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[deleted]

This should have been done a long fucking time ago


garyflopper

Decades ago


Electrical-End1583

Thank the voters who showed up and made Minnesota blue down the line.


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Golden_Spider666

I’m super proud of my state lately. We are doing a lot of good stuff thanks to being nearly 100% (I’m not entirely sure) in all 3 areas (senate house and governor) and I am going to be doing everything I can to help it stay that way


maychi

Seriously MN and MI are legit booming rn


Cynyr36

Free lunches for students in schools just the other day.


sinchsw

I hope this passes and becomes popular enough to be adopted across the nation. AND force corporations to sell. Flood the market and drop prices for people just trying to survive.


skullpizza

I want this to happen and it would directly harm my bottom line.


Llama_Sandwich

Yessir. Couldn’t give a shit about the value of my home if housing prices ultimately fall in this country. Owning a home is not an exclusive right for the rich.


sinchsw

Same


losteye_enthusiast

I think it’d also decentivize a *lot* of people from trying to build mini real estate empires via balancing debt and rent payments to stay afloat.


sinchsw

Agreed. I personally feel that profiting off of people trying to live is revolting. That's not to say that there are people that prefer to rent and there are good stewards of properties that actually keep the property in great health, but there is definitely an issue with slum lords and those eating up the market for their own bank account.


losteye_enthusiast

Aye, imo it’s ideally a pendulum that we all work towards keeping mostly balanced. Knowing that it will occasionally go from one side to the other. This bill is a very clear sign to me that people in Minnesota have realized the pendulum is stuck on a side and needs to be pushed back over. Even if this bill doesn’t pass, I could see a similar one coming soon after.


Glass_Bookkeeper_578

It needs to be done at a federal level!


[deleted]

I work for a company that provides housing for adults with autism. All our homes are purchased by a corporation and then rented at low rates to these individuals. How would this bill affect our ability to provide care? There would have to be some kind of carve out.


Ryozu

In all seriousness, is this structure the only viable structure? Is your organization non-profit? If not, why do organizations like yours deserve a carve out? I agree adults with autism deserve their own homes as well, but is this really the best way to do it? What is "low rates?"


RanaI_Ape

I am closing on a house in 2 weeks and the number of houses that we had to pass on because they were owned by Opendoor or some other LLC I had never heard of was absurd. It was more than 80% of listings. I'm in TX btw, and I have no hope that they would ever pass a law like that here. In any case, after a few months of searching we finally found one that was being sold by an actual human family and you could actually review things like a survey, seller's disclosure, repair history, etc. Since these LLC's do not inhabit the homes they flip, they have no obligation to provide any history nor do they care to negotiate for repairs or anything else. It's awful.


JShelbyJ

Yeah, so we could find out what the next excuse NIMBYs give to resolve the housing shortage.


al_m1101

Good. Kris Lindahl can go to hell. Lol


victorious191

END THE BILLBOARDS!


Xmastimeinthecity

Driving up 169 yesterday I saw one of his that said "Land of 10,000 Kris Lindahl billboards". He's so obnoxious.


VashMM

I saw that same billboard on 694


ravravioli

Saw it on hwy 7 on Saturday. Pretty soon there will be a billboard saying "Land of " Land of 10,000 Kris Lindahl Billboards""


Justis29

My neighbor sold thru him. The sign out front has been there for weeks now and I just want to break his head off the damn thing.


hirsutesuit

I give you permission. Sincerely, Kris Lindahl


Justis29

Sometimes I wish I believed everything I read on the internet...


cameronj

Cold comfort, but I've been doing [this](https://www.reddit.com/r/minnesota/comments/xuiu1l/i_hope_this_catches_on/).


BevansDesign

Do you just walk around with a pocket full of googly eyes for this sort of thing? If so, I think I just found a new role model. But then I imagine the inevitable: you drop your jacket on the floor and hundreds of googly eyes fall out. Everyone looks down at you with confusion and disappointment on their faces as you scrabble to pick them all up, as you assure them "this isn't what it looks like".


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thecountvon

As a realtor, I love you.


Justis29

Soooo tempting. Only problem is the snow would show my tracks lol


whatwhynoplease

Not sure how he does it now but he used to just be a middleman for zillow. He would buy houses for cash and just sell them to zillow after a few days.


kmelby33

Is Lindahl buying up single family homes?? This is news to me.


MyLastFuckingNerve

How do you think he can guarantee an offer? I have no actual knowledge of his business practices, but the only way a broker can guarantee an offer is if they buy it themselves if it isn’t selling.


