Speaking of unmovable [tag-cat]houses[/tag-cat] and rentals- I ran across this item by Ellyn Ferguson of Gannett News just this morning.
“Affordable Rent Alludes Many, Say Advocates”
My response? What took them so long? And why is the National Low Income Housing Coalition the only group really pointing this out? Where are the local governments on this? Why don’t they care?
Here are the facts. A Tennessee worker has to earn $11.61 per hour to afford a two-bedroom rental. Nashville workers have to stretch it even more to $13.33 since Metro is the most expensive in the state.
But that’s actually down from the national average which runs $16.31 per hourly wage. That’s for the bare bones type of two bedroom, nothing fancy unit. More amenities will require more hourly dollars from the tenants.
So if you live in District of Columbia you will need $24.73. Topping it all off are Hawaii at $22.53 and California with $22.86. Plus 14 states, mainly in the Northeast area, are also running higher figures than the national average.
I’d say with one third of the population renting, this can become a serious problem for us should the economy hit snags. Or it could be a tremendous opportunity…
Minimum Wage Increase is Not the Answer
First, let’s deal with the problem. Even with a bigger minimum wage of $7.25 an hour, which I view as somewhat useless, poorer people can not make their complicated budgets of car, childcare and healthcare, not to mention food. Besides, even illegals are already making around $8.00 to $10.00 per hour in my area and that’s under the table.
See what I’m saying? [tag-ice landlord ]Costs[/tag-ice] are way out of line. The wages can’t increase fast enough or keep up with the costs. And why is that?
Our Property taxes are a big large culprit. Washington, are you listening?
There are a lot of people being priced right out of business and that includes both tenants and landlords. Our tax bills are already astronomical and are still rising. Something must be done before it’s too late.
My Simple Solution
Stop increasing the taxes and rents will stabilize. Yes, I know it is more complicated, but after you get your rehab up and running smoothly, taxes are probably your single-most, biggest expense after [tag-cat]mortgages[/tag-cat], of course. Folks, that shouldn’t be. It’s just wrong.
Local governments need to get realistic. Property taxes need to be [tag-tec property taxes ]responsible[/tag-tec] and fair. When you tax the landlord you’re also taxing the tenant. The landlord has to pass the cost to the tenant. Everyone pays. That’s Basic Economics 101.
Where do we go from here?
In the next post I’ll give some valuable tips on how we can monetize some very big opportunities coming our way as a result of all this mess.