Millions of Americans skipping payments as wave of defaults and evictions looms(npr.org)
npr.org
Millions of Americans skipping payments as wave of defaults and evictions looms
https://www.npr.org/2020/06/03/867856602/millions-of-americans-skipping-payments-as-tidal-wave-of-defaults-and-evictions-
591 comments
I love my section 8 tenants. Same here, they take good care of the place and the government doesn't miss rent payments.
Some counties even provide free legal help for landlords if their section 8 tenants do something bad. It's actually pretty low risk.
The main downside is the increased overhead of paperwork and inspections. The government wants to (rightly) make sure you aren't a slumlord so they do a lot more inspections.
Some counties even provide free legal help for landlords if their section 8 tenants do something bad. It's actually pretty low risk.
The main downside is the increased overhead of paperwork and inspections. The government wants to (rightly) make sure you aren't a slumlord so they do a lot more inspections.
I'm on the other side of the spectrum. I converted all my units to luxury units, and have had far far fewer tenant problems after the renovations and rate increases.
High paid tenants seldom miss payment - I've setup automatic EFT withdrawal from their accounts, so I don't even need to process checks, and they aren't really impacted by the rise in unemployment right now - most just work from home.
I think the bitter spot for being a landlord (especially now) is to manage low-mid income units. ...it's just a constant stream of problems - people moving in and out - single mom's that chronically cannot afford the rent - unregistered tenants - people that refuse to pay and refuse to move out - drug and police raids... like it was a total total nightmare.
Managing 12 low-mid income apartments was a full-time nightmare. Managing 12 high income lux units now takes about 4 hours every other weekend and is usually a pleasure to do.
High paid tenants seldom miss payment - I've setup automatic EFT withdrawal from their accounts, so I don't even need to process checks, and they aren't really impacted by the rise in unemployment right now - most just work from home.
I think the bitter spot for being a landlord (especially now) is to manage low-mid income units. ...it's just a constant stream of problems - people moving in and out - single mom's that chronically cannot afford the rent - unregistered tenants - people that refuse to pay and refuse to move out - drug and police raids... like it was a total total nightmare.
Managing 12 low-mid income apartments was a full-time nightmare. Managing 12 high income lux units now takes about 4 hours every other weekend and is usually a pleasure to do.
My wife discovered the same thing. You either want to manage section 8 housing or you want higher-income housing. Once you know the system and the case workers it's easy to deal with bad section 8 tenants. It takes a while to learn the ropes, though. The higher-end tenants are generally easy to work with as you mention. The problem now is that's where all the property managers are wanting to go!
Just for my own edification, is the problem market size?
Is it the case that most people are in the middle, with not enough section 8 and luxury qualified people to go around? In my naiveté, I thought that there would be more section 8 people. (Of course, I also thought they would be worse than the middle income people. So I guess that shows how much I know about it.)
Anyway, if the majority of the market are those low-mid people, I mean, that's a problem. I was under the impression that those people normally bought houses they couldn't afford and so didn't negatively impact the rental market that much. (Again, maybe just a stereotype I had?)
Is it the case that most people are in the middle, with not enough section 8 and luxury qualified people to go around? In my naiveté, I thought that there would be more section 8 people. (Of course, I also thought they would be worse than the middle income people. So I guess that shows how much I know about it.)
Anyway, if the majority of the market are those low-mid people, I mean, that's a problem. I was under the impression that those people normally bought houses they couldn't afford and so didn't negatively impact the rental market that much. (Again, maybe just a stereotype I had?)
Is it the case that most people are in the middle, with not enough section 8 and luxury qualified people to go around?
Exactly. Section 8 is difficult to get as there is a fixed allotment of housing available and it can take years to get your voucher.
The other thing that's surprising is how many people are renting their homes. My own naiveté had me believing renters lived in apartments. Not even close! Most renters live in houses in regular neighborhoods from the low-end to the high-end. There are higher-end neighborhoods near where I live where 20%-30% of the houses are being rented, not mortgaged. In lower-end neighborhoods the percentages are much higher. That was before the 2008 housing crises, the percentages have increased since.
Exactly. Section 8 is difficult to get as there is a fixed allotment of housing available and it can take years to get your voucher.
The other thing that's surprising is how many people are renting their homes. My own naiveté had me believing renters lived in apartments. Not even close! Most renters live in houses in regular neighborhoods from the low-end to the high-end. There are higher-end neighborhoods near where I live where 20%-30% of the houses are being rented, not mortgaged. In lower-end neighborhoods the percentages are much higher. That was before the 2008 housing crises, the percentages have increased since.
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My mom was obsessed with providing Section 8 housing and low income housing, the tenants were a mess every single time. I was put off on the entire concept and hassle of real estate, until I was exposed to inner city luxury housing. Which is priced in its own privileged tier to even get started as an investor.
Of course it comes down to the people, regardless of the psychological incentives. But maybe the incentives promote some poor behaviors enough that its such a shared experience of poor behaving tenants.
Of course it comes down to the people, regardless of the psychological incentives. But maybe the incentives promote some poor behaviors enough that its such a shared experience of poor behaving tenants.
I guess being good sometimes pay
I own an apartment in Rome that I rent because I don't live there anymore.
It's rented to a Bengali family that nobody wanted as tenants because they're immigrants and such (you can guess the reasoning behind it)
They used to bring the grocery home to my mother, so I gladly accepted to rent my house to them when they asked
They've been the best tenants I've ever had and due to covid they found themselves in the position of being one of the few local shops still open in the neighborhood, so their business didn't suffer much from the lockdown.
Many in Italy stopped paying the rent for 2-3 months as of now, but they always paid in time and in full, I asked them if they needed a cut on the rent to save some money, due to the bad situation, but they refused the offer.
So I'm installing air conditioning at my expenses in exchange
It's good when things go smoothly despites the odds
I own an apartment in Rome that I rent because I don't live there anymore.
It's rented to a Bengali family that nobody wanted as tenants because they're immigrants and such (you can guess the reasoning behind it)
They used to bring the grocery home to my mother, so I gladly accepted to rent my house to them when they asked
They've been the best tenants I've ever had and due to covid they found themselves in the position of being one of the few local shops still open in the neighborhood, so their business didn't suffer much from the lockdown.
Many in Italy stopped paying the rent for 2-3 months as of now, but they always paid in time and in full, I asked them if they needed a cut on the rent to save some money, due to the bad situation, but they refused the offer.
So I'm installing air conditioning at my expenses in exchange
It's good when things go smoothly despites the odds
Someone must be cutting onions in here.
What a great story.
What a great story.
Thank you for being a decent human. Is racism more prevalent in Italy ?
Thanks for the kind words!
I just did what it felt right
I'm inclined to say that racism in Italy is different from the general notion of it: I mean, there are certainly racists in Italy, no point in denying that, especially towards some ethnicities (Africans, middle Eastern and South Americans in particular, they are considered too loud and unreliable - coming from us it's really something - and often also worse than that) but Italians are mainly suspicious of what they don't know (yet) until they know them, like we still live in small state cities, surrounded by walls, that don't trust each other. But it's mostly a trust thing: still people from the north usually don't trust people from the south and vice versa. In Rome I've seen many times that Romans prefer Romans like them, just because it makes them feel safer. Until they realize they really don't like each other.
Think of it as "the evil you know".
I must also say that they are often wrong and that there is a good chunk of the population who really doesn't care where you come from and just loves being with others.
I just did what it felt right
I'm inclined to say that racism in Italy is different from the general notion of it: I mean, there are certainly racists in Italy, no point in denying that, especially towards some ethnicities (Africans, middle Eastern and South Americans in particular, they are considered too loud and unreliable - coming from us it's really something - and often also worse than that) but Italians are mainly suspicious of what they don't know (yet) until they know them, like we still live in small state cities, surrounded by walls, that don't trust each other. But it's mostly a trust thing: still people from the north usually don't trust people from the south and vice versa. In Rome I've seen many times that Romans prefer Romans like them, just because it makes them feel safer. Until they realize they really don't like each other.
Think of it as "the evil you know".
I must also say that they are often wrong and that there is a good chunk of the population who really doesn't care where you come from and just loves being with others.
I only spent a month and a half in Italy, almost all of it in Milan, but I was around italian families a lot. The north south thing really seemed like a big deal, though obviously for some more of a joke than others, as you say.
In at least half of the young families (kids aged elementary to high school) I was around in Milan, one or both parents were originally from the south. They spoke of it almost like how immigrants do: they'd moved north for better jobs/better life, with the implicit sacrifice of being close to family/environs where their real roots were. I guess the southerner stereotype to northerners was sneaky/mafia etc, while the reverse was something like overly bourgeois, slick without substance, moneygrubbing etc. Very interesting and a bit sad (that development in the country seems so uneven).
I never got to visit the south so if I ever get to go back I hope to spend just as much time in the south as I did in the north.
The only other place I know well with such strong and old regional beefs is South Korea and that's really only between two regions, plus people from Jeju stereotypically don't trust mainlanders I guess.
In at least half of the young families (kids aged elementary to high school) I was around in Milan, one or both parents were originally from the south. They spoke of it almost like how immigrants do: they'd moved north for better jobs/better life, with the implicit sacrifice of being close to family/environs where their real roots were. I guess the southerner stereotype to northerners was sneaky/mafia etc, while the reverse was something like overly bourgeois, slick without substance, moneygrubbing etc. Very interesting and a bit sad (that development in the country seems so uneven).
I never got to visit the south so if I ever get to go back I hope to spend just as much time in the south as I did in the north.
The only other place I know well with such strong and old regional beefs is South Korea and that's really only between two regions, plus people from Jeju stereotypically don't trust mainlanders I guess.
There's a similar dynamic in South Africa between Cape Town and Johannesburg. Cape Town is tourism, tech and surfing, Johannesburg is industry (mining, smelting, utilities) and 'business'. Cape Town has even earned the nickname of Slaapstadt (Sleep Town), a play on Kaapstadt, the Afrikaans name.
> In at least half of the young families (kids aged elementary to high school) I was around in Milan, one or both parents were originally from the south. They spoke of it almost like how immigrants do
That's correct.
A lot of families moved from the south to the north in the past 70 years and they lived the same experience you hear from migrants today: discrimination, poverty, segregation etc etc
So many moved to the point that at least half of the north, especially in Lombardy, is made by families with roots in the south (usually grandparents, many are from Sicily)
There are many popular stories about the infamous "we don't rent to people from the south" you could find on the listings all over the north (from Bologna to the Alps)
My parents moved in the late 60s from the country side 100kms south of Rome to the city to find a job as well
My uncles went to Germany, Belgium, Argentina and then have come back only because their parents were becoming old and needed support
I moved from Rome to Milan as well, not in the same conditions of course, I moved for a well payed job, but I still had to move to get it
It is so engrained in our recent history that it's taken for granted that if you are stuck in your homecity in the south the only way to change things is move to the north, that there is even a comic movie from the 80s titled "thanks to Apulia region for giving us the Milanese"
On the other hand people move to the south when looking for a better lifestyle, better climate, better food or just being closer to the sea, and many of those that moved to the north try to go back to where they are from as soon as possible
Including my parents that went back to their city in the country as soon as they retired, especially my father
The north is beautiful, the food is good, but the stereotype says that in the south everything is much better, and I somewhat agree with it. I can't help it, Milan is not Rome, it will never be. A risotto will never beat a carbonara. But that's just my opinion :)
Now that we live almost 800 Kms apart I see my parents rarely, especially my father who really enjoys being alone, away from the crowded city
He went to Rome only to work, he lived there for 50 years, raised two children, but he never really felt part of it, he never lost his accent and never took the Roman one.
So in a way in Italy we are all trying to go back home, one day.
That's correct.
A lot of families moved from the south to the north in the past 70 years and they lived the same experience you hear from migrants today: discrimination, poverty, segregation etc etc
So many moved to the point that at least half of the north, especially in Lombardy, is made by families with roots in the south (usually grandparents, many are from Sicily)
There are many popular stories about the infamous "we don't rent to people from the south" you could find on the listings all over the north (from Bologna to the Alps)
My parents moved in the late 60s from the country side 100kms south of Rome to the city to find a job as well
My uncles went to Germany, Belgium, Argentina and then have come back only because their parents were becoming old and needed support
I moved from Rome to Milan as well, not in the same conditions of course, I moved for a well payed job, but I still had to move to get it
It is so engrained in our recent history that it's taken for granted that if you are stuck in your homecity in the south the only way to change things is move to the north, that there is even a comic movie from the 80s titled "thanks to Apulia region for giving us the Milanese"
On the other hand people move to the south when looking for a better lifestyle, better climate, better food or just being closer to the sea, and many of those that moved to the north try to go back to where they are from as soon as possible
Including my parents that went back to their city in the country as soon as they retired, especially my father
The north is beautiful, the food is good, but the stereotype says that in the south everything is much better, and I somewhat agree with it. I can't help it, Milan is not Rome, it will never be. A risotto will never beat a carbonara. But that's just my opinion :)
Now that we live almost 800 Kms apart I see my parents rarely, especially my father who really enjoys being alone, away from the crowded city
He went to Rome only to work, he lived there for 50 years, raised two children, but he never really felt part of it, he never lost his accent and never took the Roman one.
So in a way in Italy we are all trying to go back home, one day.
> if they can't pay the hundred bucks the government won't I sure don't care
I used to have this same mentality. Until the person who was renting one of my properties decided to lie about certain issues (like claiming a shampoo bottle lodged down one of the toilets was there for years). When I decided to not renew the lease with that tenant, they decided to cause considerable damage to our property.
Sometimes, when things come easy to people, they don't appreciate it. Holding people accountable helps them lift themselves up too.
I used to have this same mentality. Until the person who was renting one of my properties decided to lie about certain issues (like claiming a shampoo bottle lodged down one of the toilets was there for years). When I decided to not renew the lease with that tenant, they decided to cause considerable damage to our property.
Sometimes, when things come easy to people, they don't appreciate it. Holding people accountable helps them lift themselves up too.
Anyone who thinks anything comes easy because you're poor hasn't been poor except in the poor college student "working" their way through the college daddy is paying for type of poor.
Your experience points to the human race sucking not poor people.
Your experience points to the human race sucking not poor people.
There is a significant difference in incentives, though. How many well-to-do people get evicted? Not a lot. And if they do, they can probably afford a higher deposit on their next apartment to offset the perceived risk. And they probably have the money to pay market rate, or above market rate, to get somewhere to live. And even if they can't find something fast, they can probably afford to get a hotel or an AirBnB for a little while so they have somewhere to sleep at night. They will likely keep their job through an eviction to maintain a stable employment record.
People living in poverty don't have those luxuries. Their chances of having an eviction record are higher. Their ability to pay a higher deposit are drastically lower, since just staying alive consumes basically all of their paycheck. The chances of them being able to pay above market rates are basically nil; their chances of being able to pay market rates are not great. If they get evicted, there is a significant chance they end up homeless. There is a significant chance their new circumstances will result in them losing their job as they struggle to find somewhere to live, because priority 1 is not sleeping in a shelter (which I absolutely understand). To add on to that, they might have children who also follow them into their new circumstances. 28.9% of children below 50% of the federal poverty line experience an eviction before they turn 15, and 25.6% of children between 50% and 100% of the federal poverty line experience an eviction before they turn 15.
All of which is to say, the possibility of eviction is far more threatening to people living in poverty. Their lives are not cushy even when they have stable housing. I can absolutely understand that losing their housing could be the straw that broke the camel's back, and they lash out irrationally. I don't think they suck. In fact, they're probably stronger than I am, I don't think I could endure the things they deal with on a daily basis. But I also don't discount the possibility that they react more vehemently to losing their housing than someone who has less to lose.
This is a situation where I think the private sector does a poor job of handling the situation. In a market where there is perpetually more demand than supply (who has a housing glut, other than Detroit?), there is always going to be some bottom percent of less profitable potential buyers who get screwed. For non-necessary goods, this is fine, but not for housing. I don't think any first world countries should have citizens that have persistent worries about how long they will have a roof over their heads.
People living in poverty don't have those luxuries. Their chances of having an eviction record are higher. Their ability to pay a higher deposit are drastically lower, since just staying alive consumes basically all of their paycheck. The chances of them being able to pay above market rates are basically nil; their chances of being able to pay market rates are not great. If they get evicted, there is a significant chance they end up homeless. There is a significant chance their new circumstances will result in them losing their job as they struggle to find somewhere to live, because priority 1 is not sleeping in a shelter (which I absolutely understand). To add on to that, they might have children who also follow them into their new circumstances. 28.9% of children below 50% of the federal poverty line experience an eviction before they turn 15, and 25.6% of children between 50% and 100% of the federal poverty line experience an eviction before they turn 15.
All of which is to say, the possibility of eviction is far more threatening to people living in poverty. Their lives are not cushy even when they have stable housing. I can absolutely understand that losing their housing could be the straw that broke the camel's back, and they lash out irrationally. I don't think they suck. In fact, they're probably stronger than I am, I don't think I could endure the things they deal with on a daily basis. But I also don't discount the possibility that they react more vehemently to losing their housing than someone who has less to lose.
This is a situation where I think the private sector does a poor job of handling the situation. In a market where there is perpetually more demand than supply (who has a housing glut, other than Detroit?), there is always going to be some bottom percent of less profitable potential buyers who get screwed. For non-necessary goods, this is fine, but not for housing. I don't think any first world countries should have citizens that have persistent worries about how long they will have a roof over their heads.
I don't disagree. I hope I didn't come across any other way.
You said "when things come easy to people, they don't appreciate it" referring to one of your Section 8 tenants.
If you didn't mean to imply that housing comes easy to poor people who are on Section 8, then what did you mean?
If you didn't mean to imply that housing comes easy to poor people who are on Section 8, then what did you mean?
That a $0 copay may lead to different behavior than a $50 copay?
You "It's not what you did, it's that you lied"ed a tenant who lied to avoid being kicked out, in order to justify kicking them out?
Yeah, it sounds like moralizing to avoid coming across as ignorant of class issues. However, ironically, it gives you away, because people who think that's excusable are generally ignorant of class issues.
Yeah, it sounds like moralizing to avoid coming across as ignorant of class issues. However, ironically, it gives you away, because people who think that's excusable are generally ignorant of class issues.
What if the bottle was there for years?
The funny part about that shampoo bottle is that it's the same kind that they keep over the toilet in the cabinet... The reaction when I showed them the bottle was priceless.
Why did they lie? They feared you would kick them out? The horror of that conversation? You are ofc not responsible for the formula but... The most productive approach is probably to beg you for mercy at your feet?
No clue why they did. It was one thing after another, so it wasn't just the bottle issue. After a few inspections and things not being well kept, I decided it was best to not renew.
Do you honestly believe I expected them to beg for mercy at my feet? You need a reality check. The problem is that you don't fully understand the situation, the background, etc.
Do you honestly believe I expected them to beg for mercy at my feet? You need a reality check. The problem is that you don't fully understand the situation, the background, etc.
Of course you don't expect that. You should pick the best candidates within the parameters of the law. Your laws put them at your mercy. Here in the Netherlands it is almost the other way around. (not ideal at all)
And yes, from your comments we cant understand nor judge the situation at all. Even if you would describe it in great detail it would merely be one side of the story.
People can at times end up in a downwards spiral of crap. A mix of stuff that is their own fault and things they couldn't do anything about. At some point one may throw the hands into the air and get careless and sloppy about it. You should obviously get rid of people like that but it isn't like they stop existing when you do.
And yes, from your comments we cant understand nor judge the situation at all. Even if you would describe it in great detail it would merely be one side of the story.
People can at times end up in a downwards spiral of crap. A mix of stuff that is their own fault and things they couldn't do anything about. At some point one may throw the hands into the air and get careless and sloppy about it. You should obviously get rid of people like that but it isn't like they stop existing when you do.
> when things come easy to people
I think you have a very misguided idea of what it's like to live in poverty.
I think you have a very misguided idea of what it's like to live in poverty.
I think you have a very misguided idea of what it's like to be a landlord....and perceptions of who/what 'landlords' (a very unfortunate term) are from some tenants... no good deed goes unpunished etc. Plenty of great people around but you have to be very careful who you rent to...
For most of my adult life (now I'm 34) I have spent 30-50% of any paycheck I've received on rent.
In my country (Ireland) over the previous two generations, houses went from dirt cheap to extremely expensive. In the generation that came of age in the late 80s and early 90s, you could work a normal job and buy a house, easily. If you had a good job, you could buy several houses.
Now, my generation. We came too late. Houses now cost so much that you will be en-debted to a bank for life if you buy one. Now we have a rent crisis. For many people, they can barely even afford to rent a house and buy basics like food. Meanwhile, anyone who was lucky enough to be a bit older and smart enough to jump on the property wagon when it was cheap, they are rolling in money. They earn thousands of euros from doing essentially nothing except be born in the right generation.
It's very hard not to look at them, look at the hardships of the people my age who struggle to pay rent, and not think of landlords as social parasites.
In my country (Ireland) over the previous two generations, houses went from dirt cheap to extremely expensive. In the generation that came of age in the late 80s and early 90s, you could work a normal job and buy a house, easily. If you had a good job, you could buy several houses.
Now, my generation. We came too late. Houses now cost so much that you will be en-debted to a bank for life if you buy one. Now we have a rent crisis. For many people, they can barely even afford to rent a house and buy basics like food. Meanwhile, anyone who was lucky enough to be a bit older and smart enough to jump on the property wagon when it was cheap, they are rolling in money. They earn thousands of euros from doing essentially nothing except be born in the right generation.
It's very hard not to look at them, look at the hardships of the people my age who struggle to pay rent, and not think of landlords as social parasites.
This is a problem for our generation actually. The two generations before us became rent seekers about everything and from what I can see %90 of current population is unable to acquire significant income to buy anything meaningful. We are going back to feudal times, with minority of population owning everything and others paying for the privilege of using them.
I think a big part of this is that suburbanization created a tremendous amount of (government subsidized via infrastructure) value that in many metro regions has all been scooped up now. There’s not much left to build outward, no arbitrage, and not enough political will to fix it (or: too many people benefitting from capturing the value).
And in combination globalization/corporatization has put a lot of high paying jobs in a small number of areas.
In my opinion it’s basically generational warfare or at least a hidden retirement tax paid for by professionals in booming cities for old people who happened to own property in those cities. Even if you don’t subscribe to that hot take, it should be uncontroversial that property values massively outstripping wages in some areas reduces quality of life and contributes to inequality.
And in combination globalization/corporatization has put a lot of high paying jobs in a small number of areas.
In my opinion it’s basically generational warfare or at least a hidden retirement tax paid for by professionals in booming cities for old people who happened to own property in those cities. Even if you don’t subscribe to that hot take, it should be uncontroversial that property values massively outstripping wages in some areas reduces quality of life and contributes to inequality.
I wonder if the current behavior can change if majority of companies start allowing remote work for a wide area of job families. I think we are already starting to see this in Bay Area with the introduction of remote work in leading tech companies.
Affordable housing/having roof over your head is a massive problem for everyone but the super wealthy. House costs in the western world are wildly out of whack with median incomes and whether you rent or own a disproportionate amount of your income is gone on this. The 'Rich Dad, Poor Dad' house flipping and rental era did enormous damage to society, giving the illusion property owners are primarily rent seekers. (Slightly ironic on HackerNews since so many are now paid for working on software for rent rather than being purchased outright).
The reality of owning rental property is often one of breaking even and spending money for repairs and new appliances that must be done now, as opposed to when you have the money in the bank for your own place. Finding good tenants is like Russian Roulette. A friend's mother died and she rented the house to a man without doing proper background checks. He showed up once and was never seen again after saying a 'friend' would move in some furniture. That 'friend' was a woman who changed the locks, never paid any rent and was seen bringing large packs of dogs in by neighbors. After months of expensive litigation the woman suddenly left on the eve of final eviction. The house had been trashed with every room used to keep dogs in for her 'dog walking' business. The place stunk and there was drug paraphernalia and needles everywhere. It cost thousands more to restore the house to livable condition. Horror stories like this are not uncommon, These are not 'rent seekers', just ordinary people renting out houses and flats, often under considerable financial stress themselves. Another (also female) friend answered a home wanted ad on a lamp post for a section 8 person and rented a small unit in her garden to her out of the kindness of her heart. That person then called social services after harassing her 'landlord' and told them the person she was renting from was insane. She made her 'landlord's' life hell for months until she was finally dealt with.
The solution is far more affordable housing but how we get back to that 1960's era English and Irish council housing model I have no idea in the current political and financial climate...
The solution is far more affordable housing but how we get back to that 1960's era English and Irish council housing model I have no idea in the current political and financial climate...
> Plenty of great people around but you have to be very careful who you rent to...
This goes both ways. You have to be careful who you rent from, too.
Of all the investment opportunities available to people, I'm not particular sympathetic to purchasing property to seek rents.
This goes both ways. You have to be careful who you rent from, too.
Of all the investment opportunities available to people, I'm not particular sympathetic to purchasing property to seek rents.
> Of all the investment opportunities available to people, I'm not particular sympathetic to purchasing property to seek rents.
If forbidding renting properties to tenants would solve problems, I would be on your side.
People will always need to rent. A society has to allow them to without allowing them to be exploited. But once you allow renting, you have to protect property owners from tenant caused damage as well.
I'm not saying we're there - we may be far from it. But renting is not only useful, it is necessary.
If forbidding renting properties to tenants would solve problems, I would be on your side.
People will always need to rent. A society has to allow them to without allowing them to be exploited. But once you allow renting, you have to protect property owners from tenant caused damage as well.
I'm not saying we're there - we may be far from it. But renting is not only useful, it is necessary.