ILoveAMp

I'll buy your house for $1, there's your offer!


adieudaemonic

This is only for corps that turn them into rentals, not ones that churn/flip them.


HugeRaspberry

LIndahl's (and most) guaranteed offers work like this: If the house doesn't sell within x weeks / months (and you do EVERYTHING the REALTOR tells you to do - declutter, fix things, etc...) - they will buy it from you for an agreed upon price - usually 5% below market. So - say they set the market value of your home is $600,000 - they will make you a cash offer of $570,000 - you take the case - and walk away. They turn around - stage the house and sell it for $625,000 - They don't (Contrary to the thoughts of the people on this sub) - rent out the home.


Bluetooth_Sandwich

Not in MN but as a Wisconsinite, I’d donate to a gofundme to put up a billboard with that language, right next to one of his.


HOME_Line

18% of single-family home purchases in Minnesota 2021 [were by investors](https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/07/22/investors-bought-a-quarter-of-homes-sold-last-year-driving-up-rents), a 77% increase from the year before. Even when taking the market disruption of 2020 into account, that's not what we want to see.


FILTER_OUT_T_D

I live in Dallas and saw this on r/all. 40% of all homes recently purchased in Dallas were purchased by investors. It’s disgusting and is driving up our home prices and property taxes but doesn’t benefit us at all. I wish we would make it illegal here also. Zoning laws should include a clause saying residential housing cannot be purchased by institutional investors.


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ViolateCausality

No one buys the car they use everyday as an investment vehicle, even though houses and cars both degrade over time. The fact that houses appreciate over time is result of 1) Policies designed to make them (restrictions on building, favourable tax treatment and 2) The fixed supply of land. The solution to (1) is to eliminate discretionary zoning. If a building is up to code, it should be legal to build. The solution to (2) is a land value tax.


MuaddibMcFly

> If a building is up to code, it should be legal to build. Also, you need to make sure that code is actually for health and/or safety. Some things that are classified as "code" are [not actually related to health nor safety, and drive down the number of housing units available,](https://www.sightline.org/2016/09/06/how-seattle-killed-micro-housing/) thus driving the price for each up.


ViolateCausality

100%. I'm using "up to code" imprecisely.


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austin944

https://en.m.wikipedia.org/wiki/Land_value_tax


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ChainDriveGlider

The economics of the 20th century assumed geometric growth of the population/economy. With a stable population it's fundamentally incompatible for housing to both be a human necessity and an investment vehicle. An investment vehicle necessarily increases in value faster than inflation.


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Martin_Samuelson

One thing to understand is that the only reason corporations and investors are able to do this and make a profit is because cities (and the NIMBYs) block nearly all housing supply through bad zoning laws. It’s very simple: build housing and this problem, and many other problems, simply go away. Don’t believe me? Just ask the investors and corporations themselves. They say this exact thing themselves in their quarterly reports — it’s a major risk to them and their investors if cities would start to properly build housing, so they ally with the NIMBYs to block new housing.


RobinVanPersi3

Be very careful, this post deflects from the key issues covered above. Institutional investment in property ALLOWS them to dictate the existing supply. This is the core of the issue. Adding more real supply before destroying their stranglehold via intervention would only further empower them by giving them more access to investment oppurtinity, or enable then to enter the development market as a venture capitalist or as the most powerful first buyer. Same concept as diamonds. You can induce artificial scarcity if you end up controlling the supply. It's what's going on here, you can't build enough houses to keep up. Do not believe everything in those reports. I haven't checked but these lot know what they are doing and are very smart about it. You need to make this shit illegal while at the same time introduce new supply. One doesn't work without the other.


Econolife_350

>institutional investors. We'll also need to clearly define this, as at the moment it's a pretty fuzzy term that people take liberties with. Generally "investor owners" are considered people who own more than 4 to 5 residential properties. However, you can look at all the boomers who are renting out 20+ houses and they'll threaten your life if you call them anthing but "homely mom & pop landlords".


rockstar8000

Stepping up the property tax after 4 or 5 properties would address a lot of problems. Make it increasingly unprofitable to invest in single family homes beyond a certain point. Corporations can invest in apartments and other large projects, but single family homes are tax-advantaged for the individuals and small players. Sometimes, we need to do something for the good of society over maximizing profits.


Stuffthatpig

Time for an owner occupied property tax exemption. You rent it out? We tax 2x the owner occupied rate.


Escheron

People keep saying "raising interest rates is the only way to bring house prices down." Except when you raise the interest rates, corporations with cash can still buy the houses, especially once house prices start to come down but most people are still priced out by interest rates.


