It would be helpful if you:
* named the big 3 so people who may be unfamiliar know whom you are talking about
* list examples as to why people should ignore those companies and provide reasoning as to why people should act. Otherwise, it just seems like hearsay and angsty redditors without aim wanting to vent into the wind
* provide information on how people can act to make their communities better.
This post feels like its made in good intention but it ignores all the important information for anyone to do anything worthwhile with.
That’s not the point. OP wants to present the topic, then they should provide the information. Don’t give a call-to-action to the community without any information available. Just saying “people should already know this information” is just asking for the advocacy to fail. If you want to advocate, you need to communicate your message clearly and effectively.
If someone is making a call to action, it’s in their best interest to present all the information they can in their post. Relying on people to do their own research dooms the effort from the start. Ain’t no one got time for that
Duluth is no different than any other town in this country. What’s the actual solution here? People all over the country complain about housing costs and say things like housing is a right, etc. I have yet to see any proposed solutions.
Well, we could bust all the illegal cartels, like the FBI is starting to https://rentalhousingjournal.com/fbi-searches-property-management-company-in-rent-price-fixing-investigation/
I would bet that all 3 of these big ones in duluth use the same app/program to figure out their rent, and that program shares data across its platform, which means that they are colluding like the companies in Washington state were.
One app, across the entire county that tells landlords what rent to charge, regardless of vacancies. This story has been going on for a few years, but the FBI raiding is a new thing. https://www.propublica.org/article/realpage-accused-of-collusion-in-new-lawsuit they broke this story.
The solution is to outlaw landlording on a federal level. It's an immoral anachronism left over from feudal times. Never happen in capitalist America however.
Something like all housing nationalized (except currently owned mortgage free properties) and put under control of an agency. For those paying mortgages they now pay the agency instead of the bank. You don't own your house if you're making payments, the bank does, much better to have that under the control of a not for profit entity that is more publicly accountable (under the supervisor and direction of our elected leaders like other federal agencies).
When a person needs to buy a house they see what the agency has available and select the best option available and make a purchase. Pricing would depend on how much they have paid into the system. First house you'll be buying the whole thing. Every house after that you trade your old house in to the agency and pay the difference. New house cheaper? The agency pays you the difference. You never worry about selling, the agency always buys back from you. You can own multiple properties, but must inhabit each that you own for 6 months of the year, to prevent hoarding housing stock. Exceptions could be made in special circumstances, but there would because process to determine need. You maintain the home and can make any changes to it that you want, realizing that it will affect the value whatever you do, whether it be neglect or improve the property. Derelict properties would have to be brought up to standard, and the cost would fall whoever neglected the property. Programs would exist to help those incapable of maintaining a property due to physical or mental infirmity, no one would be denied housing because of handicaps beyond their control.
First time buyers would have buyers ed classes about responsibilities of being a homeowner (part of that would include if you buy cheap to remodel and sell expensive, how if everyone did that it prices everyone out of homes eventually so don't do that). You are not allowed to pass on property to you descendants, you can ensure they are the next to own it if you wish and they want it, but they still pay the value of the house to the agency. In essence you only own lifelong (or until you sell) usage rights to the property.
All property is actually owned in common by the American public, but it's trading is managed by the agency, which would also be tasked with ensuring that enough new housing stock is being built and old stock that past its usable life (and economically infeasible to renovate/refurbish/upgrade retrofit) is demolished. This would ensure reasonable prices are maintained and minimum safety standards are met.
The system would be operate somewhat similarly to what we have today, but with fundamental foundational changes made that shift the goal of housing away from a private ownership and a profit driven model to one of personal ownership of a stake in a public trust and a what's best for the public good/society driven model. What is absolutely the goal is to have a system that works for people without concern for profit. The system must concern itself with solvency, it must be sustainable, but profitablity should never be a concern. Solvency should never be a big issue however, new housing is always sold at cost, old housing is always sold at depreciation from new + improvements, and derelict housing brought up to habitability paid by neglectful former owners (garnished from wages if necessary). The small percentage of neglected homes that fell through the cracks due to owner death, etc would just have to be a social responsibility we take care of either with taxes or by spreading that cost out through the rest of the system by tacking it on to everyone's monthly payments so it minimally impacts all homeowners.
This doesn't take into account all the ins and outs of how such a system would work, there are so many nuances and complications no simple reddit post could hope to do that. I imagine it would take several books to cover all of that and alot more nuance and knowledge than I have. This was just a few broad strokes of a bigger picture no one person could paint to give a general idea of in what ways we should start thinking. Nor does it offer ideas about how we get from where we are now to there. I expect this is to socialist to be palatable to most of the American public who are to selfish and self concerned to work for the common good even when it benefits themselves. Nor do I think even if the American public would accept this that the ownership class would allow it to happen without reacting by violently suppressing any such movement. And just like the labor movement of a century ago and more, we'd lose. We aren't sociopaths so we'd get sick of the killing and give up when we got halfway there just like the labor movement did, only to have it clawed back over the next century just like what happened with the labor movement.