Think lease-to-buy. That way the tenant has skin in the game. MY house was a school project. It was absurdly cheap to build as the construction workers had to pay to build it. If you account for market value the rent paid for the place 4-5 times by now. If you only take the original construction cost + maintenance its been paid for an absurd number of times, so many times over that I don't want to think about it.
We can at least lower the rent down to zero over [say] 40 years but it would be more reasonable to make the tenant the owner after he paid for the place 3 times over.
We can at least lower the rent down to zero over [say] 40 years but it would be more reasonable to make the tenant the owner after he paid for the place 3 times over.
@majormajor Absolutely. People are untrustworthy on both sides. I've had the stress of being evicted by an unscrupulous San Francisco property shark in the past, and also know people who have had to spend large sums to evict sketchy people and then thousands more to make repairs. It cuts both ways...
When we talk about 'rent seeking' it's usually not about actual rental of property, which fills a very real need in society.
Maybe it's different in other parts of the world but where I live, rent seldom covers the mortgage on a property, let alone all other expenses. The profit, if any, generally comes from capital gains when selling the property (which right now isn't on the cards for pretty much anyone.)
Maybe it's different in other parts of the world but where I live, rent seldom covers the mortgage on a property, let alone all other expenses. The profit, if any, generally comes from capital gains when selling the property (which right now isn't on the cards for pretty much anyone.)
For Germany, the profits usually come from rent itself as well as capital gains, at least in the cities.
I'm a member and live in a housing complex owned by a cooperative. The rent you'll pay in this kind of setting is at the lower end of the market, the services you get are at the upper end. Being a cooperative means I own shares, so I get dividends and balance sheets etc. Even with this great (for renters) setup, they still pay out 4% dividends and expand like crazy (not to produce more dividends but to provide more apartments). They could pay out much more than 4% but they don't want to optimize for profit and make it an investment, the dividends are meant to incentivize members to invest/save more than legally required.
The place I lived at previously had higher rents and less services. I don't know how much of a profit they made annually, but I'm sure it wasn't anywhere close to 4%.
I'm a member and live in a housing complex owned by a cooperative. The rent you'll pay in this kind of setting is at the lower end of the market, the services you get are at the upper end. Being a cooperative means I own shares, so I get dividends and balance sheets etc. Even with this great (for renters) setup, they still pay out 4% dividends and expand like crazy (not to produce more dividends but to provide more apartments). They could pay out much more than 4% but they don't want to optimize for profit and make it an investment, the dividends are meant to incentivize members to invest/save more than legally required.
The place I lived at previously had higher rents and less services. I don't know how much of a profit they made annually, but I'm sure it wasn't anywhere close to 4%.
> rent seldom covers the mortgage on a property
Don't forget that "covering the mortgage" involves building the landlord's equity, so it's not as if this portion is lost to the bank while the landlord has to depend on appreciation. If I "only just cover the mortgage" while renting for the entire term of the mortgage on a house that doesn't appreciate above inflation, the landlord still goes from owning 20% of a house to 100% of a house over that term.
Don't forget that "covering the mortgage" involves building the landlord's equity, so it's not as if this portion is lost to the bank while the landlord has to depend on appreciation. If I "only just cover the mortgage" while renting for the entire term of the mortgage on a house that doesn't appreciate above inflation, the landlord still goes from owning 20% of a house to 100% of a house over that term.
True but there are a lot of additional costs (maintenance, council rates, depreciation) to owning a house on top of the mortgage. Again only speaking for myself but I have a small rental property and the rent basically only covers the interest plus expenses.
I wasn't in it to seek rents, we were nearly breaking even. It happened to be a place I previously lived in and it was easier to rent than to sell during the great recession.
> Plenty of great people around
No offense but bullshit.
In my experience most people serve their own interests. Commercial enterprises in fact select for those who serve their own interests over morality because those parties are most likely to succeed.
In America you are lucky if your interests coincide sufficiently with the owner class that you can both get along productively. Expecting beneficence as well is unproductive.
No offense but bullshit.
In my experience most people serve their own interests. Commercial enterprises in fact select for those who serve their own interests over morality because those parties are most likely to succeed.
In America you are lucky if your interests coincide sufficiently with the owner class that you can both get along productively. Expecting beneficence as well is unproductive.
@michaelmrose 'In my experience most people serve their own interests'. yes, and that includes renters...
Right, but in the case of renters, "serving their own interests" means establishing the fundamental right of having a place to live. That is important at a much deeper level than landlords rights, which involves making money from land and property ownership beyond what is required for their own domicile.
You don't have much of a choice outside of what your rental criteria is and if you take section 8 due to fair housing laws.
This is always true regardless of money or social status.
enriquto(1)
You think rich people don't cause damage?
How do you know this? I think their point remains. Someone who gets a hand out, or wins $, as an example, will probably not appreciate it the same as if someone busted their ass for it.
Also, people often have a short memories when it comes to people that help them out financially. They might remember and appreciate it more if you help them move, or help them learn a craft.
Also, people often have a short memories when it comes to people that help them out financially. They might remember and appreciate it more if you help them move, or help them learn a craft.
How is that even a controversial statement? It's a well known phenomenon in behavioral economics.
There was a story about how charging some nominal amount for a mosquito net led to more consistent usage and lower malarial rates, than if they just gave the net for free.
Why? Because the "price" of something is a signal as well. If it's free, who cares? If you paid something, well then it's yours and you should look after it.
There was a story about how charging some nominal amount for a mosquito net led to more consistent usage and lower malarial rates, than if they just gave the net for free.
Why? Because the "price" of something is a signal as well. If it's free, who cares? If you paid something, well then it's yours and you should look after it.
The rich kid, trust fund baby has great credit and can pay cash. But expect damage and a huge legal fight to evict.
Do you have any evidence that they did this because the government assisted them with their housing payments?
If you read OP, he chose not to renew their lease and this caused them to do damage. I think the suggestion here is if a landlord chooses not to renew the lease of qualified tenants, the tenants will voluntarily leave.
No, but the point was to ensure people pay what they're expected to pay. Not to give them a handout.
That's on OP to decide for themselves, though, not you.
What counts as a handout these days? A tech job that pays $50k-$100k over productivity? ("The company has been losing money since its founding, but we need a rockstar engineer so we can survive long enough to get bought by Facebook.")
I'm not sure we have any idea of the real value of things these days, including what work is worth. Credit has distorted the system; just because someone who is work full-time (however many jobs that takes) can't pay the rent rate the market seems to be dictating doesn't mean someone stepping in to fill the gap is giving them a "handout".
I'm not sure we have any idea of the real value of things these days, including what work is worth. Credit has distorted the system; just because someone who is work full-time (however many jobs that takes) can't pay the rent rate the market seems to be dictating doesn't mean someone stepping in to fill the gap is giving them a "handout".
That is actually the literal definition of a handout.
It is not. They are not "needy." The market, pardon my language, fucked up either their compensation, or the rental rate, or both. This is the failure of an economic system to properly account for a worker's labor and deliver the shelter designated in the social contract, not an oversight or negligence on the worker's part. Especially with unions defanged or non-existent.
It's not charity, it's account-settling.
It's not charity, it's account-settling.
The idea that 'anyone who labors is ipso facto entitled to shelter' is new to me in the context of social contract theory. Where does this idea originate?
A lot of people would consider it an example of basic humanity.
Widespread homelessness is a bad look for any culture that likes to see itself as civilised.
Widespread homelessness is a bad look for any culture that likes to see itself as civilised.
...Locke's social contract. This is its basic premise. People consent to performing labor not directly related to their survival, and in exchange, the state resolves to provide the necessities that are not guaranteed by that specialized labor. If I work full time and can't afford food and shelter, why would I continue to work? Further, if there are structures preventing me from subsisting, away from a state which will not secure my livelihood in exchange for my labor, why would I not dismantle those structures?
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> I used to have this same mentality. Until the person who was renting one of my properties decided to lie about certain issues (like claiming a shampoo bottle lodged down one of the toilets was there for years). When I decided to not renew the lease with that tenant, they decided to cause considerable damage to our property.
Surely the lesson here is that "this person was a criminally inconsiderate jerk", not "all Section 8 tenants are untrustworthy". (cr__ put it more punchily while I was posting: https://news.ycombinator.com/item?id=23409805 .)
> Sometimes, when things come easy to people, they don't appreciate it. Holding people accountable helps them lift themselves up too.
How does denying housing to someone who needs it help them lift themselves up?
Surely the lesson here is that "this person was a criminally inconsiderate jerk", not "all Section 8 tenants are untrustworthy". (cr__ put it more punchily while I was posting: https://news.ycombinator.com/item?id=23409805 .)
> Sometimes, when things come easy to people, they don't appreciate it. Holding people accountable helps them lift themselves up too.
How does denying housing to someone who needs it help them lift themselves up?
There is a 'blood from a stone' aspect from lower income tenants. If they trash a house and cause six figure damages to your property, your not getting your money back, and typically landlord insurance does not cover intentional damage:
https://webcache.googleusercontent.com/search?q=cache:CoWtuC...
Also people growing up in poverty experience higher stress, so the probability of them doing the 'going mental' thing is higher.
Many mom & pop and breaking even on a mortgage landlords cannot afford that kind of catastrophic loss.
https://webcache.googleusercontent.com/search?q=cache:CoWtuC...
Also people growing up in poverty experience higher stress, so the probability of them doing the 'going mental' thing is higher.
Many mom & pop and breaking even on a mortgage landlords cannot afford that kind of catastrophic loss.
If a rich person or rich person's kid cause this damage. Expect them not to pay and expect lawsuits.
You have to be careful who you rent to. Sometimes someone down on their luck would make a much less demanding and better tenant overall. Be careful chasing away the poor because they actual need your place and may take better care.
You have to be careful who you rent to. Sometimes someone down on their luck would make a much less demanding and better tenant overall. Be careful chasing away the poor because they actual need your place and may take better care.
You can get vandalism insurance. I don't know any landlord that does get it, though.
Vandalism insurance doesn't necessarily cover intentional damage by tenants on a property.
As a challenge, I would like you to find an landlord insurance policy that explicitly covers intentional damage by a tenant and a price estimate on the internet, because I'm having a hard time finding it!
As a challenge, I would like you to find an landlord insurance policy that explicitly covers intentional damage by a tenant and a price estimate on the internet, because I'm having a hard time finding it!
I'm not sure where you jumped to the conclusion about denying housing. I have no problems with section 8. I gladly accept section 8. What I have a problem with is (and I speak from first hand experience), is allowing someone who is on section 8 to not pay their portion. I allowed this, got burned and learned a lesson.
I thought I was being kind and "helping them out". When, in reality, that individual didn't appreciate it and they didn't take better care of the place because of it. When other factors (e.g. the lying) caused me to not want to renew with the tenant, they caused over 10k damage and flooded my house in retaliation.
I thought I was being kind and "helping them out". When, in reality, that individual didn't appreciate it and they didn't take better care of the place because of it. When other factors (e.g. the lying) caused me to not want to renew with the tenant, they caused over 10k damage and flooded my house in retaliation.
> I'm not sure where you jumped to the conclusion about denying housing.
I am sorry that I read too quickly, and misunderstood your point, which I think I now understand. Although I see now that you specifically quoted your parent's point "if they can't pay the hundred bucks the government won't I sure don't care" before disagreeing with it, I reacted too quickly and thought incorrectly that you were disagreeing with the parent's broader point about why it was good to have Section 8 tenants.
I am sorry that I read too quickly, and misunderstood your point, which I think I now understand. Although I see now that you specifically quoted your parent's point "if they can't pay the hundred bucks the government won't I sure don't care" before disagreeing with it, I reacted too quickly and thought incorrectly that you were disagreeing with the parent's broader point about why it was good to have Section 8 tenants.
One or even a few bad experiences shouldn’t mean disregarding a whole block of people, either
[deleted]
> Sometimes, when things come easy to people, they don't appreciate it. Holding people accountable helps them lift themselves up too.
Yea I’m invoking Poe’s law on this coming from a landlord. Are you trolling?
Yea I’m invoking Poe’s law on this coming from a landlord. Are you trolling?
I would think not.
I assume section 8 is our equivalent of Housing Benefit. I know plenty of landlords who wont accept HB tenants because properties have come back absolutely trashed before.
I assume section 8 is our equivalent of Housing Benefit. I know plenty of landlords who wont accept HB tenants because properties have come back absolutely trashed before.
Isn’t that the risk rent is supposed to ameliorate? Otherwise where is the risk of renting property that justifies a middleman?
It is a risk, and any good business man/women will work to minimise risk.
Bless you for taking a chance on the less fortunate. It sounds like you treat your tenants like people and they in turn repay you in something way more valuable than money: their time and kindness.
You're very lucky. Rented to a single mother with two teenage sons. The teenage sons that decided to strip down living trees of their branches, to make bonfires for parties in the backyard. Two trees are severely damaged, and anything that was burnable in the landscape is burnt. I don't even know how to go about pricing out the damage. Insurance is paying for their rent, because the last house they lived in burned down.
Sent her a strongly worded email. She promised not to make more bonfires. But I was there this week, and more branches where hacked off, and one tree is almost hacked of its bark 60% around. Can't sleep at night, getting anxiety that they will burn the place down. They're to move out before the end of the month.
I'm not a lawyer but reddit's r/legaladvice seems to enjoy referring to people to tree lawyers. From what I gather there's a lot of money involved in tree laws. And if you've got picture evidence that's especially loved by lawyers.
It probably isn't worthwhile to litigate against Section 8 voucher recipients. Not much in terms of assets to recover for your monetary damages.
Litigate against the tenant? You're probably right. But insurance? Maybe.
Every time I see comments like this, and no direct offense intended, It always strikes me as coming from somebody who has never filed large insurance claims before. Been seeing this so much with riots lately, "oh you have insurance right, why you mad about your business getting destroyed?". If only it was that simple.
Watching Louis Rossman's videos on insurance recently has given me a whole new perspective on the subject. It's amazing just how much they get away with.
I've seen a lot of shady insurance practices of trying to get out of paying claims, but that "pandemic insurance won't pay for coronavirus because sars-covid2 is not specifically mentioned in the policy" takes the cake. The policy actually specifically says that it covers "flu and sars and other types of coronaviruses".
The fact that they are trying to waste people's time and money to litigate that out where they most certainly will not win is just unconscionable.
The fact that they are trying to waste people's time and money to litigate that out where they most certainly will not win is just unconscionable.
Have not seen those yet but this should be a friendly reminder that insurance companies jobs are literally to do everything they possibly can to not pay you any damages or the least amount in damages. They are after all for profit organizations so whatever they can do to keep as much cash as possible is the goal.
Depends on the insurer too. Riots might not be covered. Neither was pandemic. Sucks to be a small business right now. Anyone got first hand experience with SBA loans?
Travel insurance did not cover my 2 week vacation I had planned in Florida in May. They would only cover it if I or a family member who was traveling with me was sick. I count myself lucky to have a job that I can do from home. Others have it way worse right now.
If riots aren't covered in cities and neighborhoods with historical precedent of civil unrest, I don't think that's anyone's fault but the policy provider's.
Why the provider and not the purchaser who chose that insurance? It’s spelled out in the contract what you’re buying (and paying for).
"If riots aren't covered" the clause won't be in any contract to begin with.
I think that's generally false. Policies are generally written to cover a broad set of risks (which would include riots, terrorism, and acts of war) and then have exceptions listed specifically. It would be rare in my experience for property insurance to itemize the types of losses they cover.
As an example, my policy covers general losses arising from physical damage, but then explicitly excludes losses from earthquakes, floods, oil spills, and acts of war.
If I buy only that coverage and a flood or earthquake damages my property, it's not my insurance company's fault that I'm not covered.
As an example, my policy covers general losses arising from physical damage, but then explicitly excludes losses from earthquakes, floods, oil spills, and acts of war.
If I buy only that coverage and a flood or earthquake damages my property, it's not my insurance company's fault that I'm not covered.
What I'm saying is obviously true. What you seem to be concerned about is that you think the premise is false. If that is so, you haven't really communicated that...
Exactly. There's reason stores are proactively boarding up their store fronts, etc. to mitigate the change of having to go through the horrendous loses of business loss, and fighting insurance companies for money.
My dad was an insurance adjuster. He loved denying claims more than anything. "I'm not good at math, but I sure can subtract!" Fucker had a major power trip. Also had a slight anti-corporate bent, so he loved approving claims too.
He loved denying claims and he loved approving claims? How does that not completely cancel out, except perhaps for "he loves his job"?
He did love his job. He enjoyed handling hundred-million dollar checks, among other things. But the glee that he got out of denying a claim was perverse.
The largest insurance claim I've had was for a little over $5k for a vehicle repair after collision while avoiding a pedestrian in the street. I'm not sure if you think that's "large" but it was very painless to do IMO.
That's not large in this context. It would need to be large enough to cover several thousand pounds of legal defense fees to investigate and argue against the claim. So at least several tens of thousands of dollars.
Source: been through insurance claim on a business that burnt to the ground with months of finished product stock (and which our accountant had accidentally under-insured. Very painful!)
Source: been through insurance claim on a business that burnt to the ground with months of finished product stock (and which our accountant had accidentally under-insured. Very painful!)
Nope, not large.
A friend had an Aston Martin that caught on fire. About a $120k car. It took months of investigations to close that claim. Insurance pointed finger at AM, AM wanted their own investigator, fire inspector involved, etc.
And that’s not even large relative to a house or business.
A friend had an Aston Martin that caught on fire. About a $120k car. It took months of investigations to close that claim. Insurance pointed finger at AM, AM wanted their own investigator, fire inspector involved, etc.
And that’s not even large relative to a house or business.
> And that’s not even large relative to a house or business.
It's way worse for a business, when I went to the MDRS for a week the bistro's kitchen in our Flagship restaurant went up in flames. The cause was unknown, but all in we lost 4.5 weeks of work due to unnecessary down time, not including the equipment repairs, contractor labor and misc costs because the city's investigators wouldn't come out to assess the damage in the allotted time slot to investigate and approve the repairs because of snow (IT'S COLORADO!) and then the Insurance stonewalled and tried to delay things further by not playing nice with the city that delayed reopening.
All told I wouldn't be surprised if we lost over a couple 100ks in lost profits and limited operational costs (we still had the bar/grill upstairs) and having to rebuild the Kitchen plus labor. Corporate paid us bonuses, which were really just 1/3 of our normal pay to help offset expenses, because of limited hours.
Bourdain was right: restaurants really are horrible businesses. Insurance which is mandatory, compounded with local government regulations and approval, makes it way worse.
It's way worse for a business, when I went to the MDRS for a week the bistro's kitchen in our Flagship restaurant went up in flames. The cause was unknown, but all in we lost 4.5 weeks of work due to unnecessary down time, not including the equipment repairs, contractor labor and misc costs because the city's investigators wouldn't come out to assess the damage in the allotted time slot to investigate and approve the repairs because of snow (IT'S COLORADO!) and then the Insurance stonewalled and tried to delay things further by not playing nice with the city that delayed reopening.
All told I wouldn't be surprised if we lost over a couple 100ks in lost profits and limited operational costs (we still had the bar/grill upstairs) and having to rebuild the Kitchen plus labor. Corporate paid us bonuses, which were really just 1/3 of our normal pay to help offset expenses, because of limited hours.
Bourdain was right: restaurants really are horrible businesses. Insurance which is mandatory, compounded with local government regulations and approval, makes it way worse.
I had a similar problem with an Audi except it was between the original person that hit me, the repair center thst did more damage and allowed the car to be flooded, and Audi. 9 months to sort out most of the car issues on a 95k car.
I thought the idea with insurance was that they would pay out and deal with recovering the funds legally, if possible.
In my limited experience with car accidents, they generally do.
This car burst into flames overnight while parked. Turns out it was an electrical short in the dashboard wiring. But, cars don't often self-immolate, so the suspicion of wrong-doing caused a delay.
I also don't know if they paid before the investigation was completely closed. They may have, but even at that, it was a few weeks.
This car burst into flames overnight while parked. Turns out it was an electrical short in the dashboard wiring. But, cars don't often self-immolate, so the suspicion of wrong-doing caused a delay.
I also don't know if they paid before the investigation was completely closed. They may have, but even at that, it was a few weeks.
They don’t do this out of the goodness of their hearts, insurance is ‘better to have and not need than need and not have’ and the longer you can go paying premiums without needing to file a claim the better for the insurer (monetarily speaking)
I wasn't able to collect on insurance for “damage not due to a collision” on my motorcycle when it blew over in strong wind, because the insurance agent said, “There was a collision. When your motorcycle fell over it collided with the ground.”
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Would there be any recourse, possibly in court?
I can't imagine that response passing muster in court, because as another commenter pointed out, all damage would involve some kind of collision between two objects which means that if we accept their response then the policy would be worthless because it wouldn't be able to cover anything.
It's implied (in the context of motor vehicle insurance) that "collision" in their case means collision between two vehicles but they're now trying to be pedantic about it when it's in their favor.
I can't imagine that response passing muster in court, because as another commenter pointed out, all damage would involve some kind of collision between two objects which means that if we accept their response then the policy would be worthless because it wouldn't be able to cover anything.
It's implied (in the context of motor vehicle insurance) that "collision" in their case means collision between two vehicles but they're now trying to be pedantic about it when it's in their favor.
That's BS, damage due to wind when nobody was occupying the vehicle is clearly an act of god and in no way was due to your control of the vehicle.
I can't think of a better comment to prove my point.
That’s missing 5 or 6 zeros in order to be considered large.
Two words: Judgment Proof
https://en.wikipedia.org/wiki/Judgment_proof
But if it's Section 8, maybe he can find some govt agency to sue?
https://en.wikipedia.org/wiki/Judgment_proof
But if it's Section 8, maybe he can find some govt agency to sue?
Here[0] is one I reading from last year, treelaw is no joke. Birdlaw however is very much a joke.
[0] https://www.reddit.com/r/legaladvice/comments/7p3ubz/updateo...
[0] https://www.reddit.com/r/legaladvice/comments/7p3ubz/updateo...
Is she personally responsible, or is the insurance that is paying for the rent responsible. She signed the lease, but her insurance company is paying the rent. I would like to have some sort of compensation, to cover the cost to relandscape, and possibly for removing a very large tree which is likely to die now.
Can’t litigate against people who are judgment proof.
It’s the opposite. Tree Law!!!! is about people melting down over stuff a real lawyer wouldn’t even take a phone call about. That’s why they are on Reddit melting down about it.
But section 8 tenants don’t have money to compensate either.
These stories that come out of the woodwork every time tenants are mentioned are why I’ll never be a landlord.
> These stories that come out of the woodwork every time tenants are mentioned are why I’ll never be a landlord.
My wife and I own a number of (8) rental properties. My wife manages them and we rarely have problems with tenants.
I will tell you what I think is the secret. My wife figuratively crawls up the ass of all prospective tenants. She needs to see credit history, pay stubs, and proof of punctual rent payments in their current situation (if applicable).
I don't think many landlords do this type of background checking because it's extra work and it can come across as confrontational.
But you'd be amazed at the number of prospective tenants who don't come back after being asked for that information.
My wife and I own a number of (8) rental properties. My wife manages them and we rarely have problems with tenants.
I will tell you what I think is the secret. My wife figuratively crawls up the ass of all prospective tenants. She needs to see credit history, pay stubs, and proof of punctual rent payments in their current situation (if applicable).
I don't think many landlords do this type of background checking because it's extra work and it can come across as confrontational.
But you'd be amazed at the number of prospective tenants who don't come back after being asked for that information.
Last time I rented from a private person, they asked me for some basic information. I sent them my last 3 pay stubs and a credit check in a short email. They accepted me on the spot, and said most people can't even manage to write a proper email.
Every time we advertise for a new tenant we get many calls that go like this:
"Do you do criminal background checks?"
"Yes."
"Ok, thank you, goodbye."
"Do you do criminal background checks?"
"Yes."
"Ok, thank you, goodbye."
To me that's very up-front. There might be a lot of people who would try to hide disqualifying information, hoping you don't find it.
There are probably a limited number of landlords who rent to felons, and they have to just make 1000 calls to find a place.
There are probably a limited number of landlords who rent to felons, and they have to just make 1000 calls to find a place.
They also get it on both ends. Felons make 41% less than their same age counterparts [1]. Thus they are both felons, and have lower income (as well as a higher likelihood of evictions, etc).
I've been reading Evictions: Poverty and Profit in the American City on recommendation from HN and it has been eye opening. They don't make 1,000 calls, but there are several stories of people making a little over or under 100 different calls because of prior evictions and/or felony convictions. The quantity is only magnified by the fact that they're limited to apartments that are ~$500/month (which is already ~75+% of their monthly income). The book is heavily anti-landlord, although I'm not versed enough to say whether that's the truth or if there is a heavy bias.
I don't know what the solution is. There's a delicate balance of trying to give people a chance to recover or rehabilitate without also forcing landlords with cheap property to enter into blind negotiations and potentially damaging their own property. Frankly, Section 8 seems like a bad solution, and that we should go back to government owned and leased housing where you won't be evicted for complaining about sub-standard conditions because the landlord knows you can't afford a lawyer.
I've been reading Evictions: Poverty and Profit in the American City on recommendation from HN and it has been eye opening. They don't make 1,000 calls, but there are several stories of people making a little over or under 100 different calls because of prior evictions and/or felony convictions. The quantity is only magnified by the fact that they're limited to apartments that are ~$500/month (which is already ~75+% of their monthly income). The book is heavily anti-landlord, although I'm not versed enough to say whether that's the truth or if there is a heavy bias.