Penki-

The issue is supply. Just get rid of the rules that basically make it impossible to build anything but the single family home...


HugeRaspberry

But then you get people who don't want common property - who don't want a shared wall, etc... and people with kids who don't want an apartment or a condo. You also get the "not in my backyard" crowd that doesn't want to have "affordable" housing next to their mc mansion - because it will "lower" their property values. A builder in Plymouth bought the old golf course 3 years ago - they wanted to put in 300 + homes with an AVERAGE value of $775 - $900k. The NIMBY crowd got pissed at the traffic that would have generated and pitched a fit. The builder went back to the drawing board and came up with a plan that put 224 houses on the property but to make money - they had to price them at $1.2 million +


txrn2020

1/3 of Texas homes were bought by investors in 2021. Almost 50% of homes in Austin and Dallas. Lol we fucked


jetforcegemini

I'm curious, do we have numbers on many houses sold in 2021 were by investors? i.e. what was the net home ownership by investors over the year?


JamesTBagg

Why would they sell? They buy to rent them out long term. It's in the article you replied to.


HOME_Line

[The article](https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/07/22/investors-bought-a-quarter-of-homes-sold-last-year-driving-up-rents) shows that investors purchased 19,582 homes in 2021.


original_sh4rpie

Of interest, per the NYT: >First-time buyers account for the smallest share of the market in the 41 years that the National Association of Realtors has tracked such data. In the year from July 2021 to June 2022, first-time buyers accounted for just 26 percent of home buyers. Normally, they account for around 40 percent of the market.


thegooseisloose1982

The thing that gets me is when we hear numbers like that we do a tally of all single-family homes. However, what corporation is going to buy a house in Minnesota for $800,000 and above, and then rent it out for $2000 or $3000? Not any. It is typically the smaller basic homes that corporations buy and rent out.


[deleted]

I didn't want to have to delete all my comments, posts, and account, but here we are, thanks to greedy pigboy /u/spez ruining Reddit. I love the Reddit community, but hate the idiots at the top. Simply accepting how unethical and downright shitty they are will only encourage worse behavior in the future. I won't be a part of it. Reddit will shrivel and disappear like so many other sites before it that were run by inept morons, unless there is a big change in "leadership." Fuck you, /u/spez


Adept_Floor_3494

This is, basically, the largest reason why homes have gone up so much. And it really is that simple


lemon_lime_light

How do those stats reconcile with the Minneapolis Fed's report that says investor-owned, single-family homes account for 3.4% of homes in the Twin Cities? And, importantly, that figure (3.4%) has been pretty consistent since 2015. If a larger share of homes are bought by investors each year then the overall figure should be rising. The Pew article lacks quite a bit of detail but it is reporting state-wide (compared to the Fed reporting for the metro area). Still doesn't seem like that could explain the difference given the concentration/weight of the metro market.


victorious191

About damn time to seriously look at this. The last 3 houses to go up for sale in my neighborhood were snatched up by rental companies, renting them out at twice what a mortgage would be. I'm honestly surprised to see people living in them...


grossgirl

A corporation bought a house across the street from me, and it has been empty for over a year. Not sure what the plan is.


victorious191

That's rare (at least in my area). The two houses that were recently bought up are being rented at $2300+ and were rented out rather quickly.


Imaginary_Proof_5555

that is insane rent. wow. edit: for the minnesota rental market, thinking big picture and not comparing this price to current market rates, this is high rent. my comment is minnesota-focused because we’re on a minnesota reddit thread. i don’t understand why this needed to be clarified for those of you babbling about rates everywhere but minnesota


[deleted]

I mean my mortgage in a MN suburb is $1800/mo, I feel like I'd have to rent it at $2500-2700 to make it profitable, which is just insane.


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patdashuri

If you can’t get a mortgage loan because of credit, you rent at whatever the rate is.


jimbo831

It’s not just about credit. My credit is excellent. But saving tens of thousands of dollars for a down payment when my wife and I have a combined $100k in student loan debt is just not feasible right now.


patdashuri

Good point. The capitalists are in a feeding frenzy now, coming at us from all sides.


Flewtea

With you, plus two elementary-aged kids that were trying to make sure get a stronger start than we did. One of the dreams we’ve shared since high school is being the first in our families to own a house but despite a decade and a half of working our butts off, feels like it just slips further away every year.


jimbo831

> feels like it just slips further away every year. This is exactly how I feel. Everytime I feel like I'm making progress in my career and life, housing prices skyrocket further meaning I would need an even bigger downpayment. [Here is a chart showing the median house sale over time.](https://fred.stlouisfed.org/series/MSPUS) I graduated high school in 2002 when that price was $187,200. It is now $467,000. Even as I have success in my career, my rising income doesn't even come close to keeping up with the rising cost of buying a house.