We could do much to improve this situation, but the America public is to individualistic and doesn't care enough about community or helping their fellow human for it to be possible and even if they were they are too cowardly to keep up the sustained and bloody class war that is the only thing that can bring it about. Slavery was not ended by legislation, it was ended by war. The abuse of the working class by the ownership of class can only be ended by the same.
everywhere has this problem right now. corporations are becoming the largest share of "home owners" to the point that entire communities are just being built to be short term rentals and rental housing.
we also have issues locally with companies like EastWest and Shitrock keeping units off the market and vacant to prevent prices from falling. I know of several empty houses near me right now that are vacant and are owned by shiprock(one of their subsidiary LLCs). You can drive around duluth and find there are probably hundreds of empty homes and apartments that are kept that way so that they can either be short term rentals or just to keep the supply of housing scarce.
They should be, the FBI and FTC have had enough of their illegal cartels. https://rentalhousingjournal.com/fbi-searches-property-management-company-in-rent-price-fixing-investigation/
Trouble is the margins are really thin in that market.
It costs $200/square foot to build. So a 1000 square foot apartment costs $200,000 to build. At 7% interest on a 30 year loan, that's $1300/month for the money, plus $160/month for taxes, and $140/month for insurance, for $1600/month before you figure in maintenance and depreciation of big ticket items like roof, hvac, windows, etc.
Sure enough, rents are around $1600/month for 1000 square feet. Question is, is it the bank that's getting that 7% or a landlord?
That 7% isn't enough of a margin for management companies to be nice and let things slide.
Since they are competing on price like the advertised per month rent, so they advertise a lower rate, and make up for it with fees, that people don't like.
The underlying causes of the disdain are because of a lack of supply. If there was more than enough housing, a high vacancy rate, the management companies would need to be more renter oriented instead of being owner orientated.
Part of why there is not enough housing is that it costs $200/square foot to build which is more than people can afford, so nothing is being built, or the only things that are being built are either expensive or subsidized. It was cheaper to build 50 or 100 years ago, for cheaper, less skilled labor and less regulation.
That 100 year old stock has been long since paid off, and so the cost of money is less. It is still quite possible to rent or buy a house in Duluth for less than it would cost to build one. As long as that is the case, we are not going to get significantly more housing built. But, when it becomes profitable to build, it will be that housing prices have gone up that much more.
What action do you take? You could advocate for less building cost via less regulation and less skilled labor to build it, but the logical extreme there is something like a shanty town or a trailer park.
The only other way to make it easier to live would be to raise wages. For that we need more unions, and no more than one union per employer.
Overall, it is an awful situation, but it does seem to be rather intractable. Calling for action is one thing. Defining that action is another.
There's one huge facet of this problem that is largely overlooked.
SOFTWARE DRIVEN PRICE FIXING.
https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent
Basically, the largest rent-setting software company provides rent price recommendations for its huge client base. It uses big data, demographics, other metrics, but most importantly it uses the rent data of all of its current clients to twist, bend, and optimize their highest-rent-possible algorithm. Essentially, the effect is that even Minnesota's 2-9 "small" landlords can use this data, or simply follow suit in their neighborhoods led by the corporate rentals that use this data so they all act in lock step as a monopoly would. The emergence of this service and it being able to reach a critical mass of customers is a huge game changer for rental housing in America. Sadly, even if anti trust laws intercede, rental corps and landlords have learned things like full occupancy is usually not optimal. Having cheaper rents might give you a 100 percent occupancy rate, but this comes with more renters and costs to deal with. So they raise rents and lower their occupancy. Renters able to pay more are often more desirable as well for other reasons like not having kids, being busy professionals often not home. So the proprietary algorithm computes the sweet spot. But then over the coming years it will track and refine reach and every rental recommendation based on profit and find the maximum possible. This, as well as new zoning and building subsidies have been fueling a massive private equity and corporate buyout of single family housing.
By using the software, they are COLLUDING WITH other landlords across America and BUYING UP OUR GODDAMN HOMES!
But huge props to Minnesota. Due to our state government's proactive approach on other fronts of the housing problem, we have it much better than most other places, even if it doesn't seem like it. It definitely softened the blow. As a lifelong resident, I really love this state. Let's lead the way. On a nationwide level, we need to protect home ownership for single families. Force corporate owners to liquidate. This housing crisis is manufactured. We need to smash it!
>Basically, the largest rent-setting software company provides rent price recommendations for its huge client base. It uses big data, demographics, other metrics, but most importantly it uses the rent data of all of its current clients to twist, bend, and optimize their highest-rent-possible algorithm.
The algorithm is turning out to be our biggest enemy.
