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There are too few billionaires for this to have any significant effect. http://marketurbanism.com/2016/06/27/do-the-rich-cause-high-rents/ http://marketurbanis

There are too few billionaires for this to have any significant effect. http://marketurbanism.com/2016/06/27/do-the-rich-cause-high-rents/ http://marketurbanism.com/2016/06/27/do-the-rich-cause-high-... NYC has 5,600 ultra high net worth individuals. If each of these people has 10 flats in NYC (rather than the 3 you hypothesized), that's only 56,000 flats taken off the market. NYC has 3.4 million housing units. http://www.nycrgb.org/downloads/research/pdf_reports/16HSR.pdf http://www.nycrgb.org/downloads/research/pdf_reports/16HSR.p... The rich are just a tiny drop in a very large bucket. The more inequality we have, the fewer rich people there are and the smaller this problem becomes.

crdoconnor 10y ago
A) It's not just billionaires treating inner city property like bars of gold. B) Billionaire properties regularly take up 10x as much room as regular apartments. Let's be generous and say that they each have only two 10x sized properties, that means 112,000 new properties on the market which actually would make a serious dent in prices and rents. C) I can't quite figure out from your link if they counted people who do not list NYC as their primary residence but still have a property there (say, via a Cayman Islands investment vehicle). I suspect not.
- yummyfajitas 10y ago
  The ultra high net worth individuals I was referring to were $30M and up, not $1B and up. According to Le Wik, there are only 536 billionaires in the US. So if all of them have 10 10x sized properties, that's equivalent to taking 53,600 flats off the entire US housing market. You can roughly triple that number if you assume every billionaire in Europe and Asia buys 10 10x sized flats in the US. https://en.wikipedia.org/wiki/List_of_countries_by_the_number_of_US_dollar_billionaires https://en.wikipedia.org/wiki/List_of_countries_by_the_numbe... Why don't you crunch your own numbers and see if you can make them come out different?
  - AstralStorm 10y ago
    The most real part of the problem is actually people investing into rental properties. It only takes a moderately sized rental company to take out many units off the sale market, especially over time due to reinvestment. Also holdings.
  - crdoconnor 10y ago
    >The ultra high net worth individuals I was referring to were $30M and up, not $1B and up. They were also just the people who declared their residency as being in NY. Not overseas investors who want a foothold. I don't know about NYC but in London, high end developments are usually ~80% bought by these types of investors. They take up a ridiculous amount of prime real estate with their almost-always-empty pied-de-terre's. This is not even starting to count prices being driven up by high net worth investors buying rental properties in those same cities.
    - yummyfajitas 10y ago
      As I suspected, you can't even construct a plausible back of the envelope calculation that supports your points.
      - crdoconnor 10y ago
        Was entirely unnecessary in order to tear holes in your calculation's assumptions.
        yummyfajitas 10y ago
        You have not shown that the effects you cite are large enough to be significant.
RangerScience 10y ago
I'm not sure your math pans out - the issue, AFAIK, isn't rich people within the same city owning multiple flats, it's rich people worldwide. The report cited in the first link states 167,700 UHNWI worldwide. If, on average, each of those have one flat in NY, that's 20% of the NY housing, which is pretty far from a drop in the bucket. It also seems utterly unreasonable that only 3% of the world's UHNWI own housing in NY. > The more inequality we have, the fewer rich people there are and the smaller this problem becomes. I think this simplifies to the point of uselessness. On the basic level, yes - fewer rich people, fewer rich people living in housing. But, definitely not fewer rich people owning housing, and definitely definitely not fewer high-rent places, where we can define "high rent" as taking up most of your income. Then there's considerations for housing growth - as inequality and population rise, housing demand increases, but ability to pay for that housing does not, so why would you expect any additional to be built, given the increased cost of the land due to the increased demand for that land? To be clear: I don't know if your prediction would pan out, because I can imagine how easily the situation gets crazy complicated.
- yummyfajitas 10y ago
  Yes, if every single rich person owns a flat in NYC, that might make NYC unaffordable. They might also do the same in London and SF. That only leaves the entire rest of the world to live in. If the rich concentrate, they can only harm a small number of locations. After all, there aren't very many of them. Then there's considerations for housing growth - as inequality and population rise, housing demand increases, but ability to pay for that housing does not, so why would you expect any additional to be built, given the increased cost of the land due to the increased demand for that land? Well, I'd expect additional housing to be built because developers are clamoring to do exactly that. They are just not legally permitted to do so in a few of the highly desirable locations (e.g. NYC, SF, Paris).
  - crdoconnor 10y ago
    So in other words, rather than adjusting tax policy to achieve a more egalitarian society and a price for the roof over your head that could be described as "fair" you think everybody else - the people who do all the actual work - should get the fuck out of New York and London.