I don't know what the solution is. There's a delicate balance of trying to give people a chance to recover or rehabilitate without also forcing landlords with cheap property to enter into blind negotiations and potentially damaging their own property. Frankly, Section 8 seems like a bad solution, and that we should go back to government owned and leased housing where you won't be evicted for complaining about sub-standard conditions because the landlord knows you can't afford a lawyer.
I think the real problem is it's just such a one-sided market in so many places due to market capture by property owners, plus just outright over-representation in lawmaking. If there were a lot more landlords desperate for any renters they can get to avoid going bankrupt on their units, there would be more options for everyone.
As for public housing, there used to be housing projects in the city I live in. The murder rates within those blocks were probably higher than in any country in the world.
As for public housing, there used to be housing projects in the city I live in. The murder rates within those blocks were probably higher than in any country in the world.
> most people can't even manage to write a proper email
So true. I get so many emails like “we can move in tomorrow” or “hook me up”. If they call, voicemails are only marginally better. Makes screening easier though as I simply do not respond.
So true. I get so many emails like “we can move in tomorrow” or “hook me up”. If they call, voicemails are only marginally better. Makes screening easier though as I simply do not respond.
What rental market is this? In big cities where the majority professional class rents competition has been stiff. I had to meet and interview with my last landlord about my career and income.
Los Angeles, North Hollywood. Super competitive.
[deleted]
Here is "The Secret" from my wife's friend who keeps trying to talk us into buying rental properties. Especially applicable for places like Seattle that have a lot of eviction restrictions and tenant selection restrictions.
For a multi-room home:
1) Find a foreign female student to act as the primary tenant. It is easy to target rental availability to this market.
2) Let her find additional roommates.
Foreign female students usually are well-funded by rich parents. And, if a resident of a "single family home" (the first tenant) is seeking roommates they can discriminate more than a non-resident landlord can.
The last thing I want to do is get into the landlord business so I keep pushing back.
Note, when I was a kid, my mom had a hell of a time evicting a Section 8 tenant. It took months and they left behind tons of garbage and damage. It was tough on my mom because she felt so duped by the lady that rented her house while we were living in another part of the country. My mom was a struggling single mom too, our family of four lived in a basement of her friend for several months until the eviction cleared. And then it took a week to clean up the home before we could move back in.
For a multi-room home:
1) Find a foreign female student to act as the primary tenant. It is easy to target rental availability to this market.
2) Let her find additional roommates.
Foreign female students usually are well-funded by rich parents. And, if a resident of a "single family home" (the first tenant) is seeking roommates they can discriminate more than a non-resident landlord can.
The last thing I want to do is get into the landlord business so I keep pushing back.
Note, when I was a kid, my mom had a hell of a time evicting a Section 8 tenant. It took months and they left behind tons of garbage and damage. It was tough on my mom because she felt so duped by the lady that rented her house while we were living in another part of the country. My mom was a struggling single mom too, our family of four lived in a basement of her friend for several months until the eviction cleared. And then it took a week to clean up the home before we could move back in.
foreign student seems risky as hell, man. All they have to do is walk and you're left holding the bag. Further more they're not tuned to what is "normal" for the area.
In uni one of the Chinese master's students fell asleep with a hotplate turned on and burned down the apartment a couple down from us. Students gonna student.
In uni one of the Chinese master's students fell asleep with a hotplate turned on and burned down the apartment a couple down from us. Students gonna student.
Not so amazed on this end. A landlord that demands a lot from a prospective tenant upfront without any indication that it's going to be reciprocated in terms of responsiveness to maintenance issues, understanding when crises (like pandemics) come up, etc., is a red flag. It means you're going to be seen less as a customer who's paying for a service and more as a simple monthly source of cash. Those are the types of landlords that will shamelessly pull all kinds of tricks: jack up your rent annually, remodel nearby units when they want you to move out, and otherwise do whatever they can while skirting the law (if that) to get as much of your paycheck as possible. If your credit is screwed up, they'll make it worse. If you're in a bad way, they'll introduce even more instability into your life. It's generally not worth it.
Rent-seeking sucks. People just want a place to live.
Rent-seeking sucks. People just want a place to live.
I can tell you that we haven't pulled any of the tricks that you outlined (nor any other tricks that I can think of).
I think we treat the tenants fairly. My wife's background checks are her way of assessing whether someone can actually pay the rent that we're asking for. If the applicant makes $20K / year and the rent is $1300 / month, both parties are just asking for trouble if they sign a lease.
> People just want a place to live.
Can I stay at your place?
I think we treat the tenants fairly. My wife's background checks are her way of assessing whether someone can actually pay the rent that we're asking for. If the applicant makes $20K / year and the rent is $1300 / month, both parties are just asking for trouble if they sign a lease.
> People just want a place to live.
Can I stay at your place?
I do indeed have a couch. Take your shoes off when you enter. We're renting, I want my deposit back.
Suppose you had a car worth $400k.
What assurances would you want before loaning it to someone to drive cross-country and back? Would you want to see their driving record? Would you want to know their financial situation?
What assurances would you want before loaning it to someone to drive cross-country and back? Would you want to see their driving record? Would you want to know their financial situation?
I would be wondering why I live in a country where my only transportation options were walking or begging a wealthy car owner to let me borrow their vehicle for 150% of their car note.
I have one way worse. My Dad rented a couple houses for extra income when I was a kid. One tenant was evicted for reasons I cant remember. To get revenge they spread bird seed or grass seed all over the living room carpet and then turned the sink on and stopped the drain. When my dad came into the house later the seeds has sprouted and were growing out of the wet carpet.
That's actually really creative. Horrible, but creative nonetheless.
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My simplified understanding is that this is what REITs are for. They're an investment vehicle for companies looking to build real estate they don't have the capital for. They raise through a REIT and you wind up with a dividend of some kind out of what they make from tenants. It minimizes the risk for a general investor.
Disclaimer: I know very little about them, this is not a recommendation I probably have some details wrong, just something I've seen floated around.
Edit: Someone want to jump in with what they are then? Not like I said go do this right now or something, would genuinely like to learn what I'm wrong about here. Downvoting without a response continues to be the weakest part about this community.
Disclaimer: I know very little about them, this is not a recommendation I probably have some details wrong, just something I've seen floated around.
Edit: Someone want to jump in with what they are then? Not like I said go do this right now or something, would genuinely like to learn what I'm wrong about here. Downvoting without a response continues to be the weakest part about this community.
My understanding is that the appeal of owning real estate yourself is housing mortgages gives you: (1) the cheapest leverage available to retail investors and (2) a loan that can't be margin-called. In an upmarket, this leverage lets you juice your returns. Say you only have $200,000. Then by getting a mortgage of $800,000 you get ownership of a house worth $1M. This gives you the right to the cashflow from renting the house out and in an upmarket, the appreciation in the house price. If the house appreciates in value by 20% or $200,000, then with your $200,000 investment your return is 100%. Buying REITs in he form of an ETF doesn't offer you either the cheap leverage nor the margin call-proof loan.
Another difference is that REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and timberlands, but usually real estate retail investors own are for housing.
Another difference is that REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and timberlands, but usually real estate retail investors own are for housing.
The tax treatment of directly owning real estate is also extremely favorable to landlords in the US, particularly mom-and-pop scale landlords. Many will have businesses which make an economic profit and many of that subset will positively cash-flow, but for tax purposes deemed depreciation will cause their business to operate at approximately break-even or at a loss (offsetting other income). Then, when they sell the property, they either get extremely favorable treatment on exchanging for other properties (to defer taxes until post-retirement), ability to exclude capital gains, or capital gains treatment on income which was effectively business income [0] (and would therefore ordinarily be taxed at a much higher rate).
[0] This might be a little weird to wrap your head around. Suppose I am a landlord and, over the years, depreciate a building by $200k. That is a "phantom" cost. On my balance sheet, it decreases my cost basis in the building and decreases my taxable profits from the rental business. When I sell the property, because I've shifted that rental income into depreciation, my cost basis has fallen, so my gain on sale rises by $200k, but that $200k is now taxed at 0~20% not plausibly 50%+ (top individual bracket + state taxes + self-employment taxes).
(I have somewhat better than casual understanding of this because my father worked in real estate all his life and other family run mom-and-pop real estate operations, but feel free to run past your friendly local tax advisors.)
[0] This might be a little weird to wrap your head around. Suppose I am a landlord and, over the years, depreciate a building by $200k. That is a "phantom" cost. On my balance sheet, it decreases my cost basis in the building and decreases my taxable profits from the rental business. When I sell the property, because I've shifted that rental income into depreciation, my cost basis has fallen, so my gain on sale rises by $200k, but that $200k is now taxed at 0~20% not plausibly 50%+ (top individual bracket + state taxes + self-employment taxes).
(I have somewhat better than casual understanding of this because my father worked in real estate all his life and other family run mom-and-pop real estate operations, but feel free to run past your friendly local tax advisors.)
Taxation is another important advantage direct real estate investment has over REITs. Thanks for sharing it!
> a loan that can't be margin-called
What do you mean by this? That the loan can't be eagerly collected in full? That the repayment is on a schedule?
What do you mean by this? That the loan can't be eagerly collected in full? That the repayment is on a schedule?
Say you have $100,000.
You could buy a house worth $500,000 with 20% down and a 30 year note. As long as you pay the mortgage, it doesn't matter how much the market value of the property changes. A drop of 40% in real estate prices that lasts for five years is not necessarily a problem.
On the other hand, imagine you put $100,000 into a brokerage account and were able to get 2:1 leverage. You could then borrow $100,000 and buy $200,000 of stock.
However, if the market runs into a bad patch and that stock decreases in value to $120,000, your equity is now only ~16.7%. This is below the minimum margin requirement (25%) for your account. Your brokerage calls you up and says you need to put an additional $10,000 in your account - that's a margin call.
If you don't have the $10,000 then your brokerage will sell enough of your position to bring your account back within requirements; possibly at the bottom of the market.
Real estate: 5:1 leverage, no margin call Margin account: 2:1 leverage, plus margin calls
You could buy a house worth $500,000 with 20% down and a 30 year note. As long as you pay the mortgage, it doesn't matter how much the market value of the property changes. A drop of 40% in real estate prices that lasts for five years is not necessarily a problem.
On the other hand, imagine you put $100,000 into a brokerage account and were able to get 2:1 leverage. You could then borrow $100,000 and buy $200,000 of stock.
However, if the market runs into a bad patch and that stock decreases in value to $120,000, your equity is now only ~16.7%. This is below the minimum margin requirement (25%) for your account. Your brokerage calls you up and says you need to put an additional $10,000 in your account - that's a margin call.
If you don't have the $10,000 then your brokerage will sell enough of your position to bring your account back within requirements; possibly at the bottom of the market.
Real estate: 5:1 leverage, no margin call Margin account: 2:1 leverage, plus margin calls
You can get around this by purchasing leveraged funds/etc. Although that should never be considered functionally the same. That said, you could consider real-estate interest+taxes+upkeep similar to the inherent loss/overhead in leveraged funds.
The lender can't foreclose if the house loses value. You have to stop making payments before they are allowed to take the collateral.
In contrast, if you buy stocks on margin, they will forcibly sell your position if the value of the collateral gets anywhere near the loan value.
In contrast, if you buy stocks on margin, they will forcibly sell your position if the value of the collateral gets anywhere near the loan value.
Ah okay very interesting, so I guess it would be fairer to say the REIT would be used in the case you were a less a real estate savvy investor perse and more someone who was looking to diversify I guess what I would call a layman's portfolio such as me.
Thanks for the info!
Thanks for the info!
Largely offtopic but:
You are not incorrect per sé. REITs exists in an awful large number of varieties in every possible flavor and indeed broadly reflect what you describe, i.e. an exposure to a Real Estate. You get paid a dividend (which would be similar to the cashflow you receive from a rental property you own). There are a number of upsides of investing in REITs over buying a property and renting it out: - less work (no need to manage tenants) - less risk (it's a diverse set of properties across multiple locations vs a single property in one location). - highly liquid (you can buy any amount and sell virtually whenever you want you need to liquidity)
there is some downside: - it is not tangible as a property (sometimes that means that if you don't understand exactly what you bought under what conditions it can mean you have some unknown exposure/risk you were not aware of). - it has less upside generally (in terms of risk/reward, it is a much safer investment but with that there is also upside as if you were to own a single property in the right neighborhood). - less leverage (generally you get more leverage on your mortgage than on your investment account)
Particularly the last points is what catches people often. I.e. if you are renting a property and everyone else is owning, and the properties go up, you will feel 'stupid'. People love bragging how they got rich by buying and 'flipping' and ofcourse this happens and has happened in the past. But for all those great stories you don't hear the people that bought and were stuck with the house, had to sell at 'firesale price' because they lost a job/got divorced/etc etc. In the end, buying and owning property with leverage is a choice that fits a certain lifestyle and SHOULD not be for everyone. There are a lot of other investment opportunities in the set for any individual that would be better suited but are often considered 'complex'. Owning a house is simple and has been pushed for decades to 'build' wealth.
The reality is that for most people their housing cost is by far the largest fraction of their cost of living. Owning alleviates this costs to a certain extend if only psychologically, but it does not come risk free (the number of times I heard people say 'house prices only go up'). The leverage factor aside (which is a real thing), looking from a person investing their savings, an appropriate allocation would be something dependent on their age but in any case not much over 10% in Real Estate. About as much on commodities (GOLD/precious metals/etc), Fixed Income depending on age but somewhere between 20% percent earlier in career with little commitments and up to 70% in retirement, with the rest in stocks ideally globally diversified. That all being loosely based on the highest risk-adjusted return models (or how any active manager would run your fund from a top level).
Obviously, this is boring and it is way more smarter to buy this sexy property and flip it a couple times and those tenants are not an issue cause 'you love dealing with them anyways and have nothing better to do'. Basically risk-free money and you didn't even work for it. /s
You are not incorrect per sé. REITs exists in an awful large number of varieties in every possible flavor and indeed broadly reflect what you describe, i.e. an exposure to a Real Estate. You get paid a dividend (which would be similar to the cashflow you receive from a rental property you own). There are a number of upsides of investing in REITs over buying a property and renting it out: - less work (no need to manage tenants) - less risk (it's a diverse set of properties across multiple locations vs a single property in one location). - highly liquid (you can buy any amount and sell virtually whenever you want you need to liquidity)
there is some downside: - it is not tangible as a property (sometimes that means that if you don't understand exactly what you bought under what conditions it can mean you have some unknown exposure/risk you were not aware of). - it has less upside generally (in terms of risk/reward, it is a much safer investment but with that there is also upside as if you were to own a single property in the right neighborhood). - less leverage (generally you get more leverage on your mortgage than on your investment account)
Particularly the last points is what catches people often. I.e. if you are renting a property and everyone else is owning, and the properties go up, you will feel 'stupid'. People love bragging how they got rich by buying and 'flipping' and ofcourse this happens and has happened in the past. But for all those great stories you don't hear the people that bought and were stuck with the house, had to sell at 'firesale price' because they lost a job/got divorced/etc etc. In the end, buying and owning property with leverage is a choice that fits a certain lifestyle and SHOULD not be for everyone. There are a lot of other investment opportunities in the set for any individual that would be better suited but are often considered 'complex'. Owning a house is simple and has been pushed for decades to 'build' wealth.
The reality is that for most people their housing cost is by far the largest fraction of their cost of living. Owning alleviates this costs to a certain extend if only psychologically, but it does not come risk free (the number of times I heard people say 'house prices only go up'). The leverage factor aside (which is a real thing), looking from a person investing their savings, an appropriate allocation would be something dependent on their age but in any case not much over 10% in Real Estate. About as much on commodities (GOLD/precious metals/etc), Fixed Income depending on age but somewhere between 20% percent earlier in career with little commitments and up to 70% in retirement, with the rest in stocks ideally globally diversified. That all being loosely based on the highest risk-adjusted return models (or how any active manager would run your fund from a top level).
Obviously, this is boring and it is way more smarter to buy this sexy property and flip it a couple times and those tenants are not an issue cause 'you love dealing with them anyways and have nothing better to do'. Basically risk-free money and you didn't even work for it. /s
If being a landlord was so awful they’d sell the property and call it a day. They want to make it sound worse than it is.
Hire an arborists to assess the trees with whatever is remaining; street view images. Also an appraisal based on arborists opinion. Mature trees are very pricey in legal damages. as essentially irreplaceable.
I could never imagine this scenario. But I have a Tree Addendum I had drafted specifically because I don’t want my tenants to even lay a hand on the trees. I’m more worried by negligent tree trimming that kills a tree. But it sets value to each tree too. Something like “$1000 per inch diameter at 18” above ground.” Sorry about this situation you’re in.
I could never imagine this scenario. But I have a Tree Addendum I had drafted specifically because I don’t want my tenants to even lay a hand on the trees. I’m more worried by negligent tree trimming that kills a tree. But it sets value to each tree too. Something like “$1000 per inch diameter at 18” above ground.” Sorry about this situation you’re in.
How big is the tree? Beavers cause this type damage and they also can't be reasoned with. If it's small enough to reach 60% of the bark just have it cut down and into pieces. It seems to make good enough firewood for them, hopefully the'll burn through most of it and you can plant a new tree in the ashes next month?
If only trees were that easily replaceable. I'm not sure how long you think it takes to grow a tree but a good formula is 1" of girth = 1 year of growth, so a reasonably small tree with a 1 foot trunk is over a decade old.
The pine tree is fully mature, maybe 40+ feet high. Its the one with the most damage to its bark. Too big for me to cut down on my own. Its also next to a fence.
The blue spruce I could cut down.
Here in Sydney Australia some local council restrictions are very onerous when it comes to trimming or removing older trees (except a short list of excluded species). I've heard of fines of $40,000 or more. Nothing like that near you?
City has no bylaw prohibiting removing trees
Deer love to rub velvet of their antlers on the pines around me and it's not uncommon to see a whole group of pines without any branches on the lower half and they rub all the bark they can reach off in the fall. If it's 40 ft, would wrapping the trunk with tree wrap protect it until their gone? Then asses it, hopefully it starts to cover the exposed areas on it's own
"would wrapping the trunk with tree wrap protect it until their gone"
Bear in mind that the tenants have already ignored requests to stop destroying the trees, and they have opposable thumbs.
Bear in mind that the tenants have already ignored requests to stop destroying the trees, and they have opposable thumbs.
My thought was that some teenagers need a constant reminder.
Are you that worse off if they burn it down? You won’t have to worry about them resisting eviction and you’ll get an insurance payment.
Typically insurance payment doesn't cover everything. You will almost always be at some loss, often much greater than year worth of rent. Also, I'd suspect your future premium rates would rise given insurance companies will see increased risk due to your history of getting bad tenants.
Insurance payments being equal, I don't think it needs to be said that not wanting your things to be set on fire is a reasonable ask.
Problem tenants are different levels of problem in different jurisdictions. In San Francisco, I can imagine a landlord being perfectly happy to eat the distress of a tenant burning down their property, given that in the same stroke they solved the problem of their occupancy of the property.
I lived in a building with a few section 8 tenants. Most were disabled, some elderly, and others young single mothers. I only found out we had any at all because the property manager mentioned it to me. It was primarily a building of young professionals and grad students. She told me management love them. Government always pays the rent on time. They still had to pass a background check so that locked out a lot of the assumptions.
[deleted]
I am very thankful to hear you have had a good experience with your Section 8 tenants.
As a HUD-VASH veteran recipient in Los Angeles, I have hoped to discover that there are reasons to expand programs for more low-income people in the United States. I am EXTREMELY fortunate as a veteran to receive housing assistance. Thanks for making it possible for people in need to have a safe and affordable option! Blessings!
As a HUD-VASH veteran recipient in Los Angeles, I have hoped to discover that there are reasons to expand programs for more low-income people in the United States. I am EXTREMELY fortunate as a veteran to receive housing assistance. Thanks for making it possible for people in need to have a safe and affordable option! Blessings!
You should waive their fees for the duration of Corona, and refund any ones you've received! Just saying, it would be a great way to do some good, and they might get a lot more out of the 100/200 than you would!
Your tenant is the government though. Thats often pretty sweet if you can get it.
I am also in the process of converting my units to section 8.
I don't suppose the struggling non state supported private renters whom you outbid to buy these houses, which they might otherwise have been able to afford to buy themselves, but who are now paying rent to some other landlord instead, are quite so enamored with your altruistic enterprise.
I actually lived in this multi unit property when I first bought it. My wife and I were newly married and buying a multi unit property qualified us for a 3.5% down payment which was much more management than >=10%. Also, I live in a rural part of America where property values are relatively stable because there's so much room to build. There are ample new homes available and new homes cost about $100 per sq ft. Existing homes are unable to rise above this except for extreme circumstances.
You said something negative about landlords. You can really see from the rash of landlords on this post why hacker news is hugely pro landlord.
I doubt that communities adjacent to you were nearly as grateful.
what a nice government subsidy you have there.
There is a real problem with the situation though. And I want to distinguish between the decision you've made, which are savvy, and the broader picture where this showcases some of the more unfortunate elements of socialism.
It is a terrible outcome if millions of Americans are about to go broke and the relative winners are people who (a) totally rely on government handouts and (b) rely on people who are totally reliant on government handouts.
This story points to a situation where a rational person would rather be involved in ventures that produce less resources than they consume. That will really start to hurt the absolute measures of prosperity if it persists for long.
It is a terrible outcome if millions of Americans are about to go broke and the relative winners are people who (a) totally rely on government handouts and (b) rely on people who are totally reliant on government handouts.
This story points to a situation where a rational person would rather be involved in ventures that produce less resources than they consume. That will really start to hurt the absolute measures of prosperity if it persists for long.
> These tenants are often not accepted by landlords because they're thought to cause more issues.
You're ignoring the potential effects on property value.
You're ignoring the potential effects on property value.
> You're ignoring the potential effects on property value.
Bingo. Surprised nobody else brought this up. Not to mention the neighboring home/property owners are going to be pissed off because it's a potential drag on their property value. Though the stigma against section 8 may not even be warranted. I wonder whether there are any studies on the effects of section 8 on communities.
Bingo. Surprised nobody else brought this up. Not to mention the neighboring home/property owners are going to be pissed off because it's a potential drag on their property value. Though the stigma against section 8 may not even be warranted. I wonder whether there are any studies on the effects of section 8 on communities.
One of the few things our government (UK) has got right with housing is to ensure nearly every development includes social housing.
It's not perfect though as you get ridiculous situations like social housing in modern apartment blocks in the middle of London that no average worker could afford.
Or separate entrances for the social housing flats and regular flats in the same building (regular as in how it was intended to be built, not with extra walls to create extra rooms or with no living rooms at all).
Or with social housing residents being asked to pay separately for communal areas maintenance (because the government doesn't pay for that but you can't really stop people from walking on the grass) that they didn't ask for.
Or separate entrances for the social housing flats and regular flats in the same building (regular as in how it was intended to be built, not with extra walls to create extra rooms or with no living rooms at all).
Or with social housing residents being asked to pay separately for communal areas maintenance (because the government doesn't pay for that but you can't really stop people from walking on the grass) that they didn't ask for.
Nothing is perfect but it's a long way forward from complete segregation.
This is just the start. Landlords would be smart to work with tenants to share some of the loss and renegotiate temporary adjustments to keep at least some revenue coming in because the heady days of high demand for rental units is likely behind us for a while.
It'll be worse in downtown areas. I've heard from multiple firms that are looking at downsizing their expensive office space and continuing to allow employees to work from home. if a person doesn't have to work downtown they will often choose not to live there either.
COVID is going to change the face of urban real estate. So if you have a tenant, they're gold and do what you can to keep them.
It'll be worse in downtown areas. I've heard from multiple firms that are looking at downsizing their expensive office space and continuing to allow employees to work from home. if a person doesn't have to work downtown they will often choose not to live there either.
COVID is going to change the face of urban real estate. So if you have a tenant, they're gold and do what you can to keep them.
Unfortunately, as part of the unfolding of the post 2008 recession, a lot of rentals shifted from individual or smaller landlords to larger corporate landlords whom take a much more impersonal approach to making it through the depression. To some degree, to the extent they can take out holdover loans and let rentals sit empty, they will do just that - irregardless of the social utility of compromise.
https://www.theatlantic.com/technology/archive/2019/02/singl...
https://www.theatlantic.com/technology/archive/2019/02/singl...
This is the pernicious dynamic. For Large landlords, certainly but also generally, you have a situation where property appreciation becomes more important than rental income, so evicting people and getting nothing becomes a better outcome than lowering rent.
Edit: Also note this appreciation driven dynamic is something of a product of QE - printing money. As the treasury dumps money into markets, anything of apparently reliable value, "money-like", becomes more valuable - commodities and land being examples but the "best" companies also. This appreciation process becomes more important than the ordinary use of the object in the case of land (empty mansions in London being the prime example but we may wind-up with many more if the approach continues).
Edit: Also note this appreciation driven dynamic is something of a product of QE - printing money. As the treasury dumps money into markets, anything of apparently reliable value, "money-like", becomes more valuable - commodities and land being examples but the "best" companies also. This appreciation process becomes more important than the ordinary use of the object in the case of land (empty mansions in London being the prime example but we may wind-up with many more if the approach continues).
If you raise taxes on non owner occupied housing you can achieve any reasonable target for real estate "investing" you desire.
If you just want to target holding but not renting property because it decreases housing supply you can do that even more aggressively.
I'll take 100% of appreciation for the months it sat unoccupied if it sat unoccupied for 3 or more months for 1000 Alex.
If you just want to target holding but not renting property because it decreases housing supply you can do that even more aggressively.
