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Timeshares Are Back With An EVIL Corporate Spin - YouTube
Channel: The Young Turks
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as the housing market becomes more and
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more difficult for ordinary working
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americans
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what we're hearing is that the problem
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is lack of inventory there are so few
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homes on the market for working
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americans to buy that they're forced to
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rent and that leads to increased rental
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prices and people are getting priced out
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of communities that they've lived in
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their entire lives and there were
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stories recently about private equity
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firms essentially buying up entire
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neighborhoods and turning single-family
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homes into rentals so they can really
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capitalize on the uh slumlord industry
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of the united states well now there's a
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new business popping up that i want to
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draw attention to and essentially take
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single family homes and turns them into
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time shares but they don't want you to
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think of it as a time share even though
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the business model is very similar so
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one of those corporations is known as
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pasco they're turning these
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single-family homes uh into corporations
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and i want you to pay close attention to
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what their business model is
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to make second home ownership possible
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for people and of course to make money
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picasso i should say it's not pasco it's
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picasso picasso uses a fractional home
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ownership model they buy a house
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lightly refurbish it furnish it and then
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create an llc for it then they divvy up
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ownership of this corporatized house
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into eight fractions
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and sell those shares on their website
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sounds like a sounds like a time share
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right
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if it doesn't let me give you more
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details
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uh if you buy a share in a house
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you're able to stay in it for 44 nights
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per year in increments that can't exceed
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14 consecutive days per visit you can
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also gift these stays to friends or
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family
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now listen i remember
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wanting to get freebies when i traveled
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and i got sucked into one of those
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timeshare things and it was awful you
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sit there for an hour where they're
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trying to convince you to buy a
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timeshare which is an awful awful
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investment that people should never do
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uh and this is the kind of pitch that
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you hear let me give you more details
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picasso offers an app to handle the
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logistics of booking stays it oversees
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management maintenance and cleaning of
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the property in exchange for all of this
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it charges 12 percent of the home's
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purchase price up front
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and monthly fees going forward so i went
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to picasso's website to uh get an
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example of a house
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that they're trying to sell in this way
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and so here's how it breaks down
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how we price this again you would own
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one eighth share of the house
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so the purchase price of this nearly two
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million dollar house meaning what a
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person would have to pay up front is 237
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thousand five hundred dollars
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and then there are the home upgrades and
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closing costs five thousand dollars and
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then there's the service fee of course
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of uh thirty two thousand five hundred
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dollars so if someone was interested in
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one-eighth ownership of a home meaning
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that they would have access to that home
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for 44 days out of the year but nothing
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longer than 12 consecutive days they
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would have to take
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275 000
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and hand it over to picasso now look
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this business model i think is gross but
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what's even more gross is that they're
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taking the limited housing supply and
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turning these homes into corporations
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and i think that this kind of stuff
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needs to be outlawed and one of the
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reasons why they don't want to be
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considered time shares
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is because timeshares in many of the
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communities that they're trying to do
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this in are outlawed sonoma in
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california is an example of that and so
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what i love is that the community
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in this area decided to rise up and
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protest this and they actually won i'll
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give you the details to that in just a
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second but jank i wanted you to jump in
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anna you know i i find this story a
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little bit um
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more complicated so um on the one hand
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um i get that folks don't want uh
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temporary um
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part-time
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um transient not transient that's not
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the right way of putting it but
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temporary folks coming through the
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neighborhood eight different people
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owning the house eight different people
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going through and is it a time share no
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question it's definitely a time share
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you approve that case conclusively
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but
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honestly
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and they're taking a house off the
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market and that's very we have limited
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limit we have super limited inventory
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and that's what we keep hearing over and
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over again and remember when
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corporations buy up single-family homes
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or condos or whatever residential
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property uh in order to do these
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disgusting grifty things
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that drives up housing prices overall
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which prices everyone out of the market
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i'm talking about ordinary working
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americans and then they're forced to
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rent and then what happens to the price
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of rentals
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that goes up too this is this has a
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domino effect that's disastrous for
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working americans that's my problem so
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now this particular company promises
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promise later because of the pressure
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that they will not do this for any house
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under two million dollars okay i don't
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really believe them um but
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but the hence the pressure was good so
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that it shows you you put pressure on
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you get some results
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but at the end of the day one thing i'll
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say is that
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a
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i don't mind the timeshare um and
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everybody's different but if they say oh
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yeah what about the house next to you i
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don't care at all
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what do i care if it's one person who's
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in it or eight different people i i'm
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not a guy who's nitpicky about neighbors
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so oh they listen to music too loud
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i just don't care and so i know a lot of
