Boomers wanting to downsize face huge tax bills
Boomers wanting to downsize face huge tax bills
After 33 years and four children, Baby Boomers Marta and Octavian Dragos say they feel trapped in what was once their dream home in El Cerrito, California.
After 33 years and four children, Baby Boomers Marta and Octavian Dragos say they feel trapped in what was once their dream home in El Cerrito, California.
Both over 70, the Dragos are empty nesters, and like many of their generation, they’re trying to figure out how to downsize from their 3,000-square-foot, five-bedroom home.
“We are here in a huge house with no family nearby, trying to make a wise decision, both financially and for our well-being,” said Dragos, a retired teacher.
But selling and downsizing isn’t easy, appealing or even financially advantageous for many homeowners like the Dragos family.
Many Boomers whose homes have surged in value now face massive capital gains tax bills when they sell. This is a kind of tax on the profit you make when selling an investment or an asset, like a home, that has increased in value.
Plus, smaller homes or apartments in the neighborhoods they’ve come to love are rare. And with current prices and mortgage rates so high, there is often a negligible cost difference between their current home and a smaller one.
Aww these poor Boomers just made too much money on their homes and now they have to pay some taxes if they want to sell for huge profits. Boo fucking hoo.
While also taking away starter homes.
What the fuck am I supposed to live in?
I'm sick and fucking tired of moving from rented basement, to rented attic, to basement, to garage... Etc... every 2 goddamn years I have to move. I'm almost 40, never going to be married, and stuck renting absolute overpriced shit. I'm so over it.
Not that I don't emphasize with your struggle - I just want to point out that there are people stuck in those "starter homes" with 5 or more kids who could really benefit from a 5 bedroom upgrade because they're at a point in their lives where they can afford it and they need it. The housing crisis we're living through produces victims up and down the income ladder.
Also this whole problem can be traced back to our absurd zoning laws blanketing most of California and the US. Still the boomers' fault, but not for decisions they're making today. Most of them are screwed right along with the rest of us. :(
And with current prices and mortgage rates so high, there is often a negligible cost difference between their current home and a smaller one.
Is this accurate? I’m having a hard time believing it, but if it is true, then they need all cash to buy a smaller home. Downsizing shouldn’t be a money-losing proposition, otherwise there would be 0 interest in doing it.
The argument is that these people will sell their really large house then pay the same amount they earn on a smaller condo. This is going to be very much context dependent and frankly I don't buy this as a problem for most people.
As you get older, you may no longer find it worth keeping up a larger house. It’s not just repairs, but furnishing and decorating and cleaning and insurance and taxes
Article is lying by omission
The only way they pay cap gains is if this is a second house
Also must be nice to be able to afford a 3000 sq ft home on a retired teachers salary...fuck these ppl honestly.
The only way they pay cap gains is if this is a second house
Not the only way. There are several different ways you might have to pay cap gains on a home that isn't a second home.
But for the article its likely this way they have to pay:
"Both the IRS and FTB provide a capital gains tax break for home sellers who meet certain conditions. The maximum amount of capital gain that can be excluded is $250,000 for single filers or $500,000 for a married couple filing jointly." source
From OPs article:
"The taxable gain of $1.4 million at 20% would mean those homeowners are facing a $280,000 tax bill. In a state like California with additional tax, the overall payment would be over $450,000."
They bought the house at $100k, and are walking away after taxes with $1.55m. Boo hoo? They're saying they get a big tax bill because of inflation, but they're also able to sell their house for 19x what they bought if for for similar reasons. If they want to sell it to me for $600k and have zero cap gains taxes, I'll take them up on that offer.
They also spent years reaping the lower taxes from prop 13 which saw their property taxes only raise by a max of 2% per year.
It’s truly an insane housing market, but can they even afford to downsize? I have no way of judging the cost there, but certainly here there is less than $450k difference between a typical house and a 2-3 bedroom condo. Since ts the land that scarce, smaller places go up in value along with the larger, so you never know.
In a much lower cost of living area, when my Mom downsized from the big house I grew up in, she both took a sizeable gain and yet still had to take a mortgage to buy a 2 bedroom condo to replace it
The rich always find someway to divide the working class and they fall for it every time.
