Yesterday in the Washington Post was an article about a company called Starwood that has been buying up Multi family dwellings in Florida and raising rents that has led the company to earn profits out of literally forcing people to pay rents that have increased up to 50% (and higher) over their current rent. With that it forces more into poverty, debt and/or having to relocate with few options given Florida’s own issue with regards to affordable housing. And we are seeing this play throughout America, especially in Cities that are designated “it” and have intense in-migration from nearby States/Cities of individuals looking for work or in turn looking for better taxes and less regulation. Or just because an article declared it as such as the New York Times has done with regards to Nashville, Jersey City and Weehawken. Or when the New Yorker declares your city the Most Livable that pretty much kills the place. But Americans are always in search of somewhere better aka a place that will make them “richer” Places like Florida and Texas and Tennessee promise to with low wages and low costs and even less regulation. In real estate they are referred to as “migration boomtowns.” And in exchange, they generate revenue through a “regressive tax system” that harms the working class and frankly does not fill the coffers sufficiently. Which leads to endless ways to garner revenue you will certainly vote on new ways to tax property or supplement the budget, in order to improve schools, fund arts or create parks. Jersey City has done that of late and it shows how expensive it is to fund it all from the few who have little as a high rise that pays little to no taxes rises above them.
This from Investopedia explains how this tax structure works. This is also how much development across many cities build. Nashville has their Tax-Increment Financing, or TIF which is another boondoggle to taxpayers. How? By rising property values it means you have to pay more what? Property Taxes. And that used to be great when you are rich as you could deduct those, that is no longer so. Thanks to the GOP and the Trump Administration (which ironically contributed to some of his own tax issues), a Federal tax reform enacted in 2018, it limited deductions for state and local taxes and in turn supercharging the movement of more affluent Americans from the Northeast, Illinois and California toward zero-income tax states such as Florida, Texas and Nevada. Nashville was quite proud of its kills in that but TN does not quite have that “ennui” of the other States, but hey they are trying real hard. But the steady movement toward warmer, more affordable areas was well underway before the tax incentive and will persist even if it’s repealed. But also what contributed to this was the declaration of Opportunity Zones or Investment Areas. Funny I live in one or what used to be. These are the biggest bullshit of all the ways Developers use failures by Cities to build affordable housing. So you will see a brand new luxury building next to a shiny new Storage building; Convenient as you will need it as you cannot fit all you belongings into your overpriced but small unit or be homeless and keep your belongings in them as many do. And my recent trip to Detroit confirmed how that works for rich developers by buying off properties, keeping them dilapidated and then using fed funds to finally update and improve them. ProPublica did such a story on that same issue, leading the family to immediately write press releases dismissing the story as what? Fake News. Yeah right, welcome to City Living!
I live now in New Jersey with immense taxes, in 2021 I paid more in State Taxes than I did in Federal, go figure. And it taxes that push the migration, not politics. So when you go about red vs blue I suggest you realize that money is more a factor than whom you vote for. And our voting records show that. I lived in a Blue State went to a Red on and now back to Blue. Which only a few years ago was not. And with that I live in an “It” city that is undergoing immense gentrification with little to actually show for it but numerous luxury apartment buildings and some overpriced Condos (although few of those as Jersey City has the least available single family dwellings in the State and Condos are not money makers today at all but they have a few). With that we have also been listed as one of the most expensive rents in the country and are consistently in the top 10 with regards to rents and housing costs. And we have again little to show for it. The few green spaces are few and far between, the infrastructure is collapsing and they are in the middle of trying to replace all water and sewer lines. The flood that hit Jersey after Sandy has not been fully addressed and parts of Jersey City and Hoboken still flood when there are weather issues. I look out at a Development by a company called Bozzutto which built two units, one completed during the pandemic that sit directly on a FEMA floodplain. Yes folks this is city living.
