John, great article, but what happens to rental housing costs and what happens to renters if the cost of owning and then renting a house costs more to the landlord, most likely to be past on the tenants. Where are the stats about how much builders are taxed to start a home?? About 35% of people rent. They are benefiting from the "tax breaks" the landlords are getting as well. Other wise landlords would put the investment to work in something else..and rents would skyrocket.
So, if landlord costs go up, they raise rents? But when interest rates tanked in 2019-2020, and landlord mortgage interest costs fell, landlords didn't lower their rents. I think fewer landlord subsidies (fewer tax breaks) would affect the profitability of being a landlord and the number of landlords, not rents. Yes, there will be one less rental unit available but there will also be one less renter (the new live-in home owner is no longer renting).
So again. Rents would rise on the remaining renters.. most renters can not afford to buy... want or need to rent for thier own reasons..taking away rentals would only hurt the lower end renters who can not afford to purchase.. your concerns should be addressed to the costs the government put on building the units not owning the units..have you ever developed any?? Ever risk your own capital to do so?? Low returns and long term play that's why so few units country wide .. also your writings always addresse multi tax breaks.. plural.. what are they??
Those aren't tax breaks. They are incentives to build and own rental homes and bring investment to create so peaple have a place to do business.. those incentives are working very well for society not just owners.. I already know the answer but have you ever done a analysis or read a analysis on what happens without those incentives.. have you ever supplied rental housing or multi family housing to society?? How much capital of your own do you have invested... to bring down prices and bring rents down we need people like you to invest rather then to blame.. please do a article on your experiences owning and operating investment teal estate and how incredible lucrative it is.. I read forbes and am looking forward to it..
An area to expand on in future discussions might be how demand for housing was impacted Covid.
Many homeowners increased their demand for space (whether to work from home, or to host at-home schooling). This generated an outlier spike in demand for the amount of housing.
Further, adding to the point you already made, demand for increased space was in different locations from where people had envisioned living in 2019.
Those locations (think suburbs, or Mountain States) had little pending new supply in the pipeline when Covid hit. Remote work further changed the rules on where people might live.
The key questions going forward are: 1) are those lifestyle changes permanent (even if Covid were to disappear), and 2) how long will it take to generate supply for those new locations.
My sense is that the HPA for 2020-21 represents a surge due to an immediate change in preferences, combined with a slow change in supply, but that as supply comes to new areas (at the same time interest rates are increasing) HPA will temper off toward longer-term trends.
John, great article, but what happens to rental housing costs and what happens to renters if the cost of owning and then renting a house costs more to the landlord, most likely to be past on the tenants. Where are the stats about how much builders are taxed to start a home?? About 35% of people rent. They are benefiting from the "tax breaks" the landlords are getting as well. Other wise landlords would put the investment to work in something else..and rents would skyrocket.
So, if landlord costs go up, they raise rents? But when interest rates tanked in 2019-2020, and landlord mortgage interest costs fell, landlords didn't lower their rents. I think fewer landlord subsidies (fewer tax breaks) would affect the profitability of being a landlord and the number of landlords, not rents. Yes, there will be one less rental unit available but there will also be one less renter (the new live-in home owner is no longer renting).
So again. Rents would rise on the remaining renters.. most renters can not afford to buy... want or need to rent for thier own reasons..taking away rentals would only hurt the lower end renters who can not afford to purchase.. your concerns should be addressed to the costs the government put on building the units not owning the units..have you ever developed any?? Ever risk your own capital to do so?? Low returns and long term play that's why so few units country wide .. also your writings always addresse multi tax breaks.. plural.. what are they??
https://johnwake.substack.com/p/6-tax-breaks-landlords-get-that-hurt?s=w
Those aren't tax breaks. They are incentives to build and own rental homes and bring investment to create so peaple have a place to do business.. those incentives are working very well for society not just owners.. I already know the answer but have you ever done a analysis or read a analysis on what happens without those incentives.. have you ever supplied rental housing or multi family housing to society?? How much capital of your own do you have invested... to bring down prices and bring rents down we need people like you to invest rather then to blame.. please do a article on your experiences owning and operating investment teal estate and how incredible lucrative it is.. I read forbes and am looking forward to it..
John, this one so really good!
An area to expand on in future discussions might be how demand for housing was impacted Covid.
Many homeowners increased their demand for space (whether to work from home, or to host at-home schooling). This generated an outlier spike in demand for the amount of housing.
Further, adding to the point you already made, demand for increased space was in different locations from where people had envisioned living in 2019.
Those locations (think suburbs, or Mountain States) had little pending new supply in the pipeline when Covid hit. Remote work further changed the rules on where people might live.
The key questions going forward are: 1) are those lifestyle changes permanent (even if Covid were to disappear), and 2) how long will it take to generate supply for those new locations.
My sense is that the HPA for 2020-21 represents a surge due to an immediate change in preferences, combined with a slow change in supply, but that as supply comes to new areas (at the same time interest rates are increasing) HPA will temper off toward longer-term trends.
GREAT comments! Thanks.