Do-Nothing Flipper Pockets Quick $80K

Any news on the sober house going in on Edgehill?

Is it a crime now to flip a house or to sell for a profit in this market? If this happened on the stock market ; no one would blink. Look at the sales prices and the previous price listed on the page.

Is this article designed to stir up more class envy amongst renters? What else do they want? They can't be evicted and they don't have to pay. Who's better than them??

CityYankee, not a crime and as you note this happens all the time in markets. But the sales have implications that go well beyond these buildings. Which is probably why Tom highlighted these sales in the story.

The property taxes on these buildings will almost certainly soar following revaluation in October. (And the new owners will undoubtedly pass the increase on to their tenants). The sales prices will also be reflected in the revaluations of nearby, similar buildings. While assessors primarily value multifamily buildings based on the income they generate, the law requires them to also consider sales of comparable buildings.

I'll defer to people who know landlord-tenant law. But my understanding is that (1) the state eviction moratorium expired in June and (2) the revised CDC-issued moratorium does not apply (the current transmission and positivity rates are well below the triggers set in the order).

Dear Kevin,

CDC will extend the federal eviction moratorium through Oct. 3https://www.cnbc.com › 2021/08/03 › cdc-will-extend-t...
Aug 3, 2021 — The Centers for Disease Control and Prevention (CDC) announced Tuesday it will extend the federal eviction moratorium through October 3, .

Governor has ordered new steps landlords must take before delivering a notice to quit for nonpayment of rent, as well as other tenant protections (extended through September 30, 2021).

-Connecticut's UniteCT (emergency rental assistance program)...

Gov.Lamont further ordered parties to apply for all that funding , then makes it impossible to navigate and actually receive the funds. It's a win-win for tenants who don't want to pay. Not referring to those who geniunely cannot pay. But who couldn't pay a penny of rent in 18 months???!! You believe that??

Kevin: The trigger for the CDC Moratorium is "substantial" infection levels. All of CT meets that, and New Haven County is one step higher at "high" transmission. As Biden has said, the moratorium stands on shaky legal ground. The issue here, though, is long-term affordability. Even for tenants wise enough to have a lease, those leases will expire. Moreover, my feeling is that many tenants are month-to-month, and therefore subject to rent increases with almost no notice.

Why the overly provocative headline? Why not "Smart investor makes money?" By March, many people thought there was a bubble but this investor took a chance with their own money and received a gain for the risk that they took. None of the giant landlords (that so many hate) were willing to jump in at that price.

I get Kevin's point that taxes might go up in the neighborhood. However, every time taxes go up in my neighborhood, I'm told that my asset value has also gone up so I should be happy. There is no reasonable argument for keeping property values artificially depressed.

Resale value only helps you if you're selling…and that only happens once versus property taxes that are imposed every year. It's an over and over tax on wealth. The state should tax actual transactions, not fantasy ones.

"Caroleo said he plans to convert the two-family house on Saltonstall into a new sober house — or "ministry house," as he prefers to call it — for up 9 or 10 people at a time to rent individual rooms by the week and follow a specific set of guidelines as they work towards putting their lives back together.
Caroleo said the prospective new tenants of 62 Saltonstall will be able to rent rooms for between $120 and $150 per week. There will be no drinking or drug use at the house, and tenants will have to be home by curfew and give at least 30 days notice if they want to leave."
Thank you to Mike Caroleo for adding a safe sober house to the area. There is a great need for this type of supportive living, and if done properly, it can be a real asset to the community.

• If these investors who are buying from flippers want to make money on their properties they are going to raise rents to afford the increase in taxes that come with the increased sale prices raising property values in the neighborhood. If they raise rents, the poor people and lower middle class people won't be able to afford them and they will be forced to move to communities where they can still afford the rents. The number of communities that still have affordable rents in this state is an ever shrinking pool.
  Housing should not be treated as a investment commodity for gambling in the market, it should be treated as a necessity and a human right.
  The gentrification vampires are winning and our city is losing the battle, (not that the city have even tried to fight it,) they're just rolling over and showing their bellies and begging for treats (crumbs) from the developers and investors and mega landlords irrevocably changing our city.

CityYankee, the current moratorium order permits evictions for damaging property, harming other tenants, or engaging in criminal activity on the premises, inter alia. It explicitly does not absolve tenants from their responsibility to pay rent, and allows landlords to impose penalties under the lease for late payments. And it ends on October 3, 2021. It may be extended but a tenant would be foolish to assume so.

