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Old 10-10-2018, 01:48 PM
 
Location: El Pueblo de Nuestra Señora la Reina de los Ángeles del Río Porciúncula
13,545 posts, read 14,037,847 times
Reputation: 9663

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Quote:
Originally Posted by rruff View Post
Simple math. They currently tax that on the purchase price, and restrict increases in the tax, so people who bought a few years or decades ago are paying less. If they treat everyone equally then that % should go down if their goal is to collect the same amount.
You just explained exactly what Prop 13 is. The problem was that old people on fixed incomes eventually became priced out of their homes. Prop 13 fixed that.

If Prop 13 fails I'm outta here.
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Old 10-10-2018, 02:16 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,730,147 times
Reputation: 4206
Quote:
Originally Posted by Lovehound View Post
The problem was that old people on fixed incomes eventually became priced out of their homes.
No ones tax goes up unless their house appreciates. If their house appreciates and they can't afford the tax, then they can get a loan on equity to pay it.

Someone who has $1M in RE equity is not a charity case! I don't care how low their "fixed income" is.
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Old 10-10-2018, 02:27 PM
 
Location: SDL/PDX/RDU
4,297 posts, read 2,247,433 times
Reputation: 5153
I tend to believe it's a market failure in the sense that those in the market appear to forgo a "reasonable" return on their investment seeking a "high" return for their money.

We can argue all day on what's "reasonable" or "high", but when developers fail to provide adequate housing for large numbers of working wage people because, as is often cited, there's 'not enough money in it for them'. There's something very wrong with that.
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Old 10-10-2018, 02:39 PM
 
Location: El Pueblo de Nuestra Señora la Reina de los Ángeles del Río Porciúncula
13,545 posts, read 14,037,847 times
Reputation: 9663
Quote:
Originally Posted by rruff View Post
No ones tax goes up unless their house appreciates. If their house appreciates and they can't afford the tax, then they can get a loan on equity to pay it.

Someone who has $1M in RE equity is not a charity case! I don't care how low their "fixed income" is.
And somebody who has $200K in equity and living on SS? I'm too tired of the subject to explain it to you. Run the numbers of an old couple who has nothing but their house and their SS.

Quote:
Originally Posted by take57 View Post
I tend to believe it's a market failure in the sense that those in the market appear to forgo a "reasonable" return on their investment seeking a "high" return for their money.

We can argue all day on what's "reasonable" or "high", but when developers fail to provide adequate housing for large numbers of working wage people because, as is often cited, there's 'not enough money in it for them'. There's something very wrong with that.
You can blame investors if you want, but money goes where the profit is. "Affordable housing" is AFAIK not very profitable. It's usually built only when mandated.

Anger the investors by stomping on their profits and their money will flee to other more profitable sectors.
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Old 10-10-2018, 02:46 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,730,147 times
Reputation: 4206
Quote:
Originally Posted by take57 View Post
I tend to believe it's a market failure in the sense that those in the market appear to forgo a "reasonable" return on their investment seeking a "high" return for their money.

We can argue all day on what's "reasonable" or "high", but when developers fail to provide adequate housing for large numbers of working wage people because, as is often cited, there's 'not enough money in it for them'. There's something very wrong with that.
If you had the option of earning 10% on your money vs 5% which would you pick? It's isn't the developer's fault. They are just responding to the environment.

And... I've said it a few times... the market naturally corrects. If RE is too expensive, then wages will need to go up or people will eventually move... which will increase demand for workers (and wages). The problem occurs when people want to stay where they are while making crap wages, and expect someone to bail them out. It's resistance to reality.

I was a talking to woman the other day who said her daughter wanted to learn massage. I said great, you can make a good living doing that here. Then she said, no her daughter wants to move to Portland OR. I advised her to skip the degree, because she'll end up with a near MW job there. If she's lucky. But that's where all the cool kids go so they can hang out together! See the problem?
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Old 10-10-2018, 02:51 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,730,147 times
Reputation: 4206
Quote:
Originally Posted by Lovehound View Post
And somebody who has $200K in equity and living on SS? I'm too tired of the subject to explain it to you. Run the numbers of an old couple who has nothing but their house and their SS.
OK. Their RE tax would be ~0.5%/yr or $1k. If they can't afford that, then go to the bank and get an equity loan to pay it. Not that tricky.
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Old 10-10-2018, 03:05 PM
 
Location: El Pueblo de Nuestra Señora la Reina de los Ángeles del Río Porciúncula
13,545 posts, read 14,037,847 times
Reputation: 9663
Quote:
Originally Posted by rruff View Post
OK. Their RE tax would be ~0.5%/yr or $1k. If they can't afford that, then go to the bank and get an equity loan to pay it. Not that tricky.
We're discussing people who failed in retirement planning 101, while we millionaires pontificate.
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Old 10-10-2018, 03:08 PM
 
Location: SDL/PDX/RDU
4,297 posts, read 2,247,433 times
Reputation: 5153
Hey folks, I understand the concept of wishing to get the best return on investment, but if that's all you care about perhaps one should be running a hedge fund rather than a real estate venture. Like any business, if you choose to not hold yourself to some manner of social responsibility you shouldn't be surprised if (as the thread question eludes to) there's likely going to be some kind of government blow-back which is something nobody wants.
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Old 10-10-2018, 03:25 PM
 
5,220 posts, read 2,375,434 times
Reputation: 5111
Quote:
Originally Posted by take57 View Post
I tend to believe it's a market failure in the sense that those in the market appear to forgo a "reasonable" return on their investment seeking a "high" return for their money.

We can argue all day on what's "reasonable" or "high", but when developers fail to provide adequate housing for large numbers of working wage people because, as is often cited, there's 'not enough money in it for them'. There's something very wrong with that.

There is nothing at all wrong with that. Developers aren't under any obligation to provide housing to anyone. That there's not enough money in it for them is a perfectly legitimate reason to not undertake the project.
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Old 10-10-2018, 03:27 PM
 
5,220 posts, read 2,375,434 times
Reputation: 5111
Quote:
Originally Posted by take57 View Post
Hey folks, I understand the concept of wishing to get the best return on investment, but if that's all you care about perhaps one should be running a hedge fund rather than a real estate venture. Like any business, if you choose to not hold yourself to some manner of social responsibility you shouldn't be surprised if (as the thread question eludes to) there's likely going to be some kind of government blow-back which is something nobody wants.

Are you suggesting that the government will begin mandating that developers provide low-income housing?
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