I'll take 100% of appreciation for the months it sat unoccupied if it sat unoccupied for 3 or more months for 1000 Alex.
Was a renter in 2008 and you are spot on. Same situation in the Bay area as well as NY/CT. It was insane that rents started to go up during that time. People basically walked away from their houses and started to rent. It was weird. Also, the "corporatization" of housing scared me a bit. Consider the area in downtown Mountain View. Rent was under 2K around 2008. The corporate landlords did minor renovations (fancy gyms, granite counters, maybe a redo of flooring) - they then did fancy websites and sold a lifestyle. Totally focused on the high-paying tech jobs. I used to live in a complex with families and non-techies. All that evaporated as rent shot up to 3.5-4K for the exact same units.
As a renter I honestly do not mind the corporatization.
When I’ve looked for apartments in the past I’ve seen almost no difference in rents (as advertised on Craigslist, apartments.com, Zillow) between large corporate landlords and small time landlords, except for very high end luxury apartments I’m not in the market for.
Yet I’ve heard countless horror stories about unresponsive/malicious small time landlords and very few about large landlords. To the contrary, while renting from large corporations I’ve found that my service requests are addressed very quickly, there’s almost always someone in the property management team I can talk to about anything, and everything operates smoothly.
Perhaps the “mom and pop” landlords only advertise via word of mouth but every time I’ve looked for apartments I’ve come away thinking that renting from those same large, faux-luxury (as opposed to unrenovated since 1985 for the same price) corporate landlords are the best deal when renting in expensive areas.
When I’ve looked for apartments in the past I’ve seen almost no difference in rents (as advertised on Craigslist, apartments.com, Zillow) between large corporate landlords and small time landlords, except for very high end luxury apartments I’m not in the market for.
Yet I’ve heard countless horror stories about unresponsive/malicious small time landlords and very few about large landlords. To the contrary, while renting from large corporations I’ve found that my service requests are addressed very quickly, there’s almost always someone in the property management team I can talk to about anything, and everything operates smoothly.
Perhaps the “mom and pop” landlords only advertise via word of mouth but every time I’ve looked for apartments I’ve come away thinking that renting from those same large, faux-luxury (as opposed to unrenovated since 1985 for the same price) corporate landlords are the best deal when renting in expensive areas.
There's more variance with small-time landlords. With a corporate overlord you know exactly what you're getting: they are going to be firm about sticking you to the exact terms of your lease and will raise your rent by the maximum possible each year, but you can also expect any maintenance issues to be taken care of quickly and they aren't going to feud with or retaliate against you. With a mom & pop you might get someone really nice who never raises your rent, understands if you're a couple days late, and takes pretty good care of the place; but you might also get someone who is completely unresponsive, violates a bunch of tenant laws figuring you don't have the resources to call them on it, and nickle & dimes you on your deposit.
I've rented apartments from giant corporations 4-5 times, and every single time I got screwed on the deposit on the way out. Presumably because they ran the numbers, and knew that they were better off nickel-and-diming people every time since most of their tenants wouldn't have the time or energy to drag them to small claims court.
There's also no way to negotiate with a person who has any actual power. You can talk to polite mooks all you want, but they can't actually change anything. You're guaranteed to get the maximum legally allowable rent increase every year and a huge pain in the ass battle for your deposit every time you move out.
There's also no way to negotiate with a person who has any actual power. You can talk to polite mooks all you want, but they can't actually change anything. You're guaranteed to get the maximum legally allowable rent increase every year and a huge pain in the ass battle for your deposit every time you move out.
True, though tenants in corporate owned single family housing all tell me it's closer towards the worst landlords. The corporations won't harass you, but they essentially don't want to do anything. You just get an expensive "as-is" house, which can be okay if it's in decent shape.
Specifically I was referring to large apartment buildings owned by corporations. Have never lived in a corporate owned SFH nor did I know that it was common. In my experience these large apartment buildings are quite proactive about getting anything fixed - likely because they have a team of people dedicated to doing that full time or at least contract it out, and just chalk it up to the cost of doing business.
Ah, makes sense. I didn’t factor in the possibility that a small landlord might not raise rents (though I assume it’s less of a factor in SF given rent control).
I move around a lot so rents getting raised aren’t as important to me.
I move around a lot so rents getting raised aren’t as important to me.
Yeah, your experience is just very different from the average renter if you move around a lot, so you have different concerns.
Corporate landlords are rational and reasonable negotiators who will readily respond to market signals. Small landlords are a crapshoot; you might get one who just prefers an empty unit over lower rents. You can easily see this from craigslist data right now. Large buildings are lowering rent faster than small buildings and single-family houses.
This is true. I have known people who were more happy to have a house empty for months on end waiting for a tenants at a higher price rather then taking a tenant now for a lower price (~$200 price difference). They made the decision emotionally based on, "my house is worth so much" instead of looking at what would be in their best interest. Also some of the higher paying tenants I have seen not take good care of property.
I just accepted a lower price with a tenant because it helps them and was way better then them leaving and trying to find a tenant now.
I just accepted a lower price with a tenant because it helps them and was way better then them leaving and trying to find a tenant now.
This is really true. People talk about rents dropping in SF, but if you dig, it's really the large apartment complexes that are professionally managed. The same apartments that tends to be more expensive.
A good friend just moved to a 1-bed in SF last weekend. Small building (6 units). Rent was $2,200 per month, which is about the same as what it was last year. And they looked at a lot of units. They definitely noticed rents softening as they could knock $100 off most rents with little effort.
A good friend just moved to a 1-bed in SF last weekend. Small building (6 units). Rent was $2,200 per month, which is about the same as what it was last year. And they looked at a lot of units. They definitely noticed rents softening as they could knock $100 off most rents with little effort.
This is more about the specific financials of the property and the portfolio of the owner, for both small and large owners. Many small owners are, like, funding their grandkids trust funds and a few lost payments are not worth the trouble. Large owners may have occupancy covenants, or, conversely, may have appraisals that have to be maintained.
My personal experience is small owners are "reasonable" and open to building a relationship and large owners could give an eff, but mileage varies. Cheers.
My personal experience is small owners are "reasonable" and open to building a relationship and large owners could give an eff, but mileage varies. Cheers.
Living in a place the landlord has a strong emotional connection to can also be difficult (e.g. their previous family home).
I wonder if that explains my current place. There was a recent ownership change and right before that the owners cut down the shade trees for the house. There's no air conditioning so back in April it was already getting too hot to stay indoors. The lease renewal is in June so when the new, corporate management company asked us if we wanted to stay and that they were generously not going to raise rent, we asked they either lower the rent or figure out a cooling situation. They balked so we walked and they didn't flinch at all. They were honestly surprised we weren't going to take such a deal.
In California for example, due to state-wide rent control, it's very dangerous for a landlord to lower rents. I would rather offer 6 months free rent than lock into permanent nonadjustable lower rent situation.
This is yet another reason in the long list of reasons why rent control is a bad policy.
I don't disagree, but it's important to remember that when rent control is proposed, it's because some people are very desperate. It would behoove us to suggest viable alternatives every time it's proposed and we shoot it down.
After my father died, my mother rented out the lower floor of her home. I think your definition of desperate is unfair it it includes only tenants. Not all "landlords" are taking on the headache of renting out units because they are professional landlords -- many are similarly disparate, have mortgage payments, property tax, repairs, utilities, etc.
I'd be in more favor of rent control if it would also freeze property taxes, electrician bills, utility costs. It is turtles all the day down.
I'd be in more favor of rent control if it would also freeze property taxes, electrician bills, utility costs. It is turtles all the day down.
Most places with rent control also have similar limits on property tax increases. In fact, I think most places have limits on property tax increases because property taxes are largely just some number pulled out of the ass of some bureaucrat.
Utilities across the US also have regulated rates.
Utilities across the US also have regulated rates.
Yeah, lots of the problems with rent control are related to it being an unfair disadvantage to some (usually not all) landlords and they have expenses as well.
But again: the reason rent control is passed is because enough people with significant political leverage were hurting. We need to be able to show them a better alternative if we don't want the pain of rent control's (un?)intended consequences to linger.
But again: the reason rent control is passed is because enough people with significant political leverage were hurting. We need to be able to show them a better alternative if we don't want the pain of rent control's (un?)intended consequences to linger.
The alternative is allowing more housing development.
The real alternative is more housing development plus treating housing as a social good rather than an investment, but that's a long-term goal, it's not gonna happen overnight.
The government could build affordable housing and rent it out at a reasonable price. "Council houses" as they are called in the UK are built very well. They are often ugly, but I'm sure that these days they can be built well, cheaply and made to look OK.
The government could start by removing hurdles to build. The amount of hassle one has to go through in California in order to build housing is staggering.
When I visited a friend in England I accidentally stayed at a council estate that someone put up on AirBNB illegally. While it wasn't a slum, it definitely wasn't "just OK". I suspect the reason why that particular unit didn't look like a slum is because the owners were renting it out and doing their best to keep it nice. Not a single bit of that place was built well. Maybe it was cheap. Looked OK from the outside but inside it was like some background location for a movie that's about to experience an apocalypse.
What was specifically wrong? Structural issues or cosmetic. A private house from 1960 that hasn't been renovated since, unless carefully maintained will also look shit on the inside. Look at property that is auctioned in the UK, for example.
I got the impression that council estates are newer than that. However, the floors in the general areas (stairs, lobby, halls) were not cared for. The portal from the hall to the unit had a weird, rough tear in the floor right along the door jamb. I noticed once I crossed it that the unit was a half centimeter lower than the hallway. The fixtures (lights, plumbing, switches) were absolute penny quality. Very little hot water (which seemed dire since tea is so popular). The bathtub was on top of a cabinet, which I thought was really weird and unsafe. It didn't seem like an aftermarket thing- it looked like the tub was built like that.
0/10 would not use AirBNB again. Sleep on a friend's couch or floor, or shell out the money for a hotel. Or use a hostel if money is tight.
0/10 would not use AirBNB again. Sleep on a friend's couch or floor, or shell out the money for a hotel. Or use a hostel if money is tight.
You chose to book a room using a service that’s known for a near complete lack of ethics. Oopsy!
It was a huge oopsy. I haven't booked through them again.
There are a number of "housing projects" in the US that turned into rampant crime nests. US politicians are largely wary of such projects right now.
The vast majority of council houses in the U.K. are owned by private landlords who rent to the council.
No one wants to live in Social housing projects in the U.K. and for a good reason they are all rubbish, the U.K. has had some of the worst designed and built social blocks in the world many of them were demolished within 1-2 decades.
Stuffing poor people into high density housing is a horrible idea every study shows that spreading them out is not only cheaper but also much more beneficial to them.
No one wants to live in Social housing projects in the U.K. and for a good reason they are all rubbish, the U.K. has had some of the worst designed and built social blocks in the world many of them were demolished within 1-2 decades.
Stuffing poor people into high density housing is a horrible idea every study shows that spreading them out is not only cheaper but also much more beneficial to them.
Counterpoints:
1. Not all social housing is high rise or high density. Look outside of the cities for example - new towns. Lessons can be learned this time.
2. Much of the social housing was sold off in the 80's I think, the trick is to keep government ownership of it, not sell it for a pittance and let private landlords profit from price increases.
1. Not all social housing is high rise or high density. Look outside of the cities for example - new towns. Lessons can be learned this time.
2. Much of the social housing was sold off in the 80's I think, the trick is to keep government ownership of it, not sell it for a pittance and let private landlords profit from price increases.
Outside of the cities these are still high density, just instead of a 30 stories block those are 3-4 stories blocks in the burbs.
Concentrating poor and vulnerable people isn't a good strategy they do better when they are surrounded by the better off, having 2 low income families on a street would produce a much better outcome and shoving 200 of them.
Social housing in the UK is complex, at some point nearly 80% of the people lived in social housing, it wasn't for low income families but rather for nearly anyone but the most affluent which often held titles and on the other spectrum the most remote and rural communities.
Social housing was seen as a means to bring workers into the cities during the industrialization of the UK.
Today despite the fact that anyone is still eligible outside of political corruption which ironically nearly exclusively plagues Labour councillors, MP's and party officials which somehow jump to the front of the queue despite earning well above the mean council housing is seen as a solution for the working poor.
Councils already offer rent assistance, have council properties which are used to temporary house vulnerable people, building more of those won't help just look what happens when you have council flats in new build projects, drugs, anti social behaviour and damage to properties simply due to the high concentration of these individuals.
So while having 20-30% social flats in a new build project might seem like a good idea the only thing that it causes is a huge backlash from the regular tenants due to this behaviour and nearly always they end up winning.
Concentrating poor and vulnerable people isn't a good strategy they do better when they are surrounded by the better off, having 2 low income families on a street would produce a much better outcome and shoving 200 of them.
Social housing in the UK is complex, at some point nearly 80% of the people lived in social housing, it wasn't for low income families but rather for nearly anyone but the most affluent which often held titles and on the other spectrum the most remote and rural communities.
Social housing was seen as a means to bring workers into the cities during the industrialization of the UK.
Today despite the fact that anyone is still eligible outside of political corruption which ironically nearly exclusively plagues Labour councillors, MP's and party officials which somehow jump to the front of the queue despite earning well above the mean council housing is seen as a solution for the working poor.
Councils already offer rent assistance, have council properties which are used to temporary house vulnerable people, building more of those won't help just look what happens when you have council flats in new build projects, drugs, anti social behaviour and damage to properties simply due to the high concentration of these individuals.
So while having 20-30% social flats in a new build project might seem like a good idea the only thing that it causes is a huge backlash from the regular tenants due to this behaviour and nearly always they end up winning.
I don't think it exemplifies why rent control is bad. 6 months free is 50% off annualized. It's just a very simple, easy-to-execute strategy for keeping the rent on paper high.
excuse me, but dangerous for who exactly? You mean your future returns on investments will be lower on your rental property? How exactly is that dangerous? Is someone's life in danger? If anything, lower rents allow more people to afford housing, making it less dangerous.
Let me guess, you have huge problem with the homeless situation, but are unwilling to consider lowering rents? Is that right?
Let me guess, you have huge problem with the homeless situation, but are unwilling to consider lowering rents? Is that right?
So a rent reduction by another name?
Yep. My landlord did this with me. My rent is still the same amount but we created an additional 'discount' agreement on top of the original lease to lower it by a substantial amount.
If a lot of landlords start exploiting that loophole, I wouldn't be surprised if the law were revised to be based on the average rent over a year, or something similar.
They wouldn't have to change it, because that is factored in. The law states:
"In determining the lowest gross rental amount pursuant to this section, any rent discounts, incentives, concessions, or credits offered by the owner of such unit of residential real property and accepted by the tenant shall be excluded."
So if your rent is $3k/month, and the landlord gives you 3 months rent-free, your rent according to AB 1482 is still $3k.
"In determining the lowest gross rental amount pursuant to this section, any rent discounts, incentives, concessions, or credits offered by the owner of such unit of residential real property and accepted by the tenant shall be excluded."
So if your rent is $3k/month, and the landlord gives you 3 months rent-free, your rent according to AB 1482 is still $3k.
That doesn't mean the law cant change.
No, but it means the law was expressly with to account for this circumstance, so it isn't a "loophole".
I think the only effect of that would be to prevent landlords from giving free months of rent - better to lose a tenant than permanently have lower rents which may not be sustainable.
There are a million ways around that - for example, the landlord could employ the tenant to clean and tidy the property.
The obvious fix would be to make it like tax evasion (illegal) vs. avoidance (rational behaviour with a morally questionable extreme) - viz. to a large degree the line is up for interpretation, coming down to the spirit of the law and the motivation behind what was done.
That really would be the best legislation. A simple calc of the rent of the first 12 months of the lease becomes the base rent.
This is already the case in Berkeley.
At the same time maybe it's time for landlords who have been sitting in armchairs swimming in cash to start giving back to the people who haven't been able to afford to live here?
Particularly in California -- it makes no sense for landlords to pay artificially low property taxes. Prop 13 should be reformed so you pay property taxes on the market rate of the property if you're renting it out.
> it makes no sense for landlords to pay artificially low property taxes
The core problem is Prop 13, not that Prop 13 doesn't exclude for-profit properties. There are a ton of property/owner classes that should absolutely not get the Prop 13 discount. Malcolm Gladwell did an episode on why golf courses (specifically member-owned courses) in California are massive misallocations due to Prop 13.
The core problem is Prop 13, not that Prop 13 doesn't exclude for-profit properties. There are a ton of property/owner classes that should absolutely not get the Prop 13 discount. Malcolm Gladwell did an episode on why golf courses (specifically member-owned courses) in California are massive misallocations due to Prop 13.
It's not low when you first buy, even for years after. Rates can effectively start around %1.5 to %1.2 percent depending on the city.
That's because entrenched property owners are paying artificially low taxes due to prop 13. Repealing it would equalize the tax burden.
While I agree that property taxes could come down if Prop 13 was eliminated, I highly doubt that would ever happen. The gov't could never turn down a new pot of money.
Repealing prop 13 would not reduce rates for new buyers. It would only make it harder for them to retain their properties as the taxes rise.
Not sure why this was downvoted. The reality in SF and many other locations is that supply has been artificially limited and landlords who bought years ago have been making enormous profits. I don't know that I'd describe it as "giving back" but there is a market recalibration that is justifiable and I won't lose too much sleep worrying about landlords in SF who make 30% less than they do now.
Landlord aren’t the ones imposing the artificial limitations though. It’s the same group who created the rules that would punish a landlord for temporarily lowering rent.
> Landlord aren’t the ones imposing the artificial limitations though
It's certainly not the people moving in from outside the area who want to rent for affordable rates.
Landlords are part of the NIMBY problem, but not the only part.
It's certainly not the people moving in from outside the area who want to rent for affordable rates.
Landlords are part of the NIMBY problem, but not the only part.
But they aren’t the part of the problem that is accountable for it. In a democracy you should expect that everybody will be appealing to the government to protect their own interests. The NIMBYs quite obviously do this. But it’s the local governments that implement the NIMBY-protecting policies. The local governments are the ones accountable to the people, not the NIMBYs. I imagine the delinquent politicians are quite happy when people point the finger at landlords instead of them.
I want to agree but I’m not sure landlords are exactly to blame for high rent. There are many people and players involved-like the willingness of people to pay so much of their income to housing. Part of why you can’t find a better deal is everyone else willing to take the higher price.
> There are many people and players involved-like the willingness of people to pay so much of their income to housing
You are saying that "the supply line isn't to blame for the demand line" when the problem is where they intersect.
I realize Im oversimplifying the supply constraints because landlords aren't all of the NIMBY problem.
You are saying that "the supply line isn't to blame for the demand line" when the problem is where they intersect.
I realize Im oversimplifying the supply constraints because landlords aren't all of the NIMBY problem.
I agree. It’s a faulty line of reasoning. I’ve felt it before though so it might be a “gut feeling” fallacy.
I think it's only faulty because it's incomplete, but the demand side is a real factor. There are tons of discussions here and elsewhere trying to figure out how to "recreate Silicon Valley elsewhere" (which would theoretically spread the demand across a much larger area).
Another end is making it more difficult to flip real estate as a career. But that’s at the buy instead of rent demand side-but they’re totally related and affect each other.
No times been better than post-covid for a desire to branch SV outward. My two cents would be looking at how to employ the people outside SV. Like is it noise about quality of their education or abilities? Not being able to interact with them locally?
I had this thought recently to make a programming “agency”. How to structure an organization that actually works on a programming task comparably to how a 1-3 person team would, but regardless of program complexity. Wonder if this and hiring people to WFH are compatible.
No times been better than post-covid for a desire to branch SV outward. My two cents would be looking at how to employ the people outside SV. Like is it noise about quality of their education or abilities? Not being able to interact with them locally?
I had this thought recently to make a programming “agency”. How to structure an organization that actually works on a programming task comparably to how a 1-3 person team would, but regardless of program complexity. Wonder if this and hiring people to WFH are compatible.
If that were the end of it, I'd agree. Except for the massive amounts of NIMBYism strangling the market by preventing new supply from entering the market to meet the demand.
You’ve got it backwards when it comes to residential real estate. More people become renters during a recession. Vacancies reduced dramatically after 2008.
https://fred.stlouisfed.org/series/RRVRUSQ156N
https://fred.stlouisfed.org/series/RRVRUSQ156N
2008 didn't have airbnb imploding at the same time.
This appeared to be a valid point (why the downvote).
An underlying pandemic throws most of the historical data out the window.
Just ask Hertz, AMC and Las Vegas.
An underlying pandemic throws most of the historical data out the window.
Just ask Hertz, AMC and Las Vegas.
Why the downvote? Because there are a few people who downvote anything negative for landlords on this board, and as we can see from the replies to this story, there are many landlords on hacker news.
Well. 1st one to the door (selling artificially inflated assets) does not guarantee success.
I'm sure many/most landlords are still rooted in reality and are still using the infamous investing formula of "where there are losers, there are winners" (aka buy low, sell high).
I'm sure many/most landlords are still rooted in reality and are still using the infamous investing formula of "where there are losers, there are winners" (aka buy low, sell high).
In some places, like Oakland and Tahoe, rent seems to be going up. But in San Francisco it is going down. Probably all as a result of people fleeing San Francisco to nearby places with a cheaper rent per square foot.
Mix shift. Oakland has just gone through a major wave of new construction. New apartments command higher rents. This does not necessarily imply a movement of people.
> Oakland has just gone through a major wave of new construction. New apartments command higher rents.
Funny, the religion in these parts is usually that building more apartments is the only way to drop rents.
Funny, the religion in these parts is usually that building more apartments is the only way to drop rents.
New construction (supply) brings down prices overall but rental market reports only include inventory turning over right now, which is biased toward new, empty, and more expensive buildings. These two facts are not conflicting.
All new construction in the bay is usually high priced luxury since that’s where developers make the most return. Thus new units aren’t cheaper.
What I’ve heard is that’s either supposed to free up other older apartments or we’re supposed to wait 30 years for the new luxury apartments to become old and cheaper.
I think we need rules about constructing diversified units, not exclusively luxury ones but proportional numbers of basic, medium and luxury.
What I’ve heard is that’s either supposed to free up other older apartments or we’re supposed to wait 30 years for the new luxury apartments to become old and cheaper.
I think we need rules about constructing diversified units, not exclusively luxury ones but proportional numbers of basic, medium and luxury.
How in the world did this one of my comments get a downvote.
Are that many people really moving away? I understand the logic, but it's a major life decision, so I'm surprised if it's happening so rapidly in response to covid. I've heard of people leaving the city temporarily, but assumed many of them were maintaining their apartments.
I would have guessed the lower rents were more about money drying up, and landlords being desperate to hang onto any tenant who can pay.
I would have guessed the lower rents were more about money drying up, and landlords being desperate to hang onto any tenant who can pay.
Anecdotally, I know two professionals in their late twenties who used to live in New York City, but moved home to be with their family during quarantine. Their leases are up in September, and neither one seem likely to renew, since their jobs can be done remotely and their offices are planning on maintaining the status quo for the forseeable future, past the point when many people usually sign leases. I don't have data that this is a larger trend, but I don't see anything particularly unique about those two individual' s situations that would make a similar approach untenable or unappealing to many other people.
We're in a similar situation in our household. Our jobs are remote until (at least) 2021/1/1. Our lease is up in December, instead of June/July (unfortunately for us!).
In our case, instead of moving away, we'd be pouncing on the way-below-baseline price, high-quality rentals that have been popping up for the last couple months.
The market's totally inverted. It used to be that if deals like these appeared, they'd be snapped up within 48 hours or less. Nowadays, they linger for days and even weeks in some cases.
To clarify, I've been tracking 1-2BR apartments in the Clinton Hill-Brooklyn Heights-Park Slope-Carrol Gardens quadrangle. I've heard that other neighborhoods are popping in the other direction, but I don't follow them as avidly.
This crisis is terrible in many ways, but it's also a perfect opportunity to find your long-term rental "forever-apartment", if your lease is up.
In our case, instead of moving away, we'd be pouncing on the way-below-baseline price, high-quality rentals that have been popping up for the last couple months.
The market's totally inverted. It used to be that if deals like these appeared, they'd be snapped up within 48 hours or less. Nowadays, they linger for days and even weeks in some cases.
To clarify, I've been tracking 1-2BR apartments in the Clinton Hill-Brooklyn Heights-Park Slope-Carrol Gardens quadrangle. I've heard that other neighborhoods are popping in the other direction, but I don't follow them as avidly.
This crisis is terrible in many ways, but it's also a perfect opportunity to find your long-term rental "forever-apartment", if your lease is up.
It’s June. I don’t know about SF but in NYC most leases expire in June or July.
A lot of companies aren’t ending WFH till 2021 or fall. Plenty of young people are not renewing their lease and staying with their family outside the city or state.
My building had has four tenants move out in the past week - one a family.
They’ll probably be back and rent again but by then rents will have dropped.
A lot of companies aren’t ending WFH till 2021 or fall. Plenty of young people are not renewing their lease and staying with their family outside the city or state.
My building had has four tenants move out in the past week - one a family.
They’ll probably be back and rent again but by then rents will have dropped.
You're right; the immediate response is driven by cash flow. The situation im talking about is likely a year or more away as many commercial firms are in longterm leases.
I'm just saying that its definitely on the horizon given the conversations I'm having, even if evidence at the moment is scant.
I'm just saying that its definitely on the horizon given the conversations I'm having, even if evidence at the moment is scant.
Yeah, people want that space for a home office now.
Google 'white flight' for historical precedent. It remains to be seen if it will happen again, but it is certainly possible. I know I'm ready to leave the Bay Area for someplace boring.