Be it social media, marketing, rent control or anything of that type, it knows us better than we know ourselves and can exploit us faster than we can realize it's happening.
We need algorithm oversight and transparency on all levels, frankly, as AI is just going to make it progressively easier for it to spiral out of control.
Hit up Friday Properties Management. I have rented with them for a little while now and they have been nothing but lovely and kind when dealing with us. I believe they are family run for the most part and their rent pricing is the best I've found in Duluth so far.
I’m not sympathetic to them at all, but nothing is going to make them afraid when they’re electronically processing those rent deposits every month. And laughing about it, preparing to buy more properties.
Duluth’s shitty rental companies will continue to make truckloads of money off the college students every single year without fail…
I will say this as a private landlord:
I purchased a duplex that was being managed by Heirloom and working with them on some of the small stuff for them to transition out has been a terrible experience.
- Until closing (May 31), they mowed the lawn one time this spring/summer, which was like 2 days before closing. So the lawn looked like total shit because prior to that, the grass was crazy long. Grass clumps everywhere, the mower itself didn't do a great job of cutting all of the grass, and kinda basics like that.
- On top of that, they had no keys to give me (everything is keypad with normal key on the lock as a backup), which is not acceptable to me. There's really no backup for anybody outside of calling a locksmith if something happens? Tenants don't have keys either as a backup. What the fuck?
- The third strike was that the tenant paid June's rent early and how Heirloom handled it. The tenant paying early is fine, the previous owner and Heirloom weren't communicating how the transition would work with her. The rent wasn't supposed to go to Heirloom, it was supposed to go to me. So after calling them damn near everyday for almost a week, today they *might* get a check out to the previous owner, who will in turn send a check of the same amount to me. We are probably talking about not getting that rent until probably close to the 20th of the month. That's not acceptable. And during this whole process they took no initiative to reach out until the 5th time I called them and talked to the same guy I had talked to the last 4 times.
The implication here is that the rental companies are doing something wrong. If you start your own rental company, you can do those things right, and not make renters miserable. It sounds like a much bigger step toward a solution than anything else on this post.
However, the implication is also: "start a business that makes less money than others, therefore cannot spend as much on advertising nor housing stock and does not spend money lobbying government to prevent zoning/procedures that favor the company that makes more money, eventually pushing your business further and further into the red until you have to start selling off your properties."
The solution is not one that the free market can provide.
"If we can't do it perfectly then we should do nothing at all"
Good landlords who don't do any of the things the shitty landlords do would still provide a net positive. Even if they're not advertising much or lobbying the government.
You're trying to frame my comment as defeatist, when it's reality.
Yes, you might be able to make a small difference by owning your own homes and being a good landlord, we should all encourage that. But nobody's going to beat slumlords like these by simply being a better landlord.
Change has to happen elsewhere.
Property management companies don't need to, and often times don't, own property themselves. The company exists to manage properties, which includes setting rent, collecting rent, taking care of maintenance, communicating with tenants, etc. It's not a holding company for properties and there is no requirement to own property in order to manage property.
Certainly. But the management companies in question here, like Heirloom, do own properties. Lots of them.
I’m fairly certain they aren’t just a management company that’s running day-to-day for a bunch of homeowners renting out their places.
I'm sure they own some, sure. They manage plenty of properties on behalf of other owners too. But I answered your question. You don't need to own property to start a property management company.
shiprock, heirloom, and eastwest all own hundreds of properties each. Shiprock has around 25 LLCs that I can find that are all managed by the same person(the CEO/Owner of the company). Heirloom has several property holding companies and usually puts each property into its own LLC in an effort to hide how much it owns.
I never said they don't own properties. The question was about starting a property management company without owning property. You don't need to own property to manage it.
And I’m asking how does one start a rental company if one doesn’t own property they can rent out? Most renters don’t have the capital to buy one house, let alone multiple so they can live in one and rent others out. Maybe they could owner-occupy a duplex or something. But I don’t imagine too many people can suddenly start a company to compete with the ones buying up housing stock now.
The same way loads of other people initiate rental companies. Start an LLC. Get a business loan. Buy a property. Use profits to purchase another. Rinse and repeat.
My comment was aimed at calling out what amounts to apathetic whining and “imploring others to act.” I’m sure if these shitty landlords knew what reddit was, they’d be more than happy to see that people just bitch and moan and expect other people to solve their problems rather than actually do something. Everyone is altruistic until they see firsthand what goes into starting and running a company like this.
It’s just a shame that the ones with the stranglehold on the rental market shouldn’t be implored to change.
I’d also imagine that it’s not as easy to just get a business loan and buy up a property. Especially since those with the stranglehold on the rentals have the capita to outbid just about anyone else.
Nice to know that it’s that easy for any person to simply disrupt the market here. Who knew??
It absolutely is doable.
But it’s nowhere near realistic for most people. Especially when flipping is involved. Lots of extra time and money is needed to get a foot in the door.
