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Rent freeze?

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    #32
    godtabh
    Moderators, Science, Health & Environment Moderators Posts: 23,204 Mod ✭✭✭✭godtabh


    Assetbacked wrote: »
    A nose dive in prices is a good.

    Is it? If there is a crash in prices who will build homes for demand?

    No new homes rents will keep going up


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    #33
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    godtabh wrote: »
    Is it? If there is a crash in prices who will build homes for demand?

    No new homes rents will keep going up

    They won't be allowed to thank God.


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    #34
    CPTM
    Registered Users Posts: 1,296 ✭✭✭CPTM


    Am I the only one who sees a black market increasing if this were to happen? There's a housing crisis happening. If a landlord had to freeze their rent at 1000 euro, they'll be inundated with backhanders of people offering an extra 500 cash per month on top of it. Simple really.. that's what I'd do if I were a desperate house hunter anyways. This is impossible to police.


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    #35
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    overkill602 wrote: »
    This is the worst option in a housing supply crisis but it’s a SF populist stunt
    https://www.bloomberg.com/news/articles/2019-12-09/berlin-builders-hit-the-streets-in-backlash-over-rent-freeze
    Anti investment in private residential accommodation
    property prices to slide on market uncertainty
    jobs in construction to go
    less supply will effect tenants
    more homeless
    more derelict buildings and lower standards
    less tax revenue

    Loads of dereliction already and poor standards. We're in an extremely dysfunctional housing market as is with prices held artificially high.


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    #36
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    Old diesel wrote: »
    There are number of factors to be considered imo.....

    How much do landlords need over the long term to keep it attractive to stay in. In terms of rent per month.

    Ability to pay - it's all very well to say let the market sort it but if lots of people can't afford the market rent what then?????.

    What rental model should we go for.

    Is the cost of keeping landlords happy actually worth it - we need to look at the hard cost of doing what it takes to make landlords happy and what we get in return in terms of product.

    At 24 k a year that's 240 k over 10 years if no increase - and because a freeze is not fair that cost goes up. We know it goes up because the reason a freeze is problematical is that the 24 k isnt enough.

    So a smaller figure if more supply won't be enough either

    Remember if supply ever catches up - that 24 k ends up being a smaller figure.

    I’m personally for free market and increase supply which would naturally decrease market rate. Due to government interference, this will never happen.

    Well if you don’t have landlords that are happy. What does that mean for tenants. I would think this means, there is less rentals which would cause more homelessness etc so not so happy tenants.


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    #37
    Del2005
    Registered Users Posts: 18,899 ✭✭✭✭Del2005


    ReverseGiraffe wrote: »
    If the bill passed how soon would it take effect?
    Most likely never. Plenty of legislation has been passed but the government has blocked them by not authorising the money aspect.


    For all the people saying that this is a good thing can you provide evidence of a place where rent freezes did any good? There's been plenty of rent freezes.


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    #38
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    Fol20 wrote: »
    I’m personally for free market and increase supply which would naturally decrease market rate. Due to government interference, this will never happen.

    Well if you don’t have landlords that are happy. What does that mean for tenants. I would think this means, there is less rentals which would cause more homelessness etc so not so happy tenants.

    Leave the unhappy landlords sell up at a reduced rate on their now less expensive property. Then change zoning laws on a massive scale making land cheap and building affordable.


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    #39
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    mikemac2 wrote: »
    For that example one more year paid off your asset and since its break even you don't put your hand in your pocket and yet you paint it as all negative ?

    Why do landlords exclude this point? Unless the house is shoddy timber and will fall down in 20 years it's very relevant

    Yes most don’t account for it but I do.Principle pay down is important but cannot be realized until you sell.
    There is a lot of risk when a lot of your money is on one asset class. They are at their highest rents now and it’s more than likely good or break even.
    What about when times are not so good. You need to account for these and have a contingency fund in place to protect yourself.
    Managing rentals are not passive. You need to know the legislation, maintain the property among other things so it’s not like you sit back and wait for the money roll in.


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    #40
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    Fol20 wrote: »
    Yes most don’t account for it but I do.Principle pay down is important but cannot be realized until you sell.
    There is a lot of risk when a lot of your money is on one asset class. They are at their highest rents now and it’s more than likely good or break even.
    What about when times are not so good. You need to account for these and have a contingency fund in place to protect yourself.
    Managing rentals are not passive. You need to know the legislation, maintain the property among other things so it’s not like you sit back and wait for the money roll in.

    It's not of societies concern what financial risks you take. Our government should not be propping up private landlords.