Yeah no sympathy for large taxes on massive capital gains. Especially capital gains from the massive increase in housing costs
Seriously, wtf are they whining about. "If I subtract the money we paid from the current market value of our house we get such a nice number, but now we have to lose 14% of that 😭😭😭😭"
So they pay those taxes with the gains from the sale? What's the fucking problem?
But unless this is a 2nd home, I don't think they'll pay anything unless it's over some high amount.
Ya to me this sounds more like people complaining they aren't making as much money as they want to?
Hey they earned those gains through privilege and luck!
If they're in California, they might have gains of over a million dollars. The exemption cuts off at $500k of total gains; anything beyond that has to have taxes paid.
So they're whining about paying taxes on a million dollar capital gain. They can go fuck themselves.
And? They are still taking home hundreds of thousands of dollars in cash.
Reminds me of when I was in college in business classes and some would make arguments that raising taxes would cause people not to open a business.
We used to argue around the idea that if someone opened a business, made a million dollars and stood to keep $600k of it rather than $700k of it, then somehow that still net profit means less profit therefore they won't do it? Genius thought process some people have.
It reminds me of the people afraid to get a raise because they think going into the next tax bracket means they make less money.
Most homeowners don’t have to pay capital gains on their home when they sell. Thanks to tax legislation from the ’90s, a gain of up to $250,000 for a single tax filer or $500,000 for a couple filing jointly is exempt from tax. That’s providing the sale is of the homeowner’s primary residence and that they meet other requirements such as living in the property for two of the past five years.
That means if a couple bought a median priced home in 1987 for $100,000 and they’ve lived there as their primary residence and are selling it today for $550,000, the $450,000 gain from that investment is not taxed because it falls under the $500,000 exclusion to capital gains taxes.
However, if those same $100,000 homebuyers lived for 37 years in an area that has seen enormous growth in home values — as is the case for many parts of California — and their home now sells for $2 million dollars, that’s nearly $1.9 million in profit, of which only $500,000 is excluded from taxes.
Oh, how horrible. /s
If it was just a problem of paying more taxes then the argument would be bullshit. The main problem is buried at the end of the article:
A homeowner who keeps all the profit of a home that sells for $500,000, for example, may find that a condo in their same area, where they can age in place, is $450,000. After calculating realtor fees and closing costs, the profit hardly covers the new purchase, let alone provides any extra income for retirement.
This is the real reason they are not moving. They would be stepping backwards financially instead of stepping forward.
Condos generally aren't much cheaper than houses. They would have the same issue if their region's real estate was half as expensive. They would have had this problem 10, 20, 30 years ago if they were retiring. If you sell a house in an expensive area and want money left over, you either have to choose a shittier house/apartment to live, or a cheaper area.
Haha, I mean I get it... Giving away money to uncle sam sucks but I agree with your sentiment. They are coming out ahead, that house was an investment that is paying dividends. I am hoping to have that problem some day!
Contributing financially to the democratic society in which you spent the entire time of gaining monetary value able to vote which enabled the increase in value of your property? That’s the thing here, this isn’t throwing money away, and it isn’t imposed without your say. Taxes aren’t fun, and we don’t always like where they go, but as adults we should be able to respect them. They’re part of how our society functions and a necessary component of many nice things we need in order to prosper.
This long time anti tax attitude in this country is part of what destroyed our infrastructure, ruined our regulatory bodies, and contributed to our massive wealth gap.
I forgot about all the people howling and foaming at the mouth about the "death tax". Boomers gonna boomer I guess.
Rent it, buy a new house, die, and the tax threshold on estates is $2 million.
Isn't this where the boomers use a 1031 exchange and convert the large home into a smaller luxury condo for themselves and a few lower income units to rent out to struggling Millenials?
On the other hand; would you personally make that choice if you were in their situation? I am willing to bet you, nor any other reader, would not. While that doesn't excuse the greed aspect of it; it does cast at least some light upon why they are refusing to sell and take a loss on it.
If you only paid $100,000 and you made $1,000,000; you'd have $900,000 profit; of which you'd probably only see ~60% to ~40% of, if Capital Gains taxes are anything near what I think they are. If we assume a "worst case", where the Federal Government takes 40% and the State takes about 20% more, that means your tidy profit is only about $390,000. That means you've probably got to secure another $140,000 in financing on average to pick up a more modest $500,000 home (in today's market) to retire in.
