No nation can afford to subsidize housing for an increasingly large portion of the population without radical suppression of individual rights and property. Large-scale government subsidies exacerbate problems with more money flooding a market and pushing up prices on whatever is being subsidized.
The danger is that we will become a world of landlords and renters, lords and fiefs. The better alternative is more dispersed land ownership, supported not by government money, but by a strong economy and good-paying jobs.
USC CAUTION: Millenials who think renting is preferable to owning a home should look to London for a picture of what the future might hold for them and make their calculations while they still have a choice.
New Era estate scandal: families at the mercy of international speculators
The Guardian, November 19, 2014 By Aditya ChakraborttyHomes across the capital have
Danielle Molinari and her two-year-old Frankie face being put out on the street. So does her 70-year-old neighbour Mary White, along with her adult son (and father of two) Bill. The same goes for the rest of the 93 households on London’s New Era estate. The question is why?
But something bigger is playing out in this little redbrick square on the fringes of the City – and it makes what happens next not just lifechanging for the people who live in it, but important for the rest of us, too. Because the real reason why Danielle and her neighbours must now fight like mad just to keep a roof over their heads is because their homes, and homes across the capital, have turned into an international asset class, to be bought and sold by speculators from across the world.
US investors set to sell New Era estate in London after protests
Westbrook Partners close to transferring ownership to affordable housing provider after tenants’ campaign against rent rises.
USC COMMENT: Tenants were saved temporarily, but having been conditioned to pay less than market rate for housing, will still be dependent upon a benevolent landlord. Whose problem is this, and who will want to purchase the apartments now? With less than fair market
revenues, how long can any landlord continue to own rental property.
revenues, how long can any landlord continue to own rental property.
When you rent anything you are at the mercy of the landlord and the agreement you make. Young people have begun to think there is such a thing as "free rent"; there isn't. Clearly, housing in London is becoming more expensive but why?
ReplyDeleteWhat is not mentioned is the UK and particularly London's "anti car" program. with the cost of owning and operating a car going sky high people want to live where they work. Just like that demand increases and rents go up accordingly. Check the trend of home prices in London.
News flash: this is coming to Portland. The Urban Growth Boundary and lack of investment in roads and highways is going to create more demand closer in and rents will soar.
Another thought - this may well happen at the Wizer building (if it is ever built). The developer is only going to give one year leases to start (he said that during the hearings but it went over most people's heads). Why?
ReplyDeleteTwo potential reasons - first is that the place is being built to condo standards and he may do a conversion. Remember all the seniors anxious to downsize who want to move in (such as Bob Packwood)? what will happen when the conversion takes place and they need to come up with a big pile of money? Homeless in Lake Oswego?
Second reason could be to assess demand and set rents to market in the second year. what will happen to all those seniors now? Homeless in Lake Oswego?
Out of state investors in institutional investors have been buying up Portland apartments for several years now, pushing up building prices in this sector and also rents in the process. When a property changes ownership, especially to large-portfolio owners, it's all about finances. Because of the low vacancy rate, Investors have been paying more than market for apartments in Portland with the expectation that rents will continue to climb. They are not dummies. They know that with little land available for residential construction, the government has made their product a premium commodity.
ReplyDeleteYour comment about Wizer apartments giving "only" one year leases is correct. They would want a year to stabilize their lease-up, but then allow rents to follow the market after that. They are not dummies either. When there is this much money involved, rest assured, the customer will be pushed to the edge of their ability or desire to pay. Rental homes are not homes in the traditional sense - they are a business with contracts between buyers and sellers, and the buyers (renters) have no claim beyond the time period on their lease.
And don't forget about the devastating impact the Wizer/Kessee apartment project will have on downtown retailers; particularly LakeView Village due to the extremely limited access ...Millenium Park, First St., railroad tracks all restrict access to LakeView Village and two years of construction won't be tolerated by retail customers. I have spoken with several tenants there who are already planning their exit.
DeleteRetail is really tough in downtown Lake O. Since LakeView Village opened in 2000 there hasn't really been much new retail square footage built. Developers wanted condos and now apartments. City leaders have gone from trying to compete with retail developments like Bridgeport Village to trying to emulate high density residential like South Waterfront (where retail hardly exists at all). With apparently no clue why neither of those models will work downtown. With a transportation guy and a planner manning our redevelopment agency (LORA) it's no surprise. Their just isn't any knowledge of suburban retail economics.
I'm neither a planner or a developer but I know the very first step that should have occurred with Wizer's proposal was for the city to bring together the stakeholders from LakeView Village and Block 136 with the developers and the Chamber of Commerce and Evergreen Neighborhood and hash out an agreement as to how to design and construct a project that complimented the already existing retail and more importantly didn't completely blow it up.
So yeah, homeless in Lake Oswego; retailless in Lake Oswego; and clueless at City Hall and the Chamber of Commerce!!
Yup.
ReplyDelete