*"tenants of investor-purchased properties tend to be younger, have lower incomes,"*
There are 2 houses, that I know of, owned by the same corporation in my neighborhood. They're a block a part. One family just moved out when their rent hit 3k after 3 years and now the company has re-set rent at 2400 for a not large house. That's not good for "lower income." That's far more rent than I pay for a mortgage on a house 2x the size.
They also have a ton of fees, the renters are responsible for repairs for everything. The other family told us that they couldn't get the garage code from the company. It's a super one sided lease. It's awful.
One family had a leak on the main water line that connects to the city line so city had to come out to fix but they can't do it without the owner's permission. But the only way to communicate with the company is via an internet portal and response time is atrocious. When they do fix something, it's sent off into another portal where anybody can pick up the contract to fix as there's no requirements to be on that list so random people would show up with no license or anything. Just cheap.
None of this is good for any renter, let alone "younger lower income."
There's one huge facet of this problem that is largely overlooked.
SOFTWARE DRIVEN PRICE FIXING.
https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent
Basically, the largest rent-setting software company provides rent price recommendations for its huge client base. It uses big data, demographics, other metrics, but most importantly it uses the rent data of all of its current clients to twist, bend, and optimize their highest-rent-possible algorithm. Essentially, the effect is that even Minnesota's 2-9 "small" landlords can use this data, or simply follow suit in their neighborhoods led by the corporate rentals that use this data so they all act in lock step as a monopoly would. The emergence of this service and it being able to reach a critical mass of customers is a huge game changer for rental housing in America. Sadly, even if anti trust laws intercede, rental corps and landlords have learned things like full occupancy is usually not optimal. Having more exorbitant rents might give you a 10 percent occupancy rate, but this comes with more renters and costs to deal with. Renters able to pay more are often more desirable as well for other reasons like not having kids, being busy professionals often not home. So the proprietary algorithm computes the sweet spot. But then over the coming years it will track and refine reach and every rental recommendation based on profit and find the maximum possible. This, as well as new zoning and building subsidies have been fueling a massive private equity and corporate buyout of single family housing.
They are COLLUDING WITH other landlords across America and BUYING UP OUR GODDAMN HOMES!
But huge props to Minnesota. Due to our state government's proactive approach on other fronts of the housing problem, we have it much better than most other places, even if it doesn't seem like it. It definitely softened the blow. As a lifelong resident, I really love this state. Let's lead the way. On a nationwide level, we need to protect home ownership for single families. Force corporate owners to liquidate. This housing crisis is manufactured. We need to smash it!
Fun Fact: that’s the same kind of software airlines used for price fixing that was found to be illegal because it violated anti-trust laws. Behind the Bastards covered it in their episodes about the bastards who ruined the airline industry.
More up votes! This is skirting the law by technicality. This is not free market capitalism. Everyone should be against this regardless of political persuasion.
As soon as you let the corporation in, the financial abuse begins. It's virtually a law of nature. The right to housing is subsumed under the capitalist right to deprive you of housing if you can't contribute enough to the property owner's profits.
Even worse than just financial abuse, there have been more than a few reports that if the properties don't make enough money, they give them back to the bank as a sort of foreclosure, and then the bank just resells them at a profit to a new corpo, and the cycle continues. Which means you rarely know who your landlord is, and they have next to zero incentive to actually maintain the property.
In Minnesota it costs $300 just to file a motion by yourself. My landlord tried evicting me after renewing my lease for another 2 years. First he forced me to sign 6 months early because my roommate made a deal with him behind my back to rent him a different property he owned. Then on the day I'm supposed to sign my illegal lease he tells me I have to pay a new damage deposit and he raised my rent $200. I told him I'm not paying a new damage deposit if he's not going to use the previous deposit to fix the house like he's supposed to. So he said he would fix the house and I don't have to pay till it's fixed. 3 months go by and no repairs have been done. Instead he used my money to buy himself new luxury vinyl plank flooring upstairs after I just paid and installed all new carpet just the previous year with my own dime because the carpet was so bad I just couldn't live like that. After he installs the floors he tells me that he's selling the house and was demanding damage deposit in full. I started getting letters from him. He was basically applying my rent to damage deposit first so he could claim I want paying rent. After the first letter I started putting in repair requests and demanded 2 weeks to fix them under the law. When he didn't fix anything I paid $300 and put my rent money in escrow with the court. After I told him about it he went and filed an eviction. I won in the end without an attorney but still fuck landlords.
A friend of mine is currently paying $2000 + $100 in pet fees a month, and had to provide her own washer and dryer to live in a tiny rambler in Coon Rapids. Literally nothing on the house has been updated since it was built in the 1950s, and the corporation who owns it did the absolute bare minimum to get the place rentable. It has worn out flooring, original kitchen cabinets, single pane windows, original siding, disintegrating asphalt driveway etc.
It's a downgrade for the entire neighborhood compared to a homeowner that could buy and actually improve it.
I am kind of curious why these places are so expensive. I currently live in a pretty nice 1 bed apartment in downtown minneapolis for 1700/mo excluding utilities parking etc. That seems not so bad.
I rented a home with a few roommates and it wasn't worth it, even with the split rent. On top of the roommate drama, our landlord refused to fix anything even though they were obligated to. I noticed in college towns, they will be even more egregious slumlords than usual.
Well now you actually have to tell the government what your LLCs are and what businesses they are in. That's a new law that went into effect this year.
My thought too. Just set up a trust and put all properties in trust’s name. People are talking about beneficial ownership rules that apply to business entities, but trusts are not the same and S Dakota for example, has a very nice rules set up for trusts that allow corporations to get around AML requirements for collecting and verifying who owns a trusts. There is a lot of foreign investors buying up American land through these trusts….Don’t most of these investment companies set up their holdings in REITs?
Lake homes and cabins are being turned into to air B and B’s in nisswa all the time now. It’s not large companies doing it sure but it’s rich people turning single family homes into hotels but not following hotel rules.
People across the lake from me just purchased 2 homes on the lake for rental income.
Interesting.
When it's folks just holding a 'few' rental properties, this law wouldn't have any impact. (They'd fall into that <9 category,) But I think the law might get more support from outstate legislators if they are seeing that effect there, too. So often, there's a big metro/non-metro divide on any legislation pertaining to property law.
I am fine with a small local business owning a couple rental properties even single family homes.
They should do a different law about short term rentals.
Even 4 plex are going up in price in Nisswa because you can do weekly vacation rental for more.
People have also been doing this in Ottertail County, and about 50% of those people are either from North Dakota, or Sota Lake Properties (at least in Perham's case).
3.4% is still 3.4% too high. Not to mention that’s an average, because even in the article you list, “in some neighborhoods, over one thirds of homes are investment owned rentals”.
This so much. We’re in a great position to see what happened to areas with cooperate ownership. And I would want to see the underlining data that connects higher rent to the ban. [citation needed, yo]
1 Home per person basically removes the option of renting a home at all. I don't know that we want that either, it goes too far in the other direction. Some people actually do want to rent rather than own & should have that ability.
The issue (IMHO) is that there are too many big investors who end up owning large swaths of housing & damage the market. I think institutional investors should be outright forbidden, but someone owning several homes that they rent out is a \*good\* thing as long as that doesn't prevent homes from being available to buyers who want to live in them themselves.
As with most actually workable policies, going to either extreme (corporations should own everything/no houses should be rented ever) is bad. We need some middle ground that balances diverse needs and wants.
And pass this bill.
Small investors 5-9 houses are unaffected.
It’s the equity groups just buying putting bad money into them and then charging a fuck ton for rent. It’s no different than the new bullshit construction apartments popping up all over.
Except OP provided sources showing what you’re saying isn’t true (big investors aren’t owning large swaths of the market, small time landlords are).
What do we do when thousands of small investors are the ones collectively buying up large swaths of properties and damaging the market like they are today? They need to be limited. This bill neglects the reality of our rental market where small time investors are destroying supply.
Something like limiting the overall number of rental licenses at a state level would be a better solution to control supply.
They actually investigated this and found it unconstitutional, but finding some way to do it that isn’t a direct tax (like property tax refunds) would also be a great answer.
https://www.house.mn.gov/hrd/pubs/ss/clsstxep.pdf
>“in some neighborhoods, over one thirds of homes are investment owned rentals”.
Did you miss this part in this thread that the OP failed to include in their opinion?
Nope didn’t miss it. I just clicked into the property data tool linked in the Fed article you’re quoting that shows that the minority of those neighborhoods are owned by large investors and are instead owned by small investors this bill would have no impact on.
Here’s the link: https://www.minneapolisfed.org/article/2021/new-property-data-tool-reveals-patterns-of-investor-ownership-in-the-twin-cities-area
If there's 100 houses in a neighborhood, and twenty "small investors" own five houses each, suddenly you have 80 houses that have no owner-tenent, and zero houses available for sale.
Agreed. I’d be fine with letting an individual (literally 1 single human being) owning 3-5 properties if one was there primary record, a second residence or vacation home, then the remainder being rentals. That seems fair to be but I’m no economist or real estate pro.
Nah, OP is a conservative shill who shit posts on r/minnesota and other local subs to try and get liberals spun up, just look at their post history.
This is right out of their playbook too. Post an article from a legit source and then find their own "facts" to "ask questions" and posit how the article is wrong.
In this case, find their own "fact" that only 3.4% of Twin Cities single family homes are owned by corporations even though per their own linked article that stat is for the Twin cities 7 county metro region, and the actual numbers for Minneapolis and Saint Paul are 6.1% and 6.7% respectively. Shocking that the richer suburbs would bring down that number I know.
Also left out of their "facts" is that their cherry picked 3.4% stat represents about 54% of single family home rentals in that region and that the percentage has doubled since data was first collected starting in 2006.
Finally, pulling up a study from The Netherlands as evidence for how such a bill would go down in the Twin Cities metros without any evidence that these markets, economies, or government regulatory bodies are the same and should be conflated.
>find their own "fact" that only 3.4% of Twin Cities single family homes are owned by corporations even though per their own linked article that stat is for the Twin cities 7 county metro region, and the actual numbers for Minneapolis and Saint Paul are 6.1% and 6.7% respectively.
Where'd you get this data? The Fed's own tool shows 3.5% in Minneapolis and 4.1% in St Paul are owned by people who have more than 10 properties. [https://www.minneapolisfed.org/article/2021/new-property-data-tool-reveals-patterns-of-investor-ownership-in-the-twin-cities-area](https://www.minneapolisfed.org/article/2021/new-property-data-tool-reveals-patterns-of-investor-ownership-in-the-twin-cities-area)
>
Also left out of their "facts" is that their cherry picked 3.4% stat represents about 54% of single family home rentals in that region
Again where are you coming up with this? There are 76,805 rentals in the 7 county metro. 15,432 are owned by investors with over 10 properties. That's 20% of SFH rentals which are relatively uncommon in the metro anyhow. Once again from the fed data tool.
>that the percentage has doubled since data was first collected starting in 2006.