If there is deflation in the housing market, then marginal mortgage holders will walk away and become renters. That will swell the ranks of renters and drive up rents.
In many metro areas owner occupied real estate is overpriced relative to rents. When this imbalance corrects rents will rise, as before the correction owner occupants were subsidizing renters by overpaying for property even though renting made more sense.
In many metro areas owner occupied real estate is overpriced relative to rents. When this imbalance corrects rents will rise, as before the correction owner occupants were subsidizing renters by overpaying for property even though renting made more sense.
Why do you say this? By all accounts, in the UK at least, rental demand has boomed compared to last since lockdown restrictions eased
https://www.bbc.co.uk/news/uk-england-52847319
https://www.bbc.co.uk/news/uk-england-52847319
Leases are typically for a fixed period, so it's really the integral of these charts that matters - how many people are currently in a rental.
I suspect that number is still a long way below normal, because lots of people are moving in with friends or family (students, young professionals, etc.).
My experience in London is the ratio of people looking for a house to houses advertised is the lowest I've ever seen in 10 years.
I suspect that number is still a long way below normal, because lots of people are moving in with friends or family (students, young professionals, etc.).
My experience in London is the ratio of people looking for a house to houses advertised is the lowest I've ever seen in 10 years.
The second wave and new restrictions are inevitable.
>He says a call center worker told him that he didn't qualify for any help because he was late on a car payment last year. When NPR contacted Ford, the company said that is not its policy. And after reviewing the case, the company is now letting Baird skip his next car payment, which he says is a big help.
It appears Ford operates on the Google customer service spectrum of only helping those who can gain support of public outcry.
What I would like to see is a response from Ford that they will open an investigation to review everyones requests which have been denied for skipping payment.
It appears Ford operates on the Google customer service spectrum of only helping those who can gain support of public outcry.
What I would like to see is a response from Ford that they will open an investigation to review everyones requests which have been denied for skipping payment.
Like when Wells Fargo investigated their mortgage department and found no problems, right? Or when Google investigated Andy Rubin and decided he wasn't that bad and protected him for three more years? Why on earth would you ever trust a corporation to police themselves? They always lie, they always fail.
It can't hurt to expect companies to actually troubleshoot their own policies. We don't have to expect that it's the only recourse (eg. government regulation, civil suits, public brand shaming, etc).
I have seen no evidence of any positive outcome from companies policing themselves, only negative results and coverups.
I'm sure there have been a few instances, somewhere, there must be, right? I just don't recall reading or hearing about them in my entire life, ever.
I'm sure there have been a few instances, somewhere, there must be, right? I just don't recall reading or hearing about them in my entire life, ever.
Sure it can, you’ll just end up demoralizing yourself. Expect companies NOT to troubleshoot their policies, and then when one occasionally does you’ll be pleasantly surprised. If you expect them to police themselves, most of the time you will end up being disappointed.
I have a commercial tenant who was forced to shut down their business during the lockdown. I just waived rent until they were allowed to reopen. You can't get blood from a turnip, and I really don't want to force them into default and try to find another tenant in this environment anyway.
Almost everybody is taking a haircut this year.
Almost everybody is taking a haircut this year.
Here in Czech Republic there is a program where government pays 50% of busines rent as long as the property owner agrees on a 30% discount and the tennant pays 20%. The program covers March to June (three months) with most businesses having to be closed for about six weeks from that and restaurants fully reopening only recently.
IMHO this is a really good idea while not giving money away due to each party covering a part of the deal.
IMHO this is a really good idea while not giving money away due to each party covering a part of the deal.
There's plenty of landlords in SF who think turnips bleed. There was a cafe that just closed permanently because the landlord wouldn't lower the rent, in a building bought 20 years ago for $1m where the gross rents are over $60k/month. You do the math.
This has been very much the case in UK high streets for the past few years (on and off since '08). In the county-town where I grew up a Starbucks (!?!) closed because the rents were too high. Even before the pandemic, a number of shops have closed down in the last year, so it will be interesting to see what's left 6 months post lockdown.
The only businesses in that town that have been booming are retirement homes... but after this I assume there will be a lot of empty properties.
The only businesses in that town that have been booming are retirement homes... but after this I assume there will be a lot of empty properties.
At least in NY, rising retail vacancies were partially obscured by bank branches spreading like wildfire. The retail market is not particularly healthy if the landlords' only tenants are the people they're paying off the mortgage to.
... 12?
> Almost everybody is taking a haircut this year.
I haven't had a haircut since febuary. (cutting my actual hair) :)
Some of my friends look a little bushy too.
I've paid the lady who cuts my hair anyway, I've been seeing her forever and this is her only income.
I haven't had a haircut since febuary. (cutting my actual hair) :)
Some of my friends look a little bushy too.
I've paid the lady who cuts my hair anyway, I've been seeing her forever and this is her only income.
I think that's probably the smart move, at least for commercial property in this situation. The waived rent is essentially an insurance premium against the risk of vacancy coming out of the recession.
Yup. "If you owe the bank $100 dollars, that's your problem; if you owe the bank $100 million, that's the bank's problem."
We have small scale commercial tenants and halved their rate and extended terms. Would rather retain tenants we like than play hardball and risk having to find new ones. Over the last couple of months, we've lost one tenant (half rate) but gained two (full rate).
Isn't the smarter move to defer payment of the rent for a few years?
One day, they'll be able to pay, and then you'll get paid.
One day, they'll be able to pay, and then you'll get paid.
Smarter? Eh, probably.
I dunno though. It's a small enterprise that doesn't do a lot of business even in good times. I'm ok helping them out. It can be my good deed for the decade.
I dunno though. It's a small enterprise that doesn't do a lot of business even in good times. I'm ok helping them out. It can be my good deed for the decade.
If they are a low-margin business, the only way they'll be able to pay up, is if inflation makes money worthless.
A high-margin business with low cash on hand, that's temporarily impacted by COVID is another story - they might be able to pay up later.
A high-margin business with low cash on hand, that's temporarily impacted by COVID is another story - they might be able to pay up later.
There are also tax concerns that might affect a decision on whether to write down a loss this year versus some time in the near future.
A wave of more layoffs will happen as soon as the Paycheck Protection quiet period ends.
After June 30, companies that took PPP money are free to fire people without repercussion.
After June 30, companies that took PPP money are free to fire people without repercussion.
I like to remind people that in 2008, Bear Stearns fell in March. Most of the the economy didn't realize the financial system problems until late August.
I'm waiting for a very large shoe to drop in a few months. How big will depend on whether consumers feel comfortable about their jobs+health.
I'm waiting for a very large shoe to drop in a few months. How big will depend on whether consumers feel comfortable about their jobs+health.
The turnarounds always happen quickly after the fed takes serious action. Consider the 2008 crisis, or take 1933 (I believe?) when we broke from the gold standard: immediate exit from the Great Depression.
The fed and congress have been very on point with the stimulus response speed this time around and so I think we’ve seen the bottom of the market through this. And most investors are voting with their dollars that this is true.
(I’m just parroting Ray Dalio.)
The fed and congress have been very on point with the stimulus response speed this time around and so I think we’ve seen the bottom of the market through this. And most investors are voting with their dollars that this is true.
(I’m just parroting Ray Dalio.)
Titanic Syndrome. Everything's going under, but the people on the upper decks are still enjoying their late-night cigars while the boiler crew is drowning. It's an interesting phenomenon (and, I'm sure, has a better name than the one I just made up).
I wanna say, "There we go," but this is slightly different. Not so much that one failure unexpectedly causes total collapse down the line, more so that a catastrophic failure of important components (which obviously are going to cause a system collapse to anyone who knows what happened) happens in a system so large that other portions of that doomed system are not even aware.
> How big will depend on whether consumers feel comfortable about their jobs+health.
This is a very frightening sentence because obviously not many consumers feel comfortable about either right now.
This is a very frightening sentence because obviously not many consumers feel comfortable about either right now.
Probably. Though with some weird details. I'm actually getting paid more right now being "furloughed", with the approval of my employer and (tacitly) the state. When the "don't work" bonus ends, I'll revert to full time.
> Probably. Though with some weird details. I'm actually getting paid more right now being "furloughed", with the approval of my employer and (tacitly) the state. When the "don't work" bonus ends, I'll revert to full time.
I think a lot of people haven't realized that for many workers, being furloughed or having your hours reduced can result in an effective raise under the current Coronavirus aid package.
A friend's company furloughed everyone on Fridays. She was disappointed at first, until she realized this hours reduction qualified her for the $600/week Coronavirus aid. Now she's making more money, working less, and enjoying 3-day weekends.
Now everyone at her company is trying to convince management to continue the Friday furlough until the $600/week stimulus runs out.
This is why I don't trust the unemployment claim numbers until after July. Too many perverse incentives to increase the number of claims.
I think a lot of people haven't realized that for many workers, being furloughed or having your hours reduced can result in an effective raise under the current Coronavirus aid package.
A friend's company furloughed everyone on Fridays. She was disappointed at first, until she realized this hours reduction qualified her for the $600/week Coronavirus aid. Now she's making more money, working less, and enjoying 3-day weekends.
Now everyone at her company is trying to convince management to continue the Friday furlough until the $600/week stimulus runs out.
This is why I don't trust the unemployment claim numbers until after July. Too many perverse incentives to increase the number of claims.
I feel like the perverse uplift will be more than offset by the people still working for soon to be bankrupt companies.
this is true. will probably happen at my workplace as well unfortunately. the PPP was a stopgap which helped a bit, but sales are still not back to normal to help pay for full staff.
My company, an experiencial ad agency, furloughed all but 2 people in every non-finance Dept March 23, rehires everyone with big paycuts (me, 37% cut) April 27 through PPP.
No new business was able to be drummed up and now massive lay offs of 90% of the US offices starting June 15 with a paycheck severance so effectively June 30. The EU offices have faired better with more work, and few layoffs of only receptionists.
All and all it’s bleak for the events industry. I’m sure that a lot of convention centers, caterers, AV rental houses, independent producers, PAs, will all be on the dole and you’ll see a huge spike in unemployment on Aug 1.
No new business was able to be drummed up and now massive lay offs of 90% of the US offices starting June 15 with a paycheck severance so effectively June 30. The EU offices have faired better with more work, and few layoffs of only receptionists.
All and all it’s bleak for the events industry. I’m sure that a lot of convention centers, caterers, AV rental houses, independent producers, PAs, will all be on the dole and you’ll see a huge spike in unemployment on Aug 1.
Lockdowns are effective as tourniquets, but indefinite or long term use was never logical. There should have been more forward-thinking and pragmatic options pushed earlier. We will now see the natural repercussions of lockdown-centered policies.
I think you may have misunderstood the point of lockdowns.
Lockdowns are/were intended to prevent jamming hospitals with COVID patients which would lead to non-COVID emergencies being put at risk.
The idea is to lockdown an area not to STOP, but to SLOW the trickle of new patients into hospitals at a rate they can be serviced: e.g., balancing the pipeline. In anticipation of the huge surges seen in the North East US, many hospitals built-out their capacity but didn't need it. Thankfully, and hopefully they will not.
As for "natural repercussions," the different phased-reopening plans that governors are drawing up all share the same thing: let's try opening a little, and if the cases shoot up again, lock down if hospitals are at risk of overflowing. We just don't have a national policy, it is patchworks of different state alliances.
It was the best idea at the time, and we all know the only other proposed solution was to NOT lock down and let those who are susceptible pay the price. Some people on the news vocally approved of that idea, most people did not according to surveys.
Lockdowns are/were intended to prevent jamming hospitals with COVID patients which would lead to non-COVID emergencies being put at risk.
The idea is to lockdown an area not to STOP, but to SLOW the trickle of new patients into hospitals at a rate they can be serviced: e.g., balancing the pipeline. In anticipation of the huge surges seen in the North East US, many hospitals built-out their capacity but didn't need it. Thankfully, and hopefully they will not.
As for "natural repercussions," the different phased-reopening plans that governors are drawing up all share the same thing: let's try opening a little, and if the cases shoot up again, lock down if hospitals are at risk of overflowing. We just don't have a national policy, it is patchworks of different state alliances.
It was the best idea at the time, and we all know the only other proposed solution was to NOT lock down and let those who are susceptible pay the price. Some people on the news vocally approved of that idea, most people did not according to surveys.
In Europe we are using lockdowns to get infections sufficiently low to do test, trace, and isolate - with eradication as the ultimate objective.
This. Look at what New Zeland [1] has been able to do (or any Asian country that had plans in place post-SARS).
The US lockdown should have been used to buy us time to put procedures in place to stop further spread.
1 - https://bing.com/covid/local/newzealand
The US lockdown should have been used to buy us time to put procedures in place to stop further spread.
1 - https://bing.com/covid/local/newzealand
New Zealand is interesting because it's an island (2+, really), mostly rural, relatively isolated from the world, and caught it early. At some point they're going to open up, and someone with a 16-day incubation period will slip by and spread it. Or someone from a container ship.
The first US fatality was reported on Feb 29. There are reports that it started spreading in the US in late December. It took two months to notice it, 3.5 to panic. That said, people are looking for it now, so that helps.
The first US fatality was reported on Feb 29. There are reports that it started spreading in the US in late December. It took two months to notice it, 3.5 to panic. That said, people are looking for it now, so that helps.
It won't be irradiated without a vaccine or an absurd amount of testing. Too many people have either no symptoms or minor symptoms. Between that and a potentially long incubation period, it'll keep lurking around.
That's fine, as the measures can be tightened again if a new wave starts to rear its head. We can see this much earlier now with all the testing so the dampening measures will be much shorter and cheaper and more localized. Until the vaccine arrives.
> with eradication as the ultimate objective
I don't think anyone is claiming to totally eradicate it, or did I miss something? Because as long as people travel, it will still exist, e.g., we still have SARS and MERS and ZIKA, just very low numbers.
I thought the mindset was minimize it until we have a vaccine. I could be wrong.
I don't think anyone is claiming to totally eradicate it, or did I miss something? Because as long as people travel, it will still exist, e.g., we still have SARS and MERS and ZIKA, just very low numbers.
I thought the mindset was minimize it until we have a vaccine. I could be wrong.
No cases of SARS have been reported since 2004. It's probable that the SARS-CoV-1 virus was eradicated. That one might have been easier to control because it progressed much faster (and more commonly) to death than the novel coronavirus.
What about MERS and Zika?
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Nobody was ever advocating for indefinite or long-term lockdown policies. That's a strawman.
Also:
“ Durham leaving stay-at-home order in place indefinitely” https://spectrumlocalnews.com/nc/triangle-sandhills/news/202....
NJ stay at home order continued indefinitely | FOX 5 New York https://www.fox5ny.com/news/nj-stay-at-home-order-continued-.... And many many more...
NJ stay at home order continued indefinitely | FOX 5 New York https://www.fox5ny.com/news/nj-stay-at-home-order-continued-.... And many many more...
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Which universe do you live in?
“Los Angeles County, which has recorded the highest number of coronavirus cases and deaths in California, has extended stay-at-home orders indefinitely.”
https://www.sfchronicle.com/bayarea/article/LA-to-extend-sta...
“Los Angeles County, which has recorded the highest number of coronavirus cases and deaths in California, has extended stay-at-home orders indefinitely.”
https://www.sfchronicle.com/bayarea/article/LA-to-extend-sta...
Exactly. It was time to get our feet under us, get PPE, get testing capacity up, get contract tracing in place etc. Kentucky, my state, has started opening up but is watching the numbers closely. No one wants to stay locked down.
It's going to be very interesting going forward. The American public (myself included more times than I would care to admit) is really good about moving on and having a short-term memory on things (Lots of these things happened back in 1918 with masks, social distancing, lockdowns, people hating the lockdowns, etc). I worry what happens when you couple that urgency to move on with something that, from all indications, cannot be swept under the rug.
It's going to be very interesting going forward. The American public (myself included more times than I would care to admit) is really good about moving on and having a short-term memory on things (Lots of these things happened back in 1918 with masks, social distancing, lockdowns, people hating the lockdowns, etc). I worry what happens when you couple that urgency to move on with something that, from all indications, cannot be swept under the rug.
we could be sweeping something else under the rug: knock-on effects of the shutdown. people are somehow just starting to realize that there's worse impacts of shutting down the economy than lower share prices. people go hungry. people riot. cities burn. innocents get killed throughout the whole process. we're just getting started if the economy doesnt turn around quick.
I would characterize basically all the the lockdowns as indefinite.
I guess it depends on how you define long term. I do have friends who think the lockdown should last in its current form (ie extended holiday with extra $600/week for the unemployed) until there's a vaccine.
Flattening the curve was the refrain but we seem to have forgotten that.
Flattening the curve was the refrain but we seem to have forgotten that.
If there is no spike in infections within two weeks, from areas which had large public protests in the past week, can millions of Americans be helped by restarting the economy?
>If there is no spike in infections within two weeks, from areas which had large public protests in the past week, can millions of Americans be helped by restarting the economy?
Daily new infections have more than doubled here in North Carolina in the last two weeks since "reopening" [0]. We have had more new cases in the last two weeks (2200) than in the entire length of lockdown from March until then (2000). The death rate has massively spiked beginning May 24th, exactly two weeks (the median time from infection to death) from May 9th, the day the governor relaxed restrictions [1]. The dream of this thing just magically going away is absolutely delusional.
[0] https://www.nytimes.com/interactive/2020/us/north-carolina-c...
[1] https://www.nytimes.com/interactive/2020/us/north-carolina-c...
Daily new infections have more than doubled here in North Carolina in the last two weeks since "reopening" [0]. We have had more new cases in the last two weeks (2200) than in the entire length of lockdown from March until then (2000). The death rate has massively spiked beginning May 24th, exactly two weeks (the median time from infection to death) from May 9th, the day the governor relaxed restrictions [1]. The dream of this thing just magically going away is absolutely delusional.
[0] https://www.nytimes.com/interactive/2020/us/north-carolina-c...
[1] https://www.nytimes.com/interactive/2020/us/north-carolina-c...
There are more tests than there were a month ago, and that affects how many positives are seen (by some amount).
Also the increase in deaths you link to is not statistically significant, given it is in the rage of 10-30 over the course of several months in a state with 10 million people.
Those numbers don't prove your point.
Also the increase in deaths you link to is not statistically significant, given it is in the rage of 10-30 over the course of several months in a state with 10 million people.
Those numbers don't prove your point.
We need to have another bucket in the covid classification system besides dying and no dying:
https://www.cbc.ca/news/canada/toronto/strange-symptoms-flar...
https://www.cbc.ca/news/canada/toronto/strange-symptoms-flar...
> Also the increase in deaths you link to is not statistically significant, given it is in the rage of 10-30 over the course of several months in a state with 10 million people.
A penny doubled daily is $0.64 after a week, $81.92 after two, $10,485.76 after three, and $1,342,177.28 after four.
Upwards movement in cases and deaths in something that spreads exponentially is... not great.
A penny doubled daily is $0.64 after a week, $81.92 after two, $10,485.76 after three, and $1,342,177.28 after four.
Upwards movement in cases and deaths in something that spreads exponentially is... not great.
Nothing is doubling every week anymore. Why did you bring that up?
Daily deaths across pretty much all nations are decreasing even as lockdowns are removed. Nit pick all you'd like, be as afraid as you like, but the numbers you supplied don't support your assertions.
Daily deaths across pretty much all nations are decreasing even as lockdowns are removed. Nit pick all you'd like, be as afraid as you like, but the numbers you supplied don't support your assertions.
> Nothing is doubling every week anymore
Exponential growth of the disease isn't tied to an arbitrary "week" timeline. It's delayed because of a 0.25 - 4.0 weeks. Different environment and behaviors will cause it to spread at different time intervals (not just a different number of recipients per spreader).
> Daily deaths across pretty much all nations are decreasing even as lockdowns are removed.
And COVID death doesn't happen within days of new exposure. It's delayed 3.5 - 5+ weeks after exposure and the people most likely to die aren't the ones walking around in public on the first day of end of SiP.
Your parent comment wasn't as outrageous as you make it seem.
Exponential growth of the disease isn't tied to an arbitrary "week" timeline. It's delayed because of a 0.25 - 4.0 weeks. Different environment and behaviors will cause it to spread at different time intervals (not just a different number of recipients per spreader).
> Daily deaths across pretty much all nations are decreasing even as lockdowns are removed.
And COVID death doesn't happen within days of new exposure. It's delayed 3.5 - 5+ weeks after exposure and the people most likely to die aren't the ones walking around in public on the first day of end of SiP.
Your parent comment wasn't as outrageous as you make it seem.
>Your parent comment wasn't as outrageous as you make it seem.
Parent didn't account for vastly increased testing capacity in their assertions, and characterized a statistically insignificant increase in deaths as "massive". I objected to that.
I grant that this is not over and needs to be closely watched. I object to the exaggeration of the threat.
Parent didn't account for vastly increased testing capacity in their assertions, and characterized a statistically insignificant increase in deaths as "massive". I objected to that.
I grant that this is not over and needs to be closely watched. I object to the exaggeration of the threat.
Daily deaths are decreasing while daily new cases are increasing. The areas where most of the new cases are being recorded are rapidly changing, and I think a lot of people aren't paying attention to that. In quite a short time, the western European countries are not at the top of the list of countries with the most new cases, and similarly within the US, NY and NJ are behind Texas, California, Illinois, etc.
Maybe deaths being down means something positive, but it also could be a lagging indicator to some extent. It could reflect different record-keeping in the areas that are becoming more prominent in new cases.
Maybe deaths being down means something positive, but it also could be a lagging indicator to some extent. It could reflect different record-keeping in the areas that are becoming more prominent in new cases.
>Daily deaths are decreasing while daily new cases are increasing.
But, as I originally stated, there are a lot more tests being done now, and that could explain why the number of confirmed cases is increasing. Some weeks ago they only tested those requiring hospitalization, and as time went on now anyone can get a test.
It would be nice if there were weekly samples of 20k people to serve as a valid week-to-week measure of the population infection rate.
But, as I originally stated, there are a lot more tests being done now, and that could explain why the number of confirmed cases is increasing. Some weeks ago they only tested those requiring hospitalization, and as time went on now anyone can get a test.
It would be nice if there were weekly samples of 20k people to serve as a valid week-to-week measure of the population infection rate.
The places where the new cases are skyrocketing are having more tests done, obviously, but they are places where the number of tests (and cases and deaths) up until now was low.
Conversely, the places that were hardest hit in the first wave are also having more tests done than previously, and at least before full reopening, are not yet having cases jump up.
Conversely, the places that were hardest hit in the first wave are also having more tests done than previously, and at least before full reopening, are not yet having cases jump up.
Many states are experiencing continued increase in infection rates. See https://www.worldometers.info/coronavirus/usa/california/, https://www.worldometers.info/coronavirus/usa/texas/, to a lesser extent https://www.worldometers.info/coronavirus/usa/florida/ for example. Deaths will lag that. Doubling time is really only a legitimate factor insofar as we can develop vaccines and treatments in the interim, and that hospital capacity is preserved; otherwise it's just a question of whether mass bad outcomes occur now or later. To be clear, I'm not arguing for continued lockdowns -- that seems fruitless. But it seems premature to assume the worst is behind us.
I wonder what those numbers would look like taking into account that there has been much more testing online in the last several weeks? (so of course the number of detected positives goes up)
I grant that the worst might not be behind us, but I also keep in mind that the experts said from the beginning that most likely outcomes are that this will become another variant of the common cold or flare up some years similar to a bad flue season [0]
I also agree that this needs to be watched, and I appreciate your realistic appraisal of lockdowns despite the possible remaining danger.
[0] https://www.statnews.com/2020/02/04/two-scenarios-if-new-cor...
I grant that the worst might not be behind us, but I also keep in mind that the experts said from the beginning that most likely outcomes are that this will become another variant of the common cold or flare up some years similar to a bad flue season [0]
I also agree that this needs to be watched, and I appreciate your realistic appraisal of lockdowns despite the possible remaining danger.
[0] https://www.statnews.com/2020/02/04/two-scenarios-if-new-cor...
Not sure I follow. It may become seasonal yes, but comparing it to a cold or flu downplays the severity.
The idea is that it will decrease in severity over time. It may already be doing so. In early March they were tracking a dozen mutations already.
From the linked article [0], quoting a number of infectious disease experts, coronavirus researchers, epidemiologist, etc:
>OC43 and 229E are more prevalent than other endemic human coronaviruses, especially in children and the elderly. Together, the four are responsible for an estimated one-quarter of all colds. “For the most part they cause common-cold-type symptoms,” said Richard Webby, an influenza expert at St. Jude Children’s Research Hospital. “Maybe that is the most likely end scenario if this thing becomes entrenched.”
>Odds: Moderate. “I think there is a reasonable probability that this becomes the fifth community-acquired coronavirus,” Adalja said, something he expanded on in his blog. Webby agreed: “I have a little bit of hope that, OK, we’ll put up with a couple of years of heightened [2019-nCoV] activity before settling down to something like the other four coronaviruses.”
>Odds: Pretty good. What we may be seeing “is the emergence of a new coronavirus … that could very well become another seasonal pathogen that causes pneumonia,” said infectious disease expert Michael Osterholm of the University of Minnesota. It would be “more than a cold” and less than SARS: “The only other pathogen I can compare it to is seasonal influenza.”
(The article had a lot of other interesting and relevant information.)
[0] https://www.statnews.com/2020/02/04/two-scenarios-if-new-cor...
