Do 1031 exchanges contribute to the homeless problem

Feb 13 9 Comments

I live amongst some real estate bros in Southern California who live and breathe by these 1031 exchanges. 1031 exchanges effectively is finding owners of properties and swapping ownership to avoid capitol gains taxes. From the information I’ve gathered it sounds like they target multi family properties that are “undervalued” due to rent control, swap owners then they can kick people out because it’s a new owner, bring in new tenants under higher rent. So tenants living with decent rent prices get kicked out then have to find a new place to live but can’t find an affordable place to live and end up homeless.

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TOP 9 Comments
  • Mostly has to do with zoning and other regulations restricting supply on the supply side. Regulations add complexity resulting in cost for new buildings (sometimes with good reason). Plus wealth consolidation in certain areas like the Bay Area on the demand side
    Feb 14 0
  • No, federal/state laws and regulations contribute to it. As long as a law allows people to profit off something, people are going to do it! People can't be blamed. That's the reason there is government!
    Feb 13 4
    • NVIDIA
      b4Ks0

      Go to company page NVIDIA

      b4Ks0
      How is that contradicting OP? 1031 is a law privileging real estate investing. I don't think OP is blaming people for using it.
      Feb 14
    • I am saying government is to be blamed to have extremely real estate investment friendly laws. That's fine if housing market is normal and healthy. But those laws need to be reconsidered when even high income people in some cities are struggling to find a modest home!
      Feb 14
  • New
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    hold up. there are real estate bros? that’s a thing?
    Feb 14 1
  • Apple
    aWVt68

    Go to company page Apple

    aWVt68
    California is an extremely tenant friendly place. Go to Texas or any other red state and you will find laws much more favorable to owners. Hell you could not evict anyone even if they had a million dollar income and stopped paying rent due to Covid.
    Feb 14 0