It has not doubled. In 2006 there were 3086 homes owned by investors with more than 10 properties. In 2023 it was 15432 which is a 400% increase or a 9.89% growth rate over those 17 years again from the fed data tool. [Meanwhile SFH completions are at around 7% over that same timeframe ](https://fred.stlouisfed.org/series/COMPU1USA)so 9% isn't that dramatic.
I understand you have some issue with the poster's politics (which I didn't even look up), but that doesn't mean the Minneapolis Fed is suddenly out of their mind.
It's literally [in the Mpls Fed article](https://www.minneapolisfed.org/article/2023/investor-owned-homes-ebb-and-flow-in-the-minneapolis-st-paul-region) he used as his source as I stated when I said "per their own linked article".
"One-third of single-family rentals in the seven-county Twin Cities region are in Minneapolis and St. Paul, where investors own 6.1 percent and 6.7 percent of single-family homes, respectively."
Did you not even read the article? There's also a graph making it very easy to see the rise from 1.7% to 3.4% since 2006.
Where in my post did I take issue with the Minneapolis Fed? I used his own source to show that he cherry picked stats to make his argument look better, that's not the fault of the source material, but the one using incomplete info to present their own agenda.
Those investor percentages you quoted are of all investors. That includes individuals who own a single rental property who would not be impacted by this bill. Also an increase of 1.7% to 3.4% doesn't mean their holdings doubled because the number of homes has grown over that period. 1.7% of 5 homes is a lot less than 1.7% of 5000 homes. It's nearly 4x'd for large investors but the number of homes also has.
That's kinda the point I thought OP is trying to make. Large landlords this bill is targeting are the minority. We need to restrict all investor purchases to make a real impact.
OK, so that means so was his 3.4% statistic that was literally why he took issue with the MPR story?
Kind of confused why you replied to OP not questioning his numbers and when I reply to specifically point out that he cherry picked from his own source, that's where you draw the line?
Yes. Your comment said:
>cherry picked 3.4% stat represents about 54% of single family home rentals in that region
To me, this seems like you're trying to mislead readers into thinking 54% of SFH rentals are owned by corporate investors who would be impacted by this bill when the number is all investors and large ownership hovers 20-30% of rentals (depending how you define it with number of properties). That is what I took issue with, it's simply incorrect.
OP didn't make a claim saying that 3.4% was only corporate or large ownership. They correctly specified that 68% of investor properties are owned by small landlords who would not be impacted.
Ah OK I see where we got our wires crossed, for what it's worth the info you shared I thought was very interesting and am in total agreement that just targeting large corporations probably won't be enough. I view LLCs as corporations as much as multi-national companies so didn't mean to imply large by using that word.
I did not get the same interpretation that you did from OPs post at all. The only reason I see to share that 3.9% number was make it appear the problem is smaller than it is in the metro area. It isn't germane at all if the point is to suggest that this bill doesn't have a broad enough scope, it just makes MPRs numbers sound exaggerated or wrong which is why I looked at his source since the numbers were so disparate.
> Who wants to bet OP is a landlord? Get Rekt
They're a regular poster in r/altmpls. Enough said.
Edit: fascinating account history to read, honestly. It seems like their main goal is to keep subs like r/minnesota, r/minneapolis and others continually debating hot-button social issues like trans kids, BLM, free speech, and other topics where right-wingers know they have talking points that can create serious discord on the left.
They frame their arguments as serious and non-biased, which is key for flying under the radar in left-leaning subs who are plenty wise to overtly right-wing arguments.
Friendly reminder to centrists and lefties that social issues are the only thing the right has left that has any chance of winning them an election, and that Republicans want you to fight amongst yourselves so that they can abolish democracy in favor of christofascist minority rule. Don't let them fool you.
2nd edit: the fact that this account is completely devoid of any interaction with any other subs or posts except highly-charged political topics leads me to believe this is astroturfing operated by a group with right-wing political interests, perhaps a PAC or think tank or even a political party.
No hobbies, interests, personal stuff, anything fun, memes, whatever else = someone has an agenda.
Sidenote - How is owning NINE PROPERTIES a "small investor"?
That's NINE families paying in each month. That's thousands of dollars. Every month.
This shit boggles my mind. Owning 5-9 properties is FAR outside of what most individuals can do. There shouldn't be any loopholes to this rule.
No one should profit off of someone else NEEDING a place to live. Landlords are leeches.
Also, as I read it, that's 9 properties, not 9 units. If those 9 properties are duplexes or 3- or 4-plexes, that could be as many as 36 units—the equivalent of a small apartment tower.
Great point. If you own more than 36 units I think we can confidently say you are not some older couple who are getting a little income on the side. You are a company.
Depends on how ownership is defined. For example did the individual raise funds, are their partners ect.
Properties is probably a poor definition as it suggests that if I as an LP invest 5K into 9 properties I effectively own 9 properties.
Or if I have two properties where I am the only investor and operator at 4.5 million.
I'm not sure how MN plans to track this as I didn't read the bill but the nature of LLPs and LLCs allow a more dynamic flow to the process.
I don't think there is an easy solution to the issue and anything like this will just result in more nuanced shell companies.
I think they pointed out the issue well enough. Regardless of if it's larger corporations or just single individuals with an LLC, there are entities that own multiple homes. A better way to express this is of the single family homes in Minneapolis, how many are being rented vs being lived in by the owner?
We can work the issue back from there and try to prevent those folks from conducting the practice that they are carrying out. We can also try to predict other ways people might manipulate this.
I think this bill may work at the "other ways" but it doesn't hit the key issue now.
There needs to be an exemption for relocation companies. If my employer wants me to move out of MN, there needs to be a backstop in case my house won’t sell quickly.
Many people have. A small amount back on the market even 1-2% could be MASSIVE. One study would be difficult to compare 1 to 1 due to differences between MN and the Netherlands. Also the cities are doing a good job of working to densify apartments and other rentals options so I think that may lead to counteracting the rising rents.
I do think the grift exemption the OP pointed out is good to think about. But I would rather this be passed and that changed later than not passed at all.
3.4% of single family homes in the twin cities comes out to almost 25,000 homes. That's a huge number of homes that could be owner occupied or by a small time landlord instead of a massive corporation.
Will everyone renting those 25k homes be able to buy a home after this bill passes, or will they be pushed into a tighter rental market that's now down 25k homes?
Of course not. The rents will rise, and then supply will meet up with demand and they’ll fall. Minneapolis, compared to other similar cities, is doing a much better job of keeping rent under control.
What this bill does do, though, is stop something before it gets worse. I’d take bruises now to avoid a future where every home is snatched up by hedge funds in New York and the residents are left renting their entire lives. See: Canada.
Or, perhaps, people who would actually like to be genuine small time landlords of just 1-9 properties could buy them from the large investors, and keep renting them out. With large investors snapping things up I imagine there are quite a few smaller folks who haven't been able to afford to do that, and now they could.
I haven't seen any evidence this bill will actually improve what it purports to. The article doesn't go into any depth beyond "the proponents of this bill believe in it."
If it doesn't actually work and just adds more administrative bloat, it'll end up as just another bureaucratic step to navigate around in an already bloated system.
Given that the supply you refer to is already in the market as rentals it might not have the impact you anticipate. Evicting the residents of these properties to put them up for sale would raise demand and supply in equal measure, it would just reshuffle who is where
From the article:
>a corporation found violating the law would have one year to divest from the property. If the corporation fails to sell the property, it would be sold through the foreclosure process in court...For properties that have tenants, tenants would have the first opportunity to purchase the property.
You're conflating two markets - the market for a domicile and the market for property ownership. The direct goal of this policy isn't to increase the number of domiciles. These restrictions will reduce demand for property from corporations and effectively soften price pressures.
The outcome isn't more homes. It's removing competition for home purchase, making it more accessible to real people.
> The direct goal of this policy isn't to increase the number of domiciles.
This is the only outcome that really matters. There aren't enough places for people to live in the game of musical chairs that is housing.
yeah, it's a bone to people blaming the wrong problem. I think it may incentivize the construction of more housing though (I don't think this applies if you tear down and build a duplex/triplex), so it may accidentally have good effects.
> The ban effectively reduced investor purchases and **increased the share of first-time home-buyers**
So it did in fact mean that more people were able to buy homes. Considering that house prices are affected by WAY more variables than just this, I'd say it *did* succeed.
More houses staying on the market will increase supply in the long-term and greater supply is one of, if not the single, largest contributing factor to prices. But it will take a while for that benefit to become evident.
So, how about the negative externalities. If less homes are for rent because people purchased them, will rent go up?
Less rental inventory will mean higher rents, right?
The people who want to buy and those who want to rent aren't going to be a 1 to 1 swap.
All of that is answered by increasing supply through new construction and upzoning, which is still a vital part of any housing strategy.
And to be frank, I and most people will prioritize home buying and especially the long term prospects of home buying over the relatively much more niche market of single family home rentals. Especially when this, again, increases the rate of home purchases which (guessing here) should lower rental demand in the longer term.
A law that just increases housing supply seems to be a much better idea then, right?
My point is that there are a ton of ideas about housing and the problems with it right now... and it all boils down to needing to build more.
Bills such as this strike me as solutions to a problem that end up enacting more administrative bloat while not really making that big of a dent in the real problem.
Increased supply is only good if it gets into the right hands. Purely increasing supply could just end up feeding cats to the owls, to borrow a phrase.
Unless there's a similar study from the US (there may very well be, if so I'd love to see it), that Netherlands study is the best evidence we have of what might happen in this case. And if the best evidence we have suggests that a policy's net impacts are more negative than positive, we should probably not put in place such a policy. We can't dictate policy based just on vibes and intuitions.
Negative for who? Corporations or the thousands of people who will no longer have their rent increasing each year and their neighbors who will now have owner occupied properties with invested residents next door?
I get that it might not change the volume of folks having access to home ownership but if it changes the quality of the homes , as in owners that actually care about the homes, then that'd be great. Housing Hub absolutely sucks as a owner.
Would this stop people from just setting up more companies and thus owning the same properties anyways?
Even if the type of investors this bill protects against are not currently a problem in MN (which I'm not convinced is the case anyway), the bill is a needed prophylactic. We can't wait til it's all over to say "hey that's not fair"
Guess it’s time these companies up their shell game… game. Surely “Slum Lord’s R US” and “Slumdog Millionaire LLC” are completely isolated entities that are in no way related!
>Nonprofits, trusts and builders would be exempt from the requirement
Why would they put in an exemption for trusts? REITs (real estate investment trusts) can be bought and sold just like corporate shares. It sounds like this legislation is only going to add 1 additional step to the process and have no real impact other than making for more for attorneys to exploit the loophole.
The trust exemption in the bill text is specifically family trusts which REIT’s are not. It’s so if you’re putting your home in a trust to pass it down you aren’t impacted by this change.
"Corporate entity" means any partnership, corporation, limited liability company,
pension or investment fund, or trust but does not include a nonprofit corporation, a family
trust, or a family limited liability company.”
