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Renters now rule the suburbs in DC, Miami and Los Angeles (commercialobserver.com)
24 points by jseliger 18 days ago | hide | past | favorite | 64 comments



> ...they’re more likely to be renters by choice.

So, being unable to afford a house, even with a 6-figure salary, and thus renting is a "choice" now? Hmmm. I'm sure many people choose to rent, but I feel like most renters, especially those with good salaries, do so because the cost of ownership is too damn high these days, and the tax incentives aren't what they used to be.


>The American Dream may no longer be about buying a home, but renting one

There should be a stipulation that if you see this line or one like it, you append "in high value areas where there are lots of high paying jobs". If the American Dream is defined as owning a home (and nothing more), then there are multiple affordable areas outside of the traditional hotbed areas like LA, DC, and NYC.


Then you're buying property outside of areas where you can commute to where the jobs are. You can't pay a mortgage on a Walmart stocker's wages, nor can you afford health insurance for a family working for a small business in the sticks.


There are lots of jobs outside of DC, LA, and NYC where housing is significantly cheaper than the housing in those cities without being in "the sticks".


Where? Because in my experience, the well-paying jobs are either in cities, or in the areas that are within commuting distances of the cities.

What will those places look like in 30 years? Because my experience is that while there might be one or two well-paying employers in such areas, they're bleeding talent and seem to be on the downturn compared to their heydays and competitors. I don't see a lot of those companies existing in a decade, much less 3.


Within commuting distance of DC is a huge area that covers two states.

If you dare live 30 minutes outside of DC in Maryland, you are literally in the middle of no where with farms to the east and forest to the west.

Virginia is more pricey and populated near DC. Housing in Arlington is in the 600s. But if you just live 40 minutes away in Prince Williams, you pay 400s.

Now this is all relative because hey even 600s is cheap compared to NYC and San Fran.


Where?


You can easily find houses in Baltimore city for around 200k and there's plenty of work


Baltimore has one of the worst crime rates in the country


It's almost entirely neighborhood dependent


There are no walls dividing neighborhoods. Even the safest neighborhoods in Baltimore see crime rates well above most other places in the country.


I'm unconvinced that DC has been a "traditional hotbed area" unless you mean post-2010.


??? DC is extremely strong and has been for decades. It's also very stable in this regard.


The median sale price for a detached single-family home in Sept 2011 was $390,000. The median sale price for a detached single-family home in June 2021 was $1,300,000.


If I had predicted that, I would have bought ten houses. Why did the price spike so hard? DC traditionally has a stable work environment where many people work for the government, or via a contractor but it’s not like it became a tech capital. NYC has a hotter tech market.


> but it’s not like it became a tech capital

What?

Let's put aside the massive government contractor industry. Even without it, DC's internet history includes MAE-East, UUNet, AOL, Equinix, Network Solutions, and Microstrategy. The Dulles Technology corridor is one of the largest single tech regions in the country. Nearly all the significant genomics and bioinformatics companies are here, as well as all financial regulation groups. FINRA is in DC. So is Capital One. Amazon is opening in DC, and not in New York: and Amazon Web Services has long been in DC. And all this has fueled three highest income counties in the country, all here in DC.


Hmm, that’s good to know.

For some reason I always thought biotech was in the Carolinas and finance in NYC.

As for Amazon, I mean they’ve been around… but until they decided to stick their HQ heard about was the warehouse and data centers which aren’t really prestige divisions to the outside world.


Nearly all of biotech is snugged up right next to NIH.

There's a reason Amazon picked DC for HQ2.


"Suburbs where renters became the majority between 2010 and 2019 are mainly concentrated in three parts of the country: California, Florida and the Washington, D.C. metro"

https://www.rentcafe.com/blog/rental-market/market-snapshots...

^Better headline in my opinion.

It's pretty funny that journalists take the high school/undergrad approach of essay writing (paraphrased/reworded source material). Sorta explains how we end up with odd titles like this one.