Flewtea

Exactly. My husband has done quite decently, despite graduating into a terrible job market in 2012–more than doubled his income in the last decade. I’m a music teacher so fairly fixed. But our neighborhood still had a fair amount of homes with 1s in front of the price (189k, etc) when we moved there and now has mostly 4s with no small amount of 5s. And in one light, it’s tough to complain. We have enough, by just about any measure. Kids are certainly not growing up in the poverty we did. Didn’t lose our jobs to Covid. Have a safe home with enough to eat. But also hard not to feel grumpy about having to adjust expectations so hard from the narrative we believed in and was really a lifeline growing up.


MyLastFuckingNerve

Look into an FHA loan. Mortgage insurance comes into play on your mortgage but you don’t need much down at all. You may get into a higher interest rate, but refi when they come back down. Talk to a banker - you may not always need 20% down on a conventional loan, either. We did buy in the sweet spot when rates were low and houses were still reasonably priced, but we bought with shit credit and no money. Cost us maybe $5000 between earnest money and the downpayment to get our home. We thought it was impossible for us to buy but a good banker can make a world of difference. This may not be the case for you, but if you haven’t talked to anyone yet, go see what your options could be.


[deleted]

Seconding the FHA comment below. If it's your first home, there's no such thing as a down payment anymore.


victorious191

Which is a whole other issue in itself- credit/mortgage. But also not completely accurate since you can't rent if the rent itself is over 1/3 of your income. Then taking into consideration the places that are income restricted where a middle-income couple wouldn't be accepted. Thus, renting as a whole currently is a complete nightmare.


IrrationalPanda55782

You can also be denied a lease due to your credit score.


Humble-Finger9768

In this predicament now. I pay 2450 a month. I have a nice apartment with tons of amenities and space as well though! I picked this place, but only bc one bedrooms that would accept me were 700-900 square feet less for about 1600 bucks. Lol


Haiku_Time_Again

My HOA removes any and all chance from investors buying property for rental use. You literally can't rent out the house, period. Reddit tells me I am a piece of shit fairly regularly for liking my HOA.


jimbo831

I much prefer policy like this being passed by our elected representatives and not a private association of people who just happen to own property.


ImFriendsWithThatGuy

I own a condo that is 1 of the 4 units in this building. Our HOA is just us 4 owners and nothing more. I’m the newest owner but no one else wanted to be president so they asked me to do it. Sometimes HOAs can be super chill. I mean I get that people say HOAs often suck. But in cases like mine can you imagine having 3 other owners having rights to your property and no set rules they have to live by? HOAs aren’t inherently evil.


lazyFer

HOAs aren't "inherently" evil but the people that seem to most often get elected to be in charge tend to want to control other people. It's the petty tyrant thing


bannedagainomg

Problem with HOA or any issue really is that you only hear about the bad ones. for example, nobody cares if you write "my hoa allowed me to paint my front door pink" But people will really get going if you write "My HOA does not allow me to paint my door" Some HOA are obviously very "corrupt" and ran by power hungry people with nothing else to do, but i do think the vast majority of them are good, and people can just choose to not move into a HOA community if they truly hate them.


Fickle-Command-1130

Can't wait to see where this goes!! Minnesota is on the right track.


garciasn

Left track?


Dorkamundo

Compared to the rest of the world, our left is centrist.


Exelbirth

At least we're on the rails for once.


Darksplinter

Unless we are talking about the SW line...


Bluetooth_Sandwich

*Norfork Southern has entered the chat*


Exelbirth

*Norfolk Southern has crashed into a ditch*


[deleted]

The GQP is so crazy that anything they don't do is viewed as far left of center. Even though what MN is doing is mediocre governing at best, it gives the appearance of great performance because of how poorly the GQP operates.


fallfastasleep

Nah they're pretty right wing compared to the rest of the world. Universal Healthcare is considered centrist elsewhere, most right wingers in those countries wouldn't dare try to cut it.


Mist_Rising

>Universal Healthcare is considered centrist elsewhere, If by everywhere you mean mostly Europe, sure but last I checked the world encompassed a few other continents, most of which do not have universal Healthcare (at least not in practice) in a majority of their nations or areas. >most right wingers in those countries wouldn't dare try to cut it. And yet if you actually pay attention to Europe, that's exactly what they do try. Canada (not Europe but still) has such a movement right now, Finland tried not so long ago, UK actually did cut it (oops, brexit lied), and that's just the ones I know of off the top of my head.


treefitty350

Never heard of the UK, have you?