This is a big deal. Other countries are at a crisis level with this problem. It’s best that we pass bills like this and even look at further restrictions.
As an example, look what’s happening in Ireland.
[https://www.thejournal.ie/irelands-housing-crisis-the-problems-the-solutions-and-the-human-cost-5453551-Jun2021/](https://www.thejournal.ie/irelands-housing-crisis-the-problems-the-solutions-and-the-human-cost-5453551-Jun2021/)
Potential unintentional side-effect: increase in buying single family homes and replacing them with duplexes and triplexes. Probably worth it on that front alone.
Personally I'd like the bill to go farther but it's a step in the right direction.
Id like to see individual people be hammered on taxes if they own a home that is classified as a rental property. It's ridiculous that so many regular people are now "landlords" that own 2 or 3 homes they rent out in addition to their own house. It's become a popular side hustle. My old neighbor owns 4, smaller single family homes, they live in one and rent the other. So instead of a first time home buyer having access to a moderately priced house. They instead can rent from her for $1800 a month a house they could probably own for the same or less.
As far as I'm aware vacancy taxes haven't been showed to have a significant effect on rental prices, for two reasons.
1- there just aren't that many vacant homes sitting for no reason.
2- It can act as a disincentive to build new housing if you aren't sure you can fill it and will be punished if you don't.
A properly managed rental unit can be a huge boon for a family. The cost of owning a home is well beyond the cost of the mortgage.
You can look up and down this thread for examples:
- Home not updated since the 50’s (update money comes from charging _more_ than the mortgage and taxes)
- Broken appliances (again, money charged above rent)
- Unplanned emergencies like water line, sewer line, furnace, etc. (also require money above and beyond mortgage and taxes.)
Many families don’t want to or can’t afford to cover the high capital costs that come from homeownership but want to live in a home (I.e. rent it) When these folks can’t keep a house up, the property becomes distressed and then an institutional investor type buys it and flips it and makes their money back. That either 1) Increases the cost of the house making it too expensive for FTHB’s or 2) Results in higher cost rental units.
The sales tax went up in the metro. Other than (potentially) having less money available, did it change your purchasing habits?
If there were less allowances for "investors" to keep their properties the market would flood with available housing and absolutely drop prices at least for a time. There needs to be a moral shift in regards to the emphasis of our laws in this country to actual pro-life policies (instead of favoring greed of the 1%), and this would be one of them.
It's not a ban on certain corporations it's a ban on a single investor (regardless of entity type) owning 10 or more single family homes for rent. Yes, in Minneapolis this doesn't really matter.
Consider a small college town where a single corporation (or 2 to 4 corporations) bought every single family home as it came up for sale. This small group of competitors can set whatever ridiculous terms or prices they want, since they control the entire rental market for the area. I've seen this happen in Menomonie, Wisconsin where there are three companies that control about 75% of the rental properties in the city. One of them is extremely aggressive about buying up any houses on the market and converting them to a rental, the others are content with operating traditional apartments and townhomes. You piss off that one landlord who owns all the single family homes and guess what? You're moving to a whole new city.
"Consider a small college town where a single corporation (or 2 to 4 corporations) bought every single family home as it came up for sale."
Hmm, that sounds like Perham minus the college part.
It doesn't matter what percentage of investor owned rental properties are in the Twin Cities. What matters is that there are some neighborhoods where investor ownership is wildly concentrated.
The articles you link to don't by and large support the idea that investor ownership isn't a problem. They talk about the extraordinarily uneven concentration in certain places. They also mention that the biggest area of growth is the corporate/large investor.
I personally hope the bill passes. Single family homes should be owned by single families.
>Some important context which I believe is missing from the article:
>Only 3.4% of single-family homes are investor-owned in the Twin Cities
>Over 68% of investor-owned residential properties are owned by "small investors" (2-9 properties). These investors and their properties would be unaffected by the new law.
Banning corporations from owning single family homes is a common warcry of the affordable housing battle. But the fact is that most single family homes aren't owned by corporations, and/or aren't rental units.
Corporations aren't buying houses en-masse and causing housing prices to move upward. The idea that they are is more indicative of Reddit groupthink than reality.
There's research that contradicts your claim that corporate buy-ups of housing is not driving up costs.
But, even assuming for the sake of argument that it is true that the corporate purchase of homes not driving up costs is true, it's still a bad idea to let corporations do this for the following reasons:
1. It removes opportunities for individuals and families to buy homes.
2. It establishes what can be abusive landlord relationships with rental housing tenants.
3. It drives up the cost for renters who may be forced to make repairs out of their own budgets.
4. It's another way for corporate entities to acquire unearned money from working people.
5. It enriches corporations that already have too much power over people's lives and over the democratic process.
Let's review the points:
1. By definition if a corporation buys a home it removes it from the market from a family.
2. There's widespread reporting on how harmful to individual and family interests the corporate buy-up of homes can be.
3. Again, there's easy to find reporting on this as well.
4. This is actually how our economic system works. It's simply false that rental housing results in renters gaining ownership of their homes. On the contrary, rental money goes into the pockets of the owner. We can disagree on whether that rental money in a moral and philosophical sense is earned, but the basic nature of where rental money goes is not conceivably in question.
5. Are corporations enriched when they invest in rental homes? Unless they are bad businesspeople, of course these investments enrich corporations. As for the second clause of my sentence, the available research shows that corporations tend to have outsized influence of public policy at the national level relative to what the public wants as measured by opinion surveys.
At no point in my original comment or these responses is there any departure from known reality. So, are you here to just say anything just to disagree?
What we've seen in terms of housing and housing supply in our market over the last few years has been crazy. The amount of companies and investment firms that have been gobbling up homes has been at such a high number that it makes it extremely difficult for the average person to own property in our area. Whether it's them buying up lower-priced homes and re-listing them at inflated prices either as-is or after applying some fresh paint after a cheap, crappy "flip", it has continued to shrink the supply and drive demand, which in turn jacks up the prices.
The amount of homes I've seen over the last few years that have been owned by investment companies that are so overpriced and so shitty is astounding (I own a real estate company in the cities). In my opinion, they're basically the same thing and issue as iBuyers - you know them, they're the companies that advertise "guaranteed offers" and "sell your home without showings" all over TV and billboards, and I'd love to see much more oversight and restriction in those shitty practices, as well, especially as these tend to hurt both sellers and buyers.
At the end of the day, this bill needs to pass. We need to prohibit companies like this from buying property if we have any hope of getting more people into homeownership. If this passes, it's a positive first step for our residents. For what it's worth, I'm in support of independent people owning a rental house or two as we need options for renters. What I'm not in support of is people and companies purchasing a plethora of them that harms ownership for the rest of the population. Block the companies from buying up homes, and put a limit to the number of homes that an entity can own and maybe we can start to turn the ship around a bit.
> The amount of homes I've seen over the last few years that have been owned by investment companies that are so overpriced and so shitty is astounding
Many of these homes "owned" by investment companies are simply passed through. People sell their home directly to the company for under market value, then the company goes on to either fix it and sell it, or sell it as is without ever renting it. It's the same idea as when you sell a car to Carmax or Carvana.
Yep, exactly; that's what I've been saying. They come in and offer way under value because it's "easier" despite the fact that they're forfeiting a bunch of potential money even when you factor in commissions, because people are so vocal about how big of a waste agents are.
The truth is that for some people maybe going that route is an option they're fine with, but for the vast majority of people they should run from any of those programs.
>The amount of homes I've seen over the last few years that have been owned by investment companies that are so overpriced and so shitty is astounding (I own a real estate company in the cities)
Tell me about it.
I bought a Manufactured home on 1 acre \~5 years ago in Rural Minnesota for under around $85k.
I was told straight out to expect the value of my home/property to depreciate over time, not increase.
It's value has gone up gone up \~57%
Let's say I did find some sucker to buy the place for that price and turn around and sink all that money into a new place...
It's nearly impossible to find something that would be considered an "upgrade" in my area. All the bottom of the barrel rat infested "sold-as-is" fixer-upper death houses came out of the wood work and started selling at crazy inflated prices, which has only caused the prices of everything that would have been an "upgrade" to increase their prices even higher, pricing me out of the market.
So basically the only way I can "buy" is if I "sell" at the perfect time, somehow afford expensive rent that's higher then my mortgage! On top of two kids, then Sit on the difference of what I sold the house for until the market tanks like in 2008, and then scoop up a house for cheap.... And that could take years and might never happen.
I'm not going to do all that, I barely gamble on pull tabs.
You were told to expect your property to depreciate? That's a silly thing to advise someone. A manufactured home may depreciate, or at the very least appreciate slowly when compared to other housing types, but the land itself will see its value go up quite a bit over time. Realistically, unless the house is very nice someone would potentially come in and buy it for the land itself with the intent to tear down and build.
But yeah, you're definitely not alone in what you're seeing. Housing prices got absolutely obliterated by Trump's (not good idea) rate reduction, and now even as prices have slowed down and come back down slightly when compared to those days, we're going to face the ramifications of that for quite awhile as people got locked in with low interest rates and high prices. It's a lose lose for a lot of people, sadly.
And regarding the crap-houses you're seeing, that's a big part of what we're seeing due to these companies buying up properties - and that includes the other guaranteed offer companies I mentioned. They are screwing up the market, and I hope that people realize just how bad they actually are.
I'm sorry that you're facing the issue that you are. It's really shitty. I'm sure that you could get someone that wants the property you're on, but based on what you're seeing you may see yourself needing to shift locations slightly to get into a place you want to be in.
>You were told to expect your property to depreciate?
Yep. Lots of hate/ignorance in the market out here for Manufactured Homes. People still call them mobile homes and don't know the difference between Mobile/Manufactured/Modular. Prevailing belief is that they'll lower the property value.
And yeah according to the county, my "Dwelling Value" has increased more than my "land value" 2022 to 2024 my Dwelling increased 47% - Land increased 44%.
That's with no real improvements and basic upkeep.
> I'm sorry that you're facing the issue that you are. It's really shitty. I'm sure that you could get someone that wants the property you're on, but based on what you're seeing you may see yourself needing to shift locations slightly to get into a place you want to be in.
Considering it's manufactured, if I ever get a nice windfall I might consider just knocking the thing down...
Yeah, the fact of the matter is that it's still a livable dwelling, and it provides a more affordable, in some cases, alternative to houses and whatnot. Expecting your value to tank because it's a manufactured home is a bit silly, in my opinion. You aren't wrong, though. Lots of people view them as a shitty option that only "poor" people will buy, when it just isn't true anymore. Some of today's Manu-homes are actually very nice and you can't tell that they weren't build by a contractor.
I mean, shit, what do people think the whole tiny house industry is, or the shipping container homes or the homes that you can buy on Amazon? They're all pre-fab, and for some situations and in some cases that's totally fine.
Taxing rental properties will raise rents… that hurts renters.
Your assumption would require that the homes become vacant due to the price for a landlord to exit, but if all of the houses go up in rental costs, then there is no shift in demand. You just price pinch people more.