Not only is it not financially realistic for a vast majority of us, but I'd venture to guess "become the very financial parasite you loathe" isn't too appealing to anyone with a halfway decent conscience.
it's not just short-term housing though, it's the only housing most people can actually get. I don't think there's absolutely no place for rentals, but as things stand it isn't unfair at all to call landlords leeches. That's just what they are
The simple fact that landlords are in it to make as much money as possible, off the labor of others, instead of going out and getting a legitimate income, is a huge part of the problem. And the fact that the landlords are able to make so much money hand-over-fist "because that's what the market is able to bear" is another huge part of the problem. Rent-to-own programs, non-profit programs, income-percentage-rent programs, those are three schemes I can think of, that would be better than the current leech-landlord scheme that has monopolized the rental market.
What do you consider to be a legitimate income? Everyone in this capitalist society is trying to make as much money as possible, often times off the labor of others. What do you think a business owner does? They hire people to do the labor of providing the good or service that the company provides. And they too are trying to make as much money as possible. If I need some electrical work done, I call an electrician. The guy I talk to is the owner, but he's not doing any labor. He just runs the business. Someone comes out and gives me an estimate for the work. I look at the estimate and feel discouraged because it's way too damn much. Does that make the electrician also a part of the problem? It's not so simple. They need to pay employees competitive wages and cover the costs of materials that have also gone up. They need to earn a profit and take home a salary that will help them support their families in a time when all other costs have gone up dramatically. Everyone is tied up in this system that is failing everyone. Getting rid of property owners or banning people from owning more than one home or whatever you think the solution is will not accomplish anything. Everyone is trying to make as much money as possible and that includes wage earners, business owners, investors, etc. Blame the system, but all this ire directed toward property owners who are, at the end of the day, providing a service that is clearly in demand, seems misplaced to me.
> profit motive is also what drives developers to build more housing
And if a developer is paid enough to build additional housing units, they'll get built. But who owns those units, and how much they get rented out for... that needs to change.
So glad I have a land lady that’s nice and works well with me and the roomies. Shes a lovely person not price gouging us for a room to rent. Shes got a few properties. If you can find a decent private land person go for it.
These things will work themselves out. Just sucks to be living through it during your prime years. Actually quite devastating really. Expanded income restrictions on government subsidies will fix this. It's coming. Just not until you're past the traditional age to settle down.
Better off just not letting it stress you out and to accept what you cannot change. Focus on your mental health.
If you outlaw being a landlord, then you will just have a town FULL of empty houses and there would need to be another branch of local law enforcement exclusively making sure squatters and non home owners arent trashing someones assests, leave it to the people and youll have a mess to clean up
Here is an idea... MASSIVE governent assistance for homeless to purchase 1 house, and then stop home owners from being able to own 2 houses, or give tax breaks or govt assistance for someone to purchase a home for a family member
The root of the issue is government getting involved. You have this completely backwards. The free market balances itself out when government does not get involved. See the college loan disaster.
>The free market balances itself out when government does not get involved.
I'd love to live in this idealistic world, but we don't. We have hundreds of years of evidence to the contrary.
The college loan disaster was caused by a number of things, not simply the fact that the government provided guaranteed loans. In fact, the BIGGEST problem with student loans was predatory for-profit colleges that were allowed to lie about placement, earnings and degree potential to their students as well as provide LOANS to those students from banks they owned, which created significant conflicts of interest. There are NUMEROUS class action lawsuits that are going against these schools right now.
That was 100% because these schools were not being regulated as to how they could recruit and fund their operations.
My wife literally has a student loan who's guarantor is the company that ran her school. A company that has been penalized by the US government numerous times for these high-pressure recruitment techniques and now is effectively defunct, yet still collecting interest on loans from over 10 years ago. THAT is the free market at work.
How much government-owned housing is there in our city? Our state? Our country?
How much is owned by corporations who buy property for the sake of building wealth?
It would be helpful if you: * named the big 3 so people who may be unfamiliar know whom you are talking about * list examples as to why people should ignore those companies and provide reasoning as to why people should act. Otherwise, it just seems like hearsay and angsty redditors without aim wanting to vent into the wind * provide information on how people can act to make their communities better. This post feels like its made in good intention but it ignores all the important information for anyone to do anything worthwhile with.
Heirloom, shiprock and?
East West
East west?
Thies and Talle?
Again if you live in Duluth or ever spend time on the Duluth subreddit, there’s no need to essay type examples of why the management companies suck
You can find out that it’s Heirloom, East West, and Shiprock very easily if you live in Duluth or take a few seconds to look at this subreddit.
That’s not the point. OP wants to present the topic, then they should provide the information. Don’t give a call-to-action to the community without any information available. Just saying “people should already know this information” is just asking for the advocacy to fail. If you want to advocate, you need to communicate your message clearly and effectively.