Sadly the goal of news networks is not to convey information properly, it's to outrage or surprise you, and generate ad traffic. The more facetious a headline, the more $$$ it makes the news network from clicks. Because of this, consider all news another form of entertainment (and nothing more).


It’s like they are going for the Taboola approach to clickbait: Have a title that generates interest and don’t even bother delivering on it in the content.

Content farms do something like: “Why travelers are advised to take blank sheet of paper with them.”

Then they go on about some unrelated nonsense and never mention anything about any sheet of paper.


FYI the person who writes the article rarely writes the headline. That's the job of editors. Source: I worked as a copyeditor at a newspaper. A big part of our job was writing the headline. Back in the day it was harder because it had to fit allotted space on paper, today it's easier.


"Rule" is a weird choice of words there.


Yeah, I think it's the landlords doing the ruling. It's right there in the name.


Voting is by person, not by land parcel. Just ask landlords in Seattle how it goes when the renters have more political power than the landlords.


When the incentives are asymmetric, the party that cares more only has to install a few hurdles to win.

I congratulate renters in Seattle on jumping over the hurdles, but I suspect it required some doing.


When is renters having more political power than landlords a bad thing?


When you are a landlord for instance.


Sounds like owning huge amounts of property concentrated in a single area gives you some counterparty risk you should consider.


And that the financial power this gives you as a class needs to be countered by political power in your opposition.


Who said it's a good OR bad thing? This is a discussion of who has the power, not the ethics of the power.

Having said that, I think the current balance in some places can be harmful because there is a non-insignificant number of tenants who stopped paying rent simply because the eviction moratorium means they can enjoy the property for free. When questioned they say "investments have risks ". This leads a number of landlords to jack up credit requirements or let properties stay empty, exacerbating supply problems.


Voting is one sort of power. Many see rent-seeking as a form of regressive taxation; setting of tax rates is another form of power. Landlords, in this situation, are kinda like middle management. While they don't have absolute power, denying that they have power is a bit narrow-minded.


I didn't deny that landlords have power. But the power of the vote includes the ability to regulate and control nearly every form of landlords inherent power. Rent control and eviction moratoriums nearly completely neuter landlord power.

Which as I said elsewhere to downvotes, leads to heavy discrimination based on income/class and less supply for the neediest of folk


And when no candidates will enact these policies, largely because of the monied interests elevating them to contention, how does the power to vote help?


These policies are enacted across the country. I must admit to confusion about your hypothetical. Rent control and eviction moratoriums exist in major cities across the USA, so an argument that they can't be enacted because no one will run that supports them is very odd to me.


Voting is by person, but money is speech, and one side has a lot more speech to influence voting patterns than the other.


We could house them all in a small fraction of the space if we mandated renting to be done in apartments rather than wasting space in houses. Everyone should be able to work toward owning their own home and banning non-efficient renting would do just that. We're really just building houses for the sake of making some greedy landlords richer. In fact, there is almost no difference between what we're doing and Chinese ghost cities that were built for artificial demand.

However, I've only ever met severe disagreement when I bring this up. I don't know if it's clear or not but for me (and probably most of everyone who frequents HN), keeping the status quo will continue to make us richer. I'm very clearly arguing against my own self-interests because I don't find low-efficiency renting to make the world a better place.


I for one don't want a world of hive cities where it's 100-story skyscrapers everywhere you look. There's no human right to live in LA; if you can't afford it, live somewhere else.


Easier perhaps to make it legal to increase the housing supply in a sustainable way (by allowing densification) and to stop letting people write off interest payments on non-owner-occupied houses.


I don't understand LA. I've been out here for a couple of months now and I'm seeing 2 trends - the salaries are generally very average (I'm not just talking about IT) and completely disproportionate to cost of living and it seems like a good majority of young adults are either broke or severely paycheck-to-paycheck. Yet, somehow these people love the fact that they will never own anything it because "the weather is nice here."