A conversation with a neighbor about Jersey and the City led to some similar complaints, the lack of interesting places to socialize, inadequate library system, amenities in the building and of course rent. We also discussed the “character” or “type” of Jersey resident, either English as a Second Language group who rarely mix outside their own and she is Asian and the lack of sophistication and education. I agree that after my incident with the Cunt Family of 946 that there are problems, but I had not witnessed what she had in the building gym when a Young Man verbally berated and abused another over weights not returned, leading him to leave the gym and the Man followed this other man out, still screaming and ranting over the weights. She said she was terrified as she recognized both men, commented on the one young man’s good looks as well as the other and he often worked out with his girlfriend, so she knew them on sight. Yet, no complaints were filed with the building as this is another issue that defines White Privilege. White people here are abusive and unkind to other white people and believe that that is an implicit contract between you that you will keep it in house, handle it and accept it. I realized that when I filed my complaint over the Karen in 946, and her husband’s subsequent threat to me about “airing out our dirty laundry”. I kept on believing he had a type of Hoover file on me about some bullshit that he had “found out” from a former employee but I actually believe that is the again the invisible agreement, contract or script that we as White people have and tacitly agree to. These include such things that many Karen’s have been busted for when accosting POC about their behaviors. That is the first rule, don’t go public. Okay. So when I did mention this to the Front Desk one asked me “What Race where they?” He is White and often is a combative type, the stereotype Jersey person. Again, the implicit contract is in that response. I wonder if I had said Asian or Indian as we have few Black residents and to my knowledge no Latin ones or if there are they are really in hiding, what his response would have been.
The Racial divide is one of both Class and Money. Poverty is the level-izer that crosses all three. I saw that in Tennessee and in my travels in the South. There is little in migration in states like Alabama, Louisiana, and Missouri. The reason being that while they are not highly taxed they are highly populated by people of color and incomes and work are largely confined to small businesses. Larger industries and business have not established outposts the same way they have in Georgia, Texas, Florida and Tennessee. The courting and fawning over industry can only spread so far like the butter that melts on the table during the relentless hot muggy summers. And so while many do relocate there and have established homes, moving is not something you can do as frequently as I. You have children, you have family and you build roots. And with that you do not move unless a Job is in the offering and guaranteed. Despite all the hybrid work, I find it interesting the few chose to move to less populated states and areas, hell many moved to NYC or Boston or LA as this was their chance to take advantage of that cheap rent and availability thanks to those leaving in the same amount for safer pastures. My favorite of all of this are all the City Slickers who bought homes in the Country and found themselves now saddled with lemons and the costs to restore them now beyond the reach, so as Mortgages climb, the ability to dump it back on the market also declines. Watch for Foreclosures and more Venture Capitalists to buy those homes to rent back to the former occupants at a much higher cost. Regrets, I have a few.
That is the circle of ownership today. We have more businesses buying residences, both single and multi family units and moving them like checker pieces on a board. Add to that the growth of AirBnB. But cities are starting to realize how that affects home availability but that again does not exempt that home from being purchased by an investor and using it as a short term rental with minimal lease requirements, or a pied a terre which allows the unit to be vacant. There are those too that are an issue with regards to housing. But the reality is that most developers are seeing money in rentals. With now home purchases on decline, and more smaller landlords worried about rising interests and other costs they are looking to sell so, the building run by one slumlord today will be purchased and run by another tomorrow. I want to point out that again both Kushner and Trump were sons of fathers who began their career as slumlords.
But they have like all rich folks divested themselves of those properties and again the checkerboard keeps moving those pieces. Today in JC, there are the Cast Iron Lofts, once run by the most infamous of Slumlord Billionaires, Sam Zell, and Equity Residential now taken over by Bozzutto that has raised rents, amenity fees and reduced maintenance and oversight. They are notorious throughout the area as the numerous complaints from Yelp, Google and Apartments.com note. Equity, along with other property management firms are part of a class action lawsuit for price fixing thanks to the algorithms they use to inflate rent and discriminate. Yes folks the rent you pay may not be the same rent your neighbor pays. And they can blame the computer for that. You know like they do in law enforcement for facial recognition and other junk science.
And here again is Pro Publica, which did a recent investigation into this practice and the software used RealPage that supposedly enables leasing agents to get more bang for the buck. In other words gauge the tenant. It also allows for greater vacancy rate as they in turn can balance the books on the backs of the current residents to raise their rents to offset the loss. If you realize that most of these buildings are also required to have leased businesses be they local or educational as in day care, Boys and Girls Clubs etc to offset the tax incentives that the city provides. So when those big spaces are empty someone has to pay. Well that are those that live above. Write off? No. Many co-ops in Manhattan are struggling with that issue and have been working to find ways to fill spaces once held by Physicians, Bodegas, Cleaners and other commercial enterprises that supplemented the buildings bottom line. And with that, there will be many a unit with new costs to their annual assessments coming soon! But they too are equally discriminatory and have even more restrictions and requirements in in which to live. This is city living folks.
