Originally published at: https://boingboing.net/2020/07/20/the-government-in-barcelona-is.html
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I appreciate the sentiment here, but 194 apartments seems like a drop in the bucket.
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I wish they’d do that here in the UK too…
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It is, but to get them on the market quickly they will have to drop prices and that can have a huge effect in a local area.
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It’s important to see that these apartments are suitable to get in. It’s a problem also with public housing where some old condos are in a very bad shape too, and happens more with private flat, especially in areas that aren’t interesting. Typically granddad dies, heirs try to sell the flat but because the last renovation was 50 years ago, the furnace is broken and the the circuit breakers are not to code.
Near my parent’s house there is a very nice villa with swimming pool and a giant platform that remained with “for sale” sign for 15 years … Until someone that was willing to spend a lot of money for renovation decided to buy.
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Not for 194 families.
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Fuck yes. I’d love to see this in San Francisco.
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This is Barcelona though. Cost of refurbishing the place, however dilapidated, will be a mere fraction of what you pay for the location.
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I was just about to comment that I was betting a number of folks in San Francisco, LA, New York, and the like would LOVE to see something like this. Someone needs to get it on the next California ballot initiative.
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Given how hard it can be to get rid of a tenant in San Francisco, it’s no wonder folks don’t want to rent on a shorter term basis. Solve for that and fewer people would see the upside (or lack of downside) in keeping an apartment vacant.
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For clarity, I think you’re saying that the biggest obstacle to affordable housing in San Francisco is that it’s too hard for landlords to evict tenants.
Presuming I’m understanding you correctly, I would like to ask a couple of questions.
- Just how hard is it to evict a tenant in San Francisco today?
- How easy should it be so that landlords no longer have the incentive to keep units vacant?
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Not sure about how the process works anywhere but the US, but in my own experience, Having enough money to get a mortgage to buy a home" and “Having enough cash afterwards to also pay for renovations that you can’t roll into said mortgage” can be very different hurdles. Just because I can buy, say, a $500,000 home (not talking about Barcelona here) doesn’t mean I can buy a $400,000 home and then drop $100,000 fixing it up.
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The assumption that these are not ready to use needs examining…the article says they were being held out of use until the price was met, not until repairs were made. Artificial scarcity and price-fixing are often at work in these situations.
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You can get mortgages with a renovation loan attached to it
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Thanks! Learn new things every day!
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The one thing about buying a home during the housing bubble of 2003-2008 was I got to learn about all the variations from a fixed rate mortgage that they tried to foist upon me. Back then you had to be stern with mortgage brokers and insist on something normal.
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Gotcha. When I was looking in 2014 no one tried to pull any of that on me, and it was still possible to find some recently updated homes at very good prices in my area.
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Except, it’s still not the same.
Using those BankRate pages to estimate.
A $400,000 loan on a $500,000 purchase may have a rate around 3.375 over 30 years, roughly $1,800 monthly.
A $320,000 loan on a $400,000 purchase may have a rate around 3.375 over 30 years, roughly $1,400 monthly. Leaving $20,000 cash plus an $80,000 loan at 5.5% over 12 years, roughly $760 monthly. Making the total monthly payment $2,160. An extra $360 monthly to fix up the cheaper place.
It’s generally better to buy what you can if the goal is to live in it, not to try and fix it up. That changes some if the goal isn’t to live in it but to fix it up and sell as an investment, with all the risks that this type of investment brings.
Alternatively, if you’re not borrowing money to fix it up, but able to live in it and fix up over time with your own cash reserves, that could be a good deal. Meaning, fixing it up with the initial $20k cash and $400 cheaper monthly mortgage. This can take a lot longer obviously, and doesn’t work if the place isn’t habitable.
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If the local government seizes empty apartments from these companies, it’s going to put a fear of God and Govt into others, who will suddenly find that they’ll prefer lower rent income to losing their properties at half the price. It should have an effect in reducing the number of apartments sitting empty.
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Any time you are deviating from a fixed rate mortgage for the purchase price only (with 20%+ down) , you are getting royally screwed by the terms. It is far better to buy the home and fix it up with available cash if possible.
Typically loans used for professional “flipping” are very short term interest only. Best used if you have a crew of renovators and cash reserves to put into a home so it can be renovated and sold fast (within 30 days).Real estate investment of any type should not be done without a large cash reserve to call upon.
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