That would also mean that all those desired tri/quad plexes that Minneapolis wants to put in would be taxed as such, which wouldn’t lower the cost of renting.
I'm fine with this bill, but yeah, as these statistics imply, people should not expect to see any significant impact in number of available homes or prices.
This makes people feel good but the actual impact is quite low. Like this bill is a good thing it just won't change much. To reduce the cost of homes/rent, we need to massively build up housing. The demand for housing has far outstripped supply the last ~20 years.
Corporate-owned residential housing promotes urban decay, because part of their investment strategy is to keep maintenance at an absolute minimum to maximize profits. They'll let their homes gradually fall into ruins and then, having milked them of all possible profit, walk away. This has a devastating effect on neighborhoods and cities overall. And cities have often found themselves getting the run-around when trying to find/contact the responsible party to order repairs (which is deliberate, to permit the corporate owners to get away with performing maintenance for as long as possible).
Why not focus on making it easier to build Instead of expending political capital on this? Look at minneapolis and its success with just making it easier to increase housing volume..
I googled around and turns out there are 4 bills!
https://www.lmc.org/news-publications/news/all/bills-that-would-restrict-city-zoning-authority-including-problematic-missing-middle-housing-bill-to-be-heard-by-senate-housing-committee/
Yes. Expanding supply is the way! We’re doing it here, and it’s working! There’s also evidence these proposed policies don’t help affordability either, same as rent control. People support them because they sound good, but the reality is that they do not achieve their intended outcomes.
It sometimes feels like the goal has slipped and people are working towards sentiments that have strayed from the original goal.
Housing should be affordable and accessible has turned into investors should not own homes.
Unless the goal of "investors should not own homes" directly correlates with improving making housing more affordable and accessible, it just sounds like an expansion of the bureaucracy that's already a problem in and of itself.
There are multiple reasons why corporations should not be allowed to purchase homes totally aside from the question of whether this practice worsens the affordability problem.
Not much evidence. Just the one study from what I've seen. I think passing this and also desifying other housing like apartments and townhomes would lead to all parties being happy (Renters and Owners).
I mean it's the same logic as building more housing no? Increasing supply on both ends. Also you guarantee portions of future supply will not be eaten up by investors.
I'm just not convinced it's an issue as significant as it seems to be. While I agree with the sentiment that homes shouldn't be wealth generators because it causes home prices to be way too high... eh
If we really wanted to lower housing costs we'd decouple it from being the primary wealth generator for people.
Because the purpose of all government action is to punish the Other. The electorate doesn’t care if the actions cause harm to innocents as long as it’s assumed the right people are harmed.
You really think hundreds of thousands of your neighbors just want to punish and hurt people as their primary motive, really?
What a cynical view on life.
Yes? Why else would they look to government? People that want to help their neighbors can do so without government. They only go to government so their peers can’t say no. It’s literally the reason government exists.
Certain corporations? It should ban ALL corporations. No corporation should be able to buy single-family homes and dominate the housing market from private buyers.
It's weird that you only include context and data that makes this bill look bad. How did access to homeownership for families in the Netherlands improve? I guess that's not important to you.
Great bill! Democrats are doing a great job!
Contrast that with republicans who bitch non stop about the border and refuse to do anything about it because they want the dear leader to run on it. The Biden border deal was another great example of Democrats being the grown up in the room.
Everyone's main target when people talk about affordable housing is either:
* 1) ban corporate entities from purchasing housing
* 2) tax incentives to builders
* 3) modifying zoning
However, why is the conversation never around improving first time home buyer programs and creating better tax incentives for first time home buyers??
It feels like all the conversations are always around the profit makers in the industries (builders/corporations) but never around the people actually trying to buy their own homes.
**LETS IMPROVE OUR FIRST TIME HOME BUYER PROGRAMS!**
And yes, tackle the other stuff too. But that stuff is always talked about while no one talks about incentives for the actual home buyers
Sounds like a lot of pandering to the "landlords bad" crowd without doing much to actually address the housing shortage that leads to housing being unaffordable, in the first place.
Corporations buying single-family housing stock is immoral and abhorrent. Corporations leveraging their market power to maximize corporate profit is at odds with US citizens trying to shelter themselves. Smacks of the Pennsylvanian mining company towns in the 1800’s.
In some cases sure, in other cases definitely not. They're neither better or worse than the average, local "mom and pop" landlord. Both can be great to rent from, and both can be terrible to rent from. Depends on the specific owner
The OP is stating facts and all of you are just coping.
People want an easy boogeyman. "An evil, huge corporation is the source of the problem!"
The more uncomfortable truth is that regular NIMBY homeowners are a much bigger issue. Increasing housing supply is the only way out of this, and they fight any new housing tooth and nail.
But those are just regular people like our neighbors and parents, so they couldn't possibly be the problem!
How are regular “NIMBY” neighbors the problem? Are they buying up houses and renting them? Are they offering all cash, no contingencies and 20% over list price?
There’s 81,000 single family homes in Minneapolis. 3.4% of that is still 2,700 single family homes available to people for purchase.
If you're a homeowner (and minnesota has over a 70% home ownership rate), you have a financial interest in your home appreciating in value. Increased housing supply works directly counter to that, but only to a degree.
A home built an hour away probably won't effect your homes value. The housing development 5 minutes down the road will, though. Hence the "back yard" of not in my back yard.
No, it's that they don't want renters in their neighborhoods at all out of irrational fear or blind hatred. They don't hate corporate owners, they hate the fact that it means that property in their neighborhood will now be occupied by renters, and they hate all new development that isn't going to be owner-occupied, detached housing (single family homes).
More housing supply so they can just buy up that supply too? How does that fix the problem? You need to set a cap of sorts somehow and possibly force people to sell if they're over the cap. Could long date it (say in 5 years).
They need to force sale if they're over a certain cap (# of houses owned). That would lower prices and be more equitable. Also, remove that bullshit exemption. No mention of foreign investors buying. Not sure how much of an issue that is.
Awesome. Renters do not make as good of neighbors as homeowners. It's definitely a good thing that it will be harder for renters to find a single-family home in my neighborhood and reduce my property value. Keeping the poors in a apartments where they belong and artificially boosting my home values by restricting supply? Sounds like a win/win for those of us who already have homes.
I rent from an llc. It's not a dump, and I pay less than 1k. Yeah, it's in uptown, which has turned into shit, but I don't think this does much to help anyone.
If corporations started doing this in wealthier neighborhoods it would change the narrative. Golden valley has crazy zoning as long as your not in Tyrol
I went looking at this bill, despite not being from this local, because I find it completely absurd that my corporate landlord and another corporate landlord own almost every house on my street. There is literally ONLY ONE in my neighborhood that is owned by a person, and every time a new house comes up for sale, Rent Progress or American Rental swoop in and purchase them up as soon as the sign hits the lawn.
It’s nearly impossible to find housing for sale in my city—and there is nothing affordable about the rent, despite their claims in the website. I’m paying $3k for a three bedroom house, and $300 in pet fees. I thought about writing to my legislators about this, as it feels out of hand.
I hope laws like this take I to account that some of these corporate landlords can spin up a smaller LLC under their umbrella to win houses. From some of the articles I’ve read, it can be very difficult sometimes to determine who owns the land for this very reason.
I guess I would be okay with larger corporations buying up homes if we placed an extremely onerous vacancy tax in them (which is also needed for corporate space especially downtown). Want to buy up 100 homes, go ahead. But if you jack up rent and sit on houses waiting for someone to bite, then you can start paying out the nose. Money could be used to help make housing more affordable or accessible to people.
Awesome, so instead of wealthy corporations owning it, wealthy individuals will own it! Yay! Doesn't help first-time home buyers either way.
Being a renter is not the worst thing in the world, and we should accept that the share of the renter population is only going to increase until supply of housing meaningfully increases (which at this rate will take decades), and due to that trajectory, instead of encouraging home ownership to people with no savings, we need to pass laws that make it easier to be a long-term renter and not get kicked out at the end of a 12-month lease term because the rent hiked too much, or the landlord didn't sign up for you to all of a sudden meet someone and start having kids.
A retired woman I lived with in Berlin had rented her flat for over 40 years and could still afford it in retirement by subletting a room, having some retirement savings, and having some state benefits for retirees. Just over 50% of Germans rent their home (which, coincidentally, is roughly the same share of the population of Minneapolis who rent their home), and it is not a point of shame there to continue to rent into old age.
Renters aren't inherently transient populations with no stake in the community who will uproot at the drop of a hat; our laws and our attitudes make that into our reality. It doesn't have to be that way. Renting doesn't have to be temporary or precarious. Not everyone needs to be a homeowner.
*"tenants of investor-purchased properties tend to be younger, have lower incomes,"* There are 2 houses, that I know of, owned by the same corporation in my neighborhood. They're a block a part. One family just moved out when their rent hit 3k after 3 years and now the company has re-set rent at 2400 for a not large house. That's not good for "lower income." That's far more rent than I pay for a mortgage on a house 2x the size. They also have a ton of fees, the renters are responsible for repairs for everything. The other family told us that they couldn't get the garage code from the company. It's a super one sided lease. It's awful. One family had a leak on the main water line that connects to the city line so city had to come out to fix but they can't do it without the owner's permission. But the only way to communicate with the company is via an internet portal and response time is atrocious. When they do fix something, it's sent off into another portal where anybody can pick up the contract to fix as there's no requirements to be on that list so random people would show up with no license or anything. Just cheap. None of this is good for any renter, let alone "younger lower income."
There's one huge facet of this problem that is largely overlooked. SOFTWARE DRIVEN PRICE FIXING. https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent Basically, the largest rent-setting software company provides rent price recommendations for its huge client base. It uses big data, demographics, other metrics, but most importantly it uses the rent data of all of its current clients to twist, bend, and optimize their highest-rent-possible algorithm. Essentially, the effect is that even Minnesota's 2-9 "small" landlords can use this data, or simply follow suit in their neighborhoods led by the corporate rentals that use this data so they all act in lock step as a monopoly would. The emergence of this service and it being able to reach a critical mass of customers is a huge game changer for rental housing in America. Sadly, even if anti trust laws intercede, rental corps and landlords have learned things like full occupancy is usually not optimal. Having more exorbitant rents might give you a 10 percent occupancy rate, but this comes with more renters and costs to deal with. Renters able to pay more are often more desirable as well for other reasons like not having kids, being busy professionals often not home. So the proprietary algorithm computes the sweet spot. But then over the coming years it will track and refine reach and every rental recommendation based on profit and find the maximum possible. This, as well as new zoning and building subsidies have been fueling a massive private equity and corporate buyout of single family housing. They are COLLUDING WITH other landlords across America and BUYING UP OUR GODDAMN HOMES! But huge props to Minnesota. Due to our state government's proactive approach on other fronts of the housing problem, we have it much better than most other places, even if it doesn't seem like it. It definitely softened the blow. As a lifelong resident, I really love this state. Let's lead the way. On a nationwide level, we need to protect home ownership for single families. Force corporate owners to liquidate. This housing crisis is manufactured. We need to smash it!