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people do but i don't and you have no
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guarantee that your one neighbor is
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going to be any better than the eight
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people rotating through at least some of
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them might be decent and your one
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neighbor might be awful all the time
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right and secondly i don't know how to
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stop it because
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yeah they they can do it
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and so they just buy the house and then
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they sell shares in it i get it
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like so i would outlaw it that's what i
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love a hundred
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in a heartbeat i would outlaw in fact
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one of the reasons why this corporation
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doesn't want to be considered a
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timeshare is because the way that
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they're doing this helps them skirt
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taxes as well so they rob the community
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of resources while they engage in this
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behavior
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the one thing that makes them a little
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different from timeshares uh because i
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want to be fair
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is that um there's this whole
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speculative aspect to it uh where
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the people who own one-eighth of the
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home
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could make money uh in the short term so
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if you buy a share in a house you have
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to hold it hold on to it for a year okay
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but after that you can sell it and
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profit from any appreciation in the
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home's value
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or you can be on the hook for any dip
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depreciation which is unlikely
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especially in today's market and
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especially in a place like napa or
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sonoma you know most of california let's
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keep it real with the exception of
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places that have been completely ravaged
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by wildfires
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now again the neighbors were not happy
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they fought back now the county had
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designated their neighborhood an
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exclusion zone which i celebrate and i
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think is great that bans airbnb style
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short-term rentals to preserve the
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residential character of communities but
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picasso argues that its clients are not
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short-term renters they are co-owners of
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an llc this also means that they don't
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have to pay the typical taxes on
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short-term rentals
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so that's tax on short-term rentals but
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not the property tax because
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there's no way i think there's no way to
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avoid the property tax and i haven't
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seen anything to the contrary and that
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would be outrageous if they were
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avoiding that uh but at the end of the
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day anna i see the issues here but i
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don't think i would make it illegal um
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and so
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why people because people do time shares
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and you're right it's definitely a time
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shares are awful and it should be
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treated as a time share but i wouldn't
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make time shares illegal time shares in
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and of them like time shares alone the
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way that they've been done
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is terrible and people get suckered into
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them and it's almost impossible to get
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rid of it once you have been suckered
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into it in fact there are literally
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corporations
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like that were created to make money off
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helping people get rid of their
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timeshare like it's just one grift after
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the next it's disgusting but the thing
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with time shares in the traditional
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sense is that they build resorts
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with the
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sole purpose of it being a time share in
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this case they're taking limited housing
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and turning it into a corporation
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yeah when we're already dealing with
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insane housing prices
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yeah no i i get that it's gonna create a
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limited supply uh now this is a really
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interesting
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not normal case and the reason i say
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that is because normally you don't like
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if they bought a house and then eight
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families got to live in it somehow right
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that would be one thing but these are
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all second
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people that are looking for their second
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home so they're already wealthy they're
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going into wealthy neighborhoods and
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that's part of the pushback is from
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wealthy neighbors who who don't like the
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riffraff coming in they could only
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afford eighth of a house they're not
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riffraff by the way i mean they're rich
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i know they're all paying don't i want
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you to be clear like the one example
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they were using uh they're all paying
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over six hundred thousand dollars to get
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a portion of a house worth over four
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million dollars right so it's not like
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riff raff can whatever that means in
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their mind rich minds can afford over
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600 000
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but so i just think it's more
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complicated i wouldn't outlaw it uh and
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it's limiting the supply in
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really
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rich areas
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uh generally but by the way they did get
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into housing that was actually lower
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than two million dollars and that they
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got more pushback and because the
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pressure they said they won't do that
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anymore so if you're fighting like anna
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is on this issue you should continue
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because it's getting results right but
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i'm just telling you my honest opinion
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about i think in the scope of different
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issues in housing
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i i don't think this one would is high
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enough as a priority that i would make
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it illegal yeah i would make this
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illegal i would make private equity
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firms buying up residential properties
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buying up entire neighborhoods
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of residential properties illegal i
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would make a foreign investment which is
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essentially money laundering in many
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cases
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in u.s real estate residential real
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estate specifically uh illegal um and
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that's not because i'm anti-foreigner
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these are people who have no interest in
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actually living in the united states
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they just buy up real estate in the
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united states because they're looking
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for a place to park their money if we
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have limited inventory if we have
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limited supply of housing then why
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aren't politicians who keep
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regurgitating that talking point
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doing something about it
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i just don't get it it's it's incredibly
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frustrating and the problem keeps
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getting worse because these corporations
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find new and improved ways of screwing
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you over from having affordable housing
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so that's why i would out loud outlaw it
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