From the linked article [0], quoting a number of infectious disease experts, coronavirus researchers, epidemiologist, etc:
>OC43 and 229E are more prevalent than other endemic human coronaviruses, especially in children and the elderly. Together, the four are responsible for an estimated one-quarter of all colds. “For the most part they cause common-cold-type symptoms,” said Richard Webby, an influenza expert at St. Jude Children’s Research Hospital. “Maybe that is the most likely end scenario if this thing becomes entrenched.”
>Odds: Moderate. “I think there is a reasonable probability that this becomes the fifth community-acquired coronavirus,” Adalja said, something he expanded on in his blog. Webby agreed: “I have a little bit of hope that, OK, we’ll put up with a couple of years of heightened [2019-nCoV] activity before settling down to something like the other four coronaviruses.”
>Odds: Pretty good. What we may be seeing “is the emergence of a new coronavirus … that could very well become another seasonal pathogen that causes pneumonia,” said infectious disease expert Michael Osterholm of the University of Minnesota. It would be “more than a cold” and less than SARS: “The only other pathogen I can compare it to is seasonal influenza.”
(The article had a lot of other interesting and relevant information.)
[0] https://www.statnews.com/2020/02/04/two-scenarios-if-new-cor...
Is there a dashboard which shows increase in testing capacity over that same period, case demographics, presence of other medical conditions, and asymptomatic cases?
With increased (including employment-related) testing, case count should be increasing everywhere, but some of those could be recovered or asymptomatic.
We know that most hospitals were well below capacity, so new cases can be treated.
With increased (including employment-related) testing, case count should be increasing everywhere, but some of those could be recovered or asymptomatic.
We know that most hospitals were well below capacity, so new cases can be treated.
>Is there a dashboard which shows increase in testing capacity over that same period
Here's the best resource Ive found for comparing all the relevant data:
http://91-divoc.com/pages/covid-visualization/
Playing around with the data there, it looks like yes NC has had an increase in cases recently, but it tracks an increase in testing. Test positivity rates are about flat. It really is completely pointless to discuss increases in cases without also comparing to increases in testing and positivity rates.
Deaths are up, but as another poster pointed out it's hardly statistically significant. The rolling 7 day average is 2.2/1m now, vs 1.7/1m on May 1st.
Here's the best resource Ive found for comparing all the relevant data:
http://91-divoc.com/pages/covid-visualization/
Playing around with the data there, it looks like yes NC has had an increase in cases recently, but it tracks an increase in testing. Test positivity rates are about flat. It really is completely pointless to discuss increases in cases without also comparing to increases in testing and positivity rates.
Deaths are up, but as another poster pointed out it's hardly statistically significant. The rolling 7 day average is 2.2/1m now, vs 1.7/1m on May 1st.
Be careful not to swing too far the other way and assume that a flat positivity rate implies a flat actual infection rate. As states increase testing capacity, lower risk individuals will start to become part of the testing pool (e.g. those without severe symptoms, those with only fleeting contact with someone infected, those with no connection at all as part of a disease surveillance measure, etc.). Thus a flat testing positivity rate can very well coexist alongside an actual increase in rate of infection, and given the aforementioned factors we might even infer the latter given the former.
That's a fair point, and definitely something to keep in mind. Thank you for highlighting that.
I know you're not debating NC, but looking again at the state, it was mostly the last few weeks that looked flat. If you compare to the peak in positivity 42 days ago, they've gone from 16% positive to to 7% positive, using rolling 7 day averages. So, if I were in NC I wouldn't be overly concerned.
I know you're not debating NC, but looking again at the state, it was mostly the last few weeks that looked flat. If you compare to the peak in positivity 42 days ago, they've gone from 16% positive to to 7% positive, using rolling 7 day averages. So, if I were in NC I wouldn't be overly concerned.
>"Deaths are up, but as another poster pointed out it's hardly statistically significant. The rolling 7 day average is 2.2/1m now, vs 1.7/1m on May 1st."
How is a 34% increase not statistically significant?
How is a 34% increase not statistically significant?
Because we're talking relatively small numbers. It's easy to create large movements in small numbers.
If one person in my town is murdered this year, and 2 are murdered next year, that's a 100% year over year increase in the homicide rate. But it's obviously a meaningless increase.
2.2 out of a million is a small number. More people in NC are dying every day from cancer or heart disease.
If one person in my town is murdered this year, and 2 are murdered next year, that's a 100% year over year increase in the homicide rate. But it's obviously a meaningless increase.
2.2 out of a million is a small number. More people in NC are dying every day from cancer or heart disease.
That's a statistical/maths term[1], not an opinion of the number.
[1] https://en.wikipedia.org/wiki/Statistical_significance
[1] https://en.wikipedia.org/wiki/Statistical_significance
>How is a 34% increase not statistically significant?
Because going from a daily death rate of 0.00017% to 0.00022% is still such a very small number, what might be called statistical noise.
Because going from a daily death rate of 0.00017% to 0.00022% is still such a very small number, what might be called statistical noise.
Testing capacity has been increased. The amount of negative cases is going up. Positive cases are going down.
https://vida.io/dashboards/ck9thqbxl00000umrd0u2pmdj
https://vida.io/dashboards/ck9thqbxl00000umrd0u2pmdj
> Daily new infections have more than doubled here in North Carolina in the last two weeks since "reopening"
Confirmed cases, not infections. The hospitalization numbers are about 30% higher or so which is about-ish how much new deaths have increased. Which is bad, but not 2x bad.
All said, NC may have one of the highest spike of any state (reopened or not). Texas and Florida have flat hospitalizations; Georgia is slightly decreasing.
Confirmed cases, not infections. The hospitalization numbers are about 30% higher or so which is about-ish how much new deaths have increased. Which is bad, but not 2x bad.
All said, NC may have one of the highest spike of any state (reopened or not). Texas and Florida have flat hospitalizations; Georgia is slightly decreasing.
> The dream of this thing just magically going away is absolutely delusional.
Since we don't really know what's going on yet, almost anything that happens is going to seem kind of magical. Right now we're operating on guesswork and superstition.
Since we don't really know what's going on yet, almost anything that happens is going to seem kind of magical. Right now we're operating on guesswork and superstition.
Yeah, the 7 day moving average of new cases and deaths is also slowly trending up [1]. I think we all wished COVID would just go away, but that seems unlikely.
[1] https://www.worldometers.info/coronavirus/country/us/
[1] https://www.worldometers.info/coronavirus/country/us/
Please post a screenshot of the graph you're referring to, because I cannot see this upward trend on the page you linked.
Regardless, your second sentence is true.
Regardless, your second sentence is true.
If you look at the "daily new" graphs they have options to see the bars and/or overlay moving averages. Deaths and new infections were coming down, but have since bottomed out and are every so slightly going back up. Still not enough to see an upward trend, but the downward trend seems to have stopped.
I think they are referring to the uptick seen after May 29 here: https://imgur.com/a/Z9y7cek
Click the "Projections" link, under the "Recovered" count. There you can see the daily trend.
Remember the whole point of shutdowns was to "flatten the curve" to keep the hospitals from being overrun. We can't stop the disease and we can't commit economic suicide.
NC has only seen a slight uptick in hospitalizations: https://covid19.ncdhhs.gov/dashboard and it's been flat for the past week.
NC has only seen a slight uptick in hospitalizations: https://covid19.ncdhhs.gov/dashboard and it's been flat for the past week.
Yes, the shutdowns failed miserably if we thought we were going to eradicate infections.
The government failed badly at communicating this.
So now you have half the people saying the shutdowns were useless (cause the virus still exists) and another half saying they have to continue (cause the virus still exists, also)!
If we had realistically wanted to squash this thing, the examples of other countries suggest we would've needed much more aggressive tracing and isolating of people, widespread early mask distribution and wearing, and more tracking.
I fear that the government also may have failed miserably at taking advantage of them to bring more capacity online. Maybe the minimum stuff like masks and clothes and ventilators are taken care of, but we still seem in a very precarious place.
Voluntary changes in behavior persist, though, which will make things very hard to untangle "effect of shutdown" from "effect of people being cautious about high-risk environments."
The government failed badly at communicating this.
So now you have half the people saying the shutdowns were useless (cause the virus still exists) and another half saying they have to continue (cause the virus still exists, also)!
If we had realistically wanted to squash this thing, the examples of other countries suggest we would've needed much more aggressive tracing and isolating of people, widespread early mask distribution and wearing, and more tracking.
I fear that the government also may have failed miserably at taking advantage of them to bring more capacity online. Maybe the minimum stuff like masks and clothes and ventilators are taken care of, but we still seem in a very precarious place.
Voluntary changes in behavior persist, though, which will make things very hard to untangle "effect of shutdown" from "effect of people being cautious about high-risk environments."
Can you define what you mean by saying other countries squashed the thing? They may have flattened the curve, drove numbers down, etc. but until they get either a herd immunity or a wide vaccination the infections will likely flare up again as soon as travel restrictions get lifted.
Some countries aren’t planning on lifting travel restrictions, or are planning on having mandatory quarantine for arrivals
Not lifting travel restrictions is not realistic unless you are talking about North Korea. If you do not lift restrictions you are also punishing your own citizens (if you let your own citizens travel they can bring back the gift that keeps giving). We will see. And quarantine where? In many countries for returning citizens it just means "please go home and try to avoid contacts for 2 weeks", which is not super effective and gets treated creatively a lot.
I see friends (US and 2 countries in Europe) who are not affected by job losses booking vacations like crazy to take advantage of low prices to visit places they always wanted. So I suspect there will be a lot of travel again in the near future.
I see friends (US and 2 countries in Europe) who are not affected by job losses booking vacations like crazy to take advantage of low prices to visit places they always wanted. So I suspect there will be a lot of travel again in the near future.
"flatten the curve" changed once people realized they can use the shutdown as a means to political ends.
>The death rate has massively spiked beginning May 24th
So it's all right for deaths to spike if the hospitals don't expend their resources dealing with it? What are the hospitals for, then?
So it's all right for deaths to spike if the hospitals don't expend their resources dealing with it? What are the hospitals for, then?
Yeah we can't live in bubbles forever. 40 million people are unemployed in the U.S. now and counting. Millions of livelihoods are being destroyed, suicides are up, deaths for untreated non-Covid diseases are up, and if we want to avoid the complete breakdown of civilization we need to get back to work.
The government orders aren't the only thing impacting the economy.
Figuring out how to mitigate the virus, and thus making people feel more confident about economic activity, is what the economy needs.
Like good luck with it, but if 95% of Americans started wearing masks in the next couple of weeks, it's pretty clear that this would be a big boost to the economy over the next 6 months. But we don't do group oriented statistical mitigations here.
Figuring out how to mitigate the virus, and thus making people feel more confident about economic activity, is what the economy needs.
Like good luck with it, but if 95% of Americans started wearing masks in the next couple of weeks, it's pretty clear that this would be a big boost to the economy over the next 6 months. But we don't do group oriented statistical mitigations here.
But that's not the choice facing us. An exponential spike in deaths is quite a different thing from a linear one!
> can millions of Americans be helped by restarting the economy?
That's already happening. The current slow reopening is restarting the economy in order to help millions of Americans get back to work. For example, the jewelry store in my neighborhood in CA is now open, but for 1 customer at a time (OK in their case because even before the pandemic they controlled the number of people inside). However, the breakfast diner nearby with closely packed tables is still shut down. Even if they could open, the owner has to figure out how to run that business with appropriate social distancing.
An additional problem is that the economy was fragile even before the lockdown. Many employers likely won't rehire nearly as many people as they let go. Those who are still hiring have slowed down their hiring rate.
And until people feel safe consuming services and gathering in public like they did before, the main street economy can't recover fast enough to employ everyone who was laid off during the lockdown.
This is why government support for laid off workers must continue until enough confidence exists that things are safe, even without the lockdowns, and that might take years for some sectors of the economy.
That's already happening. The current slow reopening is restarting the economy in order to help millions of Americans get back to work. For example, the jewelry store in my neighborhood in CA is now open, but for 1 customer at a time (OK in their case because even before the pandemic they controlled the number of people inside). However, the breakfast diner nearby with closely packed tables is still shut down. Even if they could open, the owner has to figure out how to run that business with appropriate social distancing.
An additional problem is that the economy was fragile even before the lockdown. Many employers likely won't rehire nearly as many people as they let go. Those who are still hiring have slowed down their hiring rate.
And until people feel safe consuming services and gathering in public like they did before, the main street economy can't recover fast enough to employ everyone who was laid off during the lockdown.
This is why government support for laid off workers must continue until enough confidence exists that things are safe, even without the lockdowns, and that might take years for some sectors of the economy.
I suspect we will be told that the protests were necessary and for a greater good that outweighed spreading coronavirus, and now that they're over, we should all go back into lock down to prevent further spreading, and anything else is reckless and literally killing people.
Unlikely. A fair number of people are multiple payments/rent behind, not to mention still missing their unemployment checks.
Just today I saw an article that said the covid recession is over.
However...it appears that new infections have been rising again globally since May-ish. It looks to me like it is becoming exponential again, although the slope on a log scale is considerably less than the first time.
This is my interpretation of the charts at: https://www.worldometers.info/coronavirus/
...titled Daily New Cases and Daily Deaths.
Deaths still seem to be declining, but you would expect that to lag regardless.
There seems to be a pattern where the larger countries that weren't hit so hard at first are picking up as developed Europe gets things under control. For instance, India, Brazil, Russia, Pakistan etc.
And within the US, as NY and NJ have fewer new cases, Texas, California, Illinois, and Arizona are starting to take the lead. Over 90% of new cases are outside NY and NJ now.
However...it appears that new infections have been rising again globally since May-ish. It looks to me like it is becoming exponential again, although the slope on a log scale is considerably less than the first time.
This is my interpretation of the charts at: https://www.worldometers.info/coronavirus/
...titled Daily New Cases and Daily Deaths.
Deaths still seem to be declining, but you would expect that to lag regardless.
There seems to be a pattern where the larger countries that weren't hit so hard at first are picking up as developed Europe gets things under control. For instance, India, Brazil, Russia, Pakistan etc.
And within the US, as NY and NJ have fewer new cases, Texas, California, Illinois, and Arizona are starting to take the lead. Over 90% of new cases are outside NY and NJ now.
Type of activity seems to matter a lot. Protesting in a park with quite a bit of space, where people are mostly wearing masks, is a different thing than sitting in a bar having a beer.
Depends on the density at the park though... I was a bit surprised at the photos from the Boston protests [1].
[1]: https://kubrick.htvapps.com/htv-prod-media.s3.amazonaws.com/...
[2]: https://boston.cbslocal.com/2020/06/02/george-floyd-protests...
[3]: https://www.wcvb.com/article/new-group-of-watchdogs-begins-i...
[1]: https://kubrick.htvapps.com/htv-prod-media.s3.amazonaws.com/...
[2]: https://boston.cbslocal.com/2020/06/02/george-floyd-protests...
[3]: https://www.wcvb.com/article/new-group-of-watchdogs-begins-i...
The delay in observable cases is about 4-6 weeks, due to a number of cumulative effects.
As a passive real estate investor I'm seeing bidding on new sales has actually been more competitive than ever in my area (Atlanta GA). A lot of houses are selling above asking prices with 8-10 offers on the table. I am not sure if people genuinely think it is a good time to buy, or is it mostly FOMO.
I think people who can work from home and who didn't get laid off are fine and the stonks appeared to mostly recover (which may explain some of the money sloshing around the market).
I think there will be massive economic damage in 6 months that we aren't focusing on right now.
I think there will be massive economic damage in 6 months that we aren't focusing on right now.
I agree. A good portion of the 40m job loss are not gonna be fully recovered even if the situation improved a little, not to mention it is getting worse by the day.
I actually suspect part of the widespread looting is because people who used to have low paying hourly wages before COVID lockdown feel this dread and desperation as this economic depression unfolds.
Yup, must be that. Couldn't be people just wanting to steal.
widespread looting ... dread and desperation
Yeah, that's the ticket.
It was "dread and desperation" that caused people to loot the Louis Vuitton store in downtown Portland.
https://www.reddit.com/r/Portland/comments/gt9lby/pioneer_pl...
Yeah, that's the ticket.
It was "dread and desperation" that caused people to loot the Louis Vuitton store in downtown Portland.
https://www.reddit.com/r/Portland/comments/gt9lby/pioneer_pl...
Is anyone (except govt employees and people making PPE/in healthcare) really fine? The economy is so intricately connected, I feel that everyone will eventually pay the price. The large-corp tech sector has been fine so far but I am not sure how comfortable I am taking on a large mortgage. Atlanta is cheap .. a bay area techie could probably buy a place in cash.
Lots of money has to slosh around as we dig out way out of this hole so wall street banks aren't cutting staff anytime soon.
That's my understanding as well.
My wife started a co-working space January this year, it was her office and the co-working bit was to save on the rent with a prediction of some profit in a year or two.
Then covid happened, so we gave our notice to the landlord and are looking for a bigger house, with a spare room she can use as an home-office
We're saving money from the office rent and investing them in a less potentially profitable solution, but safer, at least for the moment.
Apparently this is a thing not just here, but it's global.
I think that's gonna keep the market alive for the next few months, I really can't say what could happen after that.
My wife started a co-working space January this year, it was her office and the co-working bit was to save on the rent with a prediction of some profit in a year or two.
Then covid happened, so we gave our notice to the landlord and are looking for a bigger house, with a spare room she can use as an home-office
We're saving money from the office rent and investing them in a less potentially profitable solution, but safer, at least for the moment.
Apparently this is a thing not just here, but it's global.
I think that's gonna keep the market alive for the next few months, I really can't say what could happen after that.
I've been watching 20+ properties around Austin, some out of genuine interest, others for a baseline. Zero of them moved in March and April despite asking price coming down every couple weeks. Now in the last couple weeks, 8 of them have had offers. I can't tell if they just dropped back into a "reasonable" range or some segment of the market has turned but it's fascinating.
My understanding is real estate was not essential here in Texas. Agents tried to do virtual showings but, come on, most people want to see a home before they submit an offer.
My anecdotal factor in Seattle is we have a set $/month in mind that is then tied to the price of the house. If a house will be more than $650k we can't afford it at this point, even with down payment help. If a house nearby falls to about $650k I'll walk over and check it out to build up examples of what is nice/not or what I like/dislike. The goal is to be able to buy next summer or the year after though so this is mostly experimental to gauge what is out there and identify what we'd like to buy vs pulling the trigger.
Yeah Atlanta had a similar "dip" period earilier, with many offers cancelled and investors on the sideline. Maybe the "reopen" gave people confidence? I'm afraid it is still too early to tell so I don't want to jump in too fast.
Home sales always peak when weather is nicer. As do leases for rentals. Leases that were ending a year from today are still ending, and some people are in a great place to buy a home, and inventory is incredibly low right now.
Home sales are seasonal. They peak in the summer at over double the rate of the winter. This occurs in all regions of the US.
Your observation does not deviate notably from typical market behavior.
Your observation does not deviate notably from typical market behavior.
I sell real estate in Washington state. What you are describing has been our norm for a while. I am curious - is this a new phenomenon you are seeing in Atlanta? Is it at all price points and areas of the city? Would be interesting to see the data.
I'm not sure how it compared year-to-year, but at the beginning of the COVID thing, house prices did drop a little with quite some offers cancelled (even pending ones, according to some of my agent friends).
How do things look without using the questionable guidance of "asking price"? "Asking price" (and the notion of above asking) often seems like real estate agent reality distortion to me.
Mortgage rates are super low, so some may see this as getting an asset they can leverage in an improved environment later.
Mortgage rates are super low, so some may see this as getting an asset they can leverage in an improved environment later.
I mean listing price is the most direct measure of the market temporature, not saying it's 100% accurate but it does represent the sentiment. Mortgage rate is indeed low, but not that significant compared to before (< 1% compared to 6 month ago I think).
I'm hesitating to bid because 1) price is still high 2) unemployment benefits will run out in 2 months, and I do think teh COVID effects have a long tail, that takes time to pan out. Thus the curiosity about the thought behind the "hot" market right now.
I'm hesitating to bid because 1) price is still high 2) unemployment benefits will run out in 2 months, and I do think teh COVID effects have a long tail, that takes time to pan out. Thus the curiosity about the thought behind the "hot" market right now.
Two obvious theories ... pent up demand/renters with savings and jobs are pulling the trigger (to reduce uncertainty in renting/city slickers moving back to cheaper areas). Alternative is people know QE is debasing the currency and people are going for hard assets (stock market is going in the same direction).
It's also very location specific. Some areas listing too high will hurt you in the long run, so sometimes people definitely do what you're saying - price it low to get lots of offers hoping to get a bidding war. Other areas are much less tolerant of games like that - it's quite regional.
[deleted]
Same thing in SF. Demand dropped, but so did supply, so prices are holding reasonably steady at this point.
I assume if prices drop, they won't stay low for long as people see it as an opportunity to jump into the market.
I assume if prices drop, they won't stay low for long as people see it as an opportunity to jump into the market.
San Francisco rent is collapsing - largest YoY decreases on record
e: edited
e: edited
I'm likely out of touch here, but at least for the person mentioned in the article, why does he need a huge SUV? If the crisis hits and you cannot re-pay the bills, that would be the first thing I'd get rid of. It doesn't look like he needs it for work, and he could just get away with a used Honda Civic or a similar smaller car that doesn't require much gas, expensive insurance, and most importantly monthly loan payments.
During the last financial crisis I sold lots of stuff that was dear to my heart but wasn't essential like motorbike, mtb, etc.
Is it the cultural gap that I'm not seeing as a European? Or something else?
During the last financial crisis I sold lots of stuff that was dear to my heart but wasn't essential like motorbike, mtb, etc.
Is it the cultural gap that I'm not seeing as a European? Or something else?
If he's like a lot of Americans, he's "upside down" on the truck - as in, he still owes more on the loan than he could realistically sell the truck for. That would leave him still in debt, but now without a vehicle, even if he could be content with a 10 year old Civic or Corolla.
The wisdom of having purchased such a large vehicle on credit to begin with is another discussion entirely. Americans are, on average, far more relaxed about owing a lot of money on a vehicle than, say, Germans. I grew up assuming a car payment was just part of adult life; my husband, a German, was raised to believe that borrowing for anything other than property was foolish. I've since come around to his point of view, and am the reasonably content co-owner of a 12 year old Fiesta, though considering our upgrade options as we have a baby on the way.
Why a large truck in the first place? A lot of American men, especially in the South (where this guy is), consider small sedans to be unmanly. If they're overweight like most Americans, they also think they're going to sit more comfortably in a larger vehicle. Plus, SUVs and trucks are less expensive in the US than they are over here - for what I'd have to pay for a new Corolla hybrid station wagon (my current coveted car) in Germany, I could get a Toyota Highlander mid-sized SUV in the US, which Toyota doesn't even bother trying to sell here.
The wisdom of having purchased such a large vehicle on credit to begin with is another discussion entirely. Americans are, on average, far more relaxed about owing a lot of money on a vehicle than, say, Germans. I grew up assuming a car payment was just part of adult life; my husband, a German, was raised to believe that borrowing for anything other than property was foolish. I've since come around to his point of view, and am the reasonably content co-owner of a 12 year old Fiesta, though considering our upgrade options as we have a baby on the way.
Why a large truck in the first place? A lot of American men, especially in the South (where this guy is), consider small sedans to be unmanly. If they're overweight like most Americans, they also think they're going to sit more comfortably in a larger vehicle. Plus, SUVs and trucks are less expensive in the US than they are over here - for what I'd have to pay for a new Corolla hybrid station wagon (my current coveted car) in Germany, I could get a Toyota Highlander mid-sized SUV in the US, which Toyota doesn't even bother trying to sell here.
Gotcha! Thanks for a thorough explanation
Will this effect the economy and the stock market at some point? That is not clear to me. The way the stock market is going it makes me quite scared. The whole thing might just collapse under its own weight at some point.
Meanwhile stock market is preparing to for its record high :).
The price of a stock is whatever someone will pay for it. The stock indices certainly have no obligation to reflect the current or future conditions of the overall economy. Some points to consider:
1. Stock prices follow trends. Increasing stock prices make stocks more attractive. These are the foundations of financial bubbles. History repeats itself.
2. Most of the valuation of an index like the S&P 500 is derived from a few stocks. 17.5% of the S&P 500 is the valuation of FAAAM.[0] Take a look at other members of the top 30 like Proctor & Gamble, Johnson and Johnson, Visa, Mastercard. The S&P 500 is mainly composed of companies essential to the daily functioning of the average American's life.
3. The stock market is essentially an unknowable process. Even the most profitable trading firms making billions of dollars a year make countless unprofitable trades each day and will go for years without turning a profit.
[0] https://www.cnbc.com/2020/01/28/sp-500-dominated-by-apple-mi...
1. Stock prices follow trends. Increasing stock prices make stocks more attractive. These are the foundations of financial bubbles. History repeats itself.
2. Most of the valuation of an index like the S&P 500 is derived from a few stocks. 17.5% of the S&P 500 is the valuation of FAAAM.[0] Take a look at other members of the top 30 like Proctor & Gamble, Johnson and Johnson, Visa, Mastercard. The S&P 500 is mainly composed of companies essential to the daily functioning of the average American's life.
3. The stock market is essentially an unknowable process. Even the most profitable trading firms making billions of dollars a year make countless unprofitable trades each day and will go for years without turning a profit.
[0] https://www.cnbc.com/2020/01/28/sp-500-dominated-by-apple-mi...
> Meanwhile stock market is preparing to for its record high :)
Yes, and I don't understand it. The S&P500 is within 8% of its all-time high (3393). Even without a second wave of coronavirus cases and deaths, the current levels of unemployment, defaults, and bankruptices, I can't see what supports these asset price levels. Any ideas?
