Best & Worst Places to Rent in America

Posted on July 10, 2024 by David Reiss

I was interviewed as part of WalletHub’s Best & Worst Places to Rent in America, 2024 edition. The interview reads,

What tips do you have for a person looking to get the best value in an apartment?

The smartest thing to do is do your homework. Start online to get a sense of the broad range of options. Then visit as many as you have the time for. Not only does it give you a sense of the surroundings (neighbors, neighborhood, shopping, etc.), but it also gives you a sense of the quality of the apartment. Do the appliances look well-maintained? Is there any water damage that may be a harbinger of bad things to come?

What are the most common mistakes that renters make when searching for a new apartment?

It is also smart to ask existing tenants about the landlord. Is it (or he or she) responsive to concerns? You should also search them on the internet to see what others have to say about them.

How can local policymakers make housing more affordable for renters without upsetting homeowners?

Local policymakers need to focus on expanding the supply of new housing. Restrictive zoning (for example, zoning that only allows the construction of single-family homes) keeps housing expensive in many communities. Various forms of restrictive zoning are a big problem in hot markets like the Bay Area in California and the New York Metropolitan Area. Housing takes too long to build, we do not build enough of it, and it costs too much. Local, State, and Federal policymakers all have to work together to increase the supply of housing so that costs go down across the board.

What Is a Credit Reference?

Posted on September 22, 2017 by David Reiss

image by www.cafecredit.com

WalletHub quoted me in What Is A Credit Reference? Definition, Examples & More. It opens,

A “credit reference” is a document that attests to the creditworthiness of a prospective borrower or rental applicant. The most common type of credit reference is a credit report, as it chronicles an individual’s or business’s credit history. And the most notable credit reports are those from TransUnion, Equifax and Experian. You can check your TransUnion credit report for free on WalletHub.

A credit report isn’t the only type of credit reference, though. The term can also refer to the individual accounts on your credit report. For example, someone with no prior credit history may be deemed to have “insufficient credit references.” And that just means there are too few data points for the lender to assess his or her creditworthiness.

A letter from a credible source that speaks to an applicant’s financial trustworthiness would also qualify. This type of credit reference isn’t likely to help individual borrowers very much, except maybe for situations involving small neighborhood banks and credit unions, which are more likely than national lenders to value personal relationships. But it plays a big role in corporate lending. This includes business-to-business credit arrangements, where a borrower’s history is less readily available and the voucher of a trusted source – such as a vendor with whom the business has previously worked – is thus more meaningful. In this context, a credit reference may also be called a “trade reference.”

Below, we’ll explore credit references in greater detail, explaining the most common types of credit references and when they’re most effective.

* * *

Ask The Experts: Assessing The Effectiveness Of Credit References

Credit references are characterized by variety. Myriad types exist and the impact of many is difficult to quantify. We therefore sought additional perspectives from a panel of lending experts from both the consumer and corporate sides of the aisle.

David Reiss

Mortgage lenders want to know that borrowers have the capacity to repay your loan and one way that they can gain comfort is to see what types of assets you have. Lenders will often ask to see your statements from financial institutions as part of their underwriting process. These statements can be considered as a type of credit reference. The more liquid the asset (a savings account, for instance) the better, as far as the lender is concerned. This is because it means that you can access the funds in the account readily if you needed to make a mortgage payment.

How We Feel About Credit Scores

Posted on June 21, 2016 by David Reiss

WalletHub conducted its 2016 survey of American knowledge and opinions of credit scores and interviewed me about their findings:

What is your reaction to one-third of survey respondents believing that anyone can access their credit score/report, as if it is public information?

Given the complexity of the consumer finance industry, it is not surprising that many consumers operate in a fog of ignorance and misunderstanding about their rights and how the industry operates. Some people may be aware that many businesses can access their credit report and that many businesses contribute to their credit report, both without the clear consent of the consumer. This all leads to a sense that their financial profile is out of the consumer’s hands. And while that is not technically correct, there is a lot of truth to it. Decisions are being made about you — what interest rate will be offered to you, whether you will receive a loan, will a bank open a checking account that you applied for — and you only have a partial sense of the criteria upon which they are being made.

Why do you think 49% of people would not marry someone with bad credit?

People understand that bad credit can have a big impact on life choices — can we buy a house or a car? That can influence decisions about the suitability of a spouse as much as other financial concerns, like the job the potential spouse has. Credit scores are also being used for decisions other than whether to extend credit to someone — for instance, by landlords deciding whether to rent an apartment. These expansive uses of credit scores foster a sense that credit scores act as a broader judgment of the potential spouse, like a gauge of moral worth.

Why is money our leading societal stressor?

We live in a society that has become more divided between haves and have-nots over the last few generations. The gap shows up in the big difference between the number of people at the top (a small percentage) and the bottom (a large percentage) of the distribution of income and wealth. It also shows up in the difference in the amount of money that puts you at the top and bottom — the rich have gotten richer and the poor still have very little in terms of wealth and income. Money gets seen as being able to determine destiny and thus it stresses people out, particularly because the American safety net is not as tightly woven as those of other developed countries.

Why do you think people would prefer to be overweight, to have bad eyesight and to be going bald than to have bad credit?

Henry Kissinger has said that power is the ultimate aphrodisiac and Marilyn Monroe (in “Diamonds Are a Girl’s Best Friend”) has sung that “A kiss may be grand/But it won’t pay the rental.” Money is power, and in the age of Matthew Diamond’s “Evicted,” being able to pay the rental is a pretty attractive quality.

High and Low Property Taxes

Posted on March 17, 2016 by David Reiss

Newsmax quoted me in Lowest Property Tax Is Hawaii and the Highest Is New Jersey. It reads, in part,

The average American household spends $2,089 on real estate property taxes each year and residents of the 27 states with vehicle property taxes shell out another $423, according to the National Tax Lien Association.

However, some states cost more than others when it comes to the American Dream and its staples of a house and car.

“Different parts of the country have different levels of taxation and amenities paid for by the tax receipts,” said David Reiss, professor of law and research director with the Center for Urban Business Entrepreneurship at Brooklyn Law School.

The state with the lowest real estate property taxes is Hawaii where residents pay only $482 per household, which is the least average amount typically shelled out by a taxpayer, according to a 2016 WalletHub study, ranking states with the highest and lowest property taxes.

“High property taxes tend to be correlated with high income and high income tends to be correlated with Blue States, so it is not surprising that high property taxes are correlated with Blue States,” Reiss said.

* * *

“Local property taxes can help pay for all sorts of municipal services, including schools, road maintenance and emergency services,” Reiss said.

Alabama, Louisiana and Delaware, D.C. and South Carolina follow Hawaii among the states with the lowest property taxes.

High tax localities, such as Westchester County in New York, could have annual taxes that easily are in the tens of thousands of dollars a year range but such areas also have some of the best schools in the nation.

The WalletHub report further found that in Blue states, real estate property taxes are 39% higher at $2,250 a year than homeowners in Red states who pay $1,613.

The yearly burden weighs far more heavily on taxpayers in some states than in others based on region.

For example, communities in the Northeast typically have higher property taxes than many of those in the rest of the country.

“Monthly mortgage payments are usually much higher than monthly real property tax payments, measuring in the high hundreds in low-cost metros like Pittsburgh to the thousands in a high-cost metro like San Francisco so it is hard to put default rates squarely on the shoulders of real property taxes,” said Reiss.

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