I lived in LA for a few years, I noticed the first.

But the second is off a bit. LA is the cultural capitol of North America, and only rivaled in the anglosphere by London and New York City. It's where people go to "make it" (or break it) in film, music, art, comedy, (and to an extent, cuisine and theater). When I lived in there I was surrounded by interesting and beautiful people in every apartment building and there was always something going on, somewhere to go, a show to see, etc.

It has its ugly side too. In my experience the glamour is lifted after about three months living in the Valley. But I can see why people would stay there, despite the lower wages and high cost of living.

And fwiw I left LA for the Bay Area, and I would never live in the Bay Area again (to me the place is an abject dump and not worth the mental or physical toll of living there) but I still have fond memories of LA. It's dirty and loud but at least it has a soul.


What's so hard to understand? Some people value nice weather, and places with nice weather are scarce. Supply. Demand.


I suppose you're right, but at the cost of barely making ends meet... I don't know.


This is what the market is optimizing for. For the vast majority of people, in order to have anything nice, you will barely make ends meet. The market doesn't want to leave any income in your pocket, and it's getting very good at that.


Different strokes.


"landlords now own the suburbs" might be a more accurate description.


"Renters rule" is more apt if we're talking about elections/influence of local policy; residents can vote regardless of ownership.


When considering the outsized influence of money in shaping policy and that landlords are more likely to have money to spend shaping policy, I'm not sure that's exactly apt.

Also I feel like renters are much less likely to get involved in local politics, but that's just anecdotal.


That's always the case to be fair.


It's a relatively new phenomenon, which is why this is news. In years (decades?) past, suburbs were popular in large part because the middle class could afford to buy homes and there was little reason to rent. Today, the situation is different; wages haven't scaled with housing costs and folks can't afford to buy even in the suburbs.


And in addition, after the collapse of the Great Bubble, REITs bought up large swaths of foreclosures. Now the landlord is less likely to be A small investor than a large holding company with a portfolio of many thousands of units.


I've heard that houses in Paris have been impossible to buy for decades now, maybe US cities are becoming old and "grand" in the same sense.


I hope not.

I lived in Paris a few times in my formative years. It's so bad there that, believe it or not, there were homeless who had jobs. Literally. homeless who had to go to work.

It was insane from the perspective of a young American.

EDIT: Changed some slang words to American english.


SDF = sans domicile fixe. French for homeless.

People living on the street or out of their vehicles in the US work, too. Exact numbers are hard to get, though.

https://www.npr.org/2018/09/30/652572292/working-while-homel...

https://www.cnbc.com/2021/02/28/nomadland-amazon-rv-workforc...


Is SDF a French acronym for homeless? Kind of confusing for this site.


Yes


I was just there visiting and there appeared to be plenty of units available that looked much more affordable than NYC


Property ownership among wage and salary earners is a relatively new phenomenon.


On what timescale?


Less than half of the US owned their own homes before the 1940's, after which more than 65% of people owned their own homes.

If we go back past the 1900's, the only workers that consistently owned their own property were farmers. Mortgages didn't become a thing until after the 1860's, and it wasn't until the 1890's that they became common. Before mortgages, workers did not have the lump sum of money required to purchase a home.


What policies which would make owning a single family rental less attractive than owner occupied? Non-owner occupied property tax? We already have mortgage interest deduction, but many of these houses are purchased in cash, and when interest rates are down at 2-3%, that’s not a significant enough difference. An asymmetry of prices for owners versus landlords must be possible. Why don’t we see these policies in practice?


Does anyone have anything besides doom-and-gloom predictions wrt to housing? I'm sincerely curious because I don't - that is, I don't see how all this plays out well for anyone other than big investment firms. Well, I guess that's the bright side: earning steady 15% returns from a property rental fund while society crumbles. :o


The situation is far worse in the UK. Honestly I think it's terrifying, and the political implications are revolutionary.


Great, more grasshoppers and less ants.




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