Highest rate in the USA.

https://cdn.nar.realtor/sites/default/files/documents/2022-impact-of-institutional-buyers-on-home-sales-and-single-family-rentals-05-12-2022.pdf

CS78 said:

---

"We defined institutional buyers as companies, corporations, or limited liability companies (LLCs)."

Wonder what that number drops to if they removed LLCs. I bet 95% of LLCs are individuals.

---

You could pretty easily tease out who is an LLC because they're a flipper versus who is an LLC to protect their name from public inquiry just by the home price. Most people don't have enough money floating around to forgo the homestead exemption.

Thumb in the air, completely WAG, I would say 95% of people buying a home less than 800k under an LLC are flippers. Over 800k and into the millions range is when you get people who can spend an extra 1000 bucks a year on property taxes without flinching. Also, obvious vacation/second home locations will have people putting their home in an LLC because they don't qualify for the homestead exemption anyway.

Jay@AgsReward.com said:

---

the LLC's are not homesteads. We do loans that vest in LLC's every day and they are just mom and pop investors that might own 2 to 20 properties, and with a good portion of those not being flipped but rather held for long term. and the vast majority are well under 800k with most being 300k or lower.

---

You and I are on the same page. CS78 postulates that 95% of LLCs are individuals (I guess they could mean individual investors, not individual homeowners.) They're trying to pull LLC's out as if they aren't really investor class. But they are, no single rain drop blames themselves for causing a flood.

My point is that LLCs are almost always signal an investor owner (regardless of size) not just someone who is trying to protect their name. You'd want to use a shell corp instead of an LLC anyway. Only once you get into very expensive homes do you see people who are willing to lose their homestead status and not hold the property in their name.

Personally, I don't see a difference on market pressure applied by the a swath of middle class mom and pop landlords compared to giant corporations. Its all market pressure trying to squeeze money out of land.

Need to raise taxes on SF rental properties.

So is there a policy that addresses this issue? Like Txag#2011 said, is it raising taxes on rental properties?

I don't think higher taxes is ever really a good answer. Nor are rent controls. Each of those will end up hurting renters and making housing more expensive in the long run. I know these are not perfect, but the following two items would help a lot I think:

1. Some sort of assistance for first time homebuyers in the form of down payment waivers or credits. So only for your first home, 0% down, similar to a VA loan. Or, possibly have a federal program that allows first time buyers to apply for downpayment assistance (5% ?), which they then repay when they sell.

2. I'd also like to see something where if a buyer can demonstrate that they have been paying $X in monthly rent for the last two years, then they can qualify for a total mortgage payment of the same $X for a loan on a property they are buying. Lots of folks out there are paying $3,000 or more a month in rent, and are then being told that due to DTI guidelines, they don't qualify for a loan that would put their total monthly payment at $2,500, as an example. And there aren't any homes in their market that allow for a $2,500 monthly payment without putting some ridiculous amount of money down. DTI calculations seem to be broken.