But villainizing the boomers isn't going to solve the housing crisis easier either. We legitimately need more homes. We. Need. Them. Yesterday. So maybe the policy needs to lean towards bigger developments that cost less. We did it during WW2; where massive amounts of homes were built cheaply. We probably need to achieve that again, and do better than we did during a war that was diverting supplies away from the effort.
How do we achieve that? I don't know.
If you only paid $100,000 and you made $1,000,000; you’d have $900,000 profit; of which you’d probably only see ~60% to ~40% of, if Capital Gains taxes are anything near what I think they are. If we assume a “worst case”, where the Federal Government takes 40% and the State takes about 20% more, that means your tidy profit is only about $390,000. That means you’ve probably got to secure another $140,000 in financing on average to pick up a more modest $500,000 home (in today’s market) to retire in.
Capital gains taxes range from 0-20% Federally, depending on your income. In Cali, the addition is up to 13%
Which means that worst case scenario, you sell a property in Cali, you would pay 33% of the profiit above the original price of the house and the 500,000 exemption. So on a house you bought for 100,000 and sold for 1,000,000, you'd pay the awful, awful price of... 133,000, leaving you with a paltry $867,000.
capital gains tax rates are a lot lower than that. https://en.wikipedia.org/wiki/Capital_gains_tax#United_States
these people are mostly greedy fucks that don't want to pay their very reasonable share of taxes on their investment return.
Maybe they should just move to a lower cost of living area, away from where they've lived their whole life? You know, like they've been telling their kids and grandkids they need to do to make ends meet.
The entire argument comes down to "oh, those poor people, they have to pay their fair share of taxes on the huge amount of equity they've just earned". Seriously, the bias is disgusting.
Equity isn't money in your pocket, though, and just because the house is suddenly worth $1.5 million on paper doesn't mean they have extra money to pay their tax bill.
I know lots of people are bitter about the housing market but I don't think it's the fault of people who bought a home and just want to live in it. The people (or corporations) who buy homes as investment properties or to flip them are probably more worthy of anger.
I think you just argued against home ownership. The point in the equity is that it has a sustained value but is also non-fungible. The moment they sell the house, they will have all that cash to pay that tax bill. If they turn that equity into new equity (i.e sell one house and buy another) then they won't pay a single cent unless their earnings are greater than $500,000.
Also the people in the article DO NOT WANT TO LIVE THERE ANYMORE but will not sell to a family who does want to live there because they don't want to pay a little bit of taxes. And people wonder why everyone hates Boomers.
Don't have the money to pay the tax bill? Show me that math.
You buy a house for 300k, sell for 700k, you made 500k, that's 15% tax filed jointly on long-term property. But wait! There's more! You get to exclude the first 250k if it's your primary residence! So you're paying 15% on 250k. $37,500. Which is substantially less than income taxes.
They just sold the house and (assuming it was paid off) have 700k (less realtors fees, etc.) and absolutely could pay the tax. Even if it wasn't paid off, the capital gains would be reduced and they would owe less money. We've moved and sold 2 homes in the last 20 years, made capital gains on each sale, and paid the appropriate taxes because we aren't idiots and didn't piss the money away.
So tell me again how they don't have the "extra money to pay their tax bill"?
They took the worse couple in the article. They have the house since the 90s. They will pocket a big fat check, and they are angry that they have to pay taxes on that.
Cry me a river.
The article is explicitly about capital gains. It's not like they have to pay the tax before they sell it. Use the proceeds from selling to pay the tax. That's the whole point.
When they sell the asset, they need to pay the tax. Conveniently, at that point the sale provides the money from such the taxes should be paid.
Oh, no, boomers have to pay taxes on the MASSIVE gains on their cheaply purchased houses now worth millions. Cry me a river.
They already get to exclude $250,000 of increase (or $500,000 if married filing jointly). So a married couple selling a house they bought for $50k and sold for $550,000 pays no taxes at all!
So boomers need to shut the hell up.
Someone needs to go take a few tax and accounting classes.
So if you are ok leaving this tax law in the 90s let's leave minimum wage there too. Can't have it one way, all pay and taxes should be changed as decades move on. You will be in the same predicament 30 years from now.
A half million in tax free capital gains isn’t enough for you? It was already too high in the 90s.
Minimum wage is an absolute measure: a fixed amount not pegged to inflation. Taxes are a percentage, a relative value that adapts to inflation.