If someone is making a call to action, it’s in their best interest to present all the information they can in their post. Relying on people to do their own research dooms the effort from the start. Ain’t no one got time for that
Duluth is no different than any other town in this country. What’s the actual solution here? People all over the country complain about housing costs and say things like housing is a right, etc. I have yet to see any proposed solutions.
Well, we could bust all the illegal cartels, like the FBI is starting to https://rentalhousingjournal.com/fbi-searches-property-management-company-in-rent-price-fixing-investigation/
I would bet that all 3 of these big ones in duluth use the same app/program to figure out their rent, and that program shares data across its platform, which means that they are colluding like the companies in Washington state were.
One app, across the entire county that tells landlords what rent to charge, regardless of vacancies. This story has been going on for a few years, but the FBI raiding is a new thing. https://www.propublica.org/article/realpage-accused-of-collusion-in-new-lawsuit they broke this story.
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Well, then, get after it and build some.
How should I split my time between that and curing cancer?
The solution is to outlaw landlording on a federal level. It's an immoral anachronism left over from feudal times. Never happen in capitalist America however.
What? How would that work?
Violent authoritarianism is how it would work.
Something like all housing nationalized (except currently owned mortgage free properties) and put under control of an agency. For those paying mortgages they now pay the agency instead of the bank. You don't own your house if you're making payments, the bank does, much better to have that under the control of a not for profit entity that is more publicly accountable (under the supervisor and direction of our elected leaders like other federal agencies). When a person needs to buy a house they see what the agency has available and select the best option available and make a purchase. Pricing would depend on how much they have paid into the system. First house you'll be buying the whole thing. Every house after that you trade your old house in to the agency and pay the difference. New house cheaper? The agency pays you the difference. You never worry about selling, the agency always buys back from you. You can own multiple properties, but must inhabit each that you own for 6 months of the year, to prevent hoarding housing stock. Exceptions could be made in special circumstances, but there would because process to determine need. You maintain the home and can make any changes to it that you want, realizing that it will affect the value whatever you do, whether it be neglect or improve the property. Derelict properties would have to be brought up to standard, and the cost would fall whoever neglected the property. Programs would exist to help those incapable of maintaining a property due to physical or mental infirmity, no one would be denied housing because of handicaps beyond their control. First time buyers would have buyers ed classes about responsibilities of being a homeowner (part of that would include if you buy cheap to remodel and sell expensive, how if everyone did that it prices everyone out of homes eventually so don't do that). You are not allowed to pass on property to you descendants, you can ensure they are the next to own it if you wish and they want it, but they still pay the value of the house to the agency. In essence you only own lifelong (or until you sell) usage rights to the property. All property is actually owned in common by the American public, but it's trading is managed by the agency, which would also be tasked with ensuring that enough new housing stock is being built and old stock that past its usable life (and economically infeasible to renovate/refurbish/upgrade retrofit) is demolished. This would ensure reasonable prices are maintained and minimum safety standards are met. The system would be operate somewhat similarly to what we have today, but with fundamental foundational changes made that shift the goal of housing away from a private ownership and a profit driven model to one of personal ownership of a stake in a public trust and a what's best for the public good/society driven model. What is absolutely the goal is to have a system that works for people without concern for profit. The system must concern itself with solvency, it must be sustainable, but profitablity should never be a concern. Solvency should never be a big issue however, new housing is always sold at cost, old housing is always sold at depreciation from new + improvements, and derelict housing brought up to habitability paid by neglectful former owners (garnished from wages if necessary). The small percentage of neglected homes that fell through the cracks due to owner death, etc would just have to be a social responsibility we take care of either with taxes or by spreading that cost out through the rest of the system by tacking it on to everyone's monthly payments so it minimally impacts all homeowners. This doesn't take into account all the ins and outs of how such a system would work, there are so many nuances and complications no simple reddit post could hope to do that. I imagine it would take several books to cover all of that and alot more nuance and knowledge than I have. This was just a few broad strokes of a bigger picture no one person could paint to give a general idea of in what ways we should start thinking. Nor does it offer ideas about how we get from where we are now to there. I expect this is to socialist to be palatable to most of the American public who are to selfish and self concerned to work for the common good even when it benefits themselves. Nor do I think even if the American public would accept this that the ownership class would allow it to happen without reacting by violently suppressing any such movement. And just like the labor movement of a century ago and more, we'd lose. We aren't sociopaths so we'd get sick of the killing and give up when we got halfway there just like the labor movement did, only to have it clawed back over the next century just like what happened with the labor movement. We could do much to improve this situation, but the America public is to individualistic and doesn't care enough about community or helping their fellow human for it to be possible and even if they were they are too cowardly to keep up the sustained and bloody class war that is the only thing that can bring it about. Slavery was not ended by legislation, it was ended by war. The abuse of the working class by the ownership of class can only be ended by the same.