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    #41
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    smurgen wrote: »
    Leave the unhappy landlords sell up at a reduced rate on their now less expensive property. Then change zoning laws on a massive scale making land cheap and building affordable.
    Emotive tones with no substance behind it.

    Investments can go up and down and everyone needs to accept this. You seem to be happy that ll would loose money not because of a capitalist market(which would be fair) but because of a stupid law that can be changed on a whim. If the tides had turned and let’s say in your job. The government said “nope you shouldn’t get paid that extra 10k a year even though you can get it” how would you take it. What you are saying doesn’t make sense

    Change zoning laws - please explain. We can barely build an apartment block without complaints and objections going in and you want to dramatically change zoning laws.

    Making building affordable - please explain. Shall we just tell builders,contractors similar to my a Analogy for your 10k salary that nope. We’re not willing to pay you market rate so please accept a drop in your wages so everyone else can be happy. What areas would you sacrifice to make it more affordable as I currently don’t see many given current rates.


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    #42
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    smurgen wrote: »
    It's not of societies concern what financial risks you take. Our government should not be propping up private landlords.

    How is our government propping up ll. all I see is that they are trying to limit them as best as possible to make it appear like they are doing something for the cohort of renters when in fact it is stifling growth thus hurting them


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    #43
    Gumbo
    Moderators, Society & Culture Moderators Posts: 38,513 Mod ✭✭✭✭Gumbo


    smurgen wrote: »
    Leave the unhappy landlords sell up at a reduced rate on their now less expensive property. Then change zoning laws on a massive scale making land cheap and building affordable.

    Ok, back to the real world now guys.


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    #44
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    Fol20 wrote: »
    Emotive tones with no substance behind it.

    Investments can go up and down and everyone needs to accept this. You seem to be happy that ll would loose money not because of a capitalist market(which would be fair) but because of a stupid law that can be changed on a whim. If the tides had turned and let’s say in your job. The government said “nope you shouldn’t get paid that extra 10k a year even though you can get it” how would you take it. What you are saying doesn’t make sense

    Change zoning laws - please explain. We can barely build an apartment block without complaints and objections going in and you want to dramatically change zoning laws.

    Making building affordable - please explain. Shall we just tell builders,contractors similar to my a Analogy for your 10k salary that nope. We’re not willing to pay you market rate so please accept a drop in your wages so everyone else can be happy. What areas would you sacrifice to make it more affordable as I currently don’t see many given current rates.

    Yours is an emotive reply also. Change is laws happen in all industries. It leads to some operators dying off while others adapt.
    The zoning laws are a change of law. Can easily be done and so can other items to fast track development and make costs lower for developers. We can for one increase housing density in urban areas by getting rid of height restrictions. NIMBYism needs to be tackled head on for the greater good. And planning objection process needs to be scrapped and rebuilt. We live in a democratic system where the greater good of the majority needs to be taken into account not to pander to those with vested interests or those that are stuck in the past .


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    #45
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    kceire wrote: »
    Ok, back to the real world now guys.

    So and you saying my suggestion is impossible/unlikely or am I to suppose you just don't like it? Poor reply from a Moderator tbh.


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    #46
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    Fol20 wrote: »
    How is our government propping up ll. all I see is that they are trying to limit them as best as possible to make it appear like they are doing something for the cohort of renters when in fact it is stifling growth thus hurting them

    Institutional landlords receive many tax breaks on rental income and are heavily involved in the shadow banking industry as part of the funding drive to purchase large apartment blocks, all legal but not subject to tax. If a rental credit was given to renters, it is likely this will result in rent increases but if rents are frozen with it, it gives short term, much overdue relief to tenants. It is not a silver bullet solution as the crisis is not solveable in that manner but it is at least providing some respite to tenants which the government have not done for years as we are in a devastating housing crisis.


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    #47
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    smurgen wrote: »
    Yours is an emotive reply also. Change is laws happen in all industries. It leads to some operators dying off while others adapt.
    The zoning laws are a change of law. Can easily be done and so can other items to fast track development and make costs lower for developers. We can for one increase housing density in urban areas by getting rid of height restrictions. NIMBYism needs to be tackled head on for the greater good. And planning objection process needs to be scrapped and rebuilt. We live in a democratic system where the greater good of the majority needs to be taken into account not to pander to those with vested interests or those that are stuck in the past .

    Too se :)

    I agree with most your comments and in a perfect world could be done. I just think in the REAL world. I don’t see it as a possibility sadly. It is populist though and to hinder growth by using rent controls etc and the same could be said for renters that are “stuck in the past and need to adapt to new renting life” - I will say that I want people to afford their own property but it’s expectations that need to be reset. Another time to note is building sizes. I know in Eu countries they also have 10m sq apartments which would make it much more affordable for renters to at least get on the the property ladder. They would also be better than the communal buildings that they are currently proposing.