Yes, and I don't understand it. The S&P500 is within 8% of its all-time high (3393). Even without a second wave of coronavirus cases and deaths, the current levels of unemployment, defaults, and bankruptices, I can't see what supports these asset price levels. Any ideas?
Your not understanding is a direct consequence of the decade+ of discussion around the stock market as if it's "the economy". Of course conflating the two will cause confusion when they eventually diverge.
The average P/E ratio for SPY companies is around 15. The price of the stock today is built on the earnings of the next 15 years, and most investors seem to believe we'll bounce back in a year or two.
Good investors don't rely on P/E ratios. At this point, GAAP earnings are basically becoming smoke and mirrors:
https://www.forbes.com/sites/greatspeculations/2018/11/19/pe...
https://www.forbes.com/sites/greatspeculations/2018/11/19/pe...
I've heard that all that QE and tax cuts from '08 and '20 goes into assets that are valued by rich people. Healthcare, real estate, college, financial securities, which drives up prices due to inflation. I'm not sure if I'm totally right, seems a bit too simple, but it makes enough sense to me. That money has to go somewhere, right?
Add that demand with demand from rich people from other countries for the same services (who might just loot their country and therefore aren't subject to the same domestic economic pressures) and prices keep going up.
Add that demand with demand from rich people from other countries for the same services (who might just loot their country and therefore aren't subject to the same domestic economic pressures) and prices keep going up.
The interest rate on government bonds is negative or basically negative through most of the world. Stock markets outside of the US have been struggling for a while now. There isn't really anywhere to get any sort of return these days, so the money ends up in the US stock market where it seems to get at least some sort of return.
Money is cheap, and where else would you put it?
The market is effective at allocating funds among equities, but the overall valuation of the equities market is another issue entirely.
The market is effective at allocating funds among equities, but the overall valuation of the equities market is another issue entirely.
Part of it is that there’s nowhere else to put the money. Currently we’re in a situation where no one has a way that they can spend money to make more of it.
Markets function through buying and selling. More people need to be selling then buying for prices to go down. But the fed is just coming in and buying in the markets with no buyers so this mechanism stops working and unsurprisingly prices are staying inflated.
Stock market is a future prediction machine. The price isn't the current valuation
By that argument it should have never went down back in April :). These are self-comforting arguments in the same line of "oh, it's all priced in".
[deleted]
I imagine a huge cash crunch is coming up soon as deferred payments come home to roost.
We can’t continue kicking the can down the road forever. If people are over leveraged or insolvent we have to bear the pain eventually. It’s part of the credit cycle and it’s how savers get their foot in the door regarding asset ownership. Otherwise we will have basically embraced some absurd worst-of-both-worlds kind of socialism in which we bailout the people who are leveraged and over-exposed-to-risk at the expense of future generations and savers.
The Fed/Government can probably kick it down the road until November though.
We can’t continue kicking the can down the road forever. If people are over leveraged or insolvent we have to bear the pain eventually. It’s part of the credit cycle and it’s how savers get their foot in the door regarding asset ownership. Otherwise we will have basically embraced some absurd worst-of-both-worlds kind of socialism in which we bailout the people who are leveraged and over-exposed-to-risk at the expense of future generations and savers.
The Fed/Government can probably kick it down the road until November though.
For mortgages I don't see why the deferrals are a problem as long as they are just tacked on to the end of the mortgage.
It is going to be a major problem for renters.
It is going to be a major problem for renters.
If people don’t have their jobs immediately come back after all the restrictions are lifted then they’ll still be unable to make future payments.
Correct though that renters will be hurt more, though it will likely have less systemic effects.
Correct though that renters will be hurt more, though it will likely have less systemic effects.
I've been expecting a "cash crunch" too but the Fed seems happy to keep making me wrong.
If the actual economy (gdp, not equities) doesn’t make a v-shaped recovery then it’s inevitable. I think the shakeup of who gets rehired for which jobs is going to cause some personal bankruptcies regardless. Basically if Acme co laid off 5k people, the 5k they rehire to resume operations may be a different set of people.
Or we just ignore/jail the unfortunate ones sense the general consensus is that we have too many people anyway.
(This isn't good, it's just the way we've structured the economy.)
(This isn't good, it's just the way we've structured the economy.)
We've been in that worst world since 2008 and will likely not be leaving any time soon.
This is one of those cases when delaying solving a problem can turn out to be a good thing. And in the end, a jubilee (debt forgiveness) might be inevitable. Which is likely to be a good thing too, especially if it covers student loans and other things that aren't cleared by bankruptcies.
I know people who are skipping payments just to be in solidarity with people who can't pay. They see it as an act of protest not only of inequality generally but of the fact that no matter what happens the financial industry will get a limitless bailout at the expense of everything else. Not paying is a way of getting a piece of that bailout.
I agree with the latter point. We've seen in the past 10 years or so that the regular economy will be sacrificed to save the financial industry. This has resulted in a complete decoupling of the two. The regular economy can be in a state of total collapse and the stock market goes up.
(By "the financial industry" I mean top politically well connected banks, not necessarily smaller private equity or smaller financial institutions. Those will crash and burn and be sold off in fire sale prices to larger banks that get bailed out, just like 2008.)
If we ever have real leadership again, one of the tasks before that real leadership is going to be undoing the loss of integrity and trust created by the 2008 bailouts. Like the second Iraq war, people have yet to even grasp how much damage was done in those years.
I agree with the latter point. We've seen in the past 10 years or so that the regular economy will be sacrificed to save the financial industry. This has resulted in a complete decoupling of the two. The regular economy can be in a state of total collapse and the stock market goes up.
(By "the financial industry" I mean top politically well connected banks, not necessarily smaller private equity or smaller financial institutions. Those will crash and burn and be sold off in fire sale prices to larger banks that get bailed out, just like 2008.)
If we ever have real leadership again, one of the tasks before that real leadership is going to be undoing the loss of integrity and trust created by the 2008 bailouts. Like the second Iraq war, people have yet to even grasp how much damage was done in those years.
> I know people who are skipping payments just to be in solidarity with people who can't pay.
So they're donating what would have been spent on rent to an appropriate cause? Surely they're not keeping the money if it's just that. /s
So they're donating what would have been spent on rent to an appropriate cause? Surely they're not keeping the money if it's just that. /s
Yeah they're donating the money to their self-in-3-months, who has even less than they do now, with no job and no prospects and no bailout on its way.
Exactly. They're thinking of it as an act of simultaneous self-preservation and civil disobedience to the fact that bailouts are only for huge banks and corporations. The perception, which is at least somewhat true, is that Wall St. and DC will be saved and the rest of the country can burn.
From what I've seen, the 1% vs the 99% is catchy but wrong. The reality is more like the 0.01% vs the 99.99%.
We are probably nearing the point where we will see actual change, since we're approaching a place where the wealth distribution hockey stick is so steep the upper middle class and "merely rich" will start seeing themselves as "the 99%." You'll see working class and hippies marching with lawyers, doctors, and owners of businesses that make "only" a few hundred million a year (and don't have lobbyists).
Wish it didn't have to get that bad, but that appears to be the case. We'll probably do something about CO2 when NYC is underwater.
From what I've seen, the 1% vs the 99% is catchy but wrong. The reality is more like the 0.01% vs the 99.99%.
We are probably nearing the point where we will see actual change, since we're approaching a place where the wealth distribution hockey stick is so steep the upper middle class and "merely rich" will start seeing themselves as "the 99%." You'll see working class and hippies marching with lawyers, doctors, and owners of businesses that make "only" a few hundred million a year (and don't have lobbyists).
Wish it didn't have to get that bad, but that appears to be the case. We'll probably do something about CO2 when NYC is underwater.
[deleted]
How many HN readers are landlords?
This is the main reason I have been scratching my head thinking how the hell is NASDAQ going up. Though might just be sour that I didn't go back in after getting at the right time
Seems like working in IT isn't enough, judging from the number of landlords on this post. Almost as if all productivity gains flow into land in our current system!
Yet the S&P500 is still green. The Fed continues to print in order to delay the inevitable. Either a currency crisis or hyperinflation.
Household incomes rose because of the stimulus.
https://www.bea.gov/news/2020/personal-income-and-outlays-ap...
https://tradingeconomics.com/united-states/personal-savings#....
So millions are defaulting, but millions of others are awash in newfound cash and savings.
https://www.bea.gov/news/2020/personal-income-and-outlays-ap...
https://tradingeconomics.com/united-states/personal-savings#....
So millions are defaulting, but millions of others are awash in newfound cash and savings.
That bump was for the April period. May isn't likely to look as rosy.
Or worse: BAML had a great piece recently that QEternity (cough) has actually stoked deflation by reducing low-risk asset yields to zero, which forces many savers to save more as relatively risk-free income disappears, which lowers consumption and thus inflation, prompting more QE...rinse and repeat.
Oooh, do you have a link?
Savings rates are through the roof right now, I would worry more about a deflation spiral.
You may be biased as a WFH/silicon valley type (continuing to produce income despite shelter at home). The median checking account balance was $3,400 in 2019, and that was before COVID19 struck.
There's a lot of people who were already barely hanging on, and now covid and demonstrations have pulled the rug out from under them.
We're only 2 months in. Things will get worse before they get better.
1. https://www.valuepenguin.com/banking/average-checking-accoun...
There's a lot of people who were already barely hanging on, and now covid and demonstrations have pulled the rug out from under them.
We're only 2 months in. Things will get worse before they get better.
1. https://www.valuepenguin.com/banking/average-checking-accoun...
Yeah, most of the US is one medical emergency from absolute financial ruin. It's amazing to see how disconnected the economy is from the lived experience of the majority of people.
> Yeah, most of the US is one medical emergency from absolute financial ruin.
Most Americans have health insurance of some form.
Most Americans have health insurance of some form.
If I have 3,400 to my name and my deductible is 2,000 (common from what I've seen). And my rent is 1,500 due next week, I'm not in good shape financially.
You’re missing several important details:
1. Insurance only pays some fraction of what can be very high bills, and providers notoriously send bill-like invoices trying to get you to pay for things which were paid in full by your insurance company. Many people will be pressured to pay things and uncomfortable standing up to a huge provider’s legal department.
2. Many employers have favored plans which increase deductibles, and the people with the worst plans are also paid the least and so will struggle to have enough cash in reserve for those larger payments.
3. Hospitals commonly have unrelated specialists show up for a couple minutes to add billable consultation hours. If one of those doctors isn’t covered by your plan, you get the bill even if the hospital itself is in network or you were, say, unconscious at the time or unaware that you could turn down their “help”.
4. Insurance is tied to employment: if you have a medical emergency which affects your ability to work, guess what happens to your coverage?
1. Insurance only pays some fraction of what can be very high bills, and providers notoriously send bill-like invoices trying to get you to pay for things which were paid in full by your insurance company. Many people will be pressured to pay things and uncomfortable standing up to a huge provider’s legal department.
2. Many employers have favored plans which increase deductibles, and the people with the worst plans are also paid the least and so will struggle to have enough cash in reserve for those larger payments.
3. Hospitals commonly have unrelated specialists show up for a couple minutes to add billable consultation hours. If one of those doctors isn’t covered by your plan, you get the bill even if the hospital itself is in network or you were, say, unconscious at the time or unaware that you could turn down their “help”.
4. Insurance is tied to employment: if you have a medical emergency which affects your ability to work, guess what happens to your coverage?
And most would still be stuck with a huge bill with a trip to the ER.
The QEternity money being discussed is going into checking accounts well above the median.
I'm talking specifically about PSAVERT[1]. This is nothing to do with my personal experience or identity.
PSAVERT went from a very steady baseline in the ~6-7% range for the last five years to 33% in eight weeks between February and April.
[1] https://fred.stlouisfed.org/series/PSAVERT
PSAVERT went from a very steady baseline in the ~6-7% range for the last five years to 33% in eight weeks between February and April.
[1] https://fred.stlouisfed.org/series/PSAVERT
This is entirely unresponsive to the parent and really only further demonstrates the point that deflationary pressure is the real risk here, not absurd claims of "hyperinflation."
I think your parent comment meant that people are trimming their expenses, not that they are sitting on so much income that they can't spend it fast enough.
> The median checking account balance was $3,400 in 2019, and that was before COVID19 struck.
Does that count money market and savings accounts? And given interest rates are so low I wonder if people invest in more riskier stuff.
Does that count money market and savings accounts? And given interest rates are so low I wonder if people invest in more riskier stuff.
People need capital to invest. A lot of people are floating by with that 3,400, not strategically holding only 3,400 in their bank account while they make their fortune on risky investments.
I wonder how useful that statistic is. I have a checking account and I move funds into it when I need to pay someone and otherwise I leave it empty. And I have other empty accounts that I just don't bother closing.
Not every inflation is a hyperinflation. Look at inflation in America in the 1945-1951 or the 1970s. It wasn’t the end of the world. A little inflation is easier to deal with than mass unemployment and bankruptcy.
I wonder who downvotes this and why.
QE has been going on for years since 2008. Still waiting on that inflation.
https://www.usinflationcalculator.com/inflation/historical-i...
QE contains an easy break on inflation. If it starts surging, the market can just have the assets the fed holds added back to it.
https://www.usinflationcalculator.com/inflation/historical-i...
QE contains an easy break on inflation. If it starts surging, the market can just have the assets the fed holds added back to it.
> Still waiting on that inflation.
You're waiting on CPI inflation.
The inflation that did actually happen was in equities, startup valuations, risk-adjusted debt (interest rates are far lower than the underlying risk would be without QE), fine art, yachts, healthcare, college tuition, etc. None of these are in the CPI because they aren't consumer staples.
You're waiting on CPI inflation.
The inflation that did actually happen was in equities, startup valuations, risk-adjusted debt (interest rates are far lower than the underlying risk would be without QE), fine art, yachts, healthcare, college tuition, etc. None of these are in the CPI because they aren't consumer staples.
That's just.. not what inflation is.
You're looking in the wrong place. QE doesn't go to families, so it doesn't increase the cost of milk, apples, or eggs. It went to the wealthiest banks and corporations, and wouldya look at that -- asset prices are inflated, "startups" have absurd valuations, and the wealth gap is larger than ever before.
The inflation is there, clear as day. You're just not looking in the right place and you think you're so smart because of it.
The inflation is there, clear as day. You're just not looking in the right place and you think you're so smart because of it.
Your claim that Fed policy somehow doesn't have an impact on aggregate demand because it goes "to the wealthiest banks and corporations" is laughable for anyone with an elementary understanding of economics.
We're not seeing inflation because there would have been a huge AD collapse and deflation in the absence of Fed action.
We're not seeing inflation because there would have been a huge AD collapse and deflation in the absence of Fed action.
THIS, so much this ... for years people said bottom-up stimulus plans would inevitably cause inflation. Injecting the money on top changes little, now it's just trickle-down inflation.
(and if this doesn't hold, I would love to understand why)
(and if this doesn't hold, I would love to understand why)
It doesn't hold because people get the money via loans at low interest rates and then spend more.
Fed policy has a clear impact on AD.
Fed policy has a clear impact on AD.
yep, also plenty of inflation to see at the grocery store. the 'family size' of cereal is actually the 'baby' size of a few years ago. that's how they can maintain the same price over time.
It's really easy to hand wave away all the inflation when you change the formula. They have so many "soft" factors they use and completely subjective ones that the reported inflation is in no way matched real world inflation. They only changed the way it was calculated because the national deficit was getting out of control. GDP is, simply, growth - inflation. If you can make inflation look lower you can make GDP look higher.
Look at asset prices not goods prices. It’s there.
Because there's no indication of inflation let alone hyperinflation in any economic data or a 'currency crisis' whatever that means.
In fact a sharp decline in demand seems to have outweighed reduction in supply leading to if anything, deflation. (which is in line with data as inflation has slowed to about 0.3%, down a percent from last year).
Given how large the service sector is in particular in the US, and how strongly it is affected by social distancing measures, disinflationary preasures are very likely to persist for a while.
In fact a sharp decline in demand seems to have outweighed reduction in supply leading to if anything, deflation. (which is in line with data as inflation has slowed to about 0.3%, down a percent from last year).
Given how large the service sector is in particular in the US, and how strongly it is affected by social distancing measures, disinflationary preasures are very likely to persist for a while.
"US food prices see historic jump and are likely to stay high"
https://abcnews.go.com/Health/wireStory/us-food-prices-histo...
https://abcnews.go.com/Health/wireStory/us-food-prices-histo...
Sure, but the US economy doesn't just run on food. In that particular sector the price increases make inuitive sense, as consumption is expected to stay mostly steady while supply chains have been heavily impacted.
Inflation is measured, for very obvious reasons, by looking at the general price level of goods and services in the economy, not just any given sector.
Inflation is measured, for very obvious reasons, by looking at the general price level of goods and services in the economy, not just any given sector.
I agree that there's little sign of unusually high general inflation, but you said "there's no indication of inflation let alone hyperinflation in any economic data", and the sudden rise in food prices is definitely an indication of inflation. You may want to coach/moderate your statements a little more in the future.
No, I don't need to do that to be honest. A 2% increase in food prices while the general price levels fall is not an indication of inflation unless someone redefines inflation and cherry picks data to advance their cause. (In this case the annual doomsday prediction about inflation, which is normal on HN with its substantial contingent of people who rant about fiat money).
Timescales matter; a 2% increase in food prices over a year would be an indication of normal inflation; a 2% increase over a month indicates above-average food price inflation. In either case, the evidence of inflation in one area does not mean there is generally high inflation, it just means one thing is increasing in price.
You can call it cherry-picking, but any presentation of data in this format will be guilty of that, so it's not a particularly damning indictment.
As I said before, I don't agree with the previous version of the other post, but I think you're being a bit broad.
You can call it cherry-picking, but any presentation of data in this format will be guilty of that, so it's not a particularly damning indictment.
As I said before, I don't agree with the previous version of the other post, but I think you're being a bit broad.
I saw a chart about what hyperinflation in the Weimar Republic did the average family budget. The price of food skyrocketed and the price of just about everything else struggled to keep up. Before food/rent/fuel/other was each 30,30,30,10 percent of the budget. At the end food was 90% of the budget. Rent at 0.2% was a rounding error.
So yeah food goes up 2% is basically nothing.
So yeah food goes up 2% is basically nothing.
"Lalala I cant hear you, stonks go UP"
probably
probably
Probably someone who actually looked into what QE actually does--it's more deflationary than inflationary. Look at Japan--they've been doing forms of QE for decades. These Fed printing money, inflation trolls are almost never right even though they've been screaming about it for decades.
Trolls? Sounds like YOU need to understand what QE is. From Wikipedia...
"Quantitative easing (QE) is a monetary policy whereby a central bank buys government bonds or other financial assets in order to inject money into the economy to expand economic activity."
Sounds pretty inflationary to me. Especially when they buy up illiquid mark to fantasy assets that nobody wants and unloads them on the taxpayer to foot the bill while their buddies get a wad of cash to redeploy, into the stock market as it turns out. How is that not inflationary exactly? Oh, the destruction of those bad assets? Yeah I suppose but the socialization of that across America hides that and what's left is pumped up asset prices that cause the average American to have to work even harder to save up to buy and get worse returns because the fed's buddies got in first and drove prices higher.
Have you happened to look at the price of assets since 2008 vs. the actual recovery of the economy? Have you seen that S&P earnings were flat to down for the past 4 years going into this crisis? Yet what's happened to stocks? That's right they've tripled since 2009. Go look at any piece of real estate now almost anywhere vs. 10-20 years go and tell me there's been no inflation.
I realize it's different everywhere but the idea that we've had "low inflation" over the last 10 years is completely laughable because the calculation removes the highest cost items. The fed has effectively destroyed any price discovery on any assets. It's taken increasingly larger amounts of QE to goose the fake economy. And now for its encore it has overreacted to save their buddies and decided to lower rates to zero and tell the world that it will never let assets fall. How in the world is that not inflationary when you're flooding the market with free money and enabling those at the top to buy up assets and run up prices?
Every single person that works to earn USD and saves USD should be livid and rioting in the streets for the theft that's been, and continues to occur.
Also, your example of Japan isn't apples to apples. The US has the world's reserve currency and can print as much of it as it wants, Japan does not. Japan is a nation of savers so getting them to spend is harder than a US citizen.
We may have short term deflation and that's what the fed is scared of but make no mistake about it what they've done is inflationary as they will well overshoot whatever deflationary impact any failures have. Hell, they've made it clear that's what they're gonna do.
"Quantitative easing (QE) is a monetary policy whereby a central bank buys government bonds or other financial assets in order to inject money into the economy to expand economic activity."
Sounds pretty inflationary to me. Especially when they buy up illiquid mark to fantasy assets that nobody wants and unloads them on the taxpayer to foot the bill while their buddies get a wad of cash to redeploy, into the stock market as it turns out. How is that not inflationary exactly? Oh, the destruction of those bad assets? Yeah I suppose but the socialization of that across America hides that and what's left is pumped up asset prices that cause the average American to have to work even harder to save up to buy and get worse returns because the fed's buddies got in first and drove prices higher.
Have you happened to look at the price of assets since 2008 vs. the actual recovery of the economy? Have you seen that S&P earnings were flat to down for the past 4 years going into this crisis? Yet what's happened to stocks? That's right they've tripled since 2009. Go look at any piece of real estate now almost anywhere vs. 10-20 years go and tell me there's been no inflation.
I realize it's different everywhere but the idea that we've had "low inflation" over the last 10 years is completely laughable because the calculation removes the highest cost items. The fed has effectively destroyed any price discovery on any assets. It's taken increasingly larger amounts of QE to goose the fake economy. And now for its encore it has overreacted to save their buddies and decided to lower rates to zero and tell the world that it will never let assets fall. How in the world is that not inflationary when you're flooding the market with free money and enabling those at the top to buy up assets and run up prices?
Every single person that works to earn USD and saves USD should be livid and rioting in the streets for the theft that's been, and continues to occur.
Also, your example of Japan isn't apples to apples. The US has the world's reserve currency and can print as much of it as it wants, Japan does not. Japan is a nation of savers so getting them to spend is harder than a US citizen.
We may have short term deflation and that's what the fed is scared of but make no mistake about it what they've done is inflationary as they will well overshoot whatever deflationary impact any failures have. Hell, they've made it clear that's what they're gonna do.
"Essentially, the mechanism of QE is that the Federal Reserve and other central banks are buying government bonds - but not directly from the Treasury Department. They’re buying government bonds from banks and paying for them with central bank reserves.
Crucially, these cash reserves are held by the central bank and pay an interest rate just as the treasury bonds did. In a sense the Federal Reserve swapped ten year treasury bonds with hypothetical Federal Reserve Bonds. That’s why you can see a graph of the money supply that shows a massive increase, and yet inflation has not spiked. The money never entered the economy - it is being held in a vault at the central bank (or more realistically is just a number in a spreadsheet). In practical terms it was an asset swap, not a true increase in the money supply."
https://www.cassandracapital.net/post/quantitative-easing-ha...
Crucially, these cash reserves are held by the central bank and pay an interest rate just as the treasury bonds did. In a sense the Federal Reserve swapped ten year treasury bonds with hypothetical Federal Reserve Bonds. That’s why you can see a graph of the money supply that shows a massive increase, and yet inflation has not spiked. The money never entered the economy - it is being held in a vault at the central bank (or more realistically is just a number in a spreadsheet). In practical terms it was an asset swap, not a true increase in the money supply."
https://www.cassandracapital.net/post/quantitative-easing-ha...
> The money never entered the economy - it is being held in a vault at the central bank (or more realistically is just a number in a spreadsheet)
This is just incoherent. The money does enter the economy because now the banks can lend out money without their cash reserves dipping too low.
The reason that inflation is not spiking is because of the actual reason that the Fed reserve felt that it was necessary to engage in QE in the first place - huge amounts of deflationary pressure. Without the QE, we would be seeing deflation right now.
This is just incoherent. The money does enter the economy because now the banks can lend out money without their cash reserves dipping too low.
The reason that inflation is not spiking is because of the actual reason that the Fed reserve felt that it was necessary to engage in QE in the first place - huge amounts of deflationary pressure. Without the QE, we would be seeing deflation right now.
>Japan’s QE has been about four times that of the U.S. For the U.S. to do what Japan has done, the Fed would have to QUADRUPLE down and print $12 trillion in addition to the $4 trillion it has already printed.
>Try proposing that after the last round of QE finally fails.
>But even if the Fed tried to print a fraction of that, it still wouldn’t result in hyperinflation.
>Europe has printed almost twice as much as what we have, when compared to GDP, and it has very low inflation and lower growth than the U.S. That’s because our workforce and demographics are flattening, but not declining, as is the trend in Europe and Japan.
https://www.economyandmarkets.com/economy/central-banks/japa...
QE is deflationary.
>Try proposing that after the last round of QE finally fails.
>But even if the Fed tried to print a fraction of that, it still wouldn’t result in hyperinflation.
>Europe has printed almost twice as much as what we have, when compared to GDP, and it has very low inflation and lower growth than the U.S. That’s because our workforce and demographics are flattening, but not declining, as is the trend in Europe and Japan.
https://www.economyandmarkets.com/economy/central-banks/japa...
QE is deflationary.
There are so many issues with this comment, it's hard to pin point any exact one.
You're right that it's idiotic to describe QE as "deflationary" (don't know where they go that idea) but QE is neither inflationary nor deflationary as either description would be reasoning from a price change [0].
> The fed has effectively destroyed any price discovery on any assets
Don't see why this would be the case - price discovery is relative.
All this talk about rioting in the streets - inflation is projected to go down in the next few years, which should help the average American saver. If there is any place for outrage, it's over the Fed not acting forcefully enough!
