L.A. County wants to cap rent hikes at 3%. Landlords say that would push them to sell
L.A. County wants to cap rent hikes at 3%. Landlords say that would push them to sell
A proposal to cap rent increases at 3% for many landlords in unincorporated L.A. County is meant to keep housing affordable for at-risk tenants.
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good, get a real job
My mom is in her sixties, not everyone wants to work until the day they die
In LA County, looks like the median home price is $1M. The proceeds of such a sell, combined with presumed other typical sources of retirement income and social security should provide for an above-average retirement lifestyle.
I'm not talking about LA county, which this article is about, but just the general idea that every landlord can just go and get a job.
Also, 1 million only lets you take out a maximum of $40,000 per year safely which is not above average. Social security? Is that still $900 a month? That's way below the median income in LA county even when added together.
You're also assuming the mortgage is completely paid off
Considering the proposal is only about LA county, figure I'd use that, but we can consider things either way.
I would expect that whatever means had the retiree have both a home and at least another property left them with other typical sources of passive income. So in aggregate, I would expect social security, with retirement savings, plus the value of the house produces an overall viable income.
Whether the mortgage is paid off or not is immaterial unless they are somehow "upside down" on it. If the mortgage is not paid off, then selling it also removes the mortgage payment.
But let's say that it is unreasonable to sell, maybe somehow the person has all of their money tied up in the property and can't sell the property for an amount to get enough passive income. This measure would not force her to sell, it simply caps her rental income increase to 3% a year. Her property value may go up, but that doesn't make her mortgage go up (if she even has one). County assessments would make her tax bill increase some, though generally a pittance. Even if you are concerned about the tax bill, you could have some clause that assessments or property tax for people with rental properties is similarly capped if the owner is subject to a rental income cap. In most contexts, the ability to guarantee oneself a 3% a year raise would be pretty respectable.
The retirement savings is what she used to buy the property, so the property IS the retirement savings
3% a year is fine, but only when the inflation is below 3%. If this affected my mom when the inflation was 10%, then of course it wouldn't pay for her increased costs of living
What a bad-faith argument. People who do every single other job have managed to save for retirement.
My mom was a housewife before she divorced my dad. She bought properties with the divorce settlement.
Guess she should have saved for retirement then like the rest of us have to do.
How does a housewife save for retirement?
With the money that put a roof over her head and food in her mouth, same as the rest of us.
My dad's no longer paying anything to her, and he wasn't contributing to any retirement account for her when they were married
Guess he should have been doing that. And maybe she should have been somewhat aware of their financial situation. It sounds like your mom is a product of her own poor decisions.
She's doing fine as a landlord, thank you
Well, at least until legislation like this comes to where she’s at, at least. Then the free ride will be over.
It's not a "free" ride, it's her life savings
The reason why she was involved with real estate is the beneficial tax treatment for capital gains when selling
The government encourages investment into real estate in the first place
So she had money to buy real estate but not put in a retirement fund, ok. It also doesn’t sound like “her life savings” as much as it is someone else’s income in the form of rent.
This just circles all the way back to the comment you originally replied to. It’s difficult to be sympathetic to somebody who retires and lives off of somebody else’s hard earned money, as opposed to the person who retires and lives off their own hard earned money.
You’re describing a woman who has lived her entire life on somebody else’s dime and will continue to do so, with their only measurable contribution being to you and your siblings/father. So I understand where your sympathy is coming from and that’s totally understandable. But you have to understand that trying to apply that to people outside of your family means next to nothing to anyone else but you.