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    #48
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    Assetbacked wrote: »
    Institutional landlords receive many tax breaks on rental income and are heavily involved in the shadow banking industry as part of the funding drive to purchase large apartment blocks, all legal but not subject to tax. If a rental credit was given to renters, it is likely this will result in rent increases but if rents are frozen with it, it gives short term, much overdue relief to tenants. It is not a silver bullet solution as the crisis is not solveable in that manner but it is at least providing some respite to tenants which the government have not done for years as we are in a devastating housing crisis.

    Genuinely forgot that the renters credit could act like oxygen to fire and cause rents to go up.

    I actually was only commenting on private ll when I said the government don’t prop up ll. For REITS they for sure allows certain aspect I don’t approve of. I do think REITS should be treated like any other corp though and be taxed accordingly.

    Once you bring in a rent freeze as we are seeing with rpz. It’s politically very hard to back track away from it and allow rents to increase again without political suicide.


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    #49
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    Fol20 wrote: »
    How is our government propping up ll. all I see is that they are trying to limit them as best as possible to make it appear like they are doing something for the cohort of renters when in fact it is stifling growth thus hurting them

    By not encouraging house building quickly is one way. This is restricting supply. Then you had a council last week in dublin sign a 25 year lease on multiple luxury private apartments to be used for social housing from a German investment fund. At a cost at more than it would to build these apartments themselves.Such a move means that the market for private renters not seeking social housing gets a little tighter. But I don't see private landlords in here kicking up with government intervention that works in their favour.


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    #50
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    smurgen wrote: »
    But I don't see private landlords in here kicking up with government intervention that works in their favour.

    What intervention would that be?


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    #51
    Old diesel
    Registered Users Posts: 5,788 ✭✭✭Old diesel


    Fol20 wrote: »
    I’m personally for free market and increase supply which would naturally decrease market rate. Due to government interference, this will never happen.

    Well if you don’t have landlords that are happy. What does that mean for tenants. I would think this means, there is less rentals which would cause more homelessness etc so not so happy tenants.

    The market at the moment seems to be signalling that it requires more rent even with some insane rents.

    There has to be a point where you say ENOUGH and that there just isn't the money there to make people happy.

    Personally I think the market needs a player to come in with the specific intention of delivering cost effective housing. The reason air travel to London is relatively cheap is because Michael O Leary made a deliberate decision to step up and reduce air travel costs. Cheaper fares.

    This might even mean a state solution like opening up social housing eligibility to higher incomes.

    That means higher incomes coming into a version of HAP.

    Housing to my mind as it stands is a money pit.


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    #52
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    Fol20 wrote: »
    Genuinely forgot that the renters credit could act like oxygen to fire and cause rents to go up.

    I actually was only commenting on private ll when I said the government don’t prop up ll. For REITS they for sure allows certain aspect I don’t approve of. I do think REITS should be treated like any other corp though and be taxed accordingly.

    Once you bring in a rent freeze as we are seeing with rpz. It’s politically very hard to back track away from it and allow rents to increase again without political suicide.

    As someone who has done the accounting for REITS, ICAVs and other type of real estate investment vehicles I agree. However these funds can potentially have the financial muscle we need to get developments done. The reason that these corps started here was because the market became so lucrative. If we mess with their tax we will see in my opinion one of two things 1) less of them investing here as retuns may not be as attractive compared to other countries or 2) lobbying for a greater number of devopments in a bit to make up for lost margin through higher turnover.


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    #53
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    smurgen wrote: »
    By not encouraging house building quickly is one way. This is restricting supply. Then you had a council last week in dublin sign a 25 year lease on multiple luxury private apartments to be used for social housing from a German investment fund. At a cost at more than it would to build these apartments themselves.Such a move means that the market for private renters not seeking social housing gets a little tighter. But I don't see private landlords in here kicking up with government intervention that works in their favour.

    Everything the government has done so far have been approaches to make it appear like they are helping renters. Key word here is appear. Their techniques have also angered ll so it doesn’t help either groups at the moment.

    The Dundrum leasing deal was just a headline for the news and only that. If you look at any hap deal over the span of 25-35 years. HAP will pay back much more than the cost of the property. The benefit to the government here is cash flow. They don’t pay it all in one go but is spread out over x years. I’m not saying their strategy is good but the headline skews the sea when in fact all leasing deals would be like that. When you lease va buy. You will pay much more over a long period of time.