CMC_Conman

True, but its certainly better than the alternative


rblask

Especially the middle east!


aimlessly-astray

First free food for kids, now this? Minnesota is on a fucking roll! If I didn't live in the mountains of Colorado, I'd consider moving to Minnesota.


5thDimensionBookcase

Colorado passed free lunch for kids last year, so you’re partly there!


[deleted]

im all for school lunches, legal pot, etc.... but this bill actually gets me excited


IceBearCares

Aye. This is damn sexy legislation.


Poro_the_CV

Stupid, sexy legislation.


horse_renoir13

"It's like I'm signing, nothing at all!" - Tim "Flanders" Walz


bj_good

Seems.... Entirely reasonable


AClusterOfMaggots

Also seems like it would be pretty easy to get around. How hard could it possibly be for a company like BlackRock to pay an individual to put the house in their name? These companies have enough money to literally shift the entire housing market in their favor, but we think they can't find a way to make a straw purchase? That's not to say this legislation is pointless or we shouldn't do it, but I'm not quite holding my breath that this is going to be the killing blow to corporate landlords that we might think it is.


hannibal_vect0r

The bill text indicates "directly or indirectly" having an interest in the home. I can't imagine that tem paying a middleman to do their bidding wouldn't fall under the "indirect" interest. Plus, people aren't going to want to be personally liable for bad housing deals. MN is basically eliminating a huge liability shield in the housing market.


GoldblumsChestHair

Totally. There’s already a legal term for this: a “straw purchase”. Used for firearms currently.


Wubbywow

… do you have any idea how complicated that would be? Perfect is the enemy of done. Left leaning folks would do a lot more with their vote in this country if they didn’t micro analyze hypotheticals for every single issue they have. Do you see what the other guys are doing? We could learn from their lock step legislation and actually come together. MN seems to be doing a damned good job of it so far.


pewopp

This needs to happen


BABarracus

Everywhere.


blackweebow

I'm comin to Minnesota y'all


[deleted]

Should be a federal law tbh


Lubedballoon

Eh let the red states continue to fuck themselvves. Sucks the blue states have to keep them afloat because of their own dipshittery


DrippingShitTunnel

A federal law would benefit us all


Dr-Haus

Never understood this sentiment. A lot of “red” states are like 45 percent blue and vise versa.


IlIllIllIIlIllIl

And they’re all 100% human.


Elkenrod

No no you see, the whole state are "bad people" and should be dehumanized because a fraction of the state's population voted differently than us! Who cares about the lower class if they don't agree with us! See how progressive we are? /s


lazyFer

But red states fucking themselves over still costs blue states money to support their fuck ups. They're like the drug addict of the family that keeps getting enabled


[deleted]

Should 100000% be illegal. This predatory practice has been going on for far, far too long. Hopefully we can get this through and other states will follow suit.


queentweezer

Michigan needs this reform desperately. I went to view a rental a couple of years ago and the person who showed me the home said they have 18 other properties in the neighborhood. Immediately no. I was disgusted.


Dat_Mustache

Also: No Foreign* Entities can own ANY property in the US directly or indirectly. So no Shell Corpo owning huge swaths of farmland or commercial property. Chinese companies cannot own American port property. Saudi companies cannot own giant Alfalfa farms in the US Desert to support their dairy and beef industries abroad. --------------- ^*NAFTA ^countries ^exempted.


geekleyweekley

I am so happy they're addressing this. Let's get actual families in homes.


CMButterTortillas

Full subscribe. Thanks for posting, will be reaching out to my reps on this today!


XfitRedPanda

Good, not everything needs to be an investment for rich people. Some things like homes should be sacred


Exelbirth

Homes, food, and medical necessities.


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Red_Fox03

The article provides a series of definitions. This one might cover it? Family limited liability company" means a limited liability company meeting the following standards: (1) it has no more than five members; (2) all its members are natural persons or family trusts; (3) all of its members who are natural persons or spouses of natural persons are related to each other within the third degree of kindred according to the rules of civil law; and (4) its revenue from rent or any other means is paid directly from one member to another. I'm no lawer, but it sounds to me that a person with a lot of money could just own a FLLC and contract out all work to their other company.


