πŸ“£ US Senate Continues Housing-Crisis Investigation πŸ•΅οΈ‍♂️ Barry Hoey, Broker Owner πŸ€ 239RealEstateDeals.Com LLC ☘ Southwest Florida 🌴

Dated: August 6 2022

Views: 7

Testimony suggested that “opaque ownership laws” and specifically LLC ownerships have turned “I’m going to let them foreclose” into a business tax strategy.

Florida Realtor Magazine 2022 08 05 US Senate Continues Housing Crisis Investigation amidst Ukraine Russia China Taiwan tensions and Biden Administration Economic Decisions Barry Hoey Broker Owner 239RealEstateDeals.Com LLC

WASHINGTON – Opaque ownership laws that make it easier for property owners to avoid paying taxes are compounding a national housing crisis fueled by inflation and a shortage of low- and moderate-income homes.

Limited liability companies – or LLCs – are a common way for landlords to own the real estate on which they can charge rents.  But LLCs often hide the identities of the people that stand behind them, allowing property owners to be shielded from legal consequences when they fail to pay their property taxes.  Properties can then go into tax foreclosure and be effectively taken off the market in cities where housing is in short supply, further driving up prices and forcing renters to live far away from where they work.

Studies have “linked LLC ownership to property disinvestment, tax abandonment, even completely walking away from properties,” Princeton sociology professor Matthew Desmond told the Senate Banking, Housing and Urban Affairs Committee on Tuesday.

“One of the landlords I spent time with in Milwaukee, I asked her, ‘What happened to this house that I spent a lot of time with?’ And she said, ‘I just gave it back to the city.’ And what she meant was, she just stopped paying taxes on it and let it go into tax foreclosure,” Desmond said.

“Tax foreclosure should not be part of a business strategy, but for some landlords who use LLCs, it is,” he added.

A 2019 study by Harvard Joint Center for Housing Studies fellow Adam Travis linked disrepair and disinvestment in housing to LLCs, which became widely available to property owners during the 1990s.

“Over the past two decades, the advent and diffusion of the limited liability company (LLC) has reshaped the legal landscape of rental ownership,” the study found. “Increasingly, rental properties are owned by business organizations that limit investor liability, rather than by individual landlords who own property in their own names.”

The study found “that signs of housing disinvestment increase when properties transition from individual to LLC ownership.”

The share of rental properties owned by professional landlords is increasing across the country as rents and mortgage rates are driven higher by interest rate increases from the Federal Reserve.

Professional “investors made 28.1% of all single-family purchases in February, a record high,” a July report from real estate market data firm CoreLogic found. Since the onset of the pandemic in early 2020, the share of home purchases made by investors has doubled from 14% to around 28%, according to CoreLogic data.

Growing role of institutional investors

Lawmakers from both parties noted that the increased holdings of professional landlords are causing concern.

“It’s come up repeatedly from witnesses, and my colleagues have made the point about increasing percentage of single-family homes especially that are owned by private investors.  And there’s a lot of people who are very concerned about that,” Sen. Pat Toomey (R-Pa.) said during Tuesday’s hearing.

Sen. Catherine Cortez Masto (D-Nev.) echoed Toomey, arguing, “I, too, am concerned about institutional investors and the impact this is having in Nevada, why we’re seeing all these properties being purchased.”

“I know in my state in 2021, 29% of the homes purchased in the Las Vegas metro area were bought by investors.  And the challenge is, I can’t tell how many are institutional.  I think it has everything to do with what I heard earlier, about too many LLCs and not enough transparency,” she continued.

Across the country, property values have been increasing rapidly in the wake of the coronavirus pandemic, which saw a dearth of new building projects, doubling the pace of inflation.  The Case-Shiller national home price index increased almost 20% from May 2021 to May 2022, whereas consumer inflation was up 8.6% in the same period.

Home prices rose about 20% and rents increased about 12% from 2020 to 2021, according to a joint report on national housing conditions from Harvard’s Graduate School of Design and Kennedy School of Government.

As families are priced out of the market by investors, legal mechanisms like LLCs that are favorable to professional property owners are coming under scrutiny.

“There’s a theme out there: out-of-town investors hiding behind a cloak of anonymity,” Laura Brunner, the manager of a government-backed real estate development agency in Cincinnati, told the Senate Banking Committee on Tuesday.

“Last summer, we asked the city of Cincinnati for the names of the five worst landlords,” she said.  “It took months of rigorous research to uncover that over 4,000 single-family homes in Hamilton County had been purchased by these five landlords. Tracking the acquisitions was an arduous task due to the high volume of LLCs used.”

LLCs and similar legal designations, like S corporations, were initially used to encourage entrepreneurship, so that people could undertake risky business ventures without the threat of going personally bankrupt.  Today, LLCs are more often used as devices to preserve anonymity by wealthy property owners, real estate industry experts say.

