Landlords have pushed renters to their limit

In the long tradition of serfdom and slumlords, it seems that we've finally reached the point where renters cannot pay anything more for the privilege of not living on the street.

Rent gains are finally starting to slow in many parts of the US, cooling a years-long boom that sapped affordability from coast to coast. Landlords have little choice but to ease off big increases: Demand from tenants is suddenly sinking.
...Rents nationally increased 7.5% in September from a year earlier, above pre-pandemic levels, but down from a peak jump of nearly 18% at the start of the year, when vacancies also were lower, according to Apartment List. Preliminary October data show a dropoff that’s faster than the typical seasonal decline and would be the steepest in month-over-month data dating back to 2017, said Igor Popov, the listing platform’s chief economist.

A cooldown has yet to show up in the consumer price index that’s closely watched by the Fed, about a third of which is tied to the cost of shelter. That measure of rents rose at a record annual pace last month.

While rent hikes are finally slowing down, evictions are going up. In New York, landlords have kept 60,000 rent-controlled apartments off the market.
All of this is happening just as home prices have reached their peak.

At the national level, home values stayed roughly steady from August to September after dropping slightly in the previous two months. The typical home value is $358,283, up 12.9% from last year and nearly $110,000 (43.5%) above 2019.

New pending home sales fell 18% month over month and are down 29.3% from last year.
The price of anything rising 43.5% a year is an unsustainable bubble. The fuel of that bubble came from deep-pocketed investors. Investor purchases of residential homes as rental properties as a share of all residential home sales, rose from 10.5% in May 2021 to nearly 18% in May 2022.
The bursting of that bubble has come from rising mortgage rates. Monthly mortgage payment on a typical home bought in 2022 has almost doubled since 2019, going from $897 to $1,643.

"it would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital. Interest today rewards no genuine sacrifice, any more than does the rent of land. The owner of capital can obtain interest because capital is scarce, just as the owner of land can obtain rent because land is scarce. But whilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital..."
- John Maynard Keynes

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janis b's picture

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earthling1's picture

@janis b
people stop thinking we are progressing.
As an example, when people get a raise they think they are moving forward. But the raise does not keep up with the declining value of the dollar, presented as inflation to confuse.
They/we are moving backwards in small increments, but always back.
IMHO

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11 users have voted.

Neither Russia nor China is our enemy.
Neither Iran nor Venezuela are threatening America.
Cuba is a dead horse, stop beating it.

soryang's picture

After one serious adverse event, like a serious illness, a death in the family, or a natural disaster, the standard of living and stability to which one may be accustomed disappears. One discovers the true avaricious and deceitful nature of business people, doctors, insurance people, landlords, real estate agents and the like. Hopefully, I'm not offending anyone here, but they are dishonest scum.

(edit) On reflection, I will say it's a rebuttable presumption, that also includes lawyers, judges, and legislators.

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語必忠信 行必正直

@soryang Capitalism in America has become a finely honed tool to extract money from all aspects of life, from birth to death. We live a fantasy life, that our vote counts, if we work hard, we'll get ahead, that there are child sex dungeons under pizza parlors, that we have justice, that the police are there to protect us. That we have freedom. That we have choices.

We only notice things are bad when we can't afford that one thing less out of all the things we need to live. Capitalism is a cancer that's eating us alive, it's methods are ruthless, and "our" government encourages it.

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soryang's picture

@Snode that's for sure. It wasn't quite a fantasy, but i thought I had walled off a lot of the pernicious social and political influences, could choice my issues and fights myself. Now a very different set of circumstances has been forced on me and I have to live with it. The system is ugly.

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3 users have voted.

語必忠信 行必正直

usefewersyllables's picture

@soryang

And it doesn't take long after a disaster to realize that whatever insurance you thought you had wasn't enough. I'm now putting a lot of our personal property on stated-value policies as we replace what we lost. We won't see any payment from the insurance company until March 19, 2023, at 11:59PM (364 days after the fire), although all of the various bloodsuckers (cleanup/"restoration" people) have already been paid. After which our insurance carrier will certainly cancel us, and we'll have to start the whole search for new scumbags again.

One this I can say: take pictures and videos of whatever you have that you care about *now*, and save them offsite somewhere, so that you'll have something to give the insurance people when they say "Prove it!". Which they will.

If we weren't both employed in decent jobs, childfree, and pretty much asset-free, we would be shit out of luck. The US financial food chain regards all of us as "food".

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10 users have voted.

Twice bitten, permanently shy.

@usefewersyllables

on our house due to an extreme weather event which moved trees
into the roof, I must say the insurance company ( a small outfit in New Hampshire)
was very forthcoming and covered most our losses at what I would consider as
being a minimal hassle. Just posted the expenses incurred and was soon
reimbursed. So, I guess it depends on your carrier, underwriter and agent.
It does work sometimes. Sorry it is not the case with you.

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soryang's picture

@usefewersyllables with Hurricane Ian. We had all flood damage with some wind damage, but primary the flooding which imo destroyed our home. When I had time to sit down and read the policy, the standard National Flood Insurance Policy, I could tell right away it was written by insurance lobbyists for insurers, not disaster victims. Yet, this is the standard FEMA policy that is subsidized with tax money because home insurers won't include flood risks. They want the claim formalized within sixty days of the incident. That is so unreasonable. It took us 22 days just to get an apartment lease, for a place to live, and we aren't really moved in yet. Under the common law, 90 days was considered a reasonable time. When you lose everything, including phones, wifi connections, important records, and office equipment, how do you respond so swiftly to build what is essentially a legal claim against an adversary who is bent on denying your claim, or minimizing it in whatever way possible.

About the lease and landlord problem- my lease was nominally 41 pages long, each page really containing 4 pages of legal conditions to fulfill. So a 164 page lease? Really, this to me is evidence of bad faith, an onerous contract, an adhesion contract. But when you have no place to live what choice is there. The place is a dump, smells, water leaks everywhere and other damage. Landlords suck, and their corporate lawyers suck, too.

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4 users have voted.

語必忠信 行必正直

Cassiodorus's picture

"oooh we're going to mitigate climate change and everything will be net zero." And they think this when all they're doing is siding with the super-rich in the class war.

https://caucus99percent.com/content/carbon-tax-thing-dead-yet

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"The West doesn't spend any time, or, our policymakers in Washington spend no time thinking about, like, what are the achievable goals here?" -- Tucker Carlson, on Project Ukraine

Rents are already way beyond the sweet spot. Yes, if landlords made their empty units available rents would decline, like how if employers actually hired the people they actually needed they would have to pay a living wage. (no, not really - most "jobs" today are unnecessary, but that's another rant) But that implies the losses landlords accept holding units vacant does not exceed the profits they would make if they rented them. (Yes, but only because the bribes they pay to keep governments from confiscating their units and freeing them are not counted, or the cost of funding propagandists, or police to enforce evictions, or judges to legitimize them, or a thousand other secret costs) See what happens?

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7 users have voted.

On to Biden since 1973

@doh1304 for this rental market that keeps going skyward. More and more landlords use rental software like RealPage's YieldStar to maximize return, even by allowing more units to sit empty (provided the high-paying occupied units more than make up the difference).

This creates a default cartel, especially as more big landlords use it.

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3 users have voted.

Some numbers

the typical household devoted 29.7% of its income to lease a typical
rental home last month. That's up from 24.8% in February 2021

Some numbers from just a few years ago

In 2020, 46% of American renters spent 30% or more of their
income on housing, including 23% who spent at least 50% of their income
this way, according to the most recent data available from the U.S. Census Bureau.

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