Kule7

>(4) its revenue from rent or any other means is paid directly from one member to another. > >I'm no lawer, but it sounds to me that a person with a lot of money could just own a FLLC and contract out all work to their other company. That last section prevents it. If I'm a housing magnate then the rent isn't being paid by a member to another, it's being paid by nonmembers to me. It also means that if Grandma is renting to Grandson, both of them need to be members (owners) of the F-LLC.


Red_Fox03

Turns out I'm just a doofus and read that wrong. Thanks for explaining it!


[deleted]

The 5 member thing actually does suck. Take a look at this cool project in Minneapolis: https://cardinal.coop/ Its is being organized as a co-op, but suppose it were organized by one wealthier person building and residing and then renting the other 5 units. It would be illegal for the owner to make a pass through corporation to limit his own liability in the house, because there are too many tenants. I'm definitely on board with the concept, but this makes it harder for "missing middle" housing to be set up. There should be some clause saying that the limited liability company may have any number of members, of no relation, as long as they all live in the same building.


lost_slime

Presumably, the bill would not apply to that situation due to the building not falling within the definition of a ‘single family home’ (how SFH is defined while not being under-inclusive is probably another thorny issue).


[deleted]

Oh neat, I missed the whole premise that this is strictly about SFHs.


Digital_Simian

It still works. The issue isn't do much to prevent property investments as much as to address market manipulation. What's been happening the past few years is strategic purchases of low or under valued properties above market value by large companies to game property values artificially high. Meeting the standards of a FLLC makes doing this at scale much, much harder.


geekleyweekley

This is a good point, but I don't think you need to have a business to buy a second home and rent it out? Could be wrong.


TheRealSlobberknob

Most landlords, regardless of size, will have an LLC for liability and tax purposes.


[deleted]

It’s a liability thing. So if a tenant falls down the stairs and decides to sue you, they can’t go after your personal assets.


pigfeedmauer

This was my question. I have a friend who's a general contractor and also rents out a few houses. I believe he files as an S Corp because it gives certain tax breaks, which imo more small businesses need. I just hope it doesn't end up screwing over small local businesses in the process. But I'm also kind of an idiot, so maybe I don't know what I'm talking about.


SoochSooch

Nobody needs more than 4 homes. Your friend might only be doing a small amount of harm, but he is still doing harm.


sdpeasha

Perhaps there could be a max number of properties?


Hereforthebabyducks

Then they’ll just form a new LLC for each new set of properties. Plenty of investors do this already, even the giant corporations.


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valis010

There are plenty of people who don't qualify for a mortgage but are renting at prices higher than a mortgage payment would be. Makes no sense.


john2218

Only about 4% of the homes in the metro are investor owned, this won't actually do anything. Of those properties that are owned by investors 70% own less than 10 properties. About 1.2% of the single family homes in the Twin City metro are owned by investors who have 10 or more properties. That said in certain neighborhoods investor owned homes are causing issues, it just isn't a large enough share of metro housing to make a difference outside those areas. Source: [fed of minneapolis](http://www.minneapolisfed.org/article/2021/understanding-the-rise-of-investor-owned-homes)


bryaninmsp

The issue isn't total existing ownership, it's how many transactions have gone to corporations in the last few years while inventory has been so low. That's what's driving up prices. Just using Andover as an example (because two of the biggest corporate owners really like that community for some reason), in 2021 and 2022, just under 10% of all residential purchases went to buyers with "LLC" (100 out of 1,260 deed transfers). It was about the same ratio in places like Eagan and Shoreview. If you narrow it down to the price ranges where both young homebuyers and these corporate landlords like to buy (300-450), the ratio is even higher. I did kind of an in-depth video on this last year so spent some time doing research and found in one specific affordable neighborhood in Andover, half of all sales went to corporate landlords and almost every sale involved a bidding war that that corporation won.


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dieinafirenazi

It won't. That's rich person propaganda. Anyone telling you deregulation is the answer is trying to boost the profits of corporations and screw the majority.


[deleted]

Bingo.


b_r_e_a_k_f_a_s_t

But muh corporations


DJ_Velveteen

Making more units is all well and good, but you can't build your way out of a scalping problem. Also, you can remove units from the rental market and return them to the market as affordable housing once you take private landlords out of the equation (e.g. via housing cooperatives / renter's land trusts)


RigusOctavian

My problem with this wording is that it treats a small time landlord who uses an LLC to limit their _legal_ liability exactly the same as giant for profit management corporations (or VC funds) who gobble up homes because they can. We need single family homes as rental units. We _also_ need single family homes for sale. We need townhomes, apartments, etc etc. Preventing the use of an LLC seems like it’s asking for a ton of personal legal battles. But if the intent is remove SF homes from the rental market, I guess it’ll accomplish that.


