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America's Homeless Industrial Complex - Causes & Solutions ...
Search domain californiapolicycenter.orghttps://californiapolicycenter.org/americas-homeless-industrial-complex-causes-solutions/
The alliance of special interests that constitutes what has now become the Homeless Industrial Complex are government bureaucracies, homeless advocacy groups operating through nonprofit entities, and large government contractors, especially construction companies and land development firms.
America's Homeless Industrial Complex - Causes & Solutions ...
Search domain californiapolicycenter.orghttps://californiapolicycenter.org/americas-homeless-industrial-complex-causes-solutions/
The alliance of special interests that constitutes what has now become the Homeless Industrial Complex are government bureaucracies, homeless advocacy groups operating through nonprofit entities, and large government contractors, especially construction companies and land development firms.
The same is true of the prison industrial complex, the elder care industrial complex, health care etc, foster system etc. The fact is falling on hard times is profitable for a lot of people. So what’s your solution? Let the homeless survive or die like Calcutta?
IMO, the only way for investors to make money on single family housing is through price appreciation. With all the expenses associated with owning a house in addition to the mortgage payment (taxes of numerous kinds, insurance, repairs, management fees, etc), you just can't get much, if any, positive cash flow unless you wait a decade or three and hope that inflation bails you out.
I just can't see investors willing to have zero (or negative) returns for a couple of decades in the hopes that they can cash in at some later date. I think it's a big gamble on housing inflation and that doesn't seem like a smart bet right now, IMO.
Maybe, but considering a lot of these companies started this ~10 years ago after the last crash, they probably already made a lot through price appreciation, so maybe they're just investing some of their profits in new inventory?
Also, ​"a decade or 3" is a pretty big range. If it's "a" decade, that's probably not a bad deal for them.
I'm not in the RE business, so maybe I'm way off here, but some very rough math:
$300K purchase.
$2500/month rent = $30k/year
-$10k/year in taxes/insurance/repairs = $20k/year total
= 15 years to pay it off. That doesn't seem bad (for a company that's not counting on immediate profits) considering the number of people that get 30 year loans
Quote:
Originally Posted by Avondalist
I'm pissed that Wall Street crashed the housing market, got bailed out, and then bought a ton of houses to rent out. That's just backwards and repugnant.
I agree. And I think the question now is are they possibly ultimately contributing to another crash (or at least downward trend)...
The local/regional investors, property companies can wreak just as much havoc if not more as a national company. Yes in certain neighborhoods a Wall Street company might affect prices or supply. But over all probably not. Right now the supply period is not there.
Recently sold a house where out of state investors/flippers came calling. But they were 'local' being they were an hour away. Alot flippers etc are not from that neighborhood. They come from the money supply.
The same is true of the prison industrial complex, the elder care industrial complex, health care etc, foster system etc. The fact is falling on hard times is profitable for a lot of people. So what’s your solution? Let the homeless survive or die like Calcutta?
No, the solution is to significantly tax non-homstead houses. It's pretty simple, but won't happen, because companies like in the OP will donate a ton to politicians to oppose it.
The local/regional investors, property companies can wreak just as much havoc if not more as a national company. Yes in certain neighborhoods a Wall Street company might affect prices or supply. But over all probably not. Right now the supply period is not there.
Recently sold a house where out of state investors/flippers came calling. But they were 'local' being they were an hour away. Alot flippers etc are not from that neighborhood. They come from the money supply.
The difference is flippers are at least putting the houses back on the market, and not turning them into permanent rentals.
No, the solution is to significantly tax non-homstead houses. It's pretty simple, but won't happen, because companies like in the OP will donate a ton to politicians to oppose it.
But what are you doing with the money from the taxes? It would still be distributed via social workers, put into housing and jobs programs, etc. wouldn't it?
But what are you doing with the money from the taxes? It would still be distributed via social workers, put into housing and jobs programs, etc. wouldn't it?
The RE taxes on the owner occupied homes could then be reduced.
Some of the big investors make enough on the homes to be free and clear in 7 years. In the long run, it will be a big thing since the zero rates will persist and force them to buy at higher price points as well as push other players into the real estate market. The large investment banks have announced that they're getting into the business.
It's currently mostly in the lower cost metropolitan areas like Atlanta.
In time, it probably will happen to commercial real estate as well. They have access to money and leverage that ordinary people don't have.
The RE taxes on the owner occupied homes could then be reduced.
I’m confused, how does that help the homeless problem? One of the biggest causes of homeless in some cities is due to real estate values that skyrocketed, to the point there is no longer affordable homes in a lot of areas.
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