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View Diary: The Breakfast Club: 4-11-2014 (79 comments)

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  •  The real solution is to levy a tax on (6+ / 0-)

    revenue derived from rents on single family residential property.

    Is it "Gordon Gecko Democrat" week here at Dailykos?

    by JesseCW on Fri Apr 11, 2014 at 07:32:09 AM PDT

    [ Parent ]

    •  I disagree with your comment... (7+ / 0-)

      ...see my "soluition" (in my last comment, above). Increased taxes on rents would merely be passed-on/passed-through to renters (via rent increases).

      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Fri Apr 11, 2014 at 07:38:56 AM PDT

      [ Parent ]

    •  Here in NYC, they are buying up apartment (7+ / 0-)

      buildings, collecting the rents and leaving the tenants to fend for themselves

      In the Bronx, Benjamin Warren fears that he and other residents could burn to death in a fire because management has blocked both sides of the passageways between buildings designed to offer ways out of the massive apartment complex. (Warren has called the city and management multiple times to complain, but the routes remain shut.) Nearby, Liza Ash found herself intimidated by nearly a dozen hired men when she and other residents of her building, which had heat or hot water only sporadically this past winter, attempted to organize a tenants' meeting in the lobby. A little farther south, Khamoni Cooper and her neighbors receive a constant stream of fake eviction notices ordering them to vacate their apartments within five days, even though all of them have paid their rent.

      These three tenants -- and nearly 1,600 more families in 42 buildings -- are living through one of the largest single foreclosures to hit New York City since the financial crisis began seven years ago. But here’s the twist. The owner of these buildings is far from a traditional landlord. It’s actually a conglomerate of private equity firms that bet it would be able to squeeze more money out of these buildings than it ultimately could -- and ended up unable to pay back the $133 million mortgage.

      The problem is that, when things go bust, the tenants, far more than these private equity owners, end up shouldering the costs. [..]

      Around 2005, private equity firms began amassing real estate mini-empires across the city, chasing outlandish projections of future profit. And when these deals started to fall apart, it was tenants, public pension funds, or the city that took the hit, while the private equity owners sometimes succeeded in walking away from the financial wreckage with cash in hand. The story of how those private equity players bet so wrong on housing in New York City is one that, despite the quirks of real estate in the Big Apple, is important to understand now that private equity has taken its rental market show on the road nationwide, and may soon be coming to a town near you.

      .  


      "Information is power. But like all power there are those who want to keep it for themselves" Aaron Swartz, 1986 - 2013
      TheStarsHollowGazette.com

      by TheMomCat on Fri Apr 11, 2014 at 07:39:11 AM PDT

      [ Parent ]

      •  Here in CA, they were buying bundles of (6+ / 0-)

        foreclosed homes in lots from HUD.

        Now they're tending to pick them up one at a time, often through distressed sales.

        They can borrow at .50%.   The rest of us have to borrow at 4.5%  

        It's the spread that allows them to outbid a traditional home buyer and still make a hefty profit by renting.  

        If an ordinary person tried it, they'd be losing money/making 1-2% after paying the interest on the note.

        In our situation, putting tax friction on the flow advantages the individual buyer who hopes to be an owner occupant.

        Is it "Gordon Gecko Democrat" week here at Dailykos?

        by JesseCW on Fri Apr 11, 2014 at 07:54:02 AM PDT

        [ Parent ]

        •  Borrowing at below the rate of US Treasuries is (1+ / 0-)
          Recommended by:
          angel d

          unlikely.  Do you have an authoritative link supporting the 0.50% interest rate?

          The most important way to protect the environment is not to have more than one child.

          by nextstep on Fri Apr 11, 2014 at 09:16:13 AM PDT

          [ Parent ]

          •  It's not "unlikely", (4+ / 0-)
            Recommended by:
            angel d, poligirl, triv33, TheMomCat

            it's standard operating procedure for banks for the last five years.

            Is it "Gordon Gecko Democrat" week here at Dailykos?

            by JesseCW on Fri Apr 11, 2014 at 11:31:02 AM PDT

            [ Parent ]

          •  it's called the federal discount rate and it's (1+ / 0-)
            Recommended by:
            TheMomCat

            .75 right now. you can google that -  i know its on the fed.gov site somewhere as well. Elizabeth Warren has introduced bills dealing with stident loans wondering why they can't get the bank's discount rate.

            "Hope has two beautiful daughters. Their names are anger and courage; anger at the way things are, and courage to see that they do not remain the way they are." ~St Augustine "When it is dark enough, you can see the stars." ~Charles Beard

            by poligirl on Fri Apr 11, 2014 at 01:18:38 PM PDT

            [ Parent ]

            •  Banks eligible to borrow from the Fed (which they (0+ / 0-)

              are reluctant to do, other when needed for liquidity) don't make the types of real estate investments discussed here.

              The most important way to protect the environment is not to have more than one child.

              by nextstep on Fri Apr 11, 2014 at 01:42:40 PM PDT

              [ Parent ]

              •  can you provide a quality link to back that up? nt (2+ / 0-)
                Recommended by:
                Nada Lemming, TheMomCat

                "Hope has two beautiful daughters. Their names are anger and courage; anger at the way things are, and courage to see that they do not remain the way they are." ~St Augustine "When it is dark enough, you can see the stars." ~Charles Beard

                by poligirl on Fri Apr 11, 2014 at 10:57:53 PM PDT

                [ Parent ]

                •  Here are two quality links (0+ / 0-)

                  First is from the Fed's balance sheet, which is published weekly.  Here is the latest

                  http://www.federalreserve.gov/...

                  At this link look at "credit, Loans, Primary Credit" this is from the Fed Window.  It's total value is quite smal at $3 million.  Not exactly enough to finance massive real estate purchase as discussed.  It's small size also shows how banks are reluctant to use this.

                  You can learn more about the Fed Discount Window operation from the Fed at http://www.federalreserve.gov/...
                  In my everyday life I am engaged in economics and typically meet several 4 to 6 Fed board governors per year..  I am not however in the finance industry.

                  The most important way to protect the environment is not to have more than one child.

                  by nextstep on Sat Apr 12, 2014 at 06:07:27 AM PDT

                  [ Parent ]

    •  What of making it easier to increase new home (1+ / 0-)
      Recommended by:
      angel d

      building? Or replacing decayed housing with new higher density housing.

      In addition to lowering prices through more supply there are many good paying jobs from home construction - one of the parts of the labor market with high unemployment, especially for blue collar workers.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Fri Apr 11, 2014 at 09:22:27 AM PDT

      [ Parent ]

      •  There's not a shortage of actual housing stock (3+ / 0-)
        Recommended by:
        angel d, triv33, poligirl

        and they're not making new lots closer to urban centers.

        The price is massively artificially inflated.  It's not a result of a real lack of supply, it's more akin to front running.

        Is it "Gordon Gecko Democrat" week here at Dailykos?

        by JesseCW on Fri Apr 11, 2014 at 11:32:53 AM PDT

        [ Parent ]

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