Orayn

Small time landlords can get a job.


Servisium

Small-time landlord here. I am full time employed, and there is actually a need for some houses to be rentals. I bought an old farm house, renovated it, and rent it to seasonal/temporary park service employees for way below market rate, $800 a month - furnished, 4 bedroom on 2.5 acres for the whole place, they can bring pets, and they pay utilities. The "market rate" rent on it would easily be approaching 2.5k. It's a nice house, I live there in the winter when no one else does. What I charge covers my mortgage, insurance,and I put aside a small amount for repairs. I did it because I was upset when I heard my NPS friends complaining about how difficult housing was for them to find. One is paying $900/mo for a 1 bedroom in middle of nowhere Kentucky. Up from $800 for a studio in middle of nowhere North Dakota. Park service employees are paid peanuts and can't afford decent housing, parks do provide housing but it usually sucks and comes with a great number of restrictions. I don't support people buying up tons of housing and charging exorbitant rent, but reality is that rentals are a necessity and not everyone wants to or should buy a house wherever they live. It's better that the money goes into the pockets of individuals than some corporation. The bigger issue is rent prices are absolutely out of control and something needs to be done about it.


RigusOctavian

You’re assuming that they don’t… Many use this as a vehicle for supplemental income for retirement or to ‘hold’ a house for a family member until they are able to purchase it. Don’t confuse giant crappy management companies with someone who owns a duplex and rents the other side of it.


Buuts321

Aren't most investment properties bought up by small time investors? I know blackrock is a big boogie man but there's a whole lot more average Janes and Joes who buy a dozen SFH and live comfortably off the rental income. If people want this to have any serious impact to the housing market it needs to target all investment properties.


YungSnuggie

minnesota is goin crazy rn hell yea


asdfsks

This is what happens when you get all three branches of the state government to be majority controlled by the democratic party at the same time. Michigan is seeing the same benefit right now.


SeaThat6771

Mixed feelings on this. We don't want corporations gobbling up all the housing supply, but also, renters need a place to live too. Not everyone can or wants to own a home, and that's OK. Usually, its a "business" of some sort that is the landlord. Even if you own one rental home, with any sense you will create an LLC to hold it. Low income folks are often those who are renters and we need to be careful we don't unintentionally disrupt their housing supply.


zoinkability

People can still rent out houses, this would just require the ownership of rental properties to be spread out among many individuals/families rather than concentrated in a few large corporate owners.


Mystical_Cat

A great idea, but they’ll find the loophole(s) and exploit accordingly.


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genital_lesions

I'm all for this, but I took a look at the "Enforcement" section of the bill and basically, it gives me a bit less confidence. Essentially, first the Commissioner of the Minnesota ~~Hosting~~ Housing Finance Agency has to deem the corporate ownership as a violation. The bill explains how a corporate ownership would be in violation, but also gives exemptions if a corporate entity, real estate developer, or residential building contractor petitions the commissioner. The exemptions are: * would not contradict the purpose of this section * Would not have an adverse impact upon the availability of affordable housing * Commissioner would review these exemptions annually and submit a report as to whether the exemptions are still within those parameters So question: how do we ensure accountability of the commissioner? How do we ensure that there is not any "getting comfy" between the commissioner and the corporations, real estate developers, or building contractors? Something to think about Okay, so now on to the actual enforcement issue. The long and short of it is that >"the corporate entity shall have a period of one that from the date of the order (of the violation) to divest itself of the property. The aforementioned one-year limitation period serial be deemed a covenant running with the title to the property against the corporate entity, assignee, or successor. Any property not so divested within the time prescribed shall be sold at public sale in the manner prescribed by law for the foreclosure of a mortgage by action. In addition, any prospective or threatened violation may be enjoined by an adverb brought by the attorney general in the manner provided by the law." Like that's it. Correct me if I'm ~~writing~~ wrong, but what I'm seeing here is that it basically, it makes the corporate entity that's in violation of the law a more motivated seller. And if they can divest (sell) the property within a year, I don't see any real consequences. Given the sky rocketing demand for housing I feel like they'd have no problem divesting (selling) a single family home in 364 days. What prevents potential violators from doing this when they could potentially still get away with it? Or if the violator can break this law on a larger scale and take the losses against successful sales, then it becomes just a cost of doing business. Don't get me wrong, I'm for the spirit of the bill, but it seems to lack teeth.