I'm all for a relative measure for the minimum wage.
Also, in this scenario the people would be left with $1,620,000 after selling their house, which hardly leaves them without options. I get that they want to stay in that same neighborhood. But the problem they are facing is an enviable one for many less fortunate people.
So if you are ok leaving this tax law in the 90s let’s leave minimum wage there too.
Federal Minimum wage even today ($7.25) means living $81 above the poverty line of $14,891.
Example of a home seller in the article they are walking away with $1.55m after all taxes paid.
These are not the same.
Can’t have it one way
And why not?
all pay and taxes should be changed as decades move on.
I do agree with this statement. Corporations are taxed way too low, and those at the bottom of the income ladder are subject to the highest taxation relative to their assets needed for basic living.
You will be in the same predicament 30 years from now.
$1.55m in my pocket after all taxes paid from selling a home would be a wonderful predicament to be in.
Prop 13 made it so their taxes did not change as the decades moved on. Their property was taxed much closer to that $100k value they bought their house than the current ~$2 million it is worth. They should have been paying about $19k each year in property taxes. Instead they were paying less than 1/10th that.
Article title should be "people who treated a basic need as an investment crying that they cannot realize the overinflated value of their investment without becoming homeless". 🙄
One example given in the article shows the sellers would walk away with $1.55m after all taxes paid. I'm sure many would love to be so homeless.
A 3000 sqft house in CA? Going to guess they would be making a ton off that. Couple that with the years and years of property taxes being taxed at below the appraised value and I am going to say I don't have much sympathy.
We bought our 1800 sqft house in Sacramento for almost 600k 2 years ago, when it was worth less than half that the last time it was appraised in 2008. We were at least fortunate enough to get a 30 year loan at 3.3% but we will NEVER see property taxes as low as many of our neighbors who have lived there for 20+ years.
My parents are selling their house in a couple of years in order to move closer to us. They'll easily get over a million for it and then they'll turn around and use that money to buy a house for 500k in cash. Yeah, they'll take a hit in taxes but they will still have plenty left for buying the new house outright (so no mortgage), plus doing some additional renovations that my dad wants to do in order to have his dream kitchen.
It's in a great area too. Could easily get 1.5 mil off it.
They were empty nesters 10 and 20 years ago too most likely. They got greedy and now they don't want to pay tax on the absurd increase in value of their house?
Cry me a river. The only feelings this should spark in anybody reading it is anger and hatred. Greedy, repulsive people.
It's fine to be frustrated with the housing market but it seems like you're directing that frustration at these people as if they're responsible for it and that's not really the case. You're making a lot of assumptions about their motivations that don't seem fair to me. Get angry at real estate investors, lobbyists, and politicians, not two random people trying to sell their house.
The reason they've earned some frustration is not because they bought a house in SoCal the 90s. The reason they've earned some frustration is because after living in a house in SoCal for 33 years and raising four children in it, they felt like they wouldn't earn "enough" money from reselling it. This feeling of entitlement was so strong that they complained to an international news corporation about it.
Even if they didn't create the unjust system, they clearly benefit from it and will do whatever it takes to get what they consider to be their piece of the pie. They want the real estate system to work as designed-- because how else would they get their money?
The thing that really gets me is that one of them is a retired teacher. He dedicated his life to helping young people. He's got to be educated enough to do some self-reflection. But this mindset that he has about real estate and profit is destroying the world for the same exact people he's worked so hard to help.
You vastly misunderstood what I was talking about. They are greedy. They want to realize those gains and not pay taxes. Greed. This has nothing to do with anything else. They were happy to see the value go up as high as possible until they realized they need to pay their fair share. I'm angry at them for being greedy.
They got greedy by living in a house. Right .
Nope. They got greedy by staying in that house for as long as possible to maximize their gains, and by then bitching about taxes.
Try harder next time.
This is nonsense. The tax-free allowance is massive and they're only required to pay tax on all the free money, nothing they actually earned.
If there was 100% capital gains tax on all domestic property, we wouldn't have all that free money pushing up the cost of housing for everyone.
Most homeowners don’t have to pay capital gains on their home when they sell. Thanks to tax legislation from the ’90s, a gain of up to $250,000 for a single tax filer or $500,000 for a couple filing jointly is exempt from tax. That’s providing the sale is of the homeowner’s primary residence and that they meet other requirements such as living in the property for two of the past five years.