Home ownership is not just taxes, it is upkeep and the same with Condos only you have neighbors that are literally on top and below you. Think an Apartment with more costs and even less security. Just ask the Board of the Condo in Toronto that had a mass shooting over “noise” the standard complaint in almost all community living. Same problems different solutions. And what applies to those applies to the multi family “luxury” builds. Same problems, no solutions. And yes as the Year ended, regrets there are a few. And they are not alone as many did find themselves out of work as we are starting to see the effects of the recession and the white collar layoffs, and with that owning a home they cannot sell but cannot afford; hey folks the reality is that the grass is not always greener. And it is these same communities under the NIMBY rules that often again cause more problems than create solutions.
So we have a problem that ties into the construction of affordable housing across the county, homes that are too big to both maintain and in turn sell, homes bought by venture capitalists and put back on the market as rentals that are again overpriced, the “flipper” mentality also contributing to this; Multi family dwellings being built but as “luxury” with few to none affordable units and exempt from rent controls, if in fact there are such laws or restrictions in place (Seattle is not allowed to have them thanks to the State Constitution). Then there Opportunity Zones and Investment tax laws that enable developers (often with former Governors fronting them as one had always washes the other) to skirt further taxes: As people who invest their capital gains in qualifying real-estate projects (usually REIT) within these tracts can defer their tax bill. And if they hold the investment for at least 10 years, they won’t have to pay capital-gains taxes on any profit from an eventual sale of the property. The states make the pick and one area can always outdo the other in the bid. As Camden in NJ found out the hard way.
And what these do is decimate revenue from communities in the ways of schools, roads, public transportation and other infrastructure needs that when population increases demand does as well. The Investopedia link above shows how that affects the overall community and their liveablity factor. I can personally point to the schools in both Nashville and Jersey City as being absolute dumpsters in ways that Seattle only comes close but have active citizens who seem intent at at least staving some of that, but that too from what I can tell is coming perilously close thanks to the pandemic and a loss of enrollment. And without decent schools cities do suffer folks and that migration to the suburbs the place you left is the place you end up returning to, if you can afford to. But can you afford not? But then again the roads and public transportation options leave few and that gas tax again in many of these same places that you once left never to return is necessary to fund the State. It either/or neither/nor folks. You cannot have it all ways. Take for example the lack of buses and public transportation, let alone sidewalks that contribute to numerous pedestrian deaths in Nashville every year. The rise in bicycle deaths another. You have to live in a city and work in a city or you commute, so how does that work when you have a car but you cannot afford to fill the tank, or the drive is literally a competitive one?
So why is the rent too damn high? Yes corporate greed and the need to feed Wall Street. Then we have personal wealth and familial wealth that dictates another level of reasoning. We have varying State, City and Federal incentives and programs that enable tax dodging and in turn find new ways to redline via gentrification and rental increases all under the guise of providing growth. The pandemic enabled many to stop rent and evictions but those moratoriums are over and in turn inflation has brought even the most tolerant of Landlords to the brink and are now selling properties as refinancing has become a challenge due to rising interest rates. And lastly we have simply not built enough homes period. The issues of regulations, of financing and of construction has made it seemingly impossible and yet some is done and others have failed. Major corporations are now looking into loaning or offsetting those costs, Microsoft and Amazon have established such funds. But the idea of Workforce Housing is also fraught with issues and again the private versus public sector seems to have always been a dance with the issue of who leads a problem. Answers, I have none, ideas I have a plenty but there are few who listen and ever fewer willing to try. We are ruled by money, and in turn by race and gender. That is the reality of our America. We refuse to listen. I read the comments on the pages and there are valid ones and some just equally so; however, just in the way they advocate their position puts them further on the side of the “others” and we rarely see or listen to the “other” so in “other” words, compromise is near to impossible. Coming to a City near you.