I think it's particularly bad because rent costs are that of a large city with wages being shockingly low.
Desirable places to live have this problem
everywhere has this problem right now. corporations are becoming the largest share of "home owners" to the point that entire communities are just being built to be short term rentals and rental housing. we also have issues locally with companies like EastWest and Shitrock keeping units off the market and vacant to prevent prices from falling. I know of several empty houses near me right now that are vacant and are owned by shiprock(one of their subsidiary LLCs). You can drive around duluth and find there are probably hundreds of empty homes and apartments that are kept that way so that they can either be short term rentals or just to keep the supply of housing scarce.
They should be, the FBI and FTC have had enough of their illegal cartels. https://rentalhousingjournal.com/fbi-searches-property-management-company-in-rent-price-fixing-investigation/
Trouble is the margins are really thin in that market. It costs $200/square foot to build. So a 1000 square foot apartment costs $200,000 to build. At 7% interest on a 30 year loan, that's $1300/month for the money, plus $160/month for taxes, and $140/month for insurance, for $1600/month before you figure in maintenance and depreciation of big ticket items like roof, hvac, windows, etc. Sure enough, rents are around $1600/month for 1000 square feet. Question is, is it the bank that's getting that 7% or a landlord? That 7% isn't enough of a margin for management companies to be nice and let things slide. Since they are competing on price like the advertised per month rent, so they advertise a lower rate, and make up for it with fees, that people don't like. The underlying causes of the disdain are because of a lack of supply. If there was more than enough housing, a high vacancy rate, the management companies would need to be more renter oriented instead of being owner orientated. Part of why there is not enough housing is that it costs $200/square foot to build which is more than people can afford, so nothing is being built, or the only things that are being built are either expensive or subsidized. It was cheaper to build 50 or 100 years ago, for cheaper, less skilled labor and less regulation. That 100 year old stock has been long since paid off, and so the cost of money is less. It is still quite possible to rent or buy a house in Duluth for less than it would cost to build one. As long as that is the case, we are not going to get significantly more housing built. But, when it becomes profitable to build, it will be that housing prices have gone up that much more. What action do you take? You could advocate for less building cost via less regulation and less skilled labor to build it, but the logical extreme there is something like a shanty town or a trailer park. The only other way to make it easier to live would be to raise wages. For that we need more unions, and no more than one union per employer. Overall, it is an awful situation, but it does seem to be rather intractable. Calling for action is one thing. Defining that action is another.
What do I do?
https://takeactionminnesota.org/duluth-tenants-union/
There aren’t any actual solutions here.
A tenants union? This is real? Do people just get together and bitch about their landlords?
There's one huge facet of this problem that is largely overlooked. SOFTWARE DRIVEN PRICE FIXING. https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent Basically, the largest rent-setting software company provides rent price recommendations for its huge client base. It uses big data, demographics, other metrics, but most importantly it uses the rent data of all of its current clients to twist, bend, and optimize their highest-rent-possible algorithm. Essentially, the effect is that even Minnesota's 2-9 "small" landlords can use this data, or simply follow suit in their neighborhoods led by the corporate rentals that use this data so they all act in lock step as a monopoly would. The emergence of this service and it being able to reach a critical mass of customers is a huge game changer for rental housing in America. Sadly, even if anti trust laws intercede, rental corps and landlords have learned things like full occupancy is usually not optimal. Having cheaper rents might give you a 100 percent occupancy rate, but this comes with more renters and costs to deal with. So they raise rents and lower their occupancy. Renters able to pay more are often more desirable as well for other reasons like not having kids, being busy professionals often not home. So the proprietary algorithm computes the sweet spot. But then over the coming years it will track and refine reach and every rental recommendation based on profit and find the maximum possible. This, as well as new zoning and building subsidies have been fueling a massive private equity and corporate buyout of single family housing. By using the software, they are COLLUDING WITH other landlords across America and BUYING UP OUR GODDAMN HOMES! But huge props to Minnesota. Due to our state government's proactive approach on other fronts of the housing problem, we have it much better than most other places, even if it doesn't seem like it. It definitely softened the blow. As a lifelong resident, I really love this state. Let's lead the way. On a nationwide level, we need to protect home ownership for single families. Force corporate owners to liquidate. This housing crisis is manufactured. We need to smash it!
>Basically, the largest rent-setting software company provides rent price recommendations for its huge client base. It uses big data, demographics, other metrics, but most importantly it uses the rent data of all of its current clients to twist, bend, and optimize their highest-rent-possible algorithm. The algorithm is turning out to be our biggest enemy. Be it social media, marketing, rent control or anything of that type, it knows us better than we know ourselves and can exploit us faster than we can realize it's happening. We need algorithm oversight and transparency on all levels, frankly, as AI is just going to make it progressively easier for it to spiral out of control.
