Read an article which raised this point. For California especially, they assumed that as people aged they would move out of their homes and sell them… But Boomers who don’t want to live in CA anymore are just buying another house somewhere else and renting their old house.
If you bought a house in 1982 in Palo Alto for $150k, and now that is valued at $2.5M… Why would you sell and take the cash now when you can rent it out for $15k/month while also paying like $3k in property taxes per year? Plus you still own the house!
Great “This is America” moment in this article/piece:
Even Tricon’s own presentation to investors says, quote, “homeownership is increasingly out of reach.”
Gary Berman: In our portfolio, the majority cannot buy a home. Cannot afford to buy a home or don’t have the credit to buy the home. So, for example, they may have student debt or they may have medical debt.
Yet another reason why institutions would rather keep giving 3-6 month pauses on student loan payments than to forgive them. They are trapping an entire generation under the burden, and profiting immensely off them. Healthcare system is totally fucked and chews people up and spits them out with mountains of debt? Why fix it? It’s an opportunity to leverage people!
I think if you asked a lot of millennials, and that tends to be our primary resident-- they would probably tell you, they don’t necessarily desire to own a home or to own a car. They’ve grown up in the sharing economy.
And if you just forget — if some junior person in the internal legal team leaves, and forgets to pass along the “shelfcapacityleft_07.xls” spreadsheet to her successor, and it stops being updated — then, uh. Then, at first, nothing happens . No bell rings. The SEC doesn’t call you up to be like “I see you are selling securities illegally.” (They don’t really keep track either.) The buyers of these notes don’t notice: You are still (you think) doing shelf takedowns; you are still writing pricing supplements describing the new notes and filing them with the SEC. The buyers have access to all the information they would have had if you had filed a new shelf; nobody is harmed by any of this. You just keep bopping along as though everything was fine, and then one day a new junior analyst starts on the legal team and finds the “shelfcapacityleft_07.xls” spreadsheet in a folder and asks the vice president “hey what is this,” and the VP looks, and she realizes what it is, and they check the math 20 times because it seems too horrible to be true, and then they all leave for the bar at noon because it is not a fixable error and they will miss each other when they’re all fired tomorrow.
