By: Diane Benjamin
Everyone’s first thought is property taxes. The fleecing of property owners on unrealized gains does contribute, that is no different than taxing you on stocks that have increased in value but you haven’t sold them. To pay taxes you would have to sell. Of course, if the value decreases you don’t get a refund.
Below is real data on a local multifamily building. I’m not identifying the building on purpose, the data was given to me. The rent had to increase because in 5 years the property taxes increased almost $60,000. People without any economics acumen think landlords have a stash of cash in the backroom, so they have no problem stealing their money. Tenants pay this – there is no cash stash.
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Landlords have suffered under inflation just like you. Everything you buy is more expensive. The same is true for landlords.
There is a MUCH bigger item affecting rents however!
Remember this 2021 building collapse in Florida? https://www.npr.org/sections/live-updates-miami-area-condo-collapse/2021/06/29/1010976101/timeline-what-we-know-so-far-about-what-led-up-to-the-surfside-condo-collapse
The insurance industry was shocked by that collapse. Add other natural disasters on the coasts and ridiculous inflation of building repair costs and insurance companies had to raise premiums. This company has had no claims in the last 10 years. Their deducible was $5,000, now it’s $25,000. I’m told many insurance companies have dropped coverage for multifamily buildings because of the risks. Premiums go higher and so does the rent.
Over the last 15 years this landlord had claims totaling $10,000 while paying millions in premiums.
This is how much their insurance has increased:
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When insurance premiums almost double in 5 years of course rent is going up. The increasing premiums aren’t slowing down.
Has Krystle Able talked to any landlords to find out why rent has increased? It looks like she prefers to blame them. Rent Control and more regulations mean less housing. People don’t invest money where government believes THEY run your business. Unintended consequences, it’s why unemployment in Illinois is higher than surrounding states and both businesses and people continue to flee the state.
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If this bill passes eventually only government run housing will be available. It will be substandard and poorly run because that is how government rolls. Any easier fix is not electing people with zero private sector experience.
The tax multipliers for next year are starting to trickle out. Expect another year of massive property tax increases. Government thinks you have a cash stash in the backroom too.
Some people hate anyone that has more than they do. They blame property owners for their bitterness. These are the people the democrats are selling communism to.
Very good article here. Property tax multipliers are coning out around 11.5% for next year. We used to own 12 units. Now down to two. For us, age is a factor but much more reason to get out are all the reasons mentioned here. AOC stated that “you don’t have to pay rent”. JB put the breaks on evictions. Control, control, control. We might go along with “rent caps” if our property taxes, insurance premiums, supplies and labor were all capped. Are there any other small mom and pop landlords that have looked the other way NUMEROUS times when renters fell on hard times and could not pay? We could buy a new car with the “forgive rent” due us since 1992. Will government operated rentals also look the other way? We would love to sell our one remaining duplex and end it all. However, that last property has been depreciated out and taxes to sell would exceed $40k. Not only capital gain taxes but additional Medicare taxes and reduction in social security make this an undesirable option. I penned a letter to the Pantagraph 6 weeks ago on this subject. They accepted the article but have never printed it. Good luck with a communistic society where government controls everything. The right to own property in this country is under severe attack!
My business partner and I were in the exact same circumstances. Never owned more than 12 units; the largest 6 units. We didn’t own anything that we wouldn’t live in ourselves. And, in fact, we each lived in several of our units over time. We maintained them 100 per cent and were in the business for 40 years. Based on our reputation for fairness and the physical condition of our units, we achieved close to 100% occupancy. Had a few “bad apples”, but not many. Things first went downward when the City of Bloomington started their Inspection Department. They nickel and dimed us to death over trivial issues. The second downward step occurred around 2008 when the housing market went thru its big upheaval. The clientel we rented to were able to buy houses, leaving a less desirable pool of renters. The third (and final) issue for us was that we were no longer physically able today do our own maintenance. On top of the constantly increasing cost of taxes and insurance, we just couldn’t come out ahead anymore. And, when we sold, we dealt with the same income tax issues mentioned by the previous reply, substantially reducing our sale net amount. I would love to sit down with the rent control advocates and show them, in black and white, what the real issues are!
Attend the meeting!
You know what else? Owners aren’t going to make improvements either. Everyone’s apartments will look just as dreary and beat up as old public housing units.
Rent control? Great idea. If you have the economic literacy of a homeless bum (or a communist.)
20,000,000 illegal aliens have also had an adverse impact on housing and rent.
Ms.Able is as smart as a rock. Rent control has never worked and it never will. Property owners have maintenance, insurance and taxes. Do the property owners no longer get to earn a profit???
Democrats despise capitalism!