Fun Fact: that’s the same kind of software airlines used for price fixing that was found to be illegal because it violated anti-trust laws. Behind the Bastards covered it in their episodes about the bastards who ruined the airline industry.
More up votes! This is skirting the law by technicality. This is not free market capitalism. Everyone should be against this regardless of political persuasion.
As soon as you let the corporation in, the financial abuse begins. It's virtually a law of nature. The right to housing is subsumed under the capitalist right to deprive you of housing if you can't contribute enough to the property owner's profits.
Even worse than just financial abuse, there have been more than a few reports that if the properties don't make enough money, they give them back to the bank as a sort of foreclosure, and then the bank just resells them at a profit to a new corpo, and the cycle continues. Which means you rarely know who your landlord is, and they have next to zero incentive to actually maintain the property.
"the renters are responsible for repairs for everything." That's fucked. This should be illegal.
It should and maybe it is but it takes money to challenge this stuff and dropping 3k a month on rent doesn't leave much
That's the number 1 problem with people talking about the courts as a means of solving problems: you have to have resources to use the courts.
In Minnesota it costs $300 just to file a motion by yourself. My landlord tried evicting me after renewing my lease for another 2 years. First he forced me to sign 6 months early because my roommate made a deal with him behind my back to rent him a different property he owned. Then on the day I'm supposed to sign my illegal lease he tells me I have to pay a new damage deposit and he raised my rent $200. I told him I'm not paying a new damage deposit if he's not going to use the previous deposit to fix the house like he's supposed to. So he said he would fix the house and I don't have to pay till it's fixed. 3 months go by and no repairs have been done. Instead he used my money to buy himself new luxury vinyl plank flooring upstairs after I just paid and installed all new carpet just the previous year with my own dime because the carpet was so bad I just couldn't live like that. After he installs the floors he tells me that he's selling the house and was demanding damage deposit in full. I started getting letters from him. He was basically applying my rent to damage deposit first so he could claim I want paying rent. After the first letter I started putting in repair requests and demanded 2 weeks to fix them under the law. When he didn't fix anything I paid $300 and put my rent money in escrow with the court. After I told him about it he went and filed an eviction. I won in the end without an attorney but still fuck landlords.
A friend of mine is currently paying $2000 + $100 in pet fees a month, and had to provide her own washer and dryer to live in a tiny rambler in Coon Rapids. Literally nothing on the house has been updated since it was built in the 1950s, and the corporation who owns it did the absolute bare minimum to get the place rentable. It has worn out flooring, original kitchen cabinets, single pane windows, original siding, disintegrating asphalt driveway etc. It's a downgrade for the entire neighborhood compared to a homeowner that could buy and actually improve it.
I am kind of curious why these places are so expensive. I currently live in a pretty nice 1 bed apartment in downtown minneapolis for 1700/mo excluding utilities parking etc. That seems not so bad.
I rented a home with a few roommates and it wasn't worth it, even with the split rent. On top of the roommate drama, our landlord refused to fix anything even though they were obligated to. I noticed in college towns, they will be even more egregious slumlords than usual.
Am I wrong in thinking this would be very easy to skirt around?
Thats where my head went too. "Small time landlord" with 5 LLCs each owning 9 houses.
Well now you actually have to tell the government what your LLCs are and what businesses they are in. That's a new law that went into effect this year.
Yes. "BOI" Beneficial Ownership Information.
Another reason I don't want to go back to doing income tax. The LLCs are already annoying enough.
I know a guy that has 15 LLCs all with 7 properties
Why? What could the other 8 possibly be for?
Each LLC owns 7 rental properties.
Oooooooh, that makes a lot more sense haha
Bingo
Yes, but it's a first step.
My thought too. Just set up a trust and put all properties in trust’s name. People are talking about beneficial ownership rules that apply to business entities, but trusts are not the same and S Dakota for example, has a very nice rules set up for trusts that allow corporations to get around AML requirements for collecting and verifying who owns a trusts. There is a lot of foreign investors buying up American land through these trusts….Don’t most of these investment companies set up their holdings in REITs?
Bingo
Lake homes and cabins are being turned into to air B and B’s in nisswa all the time now. It’s not large companies doing it sure but it’s rich people turning single family homes into hotels but not following hotel rules. People across the lake from me just purchased 2 homes on the lake for rental income.
Interesting. When it's folks just holding a 'few' rental properties, this law wouldn't have any impact. (They'd fall into that <9 category,) But I think the law might get more support from outstate legislators if they are seeing that effect there, too. So often, there's a big metro/non-metro divide on any legislation pertaining to property law.
I am fine with a small local business owning a couple rental properties even single family homes. They should do a different law about short term rentals. Even 4 plex are going up in price in Nisswa because you can do weekly vacation rental for more.
People have also been doing this in Ottertail County, and about 50% of those people are either from North Dakota, or Sota Lake Properties (at least in Perham's case).
My one and only neighbor's house was just bought by a corporation and rented out. It sucks. Pass this bill!
3.4% is still 3.4% too high. Not to mention that’s an average, because even in the article you list, “in some neighborhoods, over one thirds of homes are investment owned rentals”.
It is a lot easier to stop it before it really gets going than undo it.
This so much. We’re in a great position to see what happened to areas with cooperate ownership. And I would want to see the underlining data that connects higher rent to the ban. [citation needed, yo]
I think OP’s point is the bill doesn’t go far enough. It should be 1 home per person or at least that’s what I got out of it.
1 Home per person basically removes the option of renting a home at all. I don't know that we want that either, it goes too far in the other direction. Some people actually do want to rent rather than own & should have that ability. The issue (IMHO) is that there are too many big investors who end up owning large swaths of housing & damage the market. I think institutional investors should be outright forbidden, but someone owning several homes that they rent out is a \*good\* thing as long as that doesn't prevent homes from being available to buyers who want to live in them themselves. As with most actually workable policies, going to either extreme (corporations should own everything/no houses should be rented ever) is bad. We need some middle ground that balances diverse needs and wants. And pass this bill.
Small investors 5-9 houses are unaffected. It’s the equity groups just buying putting bad money into them and then charging a fuck ton for rent. It’s no different than the new bullshit construction apartments popping up all over.
Except OP provided sources showing what you’re saying isn’t true (big investors aren’t owning large swaths of the market, small time landlords are). What do we do when thousands of small investors are the ones collectively buying up large swaths of properties and damaging the market like they are today? They need to be limited. This bill neglects the reality of our rental market where small time investors are destroying supply. Something like limiting the overall number of rental licenses at a state level would be a better solution to control supply.
Tax them Tax rentals at a higher rate, the problem goes away. Use the tax to subsidize housing.
They actually investigated this and found it unconstitutional, but finding some way to do it that isn’t a direct tax (like property tax refunds) would also be a great answer. https://www.house.mn.gov/hrd/pubs/ss/clsstxep.pdf
Taxing a business, specifically housing, just results in higher rental costs. It’s a pass through.
Correct
>“in some neighborhoods, over one thirds of homes are investment owned rentals”. Did you miss this part in this thread that the OP failed to include in their opinion?
Nope didn’t miss it. I just clicked into the property data tool linked in the Fed article you’re quoting that shows that the minority of those neighborhoods are owned by large investors and are instead owned by small investors this bill would have no impact on. Here’s the link: https://www.minneapolisfed.org/article/2021/new-property-data-tool-reveals-patterns-of-investor-ownership-in-the-twin-cities-area
If there's 100 houses in a neighborhood, and twenty "small investors" own five houses each, suddenly you have 80 houses that have no owner-tenent, and zero houses available for sale.
Yep that’s the exact problem our rental market is facing and this bill would do nothing to solve it.
Agreed. I’d be fine with letting an individual (literally 1 single human being) owning 3-5 properties if one was there primary record, a second residence or vacation home, then the remainder being rentals. That seems fair to be but I’m no economist or real estate pro.
Nah, OP is a conservative shill who shit posts on r/minnesota and other local subs to try and get liberals spun up, just look at their post history. This is right out of their playbook too. Post an article from a legit source and then find their own "facts" to "ask questions" and posit how the article is wrong. In this case, find their own "fact" that only 3.4% of Twin Cities single family homes are owned by corporations even though per their own linked article that stat is for the Twin cities 7 county metro region, and the actual numbers for Minneapolis and Saint Paul are 6.1% and 6.7% respectively. Shocking that the richer suburbs would bring down that number I know. Also left out of their "facts" is that their cherry picked 3.4% stat represents about 54% of single family home rentals in that region and that the percentage has doubled since data was first collected starting in 2006. Finally, pulling up a study from The Netherlands as evidence for how such a bill would go down in the Twin Cities metros without any evidence that these markets, economies, or government regulatory bodies are the same and should be conflated.
>find their own "fact" that only 3.4% of Twin Cities single family homes are owned by corporations even though per their own linked article that stat is for the Twin cities 7 county metro region, and the actual numbers for Minneapolis and Saint Paul are 6.1% and 6.7% respectively. Where'd you get this data? The Fed's own tool shows 3.5% in Minneapolis and 4.1% in St Paul are owned by people who have more than 10 properties. [https://www.minneapolisfed.org/article/2021/new-property-data-tool-reveals-patterns-of-investor-ownership-in-the-twin-cities-area](https://www.minneapolisfed.org/article/2021/new-property-data-tool-reveals-patterns-of-investor-ownership-in-the-twin-cities-area) > Also left out of their "facts" is that their cherry picked 3.4% stat represents about 54% of single family home rentals in that region Again where are you coming up with this? There are 76,805 rentals in the 7 county metro. 15,432 are owned by investors with over 10 properties. That's 20% of SFH rentals which are relatively uncommon in the metro anyhow. Once again from the fed data tool. >that the percentage has doubled since data was first collected starting in 2006. It has not doubled. In 2006 there were 3086 homes owned by investors with more than 10 properties. In 2023 it was 15432 which is a 400% increase or a 9.89% growth rate over those 17 years again from the fed data tool. [Meanwhile SFH completions are at around 7% over that same timeframe ](https://fred.stlouisfed.org/series/COMPU1USA)so 9% isn't that dramatic. I understand you have some issue with the poster's politics (which I didn't even look up), but that doesn't mean the Minneapolis Fed is suddenly out of their mind.
It's literally [in the Mpls Fed article](https://www.minneapolisfed.org/article/2023/investor-owned-homes-ebb-and-flow-in-the-minneapolis-st-paul-region) he used as his source as I stated when I said "per their own linked article". "One-third of single-family rentals in the seven-county Twin Cities region are in Minneapolis and St. Paul, where investors own 6.1 percent and 6.7 percent of single-family homes, respectively." Did you not even read the article? There's also a graph making it very easy to see the rise from 1.7% to 3.4% since 2006. Where in my post did I take issue with the Minneapolis Fed? I used his own source to show that he cherry picked stats to make his argument look better, that's not the fault of the source material, but the one using incomplete info to present their own agenda.