“I represent the richest people in the world and some of the most famous people in the world, and they will not buy a property unless it’s in the name of an LLC, sometimes more than one LLC, and they do that in order to keep that anonymity, so people don’t know who’s buying the property,” New York real estate attorney Adam Leitman Bailey said in an interview.

“In nefarious ways, it allows people from various countries to buy property in another country, to buy property in America.  Let’s say they’re trying to hide money.  They can do so by using an LLC, and people won’t know who they are.”

Bailey said this practice was common in high-profile cities like New York.

“As a real estate attorney, New York is a phenomenal place.  If you have money that you want to make sure is not taken away from you from another country where it could be taken away or seized, you could buy a condo in New York and use it as a safety deposit box, and simply purchase it in cash under an LLC, and only the attorney and the client will know who owns the LLC.  They can hide money that way. Real estate moves very slowly, and no one asks any questions,” he said.

Housing issues have taken center stage in hearings in both chambers of Congress in recent weeks.

The Senate Finance Committee held a hearing in July about the role that tax incentives could play in building more affordable housing, and the House Ways and Means Committee recently held a hearing under the name of “Nowhere to Live: Profits, Disinvestment, and the American Housing Crisis.”

The Treasury Department announced new rules last week to finance more affordable housing loans through the American Rescue Plan, and the White House held a virtual summit on Tuesday on beefing up emergency rental assistance and working toward long-term eviction reforms.

πŸ‘‰ The Hoey Team πŸ€ 239RealEstateDeals.Com LLC ☘ serves all of Lee County and Collier County, including the Gulf Coast Islands here in Southwest Florida where we had 7 of 10 hot market projections for 2022.  We Directly Help Sellers and We Directly Help Buyers; sometimes representing both in the same transacton with everyones best interests in mind.

Recently as Listing Agents, Barry & Kim with the Hoey Team; 239RealEstateDeals.Com LLC ☘ helped a number of sellers who had been in Foreberance and in similar situations.  We were able to get all of them to a "very good place"; worry free & stress free; with excellent end results for them.   Also, Kim is a certified stager which helps us additionally on all of our listings. 

We help / serve people in many different situations; everybody's situation is different even in a hot sellers market as we recently had. 

If you know someone needing help; or simply wants advice, please have them reach out to us in confidence: 239-360-5527; anytime; we continue to achieve excellent results in the communities where we list and sell utilizing our Experience, Systems and Tools.

Sadly for some time we see a number of sellers who are not keeping up with the changes locally; putting their homes on the market and selling them for than what the market is still able to bear at this time.  Additionlly; selling a home the first day on MLS may not guarantee the best price for the seller as many homeowners had been doing.  Please call Barry at 239-360-5527 for more information on this.

We offer a confidential / private, custom Concierge Service, if their property needs work πŸ€  For every property situation, we have a solution / solutions with a proven track record ☘

As people continue to move and relocate to the general areas of Lee & Collier Counties from other parts of the United States, it is important that we are able to directly serve all of the area; which we do, efficently.  We have the ability to offer many different Choices and Lifestyles all of which are in abundance here in SW FLA, 239RealEstateDeals.Com LLC has blanket coverage of Southwest Florida and most of Florida for that matter by being active members of four different MLS systems.

Inventory remains steady, but low overall; we do continue to list and market new South Florida property listings to the marketplace and we sell many different type homes; Resale & New Construction; Multigenerational Family Compounds, Regular Single Family Homes, Villas, Townhomes and all Condo types, from low rise, to waterfront high rise right on the Beach / Gulf Coast. 

We continue to see many people planning ahead, and buying that second home now, rather than waitiang as they were planning to do; especially with Snowmads and Zoombirds working from home.  Previously we had Snowbirds; interesting how terminology keeps changing / evolving. 

Interest rates increases are sadly driving many buyers out of the market place, we do see price reductions on some overpriced / under marketed listings.  Even with the recent 0.75% interest rate hike, buyers are still looking, though not as many as before.

Low inventory is still a chalenge for active buyers who are not prepared; but if prepared you are ahead of the game; ask how we can help with all of that.  We do see more listings coming to the market here in Southwest florida, so, that is good.

We recently got a number amazing deals for buyers; even in this recent Hot Sellers Market; and we are working on others as our market shifts.  There are deals out there; if you work with us, we will definitely find them for you. 

For those relocating to Florida, we are pleased to be able to assist homeowners in other parts of the United States who need to sell to buy here; please reach out today for more information and how you can have a smooth, non-stressful transition / relocation.

At our Real Estate Team; Hoey Team ☘ we have been succesfully working 100% virtually / remotely for the past number of years as we continue to grow; i'm thankful that we already had systems in place to better help sellers and buyer with goal posts continually moving within our industry / profession.