So assuming their house is worth $1M, they get $500k tax free and pay 14% on the remaining $500k, or $70k which comes out to 7% of the sale price. $930,000 doesn't seem like too bad of a haul.
Not massive enough for how US home prices have ballooned. Even from 2016-2023, it looks like housing in El Cerrito have almost doubled from $750,000 to $1.1 million. If they bought 40 years ago, the gains would be even larger. FRED says housing prices nationally have 3x'd since 1970, which doesn't even account for localized price growth.
It is very easy to have a capital gain above $500k these days.
Definition of tax: https://www.nerdwallet.com/article/taxes/selling-home-capital-gains-tax
It's free money.
Otherwise known as: boomers wanting to downsize are making a whole bunch of cash with which to do it and are finally paying a fair portion of their net worth.
Awwwe, are these people crying in realized gains? Boo fucking hoo.
Whatever. They just don't want to pay anything. Probably bitch about the real estate agent fees, too. They're only trapped by their own greed.
Guess they are using the alternate definition of trapped. They of course could rent the house and use the rent money to rent/buy thier new place and probably have a little profit at the same time.
Ah yes, more landlords, that's what society really needs!
Most homeowners don’t have to pay capital gains on their home when they sell. Thanks to tax legislation from the ’90s, a gain of up to $250,000 for a single tax filer or $500,000 for a couple filing jointly is exempt from tax. That’s providing the sale is of the homeowner’s primary residence and that they meet other requirements such as living in the property for two of the past five years.
That means if a couple bought a median priced home in 1987 for $100,000 and they’ve lived there as their primary residence and are selling it today for $550,000, the $450,000 gain from that investment is not taxed because it falls under the $500,000 exclusion to capital gains taxes.
However, if those same $100,000 homebuyers lived for 37 years in an area that has seen enormous growth in home values — as is the case for many parts of California — and their home now sells for $2 million dollars, that’s nearly $1.9 million in profit, of which only $500,000 is excluded from taxes.
A normal.person would still be ecstatic...
Not to mention that the capital gains tax ranges from 10%-20% depending on income, so of the $1.4 million in taxable gains they're only paying $140,00-$280,000 dollars, meaning after they sell the house they still get $1.7 million profit.
Yep, and both over 70, so it's not like they're paying a lot in taxes.
They're just greedy boomers that don't want to pay taxes, nothing new or surprising
The issue is with the tax and high costs of homes, they break even or worse when downsizing. They aren't realizing that profit from selling because they are trying to buy another, smaller house.
If their new house is less than a million, they're fine...
Very few people "downsize" to a million dollar property.
Hell, they get $500k before any tax
But they contributed everything and the public services that their taxes fund contributed nothing whatsoever, ever, never, not once. How dare communism reach into their pockets at their old age. They're just trying to do the right thing, don't you know?
Yeah. I'm not hating on these people, but they would have $1.4 million in taxable income, and 37% would be owed as taxes, leading them around 900k. If they planned it over a few years they could actually avoid some of that.
So I don't know their situation, but walking away with $882k doesn't leave you without options.
Edit: I forgot that you only pay the normal income rate on assets held for a short period, so they would have $1,620,000 after taxes.
I will never tire of people showing us exactly what kind of people they are going to be when they grow up.
Fuck boomers
This is part of a growing class of "house rich, cash poor" people.
They can't afford to move because the sale price of their existing (oversized) houses would not be enough to buy existing stock of smaller houses, in spite of the crazy market. The old houses they live in are increasingly in exurbs or even age-restricted communities that the kind of new family that might need a house that size can't be in for totally different reasons.
Plus they might want to stay in that community. Maybe that's where their friends or family are. Their doctors. All that kind of stuff. And it's not unreasonable for a person to want to keep living where they have a social network.
They also can't rent out rooms or ADUs because local zoning laws arbitrarily forbid it either directly or by enforcing things like minimum parking requirements that are not achievable. Which would be one great way to increase housing supply and let people stay where they are; turn extra space into more housing. But these boomer houses tend to be in the most restrictive type of suburbs that stifle the rights of the homeowners and prevents sustainable growth.