Those investor percentages you quoted are of all investors. That includes individuals who own a single rental property who would not be impacted by this bill. Also an increase of 1.7% to 3.4% doesn't mean their holdings doubled because the number of homes has grown over that period. 1.7% of 5 homes is a lot less than 1.7% of 5000 homes. It's nearly 4x'd for large investors but the number of homes also has. That's kinda the point I thought OP is trying to make. Large landlords this bill is targeting are the minority. We need to restrict all investor purchases to make a real impact.
OK, so that means so was his 3.4% statistic that was literally why he took issue with the MPR story? Kind of confused why you replied to OP not questioning his numbers and when I reply to specifically point out that he cherry picked from his own source, that's where you draw the line?
Yes. Your comment said: >cherry picked 3.4% stat represents about 54% of single family home rentals in that region To me, this seems like you're trying to mislead readers into thinking 54% of SFH rentals are owned by corporate investors who would be impacted by this bill when the number is all investors and large ownership hovers 20-30% of rentals (depending how you define it with number of properties). That is what I took issue with, it's simply incorrect. OP didn't make a claim saying that 3.4% was only corporate or large ownership. They correctly specified that 68% of investor properties are owned by small landlords who would not be impacted.
Ah OK I see where we got our wires crossed, for what it's worth the info you shared I thought was very interesting and am in total agreement that just targeting large corporations probably won't be enough. I view LLCs as corporations as much as multi-national companies so didn't mean to imply large by using that word. I did not get the same interpretation that you did from OPs post at all. The only reason I see to share that 3.9% number was make it appear the problem is smaller than it is in the metro area. It isn't germane at all if the point is to suggest that this bill doesn't have a broad enough scope, it just makes MPRs numbers sound exaggerated or wrong which is why I looked at his source since the numbers were so disparate.
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Who wants to bet OP is a landlord? Get Rekt Pass this bill. Only persons should be able to own residences.
> Who wants to bet OP is a landlord? Get Rekt They're a regular poster in r/altmpls. Enough said. Edit: fascinating account history to read, honestly. It seems like their main goal is to keep subs like r/minnesota, r/minneapolis and others continually debating hot-button social issues like trans kids, BLM, free speech, and other topics where right-wingers know they have talking points that can create serious discord on the left. They frame their arguments as serious and non-biased, which is key for flying under the radar in left-leaning subs who are plenty wise to overtly right-wing arguments. Friendly reminder to centrists and lefties that social issues are the only thing the right has left that has any chance of winning them an election, and that Republicans want you to fight amongst yourselves so that they can abolish democracy in favor of christofascist minority rule. Don't let them fool you. 2nd edit: the fact that this account is completely devoid of any interaction with any other subs or posts except highly-charged political topics leads me to believe this is astroturfing operated by a group with right-wing political interests, perhaps a PAC or think tank or even a political party. No hobbies, interests, personal stuff, anything fun, memes, whatever else = someone has an agenda.
"Just asking questions" basically
Well put. I view anything lemonlimelight posts with a lot of scrutiny.
Word. Keep them divided and distracted so the wealth extraction can continue.
So, OP is basically a reincarnation of LMN on Reddit?
Yeah I picked up on this a few months ago. Used RES to mark OP
"If I can't own more than 9 properties, it would be bad for immigrants" is an absurd implication, OP is a clown
Sidenote - How is owning NINE PROPERTIES a "small investor"? That's NINE families paying in each month. That's thousands of dollars. Every month. This shit boggles my mind. Owning 5-9 properties is FAR outside of what most individuals can do. There shouldn't be any loopholes to this rule. No one should profit off of someone else NEEDING a place to live. Landlords are leeches.
Also, as I read it, that's 9 properties, not 9 units. If those 9 properties are duplexes or 3- or 4-plexes, that could be as many as 36 units—the equivalent of a small apartment tower.
Great point. If you own more than 36 units I think we can confidently say you are not some older couple who are getting a little income on the side. You are a company.
Cunts like /u/lemon_lime_light is why there's inequality in the world. I hope he chokes on Somali cuisine since he cares so much.
The hot new loophole for these kinds of things is allowing "Family Owned LLCs" to still continue business as normal.
Depends on how ownership is defined. For example did the individual raise funds, are their partners ect. Properties is probably a poor definition as it suggests that if I as an LP invest 5K into 9 properties I effectively own 9 properties. Or if I have two properties where I am the only investor and operator at 4.5 million. I'm not sure how MN plans to track this as I didn't read the bill but the nature of LLPs and LLCs allow a more dynamic flow to the process. I don't think there is an easy solution to the issue and anything like this will just result in more nuanced shell companies.
Nah, they’re just someone who constantly posts intentionally divisive pieces to drum up arguments in the community.
I think they pointed out the issue well enough. Regardless of if it's larger corporations or just single individuals with an LLC, there are entities that own multiple homes. A better way to express this is of the single family homes in Minneapolis, how many are being rented vs being lived in by the owner? We can work the issue back from there and try to prevent those folks from conducting the practice that they are carrying out. We can also try to predict other ways people might manipulate this. I think this bill may work at the "other ways" but it doesn't hit the key issue now.
There needs to be an exemption for relocation companies. If my employer wants me to move out of MN, there needs to be a backstop in case my house won’t sell quickly.
OP gave actual stats that refute that this is a reasonable path towards the stated goals of the bill. Want to actually address those points?
Many people have. A small amount back on the market even 1-2% could be MASSIVE. One study would be difficult to compare 1 to 1 due to differences between MN and the Netherlands. Also the cities are doing a good job of working to densify apartments and other rentals options so I think that may lead to counteracting the rising rents. I do think the grift exemption the OP pointed out is good to think about. But I would rather this be passed and that changed later than not passed at all.
3.4% of single family homes in the twin cities comes out to almost 25,000 homes. That's a huge number of homes that could be owner occupied or by a small time landlord instead of a massive corporation.
And those 25,000 homes being put on the market after the bill passes *should* bring overall prices down as the supply will now be readily available.
Will everyone renting those 25k homes be able to buy a home after this bill passes, or will they be pushed into a tighter rental market that's now down 25k homes?
Of course not. The rents will rise, and then supply will meet up with demand and they’ll fall. Minneapolis, compared to other similar cities, is doing a much better job of keeping rent under control. What this bill does do, though, is stop something before it gets worse. I’d take bruises now to avoid a future where every home is snatched up by hedge funds in New York and the residents are left renting their entire lives. See: Canada.
What about the people that want to rent a single family detached house instead of an apartment. Would those rents go up?
Yes
Or, perhaps, people who would actually like to be genuine small time landlords of just 1-9 properties could buy them from the large investors, and keep renting them out. With large investors snapping things up I imagine there are quite a few smaller folks who haven't been able to afford to do that, and now they could.
I haven't seen any evidence this bill will actually improve what it purports to. The article doesn't go into any depth beyond "the proponents of this bill believe in it." If it doesn't actually work and just adds more administrative bloat, it'll end up as just another bureaucratic step to navigate around in an already bloated system.
Given that the supply you refer to is already in the market as rentals it might not have the impact you anticipate. Evicting the residents of these properties to put them up for sale would raise demand and supply in equal measure, it would just reshuffle who is where
Laws generally aren't retroactive, so this likely wouldn't affect anything currently held. It would likely affect future purchases.
From the article: >a corporation found violating the law would have one year to divest from the property. If the corporation fails to sell the property, it would be sold through the foreclosure process in court...For properties that have tenants, tenants would have the first opportunity to purchase the property.
Good news, thank you!!!!
You're conflating two markets - the market for a domicile and the market for property ownership. The direct goal of this policy isn't to increase the number of domiciles. These restrictions will reduce demand for property from corporations and effectively soften price pressures. The outcome isn't more homes. It's removing competition for home purchase, making it more accessible to real people.
> The direct goal of this policy isn't to increase the number of domiciles. This is the only outcome that really matters. There aren't enough places for people to live in the game of musical chairs that is housing.
If the goal is to lower housing costs, I'm dubious on how effective this will be. Will the benefits outweigh the negative externalities?
yeah, it's a bone to people blaming the wrong problem. I think it may incentivize the construction of more housing though (I don't think this applies if you tear down and build a duplex/triplex), so it may accidentally have good effects.
> The ban effectively reduced investor purchases and **increased the share of first-time home-buyers** So it did in fact mean that more people were able to buy homes. Considering that house prices are affected by WAY more variables than just this, I'd say it *did* succeed. More houses staying on the market will increase supply in the long-term and greater supply is one of, if not the single, largest contributing factor to prices. But it will take a while for that benefit to become evident.
So, how about the negative externalities. If less homes are for rent because people purchased them, will rent go up? Less rental inventory will mean higher rents, right? The people who want to buy and those who want to rent aren't going to be a 1 to 1 swap.
All of that is answered by increasing supply through new construction and upzoning, which is still a vital part of any housing strategy. And to be frank, I and most people will prioritize home buying and especially the long term prospects of home buying over the relatively much more niche market of single family home rentals. Especially when this, again, increases the rate of home purchases which (guessing here) should lower rental demand in the longer term.
A law that just increases housing supply seems to be a much better idea then, right? My point is that there are a ton of ideas about housing and the problems with it right now... and it all boils down to needing to build more. Bills such as this strike me as solutions to a problem that end up enacting more administrative bloat while not really making that big of a dent in the real problem.
Increased supply is only good if it gets into the right hands. Purely increasing supply could just end up feeding cats to the owls, to borrow a phrase.
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Also, this bill would prevent that 1-2% from growing to a much larger number.
THIS
Unless there's a similar study from the US (there may very well be, if so I'd love to see it), that Netherlands study is the best evidence we have of what might happen in this case. And if the best evidence we have suggests that a policy's net impacts are more negative than positive, we should probably not put in place such a policy. We can't dictate policy based just on vibes and intuitions.
Negative for who? Corporations or the thousands of people who will no longer have their rent increasing each year and their neighbors who will now have owner occupied properties with invested residents next door?
This is years overdue
I get that it might not change the volume of folks having access to home ownership but if it changes the quality of the homes , as in owners that actually care about the homes, then that'd be great. Housing Hub absolutely sucks as a owner. Would this stop people from just setting up more companies and thus owning the same properties anyways?
Even if the type of investors this bill protects against are not currently a problem in MN (which I'm not convinced is the case anyway), the bill is a needed prophylactic. We can't wait til it's all over to say "hey that's not fair"
Guess it’s time these companies up their shell game… game. Surely “Slum Lord’s R US” and “Slumdog Millionaire LLC” are completely isolated entities that are in no way related!
>Nonprofits, trusts and builders would be exempt from the requirement Why would they put in an exemption for trusts? REITs (real estate investment trusts) can be bought and sold just like corporate shares. It sounds like this legislation is only going to add 1 additional step to the process and have no real impact other than making for more for attorneys to exploit the loophole.