Article content from FR (Florida REALTORS) Newsletter Magazine, and from other sources including Hoey Team, 239RealEstateDeals.Com LLC & Freddie Mac / Fannie Mae - Make sure to ask us for more details; Call 239-360-5527 ☘

Click Here to Find Your Estimated Home's Value, Instantly:     https://HoeyTeam.239RealEstateDeals.Com/sell.php 

For those Living in or Visiting Southwest Florida wanting additional resources, or a list of places to see / visit:   www.SWFL-Events.Com      Feel free to share this resource page with others  🌴

On our VIRTUAL OPEN HOUSE Page you may WATCH Detailed 3D Walkthrough Tours for all our LISTINGS right HERE: ? www.239VT.com  

For more Real Estate related information, or if you have questions on any aspect of Buying, Selling, Upsizing, Downsizing, Moving within or Relocating to or from Florida (the number one state for people to move to), or on any aspect of the Real Estate Market, Locally, Nationally or Internationally, please let us know, we can help, we can address / answer your questions, and we are always available to help you or someone you know..  Our business is based on referrals from past customers, friends, and Realtors.

P.S. --> If You'd like for us to create a Video Tour for ANY of the Properties on our website, just CLICK "Video Request Button"; from property details https://HoeyTeam.239RealEstateDeals.Com

CLICK HERE to Visit our High Definition Virtual 3D Open House Tours Page 24/7

Click Here for our most recent Market update Report for Southwest Florida and beyond.

We do not discriminate on price, we help homeowners and renters in all price ranges; Click Here for more information on the Hoey Team ☘ and what we do to help or visit www.239RealEstateDeals.Com anytime.

Click Here for our informational Southwest Florida Website ☘

Barry is a CLHMS; Click Here to see how we help with higher end properties.

Please visit our Hoey Team ☘ Luxury Home Market Page including Luxury Home market Reports for Naples, Marco Island and for Lee County by Clicking Here

Best Places to Retire? 13 of the ‘Top 25’ Are in Fla β˜˜ Hoey Team; 239RealEstateDeals.Com LLC πŸŒ΄ Southwest Florida πŸŒ΄

Also; please check out the other blogs, and tabs to many other Links, Updates, Reports & Stats that we have here on our informational website.  

We hope that you find the information useful. Feel free to share.  If you have any questions, please do not hesitate to contact Barry or Kim with the Hoey Team β˜˜ 239RealEstateDeals.Com LLC

Email us at Barry@SWFLLuxury.Com  or KimZuponcic@Gmail.com or Call or Text Barry ☘ at:  (239)-360-5527 

“Please Share this blog and our informational website with anyone who you think the info will help. 

Please refer any family or friends; it is the greatest compliment that you can give to us; we really appreciate referrals from Past Customers, Friends and Fellow REALTORS, who we help in any way we can. 

Most of our business is referrals by word of mouth; from past Sellers and Buyers who we have helped; please ask for and check out our testimonials and Sales Stats.  Thanks, Barry & Kim πŸ€

Blog author image

Barry & Kim, Hoey Team πŸ€ 239RealEstateDeals.Com LLC ☘

"Your Real Estate Concierge" If you are looking for a REALTOR® or one-stop Real Estate Team who will fully communicate; promptly, professionally, and in detail with you, to efficiently help you an....

Latest Blog Posts

πŸ“ˆ Rising Prices, Rates Hurt Middle-Class Buyers πŸ•΅οΈβ€β™‚οΈ Barry Hoey, Broker Owner πŸ€ 239RealEstateDeals.Com LLC ☘ Southwest Florida 🌴

Even as the housing-price runup slows, middle-class buyers - in the West and elsewhere – are still struggling to find a home they can afford where they want to live.Homeownership remains

Read More

🚨 September 2022 πŸ“’ Just Released Market Report for Naples Area with information for all of Southwest Florida ☘ Barry Hoey, Broker Owner πŸ€ 239RealEstateDeals.Com LLC ☘ SW FL 🌴

HelloBarry & Kim with the Hoey Team πŸ€ 239RealEstateDeals.Com LLC β˜˜ hope that you and yours are doing good.09-23-2022 - Hot off the press please find info from the

Read More

πŸ“’ Long-Term Mortgage Rates Climb to 6.29% πŸ“ˆ Barry Hoey, Broker Owner πŸ€ 239RealEstateDeals.Com LLC ☘ Southwest Florida 🌴

The average 30-year, fixed-rate mortgage didn’t spend much time hovering around the 6% mark.  It rose 0.27 percentage points this week, up from last week’s 6.02%.Average long-term U

Read More

πŸ•΅οΈβ€β™‚οΈ Can a HOA or Condo Board Hire a Firm Without Residents’ Input❓ Barry Hoey, Broker Owner πŸ€ 239RealEstateDeals.Com LLC ☘ Southwest Florida 🌴

Real Estate Q&A: The condo board hired a firm to remove iguanas from common areas.  Can they do that without a vote?  Yes, under the “business judgement rule.”FORT

Read More