As it stands now, the Feds policy stance is contractionary, just as what followed 2008.
[0]: https://www.themoneyillusion.com/never-reason-from-a-price-c...
You're right that it's idiotic to describe QE as "deflationary" (don't know where they go that idea) but QE is neither inflationary nor deflationary as either description would be reasoning from a price change [0].
> The fed has effectively destroyed any price discovery on any assets
Don't see why this would be the case - price discovery is relative.
All this talk about rioting in the streets - inflation is projected to go down in the next few years, which should help the average American saver. If there is any place for outrage, it's over the Fed not acting forcefully enough!
As it stands now, the Feds policy stance is contractionary, just as what followed 2008.
[0]: https://www.themoneyillusion.com/never-reason-from-a-price-c...
And yet you didn't manage to find a single one to point out and inform me of where I'm misguided, only a condescending response. Address any one of my claims about asset prices and the fed's actions distorting price discovery, please. I'd rather be wrong and realize that I'll be just fine not panic buying assets while free money is distributed and stocks rip to infinity, ignoring any and all fundamentals.
Tell me how I'm wrong about housing prices in the last ten years doubling and tripling in some areas. Tell me again how my USD are just fine and buying the same amount of goods and services they did 10 years ago, because I contend their buying power has been effectively halved by the moral hazard presented by the fed and Congress not allowing failures to happen. They're doing the exact same thing right now. How will this end? Deflation? I used to think so but not anymore. JPow even said himself that he has unlimited power to print money. They'll sooner destroy the currency than allow a deflationary depression to take hold.
Again, please, educate me as to what my "many issues" are with any of what I've said.
Tell me how I'm wrong about housing prices in the last ten years doubling and tripling in some areas. Tell me again how my USD are just fine and buying the same amount of goods and services they did 10 years ago, because I contend their buying power has been effectively halved by the moral hazard presented by the fed and Congress not allowing failures to happen. They're doing the exact same thing right now. How will this end? Deflation? I used to think so but not anymore. JPow even said himself that he has unlimited power to print money. They'll sooner destroy the currency than allow a deflationary depression to take hold.
Again, please, educate me as to what my "many issues" are with any of what I've said.
I isolated two.
One is that overall inflation does not make price discovery problematic, because price discovery is a mechanism based on the relative pricing between things.
Two is that inflation is projected to dip below historical levels, so claims of a great inflationary spike that should be met by riots are not at all backed by empirical evidence.
You're not really engaging in good faith, so I'm not going to continue this chain.
One is that overall inflation does not make price discovery problematic, because price discovery is a mechanism based on the relative pricing between things.
Two is that inflation is projected to dip below historical levels, so claims of a great inflationary spike that should be met by riots are not at all backed by empirical evidence.
You're not really engaging in good faith, so I'm not going to continue this chain.
Why don’t you google it instead of calling me an idiot. It’s not even slightly controversial, so all you jumping on this attack just reveal your actual ignorance on the subject. QE has led to deflation in Japan, not inflation.
Try reading this and you’ll get it: https://www.economyandmarkets.com/economy/central-banks/japa...
Try reading this and you’ll get it: https://www.economyandmarkets.com/economy/central-banks/japa...
> It’s not even slightly controversial, so all you jumping on this attack just reveal your actual ignorance on the subject.
It's not even slightly controversial that QE causes deflation? That's just laughable, honestly. Look, mainstream economists disagree with you [0].
QE usually occurs in the context of a real shock that induces deflationary pressure, but the fact that QE and deflation sometimes co-occur is correlation, not causation.
[0]: https://www.themoneyillusion.com/how-strong-is-the-case-for-...
It's not even slightly controversial that QE causes deflation? That's just laughable, honestly. Look, mainstream economists disagree with you [0].
QE usually occurs in the context of a real shock that induces deflationary pressure, but the fact that QE and deflation sometimes co-occur is correlation, not causation.
[0]: https://www.themoneyillusion.com/how-strong-is-the-case-for-...
Too bad it never happened in Japan where we have a real world example we can actually compare it to. I think you’re in over your head on this.
> I think you’re in over your head on this.
If you can't tease out the difference between correlation and causation, I suspect that you are the one in over your head.
I have experience in academic economics, you clearly, do not.
https://www.themoneyillusion.com/wp-content/uploads/2019/10/...
Guess when Japan's deflation ended?
If you can't tease out the difference between correlation and causation, I suspect that you are the one in over your head.
I have experience in academic economics, you clearly, do not.
https://www.themoneyillusion.com/wp-content/uploads/2019/10/...
Guess when Japan's deflation ended?
Glad you went to wikipedia to get an authoritative source... Go look at what QE did to Japan—it was not inflationary, it was deflationary. Here it is even from a right wing source: https://www.cato.org/cato-journal/winter-2017/japanese-exper...
Wikipedia... lol that isn’t allowed for a high school paper. You really showed me.
Wikipedia... lol that isn’t allowed for a high school paper. You really showed me.
Your source does not say that QE was deflationary in Japan - just that in the context of a real economic shock to Japan's economy, the central bank's stance was contractionary. Indeed, they argue that more QE would have combatted the deflation.
Why not read the sources you link?
Why not read the sources you link?
You read all 22 pages already? Bullshit. First pages mentions deflation... if tripling their money supply did nott lead to hyperinflation what will? Page two:
>market peaked in the JulySeptember quarter of 1991. Those peaks were followed by steep declines in asset prices, culminating in contractions of real GDP in several quarters of 1992 and 1993 and deflation as measured by the CPI from July 199
My point was to find a right wing source that should be agreeing with you, but is agreeing with what I said. Or you can google it, there are a number of sources. Here’s another I linked above: https://www.economyandmarkets.com/economy/central-banks/japa...
It’s obvious you’re wasting my time tho. Read it or don’t, I don’t care but you’re clearly wrong and we both know it.
>market peaked in the JulySeptember quarter of 1991. Those peaks were followed by steep declines in asset prices, culminating in contractions of real GDP in several quarters of 1992 and 1993 and deflation as measured by the CPI from July 199
My point was to find a right wing source that should be agreeing with you, but is agreeing with what I said. Or you can google it, there are a number of sources. Here’s another I linked above: https://www.economyandmarkets.com/economy/central-banks/japa...
It’s obvious you’re wasting my time tho. Read it or don’t, I don’t care but you’re clearly wrong and we both know it.
> if tripling their money supply did t lead to hyperinflation what will
If you read your own linked paper, you will see that this is not what occurred - monetary base was substantially increased, sure, but that is not synonymous with money supply and there was no corresponding increase in M2.
To your second link, which is not from a reputable source, your CATO paper directly contradicts claims of "huge" QE. It was actually smaller than the prior effort:
> Throughout his tenure, Shirakawa was a reluctant expansionist, frequently making speeches to the effect that QE alone would never succeed in reviving the Japanese economy. Originally, he had intended that the QE program would be completed by the end of 2011, but with the CPI still falling in November and December 2011, operations were extended through 2012 and 2013. Compared to QE1 in 2001–06, Shirakawa’s QE2 was a much weaker program
Here, again, is the paper you linked saying that QE policies combat deflation:
> For better or worse, the Federal Reserve did not counteract the downturn in money growth in 1931–33, either with security purchases or money creation, and thereby exacerbated the depth of the recession, the level of unemployment, and duration of the deflation.
Just because the paper "mentions deflation" doesn't mean that QE "causes" deflation - and the paper is pretty clear that this is not the case. Japan's QE was ineffective, sure, (for a variety of reasons) but in the absence of QE the deflation would have been worse.
Also, I will note that right wing sources are exactly who I would not expect to agree with me. They are hawkish on QE.
If you read your own linked paper, you will see that this is not what occurred - monetary base was substantially increased, sure, but that is not synonymous with money supply and there was no corresponding increase in M2.
To your second link, which is not from a reputable source, your CATO paper directly contradicts claims of "huge" QE. It was actually smaller than the prior effort:
> Throughout his tenure, Shirakawa was a reluctant expansionist, frequently making speeches to the effect that QE alone would never succeed in reviving the Japanese economy. Originally, he had intended that the QE program would be completed by the end of 2011, but with the CPI still falling in November and December 2011, operations were extended through 2012 and 2013. Compared to QE1 in 2001–06, Shirakawa’s QE2 was a much weaker program
Here, again, is the paper you linked saying that QE policies combat deflation:
> For better or worse, the Federal Reserve did not counteract the downturn in money growth in 1931–33, either with security purchases or money creation, and thereby exacerbated the depth of the recession, the level of unemployment, and duration of the deflation.
Just because the paper "mentions deflation" doesn't mean that QE "causes" deflation - and the paper is pretty clear that this is not the case. Japan's QE was ineffective, sure, (for a variety of reasons) but in the absence of QE the deflation would have been worse.
Also, I will note that right wing sources are exactly who I would not expect to agree with me. They are hawkish on QE.
Where did I say anything about scale? You're moving the goalposts and arguing about a tangent.
>Also, I will note that right wing sources are exactly who I would not expect to agree with me. They are hawkish on QE.
Right wingers are the ones most likely to argue QE leads to inflation--see Ron Paul. This conversation is a waste of my time. You're basically saying "I'm an expert, I know more than you" which is an appeal to authority, and I'm just pointing out that based on real world examples that we have, that isn't what happened. Theory and reality are not the same thing. End of discussion for me.
>Also, I will note that right wing sources are exactly who I would not expect to agree with me. They are hawkish on QE.
Right wingers are the ones most likely to argue QE leads to inflation--see Ron Paul. This conversation is a waste of my time. You're basically saying "I'm an expert, I know more than you" which is an appeal to authority, and I'm just pointing out that based on real world examples that we have, that isn't what happened. Theory and reality are not the same thing. End of discussion for me.
Japan's never tried printing the global reserve currency. Yen was a much smaller local experiment. There's no guarantee that Brazil will continue paying USD for Huawei equipment indefinitely.
Let us all embrace the natural experiment about to occur.
The Fed targets inflation and can do so pretty precisely - massive amounts of QE are in order to combat deflationary pressure in the economy right now.
Or deflation, a bigger worry as consumers might be expecting lower prices in the future and delaying purchases. Leading to a deflationary spiral.
Given the natural resource depletion caused by our economy, plus technological progress implying that we all should be working less, how is this remotely worrying? We've had strong deflation in the tech sector for over four decades, and the results have been fantastic.
The inevitable increase in productivity brought by the promise of robotics, ai & automation? ;)
Bingo, there's also been a huge influx of retail investors fueling the earlier Bull rise
This is just not how the stock market works. "More investors" doesn't trigger price increases.
Markets go up when the amount of bullish positions outnumber the amount of new bearish positions
Depends on the size of the various positions. If a bunch of new (and naive) investors enter the market with irrationally bullish positions, institutional investors will short and profit off of the fundamentals.
Bad positions are just an opportunity for arbitrage.
Bad positions are just an opportunity for arbitrage.
There is massive demand for dollars worldwide, specifically related to dollar denominated debt and commodities contracts and the first part is likely to get more intense if there is a global recession.
I'm a gold bug libertarian end the fed kind of guy and even I don't think we are at any risk for hyperinflation. That is definitely not to say these policies can't have seriously negative consequences but I don't think hyperinflation is one of them, at least not for the US in the next decade.
I'm a gold bug libertarian end the fed kind of guy and even I don't think we are at any risk for hyperinflation. That is definitely not to say these policies can't have seriously negative consequences but I don't think hyperinflation is one of them, at least not for the US in the next decade.
Guy has what looks like a luxury truck and is apparently having trouble deciding between food and his car payment.
Sell the car, get a cheap used beater, reduce expenses, keep looking for a job. Not sure what NPR wants me to take from this example.
Sell the car, get a cheap used beater, reduce expenses, keep looking for a job. Not sure what NPR wants me to take from this example.
That is not a luxury truck. It's an extended cab F-150 with cloth seats, probably an XL. A familiar comparison for someone unused to seeing trucks in ordinary use would be a base model Chevy Malibu. And he's probably underwater on the loan, which makes it hard to sell.
NPR wants you to see that a lot of ordinary people who made ordinary life choices are going bankrupt.
NPR wants you to see that a lot of ordinary people who made ordinary life choices are going bankrupt.
The starting price of this is 28k per edmunds. That is quite expensive (even for someone from tech sector).
$28000 for a car is cheap, especially for a truck. For comparison, the 2020 Honda Civic starts at just shy of $20000.
Is your point that he _needs_ a truck for his job? He is a veteran as stated in the article and wife is a medical worker. Why do they need a truck or is this some basic necessity in the US?
Unless you need the carrying capacity to survive, $28,000 for a car is expensive. Buy a low mileage, older sedan for $5000-$7000. It’ll last 10 years and rarely have problems.
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An absolutely amazing claim. $28,000 is cheap for "millions of Americans".
What's a moderately priced car to you? 50K?
What's a moderately priced car to you? 50K?
Did I say “cheap for millions of Americans”? I’m pretty sure I just said “cheap”, as in cheap compared to most new cars.
What price does that start at?
Passively rhetorical or genuinely struggling to use google or see the point?
Many people finance expensive cars with no money down and are immediately underwater on their loan. In a situation like that, you can’t offload your vehicle easily without also coughing up thousands to cover the difference between the car’s sell value (who is even buying right now?) and the cars loan balance.
I had a friend who kept rolling the negative equity of his previous car loan on to the new one. It's pretty ridiculous what the deals will help you do now. He's since gone bankrupt.
Auto loans should allow you to return the vehicle and walk away... They should be more "rent-to-own".
In fact, in my opinion, all secured loans should be this - you should be able to hand over the security to the lender, and walk away without penalty.
In fact, in my opinion, all secured loans should be this - you should be able to hand over the security to the lender, and walk away without penalty.
what happens if you crash it first it or ding it up or run it as an uber and have lots of trash passengers? you're talking about leases vehicles which already exist.
Well look at it this way: hiring a car is a thing. Avis etc. They sell lower excess too.
Those kind of people are going bankrupt eventually no matter what.
I suspect not many people are buying trucks right now, used or not. It would be hard to sell. It may not be bright to buy a truck worth more than your annual income, but I don't think the situation can be entirely blamed on consumers. It's a systematic problem. Trucks like this are the only profitable sector left for US car dealerships, and they have gone to great lengths to get people on the hook for them. The result is pollution, dangerously large vehicles clogging roads, and consumers stuck in over their heads.
It's the opposite, a crap load of people are buying trucks right now, dealers are begging for more:
https://jalopnik.com/not-even-a-pandemic-will-stop-american-...
Now - they are drawn by 0% financing which is hard to get on a used truck.
https://jalopnik.com/not-even-a-pandemic-will-stop-american-...
Now - they are drawn by 0% financing which is hard to get on a used truck.
One of the comments on the link indicates the actual situation - Truck sales haven't increased, but are now relatively even more popular to other vehicles which have dropped in sales considerably. Most likely, as you say, by the good deals - 0% financing.
How long this keeps up is hard to tell.
How long this keeps up is hard to tell.
That's terrible. That means when the COVID-19 lockdown is all said and done, and we find out that many jobs won't be coming back, many of these folks will be underwater on a truck. I say "jobs won't be coming back" because I've heard that many companies are using this lockdown to let go of divisions and employees they've always wanted to let go of, but never got around to doing.
Car payments don't work like that.
And that's not even addressing the fact that the entire country went into economic free fall, so "Just sell the X" isn't quite the advice it used to be.
And that's not even addressing the fact that the entire country went into economic free fall, so "Just sell the X" isn't quite the advice it used to be.
If enough people experience this in aggregate it still has big effects on the economy. You’re focusing on the wrong thing
Hiring is very slow at the moment and the beater would likely require a lot of maintenance and have a high price tag although I agree that it’s smart to drive cars that are more economical.
Anecdotal, but I keep hearing about restaurants and other small businesses that can't convince their employees to come back to work. Something about the unemployment benefits + CARES Act bonus being more than they were earning while working...
Also anecdotal, but unemployment + CARES Act did in fact result in one of my housemates bringing in more from the two than they did from their employer. But, they went back to work anyway when their employer called them back from furlough, because 1) in my state, IIRC, refusing an offer for work cancels one's unemployment benefits, 2) they knew they the structure of having a regular job again would be much better for their mental health than not working.
Well maybe that should be a red flag for the economic situation of many many people that should cause some inspection on how we structure and think about work.
A friend of my girlfriend is on that situation, $1600/wk is more than what she earned previously, and isn’t looking forward for the store where she worked on to re-open or looking for a different job.
It gives me a mixed feeling about the policy because it turns out I personally know the one example conservatives would like to point out. However, I’d like to read a deep study about the impact of the measures taken before I form an opinion on them. I want to believe that the policy had a positive effect unless data says otherwise.
It gives me a mixed feeling about the policy because it turns out I personally know the one example conservatives would like to point out. However, I’d like to read a deep study about the impact of the measures taken before I form an opinion on them. I want to believe that the policy had a positive effect unless data says otherwise.
All that proves is how deeply underpaid those jobs were.
Say that $1600/wk is perfectly livable for her. That means formerly, she was working at a job that did not pay her enough to live, but she was forced to because the alternative is worse. Arguably, for many people, they could live on even less than that.
Countless people who are forced to be in the job market, slaving away at crappy jobs at the threat of poverty and homelessness. They are forced to be at jobs they hate, propping up industries that survive only because of exploitation of human labor, and they don't even get a proper living wage from it. Human life is very limited. Time is the greatest asset we have and it goes away even when we do nothing. Yet we force so many people to trade their time for a pittance.
If these people were provided a base amount of money they could live on and do something else, then those jobs would either be unfilled (and the industries die off) or the businesses will be forced to raise the wage, thus providing more money to people who are willing to work for it.
Say that $1600/wk is perfectly livable for her. That means formerly, she was working at a job that did not pay her enough to live, but she was forced to because the alternative is worse. Arguably, for many people, they could live on even less than that.
Countless people who are forced to be in the job market, slaving away at crappy jobs at the threat of poverty and homelessness. They are forced to be at jobs they hate, propping up industries that survive only because of exploitation of human labor, and they don't even get a proper living wage from it. Human life is very limited. Time is the greatest asset we have and it goes away even when we do nothing. Yet we force so many people to trade their time for a pittance.
If these people were provided a base amount of money they could live on and do something else, then those jobs would either be unfilled (and the industries die off) or the businesses will be forced to raise the wage, thus providing more money to people who are willing to work for it.
> All that proves is how deeply underpaid those jobs were.
How does it do that?
The CARES Act specifically pays money per week in addition to what unemployment pays.
So, whatever you made before, even if it was a sustainable wage, you make more by not working right now, even if you could be working.
How does it do that?
The CARES Act specifically pays money per week in addition to what unemployment pays.
So, whatever you made before, even if it was a sustainable wage, you make more by not working right now, even if you could be working.
It's a temporary stimulus payment anyway. We all paid for it.
It helps a lot of people who really needed it, especially hourly wage workers in the service industry who instantly took a hit from the shutdowns and these workers tend to not have healthcare insurance to begin with due to the low wages. It would be foolish for someone who had a well paying job with benefits to permanently stop working for "more" money on paper temporarily, especially considering you would also risk being unemployable afterward. Does +$600 to your weekly pay outweigh the health benefits that you got while being employed?
It helps a lot of people who really needed it, especially hourly wage workers in the service industry who instantly took a hit from the shutdowns and these workers tend to not have healthcare insurance to begin with due to the low wages. It would be foolish for someone who had a well paying job with benefits to permanently stop working for "more" money on paper temporarily, especially considering you would also risk being unemployable afterward. Does +$600 to your weekly pay outweigh the health benefits that you got while being employed?
Well sure, but I'm still not seeing where this "proves how deeply underpaid those jobs were".
The explicit intention behind CARES was to provide some resemblance of financial security during a very uncertain time. If paying people a couple hundred more dollars per week than they'd earn while working is what achieves that... and it's temporary... ok fine.
But the CARES Act will continue to payout through December... which is a long time from now... and that's if it doesn't become a political wiffle ball and get extended.
None of that has to do with the value an employee brings, or can earn while in the service industry.
Into the weeds, but... With a growing anti-tipping movement, I don't see how we can argue service industry workers can be paid more than they already are. If the market had the appetite for $30 diner burgers, we'd already be paying those rates, no? Wouldn't the business owners raise prices and just pocket the difference if people were willing to pay more?
I think that results in fewer people eating out... which leads to fewer service industry workers, which leads to some other problems.
Way into the weeds - I've long thought the solution isn't just to command more money be paid to service workers. We should instead focus on trade school and education to empower people to seek skilled jobs that pay far better. I'd fully support free or low cost trade schools and community colleges, and would rather pay taxes into that versus a $30 mediocre burger.
The explicit intention behind CARES was to provide some resemblance of financial security during a very uncertain time. If paying people a couple hundred more dollars per week than they'd earn while working is what achieves that... and it's temporary... ok fine.
But the CARES Act will continue to payout through December... which is a long time from now... and that's if it doesn't become a political wiffle ball and get extended.
None of that has to do with the value an employee brings, or can earn while in the service industry.
Into the weeds, but... With a growing anti-tipping movement, I don't see how we can argue service industry workers can be paid more than they already are. If the market had the appetite for $30 diner burgers, we'd already be paying those rates, no? Wouldn't the business owners raise prices and just pocket the difference if people were willing to pay more?
I think that results in fewer people eating out... which leads to fewer service industry workers, which leads to some other problems.
Way into the weeds - I've long thought the solution isn't just to command more money be paid to service workers. We should instead focus on trade school and education to empower people to seek skilled jobs that pay far better. I'd fully support free or low cost trade schools and community colleges, and would rather pay taxes into that versus a $30 mediocre burger.
That's right. As I said, I prefer those industries to collapse rather than let them continue on, surviving merely due to the exploitation of cheap human labor. Unless they can change and pay better or make work conditions better.
I don't think those industries need to collapse.
We should have fewer people making careers at unskilled jobs. Nobody can provide for a family comfortably doing that.
Instead, it should be a starting position; an entry into the workforce as you learn a trade, skills or gain knowledge.
We should have fewer people making careers at unskilled jobs. Nobody can provide for a family comfortably doing that.
Instead, it should be a starting position; an entry into the workforce as you learn a trade, skills or gain knowledge.
It’s worth keeping in mind that unemployment benefits are around half or less than what one was making. I know someone who’s job was paying him about $600 every two weeks. COVID-19 hit and they furloughed him. His unemployment benefit is about $150/week.
Sure, it’s a rough situation. He lived beyond his means and sank due to the black swan. Now, if the story was about repossessing the truck he needed to drive to a food pantry, I’d have a bit more sympathy.
The loan company should be barred from repossessing for generating subprime auto loans or whatever these are called, but this was still directly caused by lack of financial awareness.
The loan company should be barred from repossessing for generating subprime auto loans or whatever these are called, but this was still directly caused by lack of financial awareness.
Skipping payment != need to skip payment.
Yet the stonks go up.
The impact of this is going to be extremely bi-modal.
Working class people are going to be decimated. No income and the cost deferral cliff.
Middle class (office workers are least) and upper class people will do very well. They still have their jobs and their costs have collapsed.
I am no longer paying for gas, childcare, bussing fees, car insurance, and all manner of other things. I can shop at Costco now that I have more time, saving me even more. Nobody is buying lunch out as we now have tons of saved time to make food ourselves. I used the crisis to squeeze by suppliers of internet and cell phone and whatnot. We now save 40% of our take home pay.
Personally the crisis has been great for me.
Working class people are going to be decimated. No income and the cost deferral cliff.
Middle class (office workers are least) and upper class people will do very well. They still have their jobs and their costs have collapsed.
I am no longer paying for gas, childcare, bussing fees, car insurance, and all manner of other things. I can shop at Costco now that I have more time, saving me even more. Nobody is buying lunch out as we now have tons of saved time to make food ourselves. I used the crisis to squeeze by suppliers of internet and cell phone and whatnot. We now save 40% of our take home pay.
Personally the crisis has been great for me.
I think any savings will be temporarily. Long term effect will be deflationary and wages will eventually go down.
This seems to be true. Massive income inequality will in turn cause more civil unrest.
How did you get cell phone and internet discounts?
Many companies have advertised that "our customers who are affected by COVID can contact customer support for ..." type of PR messages announcing discounts/deferments.
I actually started collecting the URLs, but there are so many it's not worth centralizing.
Verizon: https://www.verizonwireless.com/support/covid-19-faqs/#bill
AT&T: https://about.att.com/pages/COVID-19.html
Cox Cable: https://www.cox.com/residential/support/coronavirus-response...
Comcast Xfinity: https://www.xfinity.com/prepare
I actually started collecting the URLs, but there are so many it's not worth centralizing.
Verizon: https://www.verizonwireless.com/support/covid-19-faqs/#bill
AT&T: https://about.att.com/pages/COVID-19.html
Cox Cable: https://www.cox.com/residential/support/coronavirus-response...
Comcast Xfinity: https://www.xfinity.com/prepare
US and Canada are going to soon realize that all the govt did was buy temporary peace.
Not sure how either country will lift from this without having a negative impact, as not only was it giving emergency funds to people, but in a lot of cases giving up to 200-300% of what they earned prior.
It will be a shitshow.
Not sure how either country will lift from this without having a negative impact, as not only was it giving emergency funds to people, but in a lot of cases giving up to 200-300% of what they earned prior.
It will be a shitshow.
These tenants are often not accepted by landlords because they're thought to cause more issues. Mine are great. They keep the units spotless, mow the lawn for me on my multi unit properties. When I have a tenant like this, I never raise their rent, and if they can't pay the hundred bucks the government won't I sure don't care.