Lamont's order adds steps that landlords must take before they can evict tenants. But at the end of the day, they can evict tenants.

Homeless people die much younger. Treating the housing market like the stock market will create more homelessness. That's why humane governments restrict the number of homes one person can own and ensure basic human rights for all of their citizens. Our government thinks of ways to transfer wealth upward and when people complain we call it cute names like "class envy" and talk about how "smart" it is to be corrupt.

1644, thanks.

Robn, I'm all in favor of moving away from the property tax as the primary financing mechanism for local government. But by law (1) assessments of property, other than those in the 490 program, must reflect fair market value and (2) assessors must consider comparable sales in assessing most multifamily properties (CGS §§ 12-63 and 12-63b).

Lookout, I'm generally pro-development and have friends who are landlords. But housing affordability is a real problem. People who have been buying multifamily buildings and complexes recently have consistently been paying well over appraised values. They will, understandably, seek to recover their investments by increasing their tenants' rent. Landlords, as a class, are not evil. But they are businesspeople.

Kevin McCarthy: No landlords cannot evict at the end of the day. They might be able to at the end of two years. As for the reasons you state, such as serious nuisance, they are generally hard to prove, involving extensive witness testimony. August brought the return of lapse of time evictions, but with a extra month added before even filing in court. Yes, technically landlords may sue evicted tenants for unpaid rent. It's a legal debt. But many tenants are judgment proof: they lack substantial income or assets which may be garnished or seized. The result is that landlords are being more selective in whom they rent too. Lamont has greatly increased the pain landlords suffer for selecting bad tenants. As a result, borderline folks will find it extremely difficult to find new housing. Plus, all rents will increase to compensate for the behavior of bad tenants.

1644, "at the end of the day" is an idiom, not to be taken literally. 🤓

There are bad tenants. Their bad behavior harms good tenants. Eviction is a very lengthy process. And you are also correct that landlords will become more choosy as a result of the moratoria - it is rational on their part. There are a variety of ways they can do this, e.g., requiring larger deposits or higher credit scores.

This phenomenon is relevant to the city's affordable housing discussion. Lower income tenants who can pay the rent will find it harder to find landlords who will take them. And the city's inclusionary zoning proposal does not address tenant screening tools such as credit scores. Developers will use these tools, understandably, to minimize their risks. Since there are 15,000+ renter households with incomes below 50% Area Median Income (the cap in the proposal), they can afford to be choosy.

On the other hand, the moratoria will make participation in Section 8/RAP more attractive for landlords. The voucher payment covers the bulk of the rent

The Truman Street purchase is an eye opener. Thats ~$105/sqf. The house across the street is appraised at half of that. Like its been in East Rock, proportionately, the revals are going to be an eye opener in this neighborhood.

First, Section 8 and RAP are not mandated spending, making them unreliable. Moreover, when the government failed to make its share, landlords were prohibited from evicting. Section 8/RAP are desirable only when, due to location, the HUD rents are substantially above market. If landlords just wanted a portion of the money owed them, they would participate in the CT Unite program. Both Ms. Parker of CT UNITE and the Section 8 programs are incredibly arrogant and condescending toward landlords, acting as if their programs are a great favor to landlords, while simultaneously imposed great burdens on landlords. The "housing advocates" that designed these programs have been clear in their design to inflict damage on landlords, making them "negotiate" to accept less than they are owed. If a doctor deliberately hurt you, would accept treatment from him?

Robn, you're right. It will be interesting to see whether the increase in values is more or less uniform across the city. If it is, taxes won't change much. But I suspect it is not.

Tom, I have a suggestion for an intern project (an intern, because you are really busy these days). Sort the recent sales by neighborhood, compare the sales prices to appraised values, and construct a heat map by neighborhood. (A quantitatively skilled intern should be able to write a program to automatically sort the sales.) This would give NHI readers an idea of which neighborhoods are at greatest risk of gentrification and whose taxes and rents are most likely to go up.

1644, we agree that the relationship between Section 8's Fair Market Rents and actual market rents is critical to a landlord's analysis of whether it makes sense to participate in the program. You're not going to participate in the program if the FMR is less than what you can make in the market. (The shift to setting FMRs by zip code should help in this regard.)

But the moratoria also affect this analysis. The moratoria, and the prospect that they may continue or be re-instated, increases the risk of a landlord who does not participate in the program. The change is marginal, but landlords make decisions based on marginal changes all the time.