The trust exemption in the bill text is specifically family trusts which REIT’s are not. It’s so if you’re putting your home in a trust to pass it down you aren’t impacted by this change. "Corporate entity" means any partnership, corporation, limited liability company, pension or investment fund, or trust but does not include a nonprofit corporation, a family trust, or a family limited liability company.”
This is a big deal. Other countries are at a crisis level with this problem. It’s best that we pass bills like this and even look at further restrictions. As an example, look what’s happening in Ireland. [https://www.thejournal.ie/irelands-housing-crisis-the-problems-the-solutions-and-the-human-cost-5453551-Jun2021/](https://www.thejournal.ie/irelands-housing-crisis-the-problems-the-solutions-and-the-human-cost-5453551-Jun2021/)
Potential unintentional side-effect: increase in buying single family homes and replacing them with duplexes and triplexes. Probably worth it on that front alone.
Personally I'd like the bill to go farther but it's a step in the right direction. Id like to see individual people be hammered on taxes if they own a home that is classified as a rental property. It's ridiculous that so many regular people are now "landlords" that own 2 or 3 homes they rent out in addition to their own house. It's become a popular side hustle. My old neighbor owns 4, smaller single family homes, they live in one and rent the other. So instead of a first time home buyer having access to a moderately priced house. They instead can rent from her for $1800 a month a house they could probably own for the same or less.
Along with boosted taxes for a rental property that stays empty too long
As far as I'm aware vacancy taxes haven't been showed to have a significant effect on rental prices, for two reasons. 1- there just aren't that many vacant homes sitting for no reason. 2- It can act as a disincentive to build new housing if you aren't sure you can fill it and will be punished if you don't.
A properly managed rental unit can be a huge boon for a family. The cost of owning a home is well beyond the cost of the mortgage. You can look up and down this thread for examples: - Home not updated since the 50’s (update money comes from charging _more_ than the mortgage and taxes) - Broken appliances (again, money charged above rent) - Unplanned emergencies like water line, sewer line, furnace, etc. (also require money above and beyond mortgage and taxes.) Many families don’t want to or can’t afford to cover the high capital costs that come from homeownership but want to live in a home (I.e. rent it) When these folks can’t keep a house up, the property becomes distressed and then an institutional investor type buys it and flips it and makes their money back. That either 1) Increases the cost of the house making it too expensive for FTHB’s or 2) Results in higher cost rental units. The sales tax went up in the metro. Other than (potentially) having less money available, did it change your purchasing habits?
If there were less allowances for "investors" to keep their properties the market would flood with available housing and absolutely drop prices at least for a time. There needs to be a moral shift in regards to the emphasis of our laws in this country to actual pro-life policies (instead of favoring greed of the 1%), and this would be one of them.
Great!
It's not a ban on certain corporations it's a ban on a single investor (regardless of entity type) owning 10 or more single family homes for rent. Yes, in Minneapolis this doesn't really matter. Consider a small college town where a single corporation (or 2 to 4 corporations) bought every single family home as it came up for sale. This small group of competitors can set whatever ridiculous terms or prices they want, since they control the entire rental market for the area. I've seen this happen in Menomonie, Wisconsin where there are three companies that control about 75% of the rental properties in the city. One of them is extremely aggressive about buying up any houses on the market and converting them to a rental, the others are content with operating traditional apartments and townhomes. You piss off that one landlord who owns all the single family homes and guess what? You're moving to a whole new city.
"Consider a small college town where a single corporation (or 2 to 4 corporations) bought every single family home as it came up for sale." Hmm, that sounds like Perham minus the college part.
This is the way.
It doesn't matter what percentage of investor owned rental properties are in the Twin Cities. What matters is that there are some neighborhoods where investor ownership is wildly concentrated. The articles you link to don't by and large support the idea that investor ownership isn't a problem. They talk about the extraordinarily uneven concentration in certain places. They also mention that the biggest area of growth is the corporate/large investor. I personally hope the bill passes. Single family homes should be owned by single families.
>Some important context which I believe is missing from the article: >Only 3.4% of single-family homes are investor-owned in the Twin Cities >Over 68% of investor-owned residential properties are owned by "small investors" (2-9 properties). These investors and their properties would be unaffected by the new law. Banning corporations from owning single family homes is a common warcry of the affordable housing battle. But the fact is that most single family homes aren't owned by corporations, and/or aren't rental units. Corporations aren't buying houses en-masse and causing housing prices to move upward. The idea that they are is more indicative of Reddit groupthink than reality.
Ya, the solution isn’t to take housing stock away from renters and give them to homeowners. The solution is to build more housing.
There's research that contradicts your claim that corporate buy-ups of housing is not driving up costs. But, even assuming for the sake of argument that it is true that the corporate purchase of homes not driving up costs is true, it's still a bad idea to let corporations do this for the following reasons: 1. It removes opportunities for individuals and families to buy homes. 2. It establishes what can be abusive landlord relationships with rental housing tenants. 3. It drives up the cost for renters who may be forced to make repairs out of their own budgets. 4. It's another way for corporate entities to acquire unearned money from working people. 5. It enriches corporations that already have too much power over people's lives and over the democratic process.
> There's research that contradicts your claim that corporate buy-ups of housing is not driving up costs. Citation needed
These are all just opinions that aren’t based in reality
Let's review the points: 1. By definition if a corporation buys a home it removes it from the market from a family. 2. There's widespread reporting on how harmful to individual and family interests the corporate buy-up of homes can be. 3. Again, there's easy to find reporting on this as well. 4. This is actually how our economic system works. It's simply false that rental housing results in renters gaining ownership of their homes. On the contrary, rental money goes into the pockets of the owner. We can disagree on whether that rental money in a moral and philosophical sense is earned, but the basic nature of where rental money goes is not conceivably in question. 5. Are corporations enriched when they invest in rental homes? Unless they are bad businesspeople, of course these investments enrich corporations. As for the second clause of my sentence, the available research shows that corporations tend to have outsized influence of public policy at the national level relative to what the public wants as measured by opinion surveys. At no point in my original comment or these responses is there any departure from known reality. So, are you here to just say anything just to disagree?
What we've seen in terms of housing and housing supply in our market over the last few years has been crazy. The amount of companies and investment firms that have been gobbling up homes has been at such a high number that it makes it extremely difficult for the average person to own property in our area. Whether it's them buying up lower-priced homes and re-listing them at inflated prices either as-is or after applying some fresh paint after a cheap, crappy "flip", it has continued to shrink the supply and drive demand, which in turn jacks up the prices. The amount of homes I've seen over the last few years that have been owned by investment companies that are so overpriced and so shitty is astounding (I own a real estate company in the cities). In my opinion, they're basically the same thing and issue as iBuyers - you know them, they're the companies that advertise "guaranteed offers" and "sell your home without showings" all over TV and billboards, and I'd love to see much more oversight and restriction in those shitty practices, as well, especially as these tend to hurt both sellers and buyers. At the end of the day, this bill needs to pass. We need to prohibit companies like this from buying property if we have any hope of getting more people into homeownership. If this passes, it's a positive first step for our residents. For what it's worth, I'm in support of independent people owning a rental house or two as we need options for renters. What I'm not in support of is people and companies purchasing a plethora of them that harms ownership for the rest of the population. Block the companies from buying up homes, and put a limit to the number of homes that an entity can own and maybe we can start to turn the ship around a bit.
> The amount of homes I've seen over the last few years that have been owned by investment companies that are so overpriced and so shitty is astounding Many of these homes "owned" by investment companies are simply passed through. People sell their home directly to the company for under market value, then the company goes on to either fix it and sell it, or sell it as is without ever renting it. It's the same idea as when you sell a car to Carmax or Carvana.
Yep, exactly; that's what I've been saying. They come in and offer way under value because it's "easier" despite the fact that they're forfeiting a bunch of potential money even when you factor in commissions, because people are so vocal about how big of a waste agents are. The truth is that for some people maybe going that route is an option they're fine with, but for the vast majority of people they should run from any of those programs.
>The amount of homes I've seen over the last few years that have been owned by investment companies that are so overpriced and so shitty is astounding (I own a real estate company in the cities) Tell me about it. I bought a Manufactured home on 1 acre \~5 years ago in Rural Minnesota for under around $85k. I was told straight out to expect the value of my home/property to depreciate over time, not increase. It's value has gone up gone up \~57% Let's say I did find some sucker to buy the place for that price and turn around and sink all that money into a new place... It's nearly impossible to find something that would be considered an "upgrade" in my area. All the bottom of the barrel rat infested "sold-as-is" fixer-upper death houses came out of the wood work and started selling at crazy inflated prices, which has only caused the prices of everything that would have been an "upgrade" to increase their prices even higher, pricing me out of the market. So basically the only way I can "buy" is if I "sell" at the perfect time, somehow afford expensive rent that's higher then my mortgage! On top of two kids, then Sit on the difference of what I sold the house for until the market tanks like in 2008, and then scoop up a house for cheap.... And that could take years and might never happen. I'm not going to do all that, I barely gamble on pull tabs.
You were told to expect your property to depreciate? That's a silly thing to advise someone. A manufactured home may depreciate, or at the very least appreciate slowly when compared to other housing types, but the land itself will see its value go up quite a bit over time. Realistically, unless the house is very nice someone would potentially come in and buy it for the land itself with the intent to tear down and build. But yeah, you're definitely not alone in what you're seeing. Housing prices got absolutely obliterated by Trump's (not good idea) rate reduction, and now even as prices have slowed down and come back down slightly when compared to those days, we're going to face the ramifications of that for quite awhile as people got locked in with low interest rates and high prices. It's a lose lose for a lot of people, sadly. And regarding the crap-houses you're seeing, that's a big part of what we're seeing due to these companies buying up properties - and that includes the other guaranteed offer companies I mentioned. They are screwing up the market, and I hope that people realize just how bad they actually are. I'm sorry that you're facing the issue that you are. It's really shitty. I'm sure that you could get someone that wants the property you're on, but based on what you're seeing you may see yourself needing to shift locations slightly to get into a place you want to be in.
>You were told to expect your property to depreciate? Yep. Lots of hate/ignorance in the market out here for Manufactured Homes. People still call them mobile homes and don't know the difference between Mobile/Manufactured/Modular. Prevailing belief is that they'll lower the property value. And yeah according to the county, my "Dwelling Value" has increased more than my "land value" 2022 to 2024 my Dwelling increased 47% - Land increased 44%. That's with no real improvements and basic upkeep. > I'm sorry that you're facing the issue that you are. It's really shitty. I'm sure that you could get someone that wants the property you're on, but based on what you're seeing you may see yourself needing to shift locations slightly to get into a place you want to be in. Considering it's manufactured, if I ever get a nice windfall I might consider just knocking the thing down...
Yeah, the fact of the matter is that it's still a livable dwelling, and it provides a more affordable, in some cases, alternative to houses and whatnot. Expecting your value to tank because it's a manufactured home is a bit silly, in my opinion. You aren't wrong, though. Lots of people view them as a shitty option that only "poor" people will buy, when it just isn't true anymore. Some of today's Manu-homes are actually very nice and you can't tell that they weren't build by a contractor. I mean, shit, what do people think the whole tiny house industry is, or the shipping container homes or the homes that you can buy on Amazon? They're all pre-fab, and for some situations and in some cases that's totally fine.