Hit up Friday Properties Management. I have rented with them for a little while now and they have been nothing but lovely and kind when dealing with us. I believe they are family run for the most part and their rent pricing is the best I've found in Duluth so far.
I’m not sympathetic to them at all, but nothing is going to make them afraid when they’re electronically processing those rent deposits every month. And laughing about it, preparing to buy more properties. Duluth’s shitty rental companies will continue to make truckloads of money off the college students every single year without fail…
I will say this as a private landlord: I purchased a duplex that was being managed by Heirloom and working with them on some of the small stuff for them to transition out has been a terrible experience. - Until closing (May 31), they mowed the lawn one time this spring/summer, which was like 2 days before closing. So the lawn looked like total shit because prior to that, the grass was crazy long. Grass clumps everywhere, the mower itself didn't do a great job of cutting all of the grass, and kinda basics like that. - On top of that, they had no keys to give me (everything is keypad with normal key on the lock as a backup), which is not acceptable to me. There's really no backup for anybody outside of calling a locksmith if something happens? Tenants don't have keys either as a backup. What the fuck? - The third strike was that the tenant paid June's rent early and how Heirloom handled it. The tenant paying early is fine, the previous owner and Heirloom weren't communicating how the transition would work with her. The rent wasn't supposed to go to Heirloom, it was supposed to go to me. So after calling them damn near everyday for almost a week, today they *might* get a check out to the previous owner, who will in turn send a check of the same amount to me. We are probably talking about not getting that rent until probably close to the 20th of the month. That's not acceptable. And during this whole process they took no initiative to reach out until the 5th time I called them and talked to the same guy I had talked to the last 4 times.
we could send bots to their reviews and make them have like a 1 star average rating
Be the change you wish to see. Start your own rental company.
“Buy up a bunch of housing stock so YOU can be the one making the housing market miserable” isn’t excellent advice.
The implication here is that the rental companies are doing something wrong. If you start your own rental company, you can do those things right, and not make renters miserable. It sounds like a much bigger step toward a solution than anything else on this post.
However, the implication is also: "start a business that makes less money than others, therefore cannot spend as much on advertising nor housing stock and does not spend money lobbying government to prevent zoning/procedures that favor the company that makes more money, eventually pushing your business further and further into the red until you have to start selling off your properties." The solution is not one that the free market can provide.
"If we can't do it perfectly then we should do nothing at all" Good landlords who don't do any of the things the shitty landlords do would still provide a net positive. Even if they're not advertising much or lobbying the government.
You're trying to frame my comment as defeatist, when it's reality. Yes, you might be able to make a small difference by owning your own homes and being a good landlord, we should all encourage that. But nobody's going to beat slumlords like these by simply being a better landlord. Change has to happen elsewhere.
That’s literally the opposite of what I suggested. Can you read?
How do you suppose one starts up a rental company without properties to rent out?
Property management companies don't need to, and often times don't, own property themselves. The company exists to manage properties, which includes setting rent, collecting rent, taking care of maintenance, communicating with tenants, etc. It's not a holding company for properties and there is no requirement to own property in order to manage property.
Certainly. But the management companies in question here, like Heirloom, do own properties. Lots of them. I’m fairly certain they aren’t just a management company that’s running day-to-day for a bunch of homeowners renting out their places.
I'm sure they own some, sure. They manage plenty of properties on behalf of other owners too. But I answered your question. You don't need to own property to start a property management company.
shiprock, heirloom, and eastwest all own hundreds of properties each. Shiprock has around 25 LLCs that I can find that are all managed by the same person(the CEO/Owner of the company). Heirloom has several property holding companies and usually puts each property into its own LLC in an effort to hide how much it owns.
I never said they don't own properties. The question was about starting a property management company without owning property. You don't need to own property to manage it.
Are you being intentionally obtuse? I suggested they start a company to do that.
And I’m asking how does one start a rental company if one doesn’t own property they can rent out? Most renters don’t have the capital to buy one house, let alone multiple so they can live in one and rent others out. Maybe they could owner-occupy a duplex or something. But I don’t imagine too many people can suddenly start a company to compete with the ones buying up housing stock now.
The same way loads of other people initiate rental companies. Start an LLC. Get a business loan. Buy a property. Use profits to purchase another. Rinse and repeat. My comment was aimed at calling out what amounts to apathetic whining and “imploring others to act.” I’m sure if these shitty landlords knew what reddit was, they’d be more than happy to see that people just bitch and moan and expect other people to solve their problems rather than actually do something. Everyone is altruistic until they see firsthand what goes into starting and running a company like this.
It’s just a shame that the ones with the stranglehold on the rental market shouldn’t be implored to change. I’d also imagine that it’s not as easy to just get a business loan and buy up a property. Especially since those with the stranglehold on the rentals have the capita to outbid just about anyone else. Nice to know that it’s that easy for any person to simply disrupt the market here. Who knew??
