a sales tax expemtion on the university bookstores only, followed by getting students permission to use student loans to buy books and supplies. Like I said, I've seen expensive books but some were going for $200+ right at the end. As a grad student I was done buying books after the first year, but I just can't believe the highway robbery combined with the outright snobbery of the professors. As you probably know the Des Moines Register posts public employee salaries, and while the grad students saw zero pay increases for a few years (slashing pay in real terms), every prof and the admins get 6%.
I am glad to be done with school; I hope there's a better alternative for any kids I have. Any thoughts on the straw poll being cancelled?
I guess my "Obama rent for clunckers" can go back up in the rental window.
Yellen must be so happy.
$1320 bucks for a 3br house? Fuck. That's the going rate for a 500sf studio flat in Hong Kong. America's still cheap.
Rental income is America's biggest business, by far.
America sucks who cares.
I've got a four bedroom house on five acres of land. One of the bedrooms is sitting idle. Ya can live in this fucking place fer free if you'll just mow the goddamn five acres for me every two weeks.
Got a good looking wife or daughters to fuck as a bonus??/
doesn't matter - they would just laugh at your small penis anyhow, as well as your inability to get an erection.
Sure but then I flick my tongue out to comb and eyebrow and they swoon.
Housing bubble 2.0 hits former owners for the second time. There is still more milking, raping, and looting to do.
It is crazy. People don't have so much money
yes they do. check your mail box. Lots of pre approved credit cards for you. Loads of cash.
Just keep kicking the can down the road until you kick the bucket.
They don't call them Land LORDS for nothing.
Shut the fuck up serfs and continue to work your 2 or 3 shitty jobs and cough up the rent.
There are always solutions
Living Small, Full Time in a 24ft Class C Motorhomehttps://www.youtube.com/watch?v=_o0rw_SnBoM
Even viaducts are no longer safe to park your Tri-wall refrigerator box.
dont you have some solar shit to shill, db? Cuz you ain't funny.
Sure, here you go, son.
https://www.youtube.com/watch?v=tX_RtklmHx8
How about this? I work for Amazon LOL
http://www.amazon.com/Complete-VertaMax-Inverter-Off-Grid-Battery/dp/B00...
Here in Seattle, there's a tech boom happening and a supply/demand issue. I think rents are actualy going up higher than indicated. We've added 60K new residents since 2010 and simply haven't built enough housing to keep up with the demand. And the influx is increasing. (Seattle has always been a boom/bust town).
Also traffic is so bad in the suburbs, there's a trend for most young techies to stay or move into the city where there's better mass transit. PLus the 3-4br house in the burbs is simply out of reach for most young couples (at least in commutable areas).
In my neighborhood alone - Columbia City, which is on the light rail, close to downtown and booming, there's 3 huge apartment buildings under construction which will add 1000 units. Plus endless teardowns of small older homes replaced by 4-6 townhomes on the same lot. Density and genfrication in action.
The area near Amazon HQ is nuts - so many cranes so much construction you'd swear you were looking at a Chinese city. They're hiring 10K's of new staff and the tech workers that come with it.
City wide there's a huge amount of condo/th/apt construction. I think prices will level off or go down one supply catches up (and thousands of units coming on line soon).
The net effect of this will be the movement of poor and lower middle class families out of the city and into the xburbs or further out. Seattle is def an anomoly from an urban perspective. I think there's a big correction coming once the boom is over, but i'm happy I bought in 2010, right nearish the bottom of the post 2008 bust and before this big run up..
Here in Seattle, there's a tech boom happening and a supply/demand issue. I think rents are actualy going up higher than indicated. We've added 60K new residents since 2010 and simply haven't built enough housing to keep up with the demand. And the influx is increasing. (Seattle has always been a boom/bust town).
Also traffic is so bad in the suburbs, there's a trend for most young techies to stay or move into the city where there's better mass transit. PLus the 3-4br house in the burbs is simply out of reach for most young couples (at least in commutable areas).
In my neighborhood alone - Columbia City, which is on the light rail, close to downtown and booming, there's 3 huge apartment buildings under construction which will add 1000 units. Plus endless teardowns of small older homes replaced by 4-6 townhomes on the same lot. Density and genfrication in action.
The area near Amazon HQ is nuts - so many cranes so much construction you'd swear you were looking at a Chinese city. They're hiring 10K's of new staff and the tech workers that come with it.
City wide there's a huge amount of condo/th/apt construction. I think prices will level off or go down one supply catches up (and thousands of units coming on line soon).
The net effect of this will be the movement of poor and lower middle class families out of the city and into the xburbs or further out. Seattle is def an anomoly from an urban perspective. I think there's a big correction coming once the boom is over, but i'm happy I bought in 2010, right nearish the bottom of the post 2008 bust and before this big run up..
Don't worry, don't worry! I just checked the BLS web site, there is no inflation. Wheew, for a second there, I thought food, and housing prices were going through the roof. We're safe.