this post was submitted on 09 Jun 2024
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[–] [email protected] 11 points 5 months ago (1 children)

In LA County, looks like the median home price is $1M. The proceeds of such a sell, combined with presumed other typical sources of retirement income and social security should provide for an above-average retirement lifestyle.

[–] [email protected] 1 points 5 months ago (1 children)

I'm not talking about LA county, which this article is about, but just the general idea that every landlord can just go and get a job.

Also, 1 million only lets you take out a maximum of $40,000 per year safely which is not above average. Social security? Is that still $900 a month? That's way below the median income in LA county even when added together.

You're also assuming the mortgage is completely paid off

[–] [email protected] 1 points 5 months ago (1 children)

Considering the proposal is only about LA county, figure I'd use that, but we can consider things either way.

I would expect that whatever means had the retiree have both a home and at least another property left them with other typical sources of passive income. So in aggregate, I would expect social security, with retirement savings, plus the value of the house produces an overall viable income.

Whether the mortgage is paid off or not is immaterial unless they are somehow "upside down" on it. If the mortgage is not paid off, then selling it also removes the mortgage payment.

But let's say that it is unreasonable to sell, maybe somehow the person has all of their money tied up in the property and can't sell the property for an amount to get enough passive income. This measure would not force her to sell, it simply caps her rental income increase to 3% a year. Her property value may go up, but that doesn't make her mortgage go up (if she even has one). County assessments would make her tax bill increase some, though generally a pittance. Even if you are concerned about the tax bill, you could have some clause that assessments or property tax for people with rental properties is similarly capped if the owner is subject to a rental income cap. In most contexts, the ability to guarantee oneself a 3% a year raise would be pretty respectable.

[–] [email protected] 1 points 5 months ago

The retirement savings is what she used to buy the property, so the property IS the retirement savings

3% a year is fine, but only when the inflation is below 3%. If this affected my mom when the inflation was 10%, then of course it wouldn't pay for her increased costs of living