I don’t follow your reasoning that goes from landlords selling housing to less housing being available. Also, which landlords are renting out at below mortgage prices?!
Less housing in the sense of (owner-occupied + rented). Not all former rented housing would become owner-occupied housing. People who struggle to pay rent are going to have a hard time getting a mortgage, and if they do then they’re betting a lot on an illiquid asset that they’re paying for with an unreliable revenue stream, especially since that asset might go down in value to below what they owe on it like what happened to a lot of people in 2008. One of the things a renter pays a landlord to do is to absorb a lot of the financial risk.
A couple of anecdotes about when I owned a house:
I would have been better off by renting for above mortgage price than I was by buying, since I had to move a lot sooner than I thought I would. There’s a lot of overhead to purchasing real estate that only makes sense if you plan on staying in one place for a long time. Fewer and fewer Americans are doing that.
I used to rent out the house at below-mortgage price but it was to good friends who were very trustworthy. (Even then, technically they shared the house with me although I would only come for one weekend a month, because then they would be easier to evict just in case.) Their rent covered interest and taxes, so I was paying off principal. I sold the house when they moved out rather than taking the risk of renting it to strangers. With that said, I don’t think this is common.
Not all former rented housing would become owner-occupied housing
Yeah, in your previous post you suggested it would be razed to the ground, which is a bit of a throwing your toys out of the play pen when asked to share. I’ll remind you that the original post was suggesting rent controls back to 1980s levels of rent. Housing prices would likely fall, bringing whole swathes of people who can’t get a mortgage now into the buyers market.
At the moment, most landlords basically get houses bought for them by their tenants. It’s iniquitous. If you’re paying the price for the house, you should get the house, not just someone with a better credit rating.
I don’t follow your reasoning that goes from landlords selling housing to less housing being available. Also, which landlords are renting out at below mortgage prices?!
Less housing in the sense of (owner-occupied + rented). Not all former rented housing would become owner-occupied housing. People who struggle to pay rent are going to have a hard time getting a mortgage, and if they do then they’re betting a lot on an illiquid asset that they’re paying for with an unreliable revenue stream, especially since that asset might go down in value to below what they owe on it like what happened to a lot of people in 2008. One of the things a renter pays a landlord to do is to absorb a lot of the financial risk.
A couple of anecdotes about when I owned a house:
I would have been better off by renting for above mortgage price than I was by buying, since I had to move a lot sooner than I thought I would. There’s a lot of overhead to purchasing real estate that only makes sense if you plan on staying in one place for a long time. Fewer and fewer Americans are doing that.
I used to rent out the house at below-mortgage price but it was to good friends who were very trustworthy. (Even then, technically they shared the house with me although I would only come for one weekend a month, because then they would be easier to evict just in case.) Their rent covered interest and taxes, so I was paying off principal. I sold the house when they moved out rather than taking the risk of renting it to strangers. With that said, I don’t think this is common.
Yeah, in your previous post you suggested it would be razed to the ground, which is a bit of a throwing your toys out of the play pen when asked to share. I’ll remind you that the original post was suggesting rent controls back to 1980s levels of rent. Housing prices would likely fall, bringing whole swathes of people who can’t get a mortgage now into the buyers market.
At the moment, most landlords basically get houses bought for them by their tenants. It’s iniquitous. If you’re paying the price for the house, you should get the house, not just someone with a better credit rating.