They increasingly don't have pensions because those disappeared in their lifetimes. Retirements funds got fucked by a variety of financial catastrophes in the intervening years, so they're increasingly relying on social security checks to pay for their (mandatory) car, big ass house expenses, and all that stuff. They're living well above their means and even if they realize it and want to make a change, the actual ability to do so is a massive problem.
The net result of this situation is even more tightness in the housing market. Even less real stock, since the ability to downsize is so lousy.
This thread has a sure lot of angry people and boomer hate in it. Which I get, but this is all part of the same housing problem with the same solutions -- more low-cost/smaller homes need to be built and fewer restrictive codes/zoning rules preventing common-sense housing. A lot of people want to develop the properties that people want to buy, but city policies are often the biggest obstacle to them -- that and lack of financial products to fund development thanks to the gradual snuffing out of local banks.
They're going to have to get a roommate, and lay off the Starbucks and avocado toast.
I mean it’s not like we can afford the big houses either. To prevent unrest governments should keep a close eye on the accessibility of bread, shelter, and grog.
Perhaps the real problem is here:
https://www.amortization.org/inflation/amount.php?year=1997&amount=250000
If the $250k exclusion was indexed for inflation, it would be nearly $500k now. I think it's dumb that all tax-related things aren't indexed for inflation. But I know why: if they did, then the forecasts on how much the exclusion would cost the Treasury would have been higher, and it never would have passed Newt Gingrich's House
I think this article misses one of the big downsides to downsizing in California (where this article is focused): property tax. In California, property tax is basically based on purchase price. This means even if an owner can make a healthy profit moving to a smaller home, that profit might be gone in 10 years due to the increased property taxes. Even if seniors are interested in downsizing, it might be financially detrimental to do so, and they stay in place, which constrains the supply of "family homes", making them more expensive and basically adds to the housing crisis.
Fewer older homeowners selling is part of what is keeping the inventory of homes historically low and pushing prices ever higher in markets across the US. Empty nesters of this age own more larger homes — three bedrooms or more — than Millennials with kids do.
Dragos said she understands that, as homeowners, theirs are enviable problems. They own an asset that has soared in value, after all.
But as she and her husband sit at their dining table discussing the morbid math — what is left after capital gains taxes, what happens if he dies first, what if she goes before him — she says they see no good options for how to get out from under their home while keeping an acceptable amount of profit from its sale, which they’d like to use to fund their retirement.
This is the problem. People trying to sell large, expensive homes for something smaller and have any appreciable difference in cost. No one is going to sell a 3,000sqft house for a 1,200sqft condo just to break even. They'll just stay in their big homes and the housing market will continue to be fucked.
This is really only an issue right now in high COL areas where people are trying to change homes, not sell second homes for profit.
Most homeowners don’t have to pay capital gains on their home when they sell. Thanks to tax legislation from the ’90s, a gain of up to $250,000 for a single tax filer or $500,000 for a couple filing jointly is exempt from tax.
This is so when someone tries to change homes, they don't lose most of their equity. This exemption only applies to primary residences, so people speculating with homes don't benefit. The issue is that exemption ceiling has not kept pace with the massive inflation in high COL areas. Which further restricts the amount of homes for sale in those areas, driving up prices, etc.
A homeowner who keeps all the profit of a home that sells for $500,000, for example, may find that a condo in their same area, where they can age in place, is $450,000. After calculating realtor fees and closing costs, the profit hardly covers the new purchase, let alone provides any extra income for retirement.
No one will downsize if there's no real benefit. This will freeze the housing market.
I mean, I kinda get it. If a boomer just dies, and their kids inherit the house, the kids pay 0 in taxes if they sell it. Not saying that it's right, but say they want to move their 1.5 million dollar house and downsize to a million dollar house. Then they have to pay a couple hundred grand in capital gains tax which is a wash. They get a smaller house, and their kids get a smaller inheritance. If they gave the larger house to their kids, the kids could sell it at market price and pocket the entire amount tax free.
If you can't afford to sell your house lease it out and start transferring the equity to your kids as fast as you can without taking too big a hit on inheritance tax. Use the income to buy a smaller house in a less posh neighborhood.
And thus the cycle of nobody buying homes to live in continues.
That's a policy issue. A progressive tax on non- self occupied residences would go a long way to fix that.
Lower the tax on primary residences. After that have a tax rate that increases per unit until at some point like 20 or so the taxes exceed the value of the property. End corporate landlords.