Landlords Might Be the Blame of the Housing Crisis

Landlords Might Be the Blame of the Housing Crisis

Housing Price CAUSE Exposed? What The Media Won’t Tell You

( – The current economic situation has people in the United States struggling to afford everything from fuel to food. The effects haven’t only hit gas stations and grocery stores. Housing prices have skyrocketed, with no signs of cooling off, and inflation may not be to blame. The problem could be landlords driving up the cost of homes and causing a market crisis.

Opaque Ownership

Thanks to opaque ownership laws, title holders can easily avoid paying their property taxes. The issue has combined with inflation and a shortage of low- to moderate-income houses to fuel the US crisis.

Landlords take advantage of these laws by using limited liability companies (LLCs) to own homes and charge rent. LLCs typically conceal the identities of their owners, acting as shields against legal consequences when titleholders don’t pay their taxes.

Therein lies the problem. Property managers know these laws and use them to their advantage. Doing so allows their properties to go into tax foreclosure, leading to the houses going off the market in cities where there are already shortages.

In turn, the prices of the available homes increase the same way any other products would when in short supply. Now, renters have to find dwellings that could be further away from where they work, increasing their cost of living even more.

Business Strategy

Matthew Desmond, a sociology professor at Princeton University, recently spoke with the Senate Banking, Housing, and Urban Affairs Committee. The “Evicted” author detailed how the use of LLCs made it difficult to hold property owners responsible for property neglect and illegal activity. Desmond also mentioned how the loophole made it harder for tenants to contact their landlords and organize with other renters against abuse.

According to a CoreLogic study from July, more and more investors are buying homes. Housing costs have increased over the past couple of years, making it easy for property managers to price out families looking to buy.

Some of these homeowners use LLCs to stay anonymous and evade taxes. They force the city to take homes off the market, making properties unavailable to buyers who would pay the taxes. Fewer houses available means supplies drop while demand remains the same. As a result, the market becomes more competitive and prices increase.

Could landlords using LLCs really be behind the crisis? Perhaps they’re simply a cog in a larger machine, although these investors do seem to be playing a part in the current housing market problem.

~Here’s to Your Prosperity!

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