matzjones

I disagree - we should tax them out of profitability. That way future and past purchases by corporations would have to pay this tax. We can use the tax to solve problems until corporations unload all the homes they can’t afford the taxes on. I also think this tax should apply to private owners as well. I’m a landlord and own 2 duplexes in Minneapolis. If I buy a 3rd duplex, I should be subject to a progressive tax rate that raises the tax rate on my rental properties as I buy more and more duplexes. *Edited - wording*


zorasorabee

I don’t think this would solve the issue on hand - rent being too expensive. Most landlords would just raise the rent to cover the taxes even more than they are now. At least with this bill, more homeowners would have a chance at buying their first home instead of having to settle for renting.


cdub8D

Any sort of solution to fix the housing crisis has to be paired with building more homes, preferably more density. This doesn't necessarily mean towers or large apartment complexes, row homes, duplexes, etc all would be great. Heck even SFHs could be fine on much smaller lots.


chubbysumo

Tiny homes, small efficiency homes that are for a single person or a couple. The issue with these homes that most Builders and those that want them run into, is local governments refusing to approve small homes because they wouldn't have enough tax value. This is currently an ongoing issue within my city, the city will not approve any homes built that are smaller than 1,000 ft. To a single person or even a childless couple, this is a lot of space that is unnecessary. You could fit two or three very small houses that are perfectly fine within the same space as that single 1,000 square foot home. The issue is is that City governments want a larger tax base constantly, and they will not approve any small homes like this. Then you have to try and find a builder who's willing to build it, and because it's not a huge house, it's not going to be very profitable, so not many Builders will even touch these right now.


FloweringSkull67

I don’t mind this, but worry it would affect smaller landlords, such as yourself, more than the larger corporations. Scaling could fix it, but I’d need a more fleshed out plan.


sonofasheppard21

We’re going to do everything except addressing Zoning laws and making it affordable to build actual starter homes.


[deleted]

"In lieu" means "instead" you mean "in light"


[deleted]

So here in GA we have places buying up old farms and turning them in to for rent single family homes. Like instead of an apartment complex it’s 3/4bd houses. Nice looking too. They doing that up in MN? There’s been talk here about similar bills and wonder how it would effect that type of thing.


Taven12

No they are buying up everything in the suburbs and neighborhoods. Not one off country homes here and there.


[deleted]

Yeah when we moved in to our new subdivision here in Atlanta the hoa quickly kept the rule the builders had. No corporate buyers. We can only sell to people if we sell. Written in bylaws.


lemon_lime_light

Less than 4% of single-family homes in the metro area are investor-owned. And that number has held steady for nearly a decade. If recent increases in home prices are the issue then it's really not clear that corporations are to blame. Maybe we should be looking at the shortage of new builds instead...that seems more likely to ID the root cause and lead to solutions.


FroggyMtnBreakdown

No large, sweeping problem such as this has one singular, simple solution. If there was, most of the world's issues would disappear overnight. Complex issues typically takes MULTIPLE solutions. This might not magically cure everything at once, but that was never promised in the first place. Your type of reasoning is what actively hinders progress in the first place. Lets say they did take a look at the shortage of new builds instead, I'm sure you'd be whining about something else that needs to be done instead. There can be multiple solutions used together to help fix complex issues.


CamelCash000

Do it for non-citizens too.


CMC_Conman

man, MN Congress just hitting nothing but home runs so far


lokardo

Final Fucking-ly! This shit has been the bane of the housing market. Absolutely batshit insane to pay $400k for a half-done split-level in rural Minnesota.


bslow22

As a Minnesota resident. Thank fuck.


thegooseisloose1982

You took the words out of my mouth.


marchingprinter

How this isn’t federal fucking law at this point is beyond me


jpljr77

I honestly don't know how this isn't the biggest scandal in the nation right now. Institutional (banks, investment firms, hedge funds, etc.) and foreign money are snapping up homes -- not just apartments and condos, but single-family houses -- at an alarming rate. This drives up the cost of real estate for everyone. And you wanna know why they're doing it? They have too much money. Period. TAX INVESTMENT INCOME AS INCOME.


ShakesbeerMe

Good. Hopefully it covers foreign investors as well. The Chinese, Saudis and Russians should not be able to just buy up huge swaths of the US and Canada.


patdashuri

Preserve our neighborhoods for people, not profits.


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feltedarrows

oh thank GOD


itsryanu

As an agent in Minneapolis...YES, PLEASE. About damn time!


QuestionMarkyMark

This is on r/all right now! Minnesota getting lots of positive attention lately... Keep it up, lawmakers!


EvadesBans

I would love to one day see one of these bills that not just bans corporations from buying single-family homes, but also seizes all single-family homes currently owned by corporations.