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    #54
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    smurgen wrote: »
    As someone who has done the accounting for REITS, ICAVs and other type of real estate investment vehicles I agree. However these funds can potentially have the financial muscle we need to get developments done. The reason that these corps started here was because the market became so lucrative. If we mess with their tax we will see in my opinion one of two things 1) less of them investing here as retuns may not be as attractive compared to other countries or 2) lobbying for a greater number of devopments in a bit to make up for lost margin through higher turnover.

    So going back to your earlier post where "government shouldn't be propping up private landlords", you're now saying it's ok for government to prop up a private landlord as long as the landlord is a REIT?


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    #55
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    Graham wrote: »
    What intervention would that be?

    In the example I mentioned providing social housing in high end developments. It's displacing those with higher renting power into lesser accomodation thus driving up the cost of renting in lower end rental accommodation.


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    #56
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    smurgen wrote: »
    As someone who has done the accounting for REITS, ICAVs and other type of real estate investment vehicles I agree. However these funds can potentially have the financial muscle we need to get developments done. The reason that these corps started here was because the market became so lucrative. If we mess with their tax we will see in my opinion one of two things 1) less of them investing here as retuns may not be as attractive compared to other countries or 2) lobbying for a greater number of devopments in a bit to make up for lost margin through higher turnover.

    Your right. For better or worse. Even though I don’t like their unfair advantage. By tinkering with their business model in a similar vain to what the government has done with private ll. it can only mean one thing and that is less investment from them. I don’t want that to happen now however I do think there will be a point in the future post housing crisis where their tax treatment will need to be looked at. At that point you will really see how “good” these reits are when you have one strong unit that controls thousands of properties trying to fight their Corner rather than loads of single property ll with no clear direction.


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    #57
    Fol20
    Registered Users Posts: 3,624 ✭✭✭Fol20


    smurgen wrote: »
    In the example I mentioned providing social housing in high end developments. It's displacing those with higher renting power into lesser accomodation thus driving up the cost of renting in lower end rental accommodation.

    You could also say this is allowing these social housing people to remain in their local community and have those local connections bla bla bla.

    I would disagree with your statement. It’s pure and simple demand that is causing rents to increase and nothing else. Yes if you tell social housing that they can only rent in specific areas etc, this will lead to its own set of problems but this is for another story


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    #58
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    Graham wrote: »
    So going back to your earlier post where "government shouldn't be propping up private landlords", you're now saying it's ok for government to prop up a private landlord as long as the landlord is a REIT?

    Nope.i hate the idea of our government Paying long term over inflated rents to a foreign investment fund and in the example of the development in Herbert Hill. I would love to get an explanation of how they thought that was a good idea.
    But the advantages of a REIT is if it was to fail we wouldn't have to bail them out. I favour this over our own citizens investing in a potentially risky market. The problem is so many individuals in this country are invested in real estate that it's hard to get things done in a way that is beneficial for everyone. Any move at moderation is seen as an existential threat.


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    #59
    godtabh
    Moderators, Science, Health & Environment Moderators Posts: 23,204 Mod ✭✭✭✭godtabh


    smurgen wrote: »
    They won't be allowed to thank God.

    The only thing that will work is increase supply.

    A rent freeze will reduce supply with little or no investment in existing units


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    #60
    pwurple
    Closed Accounts Posts: 12,449 ✭✭✭✭pwurple


    What a completely daft notion this is.


    We have converted 80% of our residential city units to office or shop space due to the recent years tax changes and penalisation of residential housing suppliers. I was keeping the residential units for diversification and in some way for civic services. I know the market needs housing units.

    But clearly this is not what SF wants.

    Why should I keep residential tenants in this situation and NOT make them into another set of offices?


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    #61
    godtabh
    Moderators, Science, Health & Environment Moderators Posts: 23,204 Mod ✭✭✭✭godtabh


    pwurple wrote: »
    What a completely daft notion this is.


    We have converted 80% of our residential city units to office or shop space due to the recent years tax changes and penalisation of residential housing suppliers. I was keeping the residential units for diversification and in some way for civic services. I know the market needs housing units.

    But clearly this is not what SF wants.

    Why should I keep residential tenants in this situation and NOT make them into another set of offices?

    Surely that isn’t a serious question? The hassle of a residential vs a commercial rental makes that an easy choice surely?

    If I wAsnt in ne I’d be gone. As it stands I’m considering selling up at a big lose not to have to deal with the hassle but would feel for existing tenants. At what I am Charing they will struggle to afford the makers rent


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