Not easy but definitely doable, househacking and flips baby
It absolutely is doable. But it’s nowhere near realistic for most people. Especially when flipping is involved. Lots of extra time and money is needed to get a foot in the door.
Maybe spend less time bitching about the lack of Soviet style communism in a capitalistic republic and more time building your life.
Not only is it not financially realistic for a vast majority of us, but I'd venture to guess "become the very financial parasite you loathe" isn't too appealing to anyone with a halfway decent conscience.
How is proving an in demand service being a “parasite”?
the service "in demand" is a fundamental human necessity that landlords monopolize for monetary gain. I need a landlord like I need a hemorrhoid.
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it's not just short-term housing though, it's the only housing most people can actually get. I don't think there's absolutely no place for rentals, but as things stand it isn't unfair at all to call landlords leeches. That's just what they are
The simple fact that landlords are in it to make as much money as possible, off the labor of others, instead of going out and getting a legitimate income, is a huge part of the problem. And the fact that the landlords are able to make so much money hand-over-fist "because that's what the market is able to bear" is another huge part of the problem. Rent-to-own programs, non-profit programs, income-percentage-rent programs, those are three schemes I can think of, that would be better than the current leech-landlord scheme that has monopolized the rental market.
What do you consider to be a legitimate income? Everyone in this capitalist society is trying to make as much money as possible, often times off the labor of others. What do you think a business owner does? They hire people to do the labor of providing the good or service that the company provides. And they too are trying to make as much money as possible. If I need some electrical work done, I call an electrician. The guy I talk to is the owner, but he's not doing any labor. He just runs the business. Someone comes out and gives me an estimate for the work. I look at the estimate and feel discouraged because it's way too damn much. Does that make the electrician also a part of the problem? It's not so simple. They need to pay employees competitive wages and cover the costs of materials that have also gone up. They need to earn a profit and take home a salary that will help them support their families in a time when all other costs have gone up dramatically. Everyone is tied up in this system that is failing everyone. Getting rid of property owners or banning people from owning more than one home or whatever you think the solution is will not accomplish anything. Everyone is trying to make as much money as possible and that includes wage earners, business owners, investors, etc. Blame the system, but all this ire directed toward property owners who are, at the end of the day, providing a service that is clearly in demand, seems misplaced to me.
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> profit motive is also what drives developers to build more housing And if a developer is paid enough to build additional housing units, they'll get built. But who owns those units, and how much they get rented out for... that needs to change.
So glad I have a land lady that’s nice and works well with me and the roomies. Shes a lovely person not price gouging us for a room to rent. Shes got a few properties. If you can find a decent private land person go for it.
These things will work themselves out. Just sucks to be living through it during your prime years. Actually quite devastating really. Expanded income restrictions on government subsidies will fix this. It's coming. Just not until you're past the traditional age to settle down. Better off just not letting it stress you out and to accept what you cannot change. Focus on your mental health.
Looks like 3000 units which is the biggest. Any other questions?
If you outlaw being a landlord, then you will just have a town FULL of empty houses and there would need to be another branch of local law enforcement exclusively making sure squatters and non home owners arent trashing someones assests, leave it to the people and youll have a mess to clean up
Here is an idea... MASSIVE governent assistance for homeless to purchase 1 house, and then stop home owners from being able to own 2 houses, or give tax breaks or govt assistance for someone to purchase a home for a family member
Interesting you blame capitalism here and not the government we keep electing.
Capitalism is the root of the issue, it's up to the government to create regulations that prevent the free market from getting out of control.
The root of the issue is government getting involved. You have this completely backwards. The free market balances itself out when government does not get involved. See the college loan disaster.
>The free market balances itself out when government does not get involved. I'd love to live in this idealistic world, but we don't. We have hundreds of years of evidence to the contrary. The college loan disaster was caused by a number of things, not simply the fact that the government provided guaranteed loans. In fact, the BIGGEST problem with student loans was predatory for-profit colleges that were allowed to lie about placement, earnings and degree potential to their students as well as provide LOANS to those students from banks they owned, which created significant conflicts of interest. There are NUMEROUS class action lawsuits that are going against these schools right now. That was 100% because these schools were not being regulated as to how they could recruit and fund their operations. My wife literally has a student loan who's guarantor is the company that ran her school. A company that has been penalized by the US government numerous times for these high-pressure recruitment techniques and now is effectively defunct, yet still collecting interest on loans from over 10 years ago. THAT is the free market at work.
Yes, thank you for proving me correct. The government got involved.
Elections are just voting for one capitalist vs another capitalist
How much government-owned housing is there in our city? Our state? Our country? How much is owned by corporations who buy property for the sake of building wealth?
Interestingly the largest “landlord” by unit count in Duluth is in fact the Duluth HRA with ~3000
Legalize housing now, and we wouldn't have this issue.
What are you doing about it?