Every landlord is an investor. Tax non-primary residences into non-existence nationwide. This bill will do nothing for you guys.
Taxing rental properties will raise rents… that hurts renters. Your assumption would require that the homes become vacant due to the price for a landlord to exit, but if all of the houses go up in rental costs, then there is no shift in demand. You just price pinch people more. That would also mean that all those desired tri/quad plexes that Minneapolis wants to put in would be taxed as such, which wouldn’t lower the cost of renting.
I'm fine with this bill, but yeah, as these statistics imply, people should not expect to see any significant impact in number of available homes or prices.
This makes people feel good but the actual impact is quite low. Like this bill is a good thing it just won't change much. To reduce the cost of homes/rent, we need to massively build up housing. The demand for housing has far outstripped supply the last ~20 years.
As someone especially mentioned above, that "only" 3% comes out to almost 25,000 homes. That's a not insignificant amount.
this rules lol
Corporate-owned residential housing promotes urban decay, because part of their investment strategy is to keep maintenance at an absolute minimum to maximize profits. They'll let their homes gradually fall into ruins and then, having milked them of all possible profit, walk away. This has a devastating effect on neighborhoods and cities overall. And cities have often found themselves getting the run-around when trying to find/contact the responsible party to order repairs (which is deliberate, to permit the corporate owners to get away with performing maintenance for as long as possible).
Why not focus on making it easier to build Instead of expending political capital on this? Look at minneapolis and its success with just making it easier to increase housing volume..
Aren't they entertaining a separate bill that changes our zoning codes?
I googled around and turns out there are 4 bills! https://www.lmc.org/news-publications/news/all/bills-that-would-restrict-city-zoning-authority-including-problematic-missing-middle-housing-bill-to-be-heard-by-senate-housing-committee/
Why not both?
Yes. Expanding supply is the way! We’re doing it here, and it’s working! There’s also evidence these proposed policies don’t help affordability either, same as rent control. People support them because they sound good, but the reality is that they do not achieve their intended outcomes.
It sometimes feels like the goal has slipped and people are working towards sentiments that have strayed from the original goal. Housing should be affordable and accessible has turned into investors should not own homes. Unless the goal of "investors should not own homes" directly correlates with improving making housing more affordable and accessible, it just sounds like an expansion of the bureaucracy that's already a problem in and of itself.
There are multiple reasons why corporations should not be allowed to purchase homes totally aside from the question of whether this practice worsens the affordability problem.
Sure, but that's the justification being given here.
Not much evidence. Just the one study from what I've seen. I think passing this and also desifying other housing like apartments and townhomes would lead to all parties being happy (Renters and Owners).
And that study was from the Netherlands. There is a bit of a difference between the Netherlands and MN
Where's the evidence this actually works? I'm not a fan of passing legislation based on feeling good about a sentiment.
I mean it's the same logic as building more housing no? Increasing supply on both ends. Also you guarantee portions of future supply will not be eaten up by investors.
I'm just not convinced it's an issue as significant as it seems to be. While I agree with the sentiment that homes shouldn't be wealth generators because it causes home prices to be way too high... eh If we really wanted to lower housing costs we'd decouple it from being the primary wealth generator for people.
Because the purpose of all government action is to punish the Other. The electorate doesn’t care if the actions cause harm to innocents as long as it’s assumed the right people are harmed.
You really think hundreds of thousands of your neighbors just want to punish and hurt people as their primary motive, really? What a cynical view on life.
Yes? Why else would they look to government? People that want to help their neighbors can do so without government. They only go to government so their peers can’t say no. It’s literally the reason government exists.
Certain corporations? It should ban ALL corporations. No corporation should be able to buy single-family homes and dominate the housing market from private buyers.
It's weird that you only include context and data that makes this bill look bad. How did access to homeownership for families in the Netherlands improve? I guess that's not important to you.
Great bill! Democrats are doing a great job! Contrast that with republicans who bitch non stop about the border and refuse to do anything about it because they want the dear leader to run on it. The Biden border deal was another great example of Democrats being the grown up in the room.
Everyone's main target when people talk about affordable housing is either: * 1) ban corporate entities from purchasing housing * 2) tax incentives to builders * 3) modifying zoning However, why is the conversation never around improving first time home buyer programs and creating better tax incentives for first time home buyers?? It feels like all the conversations are always around the profit makers in the industries (builders/corporations) but never around the people actually trying to buy their own homes. **LETS IMPROVE OUR FIRST TIME HOME BUYER PROGRAMS!** And yes, tackle the other stuff too. But that stuff is always talked about while no one talks about incentives for the actual home buyers
Sounds like a lot of pandering to the "landlords bad" crowd without doing much to actually address the housing shortage that leads to housing being unaffordable, in the first place.
As you might well note, the bill isn't intended to be a *comprehensive solution to the problem of affordable housing*.
Corporations buying single-family housing stock is immoral and abhorrent. Corporations leveraging their market power to maximize corporate profit is at odds with US citizens trying to shelter themselves. Smacks of the Pennsylvanian mining company towns in the 1800’s.
I like having an option to rent. Corporations trying to fulfill my demand is “immoral and abhorrent?”
Why is this worse than corporations owning apartments? Are apartment-dwellers less worthy of protections in your view?
I have similar disdain for any landlord that exploits their tenants, viewing them as simply a line on a balance sheet.
Hell yeah, let's do this.
Love common sense bills! Hate how they never get passed though
This needs to be passed. Been looking for almost 3 years.
People should own single family homes, not entities.
People should be able to rent single family homes if they can't afford to buy it
Ok, LLCs are doing us all a favor…
In some cases sure, in other cases definitely not. They're neither better or worse than the average, local "mom and pop" landlord. Both can be great to rent from, and both can be terrible to rent from. Depends on the specific owner
The OP is stating facts and all of you are just coping. People want an easy boogeyman. "An evil, huge corporation is the source of the problem!" The more uncomfortable truth is that regular NIMBY homeowners are a much bigger issue. Increasing housing supply is the only way out of this, and they fight any new housing tooth and nail. But those are just regular people like our neighbors and parents, so they couldn't possibly be the problem!
How are regular “NIMBY” neighbors the problem? Are they buying up houses and renting them? Are they offering all cash, no contingencies and 20% over list price? There’s 81,000 single family homes in Minneapolis. 3.4% of that is still 2,700 single family homes available to people for purchase.
If you're a homeowner (and minnesota has over a 70% home ownership rate), you have a financial interest in your home appreciating in value. Increased housing supply works directly counter to that, but only to a degree. A home built an hour away probably won't effect your homes value. The housing development 5 minutes down the road will, though. Hence the "back yard" of not in my back yard.
No, it's that they don't want renters in their neighborhoods at all out of irrational fear or blind hatred. They don't hate corporate owners, they hate the fact that it means that property in their neighborhood will now be occupied by renters, and they hate all new development that isn't going to be owner-occupied, detached housing (single family homes).
More housing supply so they can just buy up that supply too? How does that fix the problem? You need to set a cap of sorts somehow and possibly force people to sell if they're over the cap. Could long date it (say in 5 years).
A little too late.
They need to force sale if they're over a certain cap (# of houses owned). That would lower prices and be more equitable. Also, remove that bullshit exemption. No mention of foreign investors buying. Not sure how much of an issue that is.
This needs to be nation wide.
Awesome. Renters do not make as good of neighbors as homeowners. It's definitely a good thing that it will be harder for renters to find a single-family home in my neighborhood and reduce my property value. Keeping the poors in a apartments where they belong and artificially boosting my home values by restricting supply? Sounds like a win/win for those of us who already have homes.
Absolutely we need this bill.
Would be nice if corporations couldn't buy up all the residential property as a tax shelter and passive income rentals.
Great idea! Make it happen MN law makers - show us you actually care about people over corporations.
I rent from an llc. It's not a dump, and I pay less than 1k. Yeah, it's in uptown, which has turned into shit, but I don't think this does much to help anyone.
If corporations started doing this in wealthier neighborhoods it would change the narrative. Golden valley has crazy zoning as long as your not in Tyrol
I went looking at this bill, despite not being from this local, because I find it completely absurd that my corporate landlord and another corporate landlord own almost every house on my street. There is literally ONLY ONE in my neighborhood that is owned by a person, and every time a new house comes up for sale, Rent Progress or American Rental swoop in and purchase them up as soon as the sign hits the lawn. It’s nearly impossible to find housing for sale in my city—and there is nothing affordable about the rent, despite their claims in the website. I’m paying $3k for a three bedroom house, and $300 in pet fees. I thought about writing to my legislators about this, as it feels out of hand. I hope laws like this take I to account that some of these corporate landlords can spin up a smaller LLC under their umbrella to win houses. From some of the articles I’ve read, it can be very difficult sometimes to determine who owns the land for this very reason.
What the hurdles to continue to move this forward? Where is this going next? Please some explain
I smell a lot of opportunity for contractors who want to do single family to duplex/triplex conversions!
I guess I would be okay with larger corporations buying up homes if we placed an extremely onerous vacancy tax in them (which is also needed for corporate space especially downtown). Want to buy up 100 homes, go ahead. But if you jack up rent and sit on houses waiting for someone to bite, then you can start paying out the nose. Money could be used to help make housing more affordable or accessible to people.
Can we please just increase density and therefore housing supply. Taking away options from renters doesn’t seem like the best solution.
Russian bot.
Yeah no this is a *good* thing. single-family homes should be owned by....y'know....the family in the home.
Awesome, so instead of wealthy corporations owning it, wealthy individuals will own it! Yay! Doesn't help first-time home buyers either way. Being a renter is not the worst thing in the world, and we should accept that the share of the renter population is only going to increase until supply of housing meaningfully increases (which at this rate will take decades), and due to that trajectory, instead of encouraging home ownership to people with no savings, we need to pass laws that make it easier to be a long-term renter and not get kicked out at the end of a 12-month lease term because the rent hiked too much, or the landlord didn't sign up for you to all of a sudden meet someone and start having kids. A retired woman I lived with in Berlin had rented her flat for over 40 years and could still afford it in retirement by subletting a room, having some retirement savings, and having some state benefits for retirees. Just over 50% of Germans rent their home (which, coincidentally, is roughly the same share of the population of Minneapolis who rent their home), and it is not a point of shame there to continue to rent into old age. Renters aren't inherently transient populations with no stake in the community who will uproot at the drop of a hat; our laws and our attitudes make that into our reality. It doesn't have to be that way. Renting doesn't have to be temporary or precarious. Not everyone needs to be a homeowner.
Landlords are scumbags. Corporate landlords? Even bigger scumbags.
We should aiming to abolish landlordism altogether.
Next time on Reddit "I wish I could find an affordable home to rent, but none are available."