crdoconnor 10y ago

A) It's not just billionaires treating inner city property like bars of gold. B) Billionaire properties regularly take up 10x as much room as regular apartments. Let's be generous and say that they each have only two 10x sized properties, that means 112,000 new properties on the market which actually would make a serious dent in prices and rents. C) I can't quite figure out from your link if they counted people who do not list NYC as their primary residence but still have a property there (say, via a Cayman Islands investment vehicle). I suspect not.

yummyfajitas 10y ago
The ultra high net worth individuals I was referring to were $30M and up, not $1B and up. According to Le Wik, there are only 536 billionaires in the US. So if all of them have 10 10x sized properties, that's equivalent to taking 53,600 flats off the entire US housing market. You can roughly triple that number if you assume every billionaire in Europe and Asia buys 10 10x sized flats in the US. https://en.wikipedia.org/wiki/List_of_countries_by_the_number_of_US_dollar_billionaires https://en.wikipedia.org/wiki/List_of_countries_by_the_numbe... Why don't you crunch your own numbers and see if you can make them come out different?
- AstralStorm 10y ago
  The most real part of the problem is actually people investing into rental properties. It only takes a moderately sized rental company to take out many units off the sale market, especially over time due to reinvestment. Also holdings.
- crdoconnor 10y ago
  >The ultra high net worth individuals I was referring to were $30M and up, not $1B and up. They were also just the people who declared their residency as being in NY. Not overseas investors who want a foothold. I don't know about NYC but in London, high end developments are usually ~80% bought by these types of investors. They take up a ridiculous amount of prime real estate with their almost-always-empty pied-de-terre's. This is not even starting to count prices being driven up by high net worth investors buying rental properties in those same cities.
  - yummyfajitas 10y ago
    As I suspected, you can't even construct a plausible back of the envelope calculation that supports your points.
    - crdoconnor 10y ago
      Was entirely unnecessary in order to tear holes in your calculation's assumptions.
      - yummyfajitas 10y ago
        You have not shown that the effects you cite are large enough to be significant.

RangerScience 10y ago

I'm not sure your math pans out - the issue, AFAIK, isn't rich people within the same city owning multiple flats, it's rich people worldwide. The report cited in the first link states 167,700 UHNWI worldwide. If, on average, each of those have one flat in NY, that's 20% of the NY housing, which is pretty far from a drop in the bucket. It also seems utterly unreasonable that only 3% of the world's UHNWI own housing in NY. > The more inequality we have, the fewer rich people there are and the smaller this problem becomes. I think this simplifies to the point of uselessness. On the basic level, yes - fewer rich people, fewer rich people living in housing. But, definitely not fewer rich people owning housing, and definitely definitely not fewer high-rent places, where we can define "high rent" as taking up most of your income. Then there's considerations for housing growth - as inequality and population rise, housing demand increases, but ability to pay for that housing does not, so why would you expect any additional to be built, given the increased cost of the land due to the increased demand for that land? To be clear: I don't know if your prediction would pan out, because I can imagine how easily the situation gets crazy complicated.

yummyfajitas 10y ago
Yes, if every single rich person owns a flat in NYC, that might make NYC unaffordable. They might also do the same in London and SF. That only leaves the entire rest of the world to live in. If the rich concentrate, they can only harm a small number of locations. After all, there aren't very many of them. Then there's considerations for housing growth - as inequality and population rise, housing demand increases, but ability to pay for that housing does not, so why would you expect any additional to be built, given the increased cost of the land due to the increased demand for that land? Well, I'd expect additional housing to be built because developers are clamoring to do exactly that. They are just not legally permitted to do so in a few of the highly desirable locations (e.g. NYC, SF, Paris).
- crdoconnor 10y ago
  So in other words, rather than adjusting tax policy to achieve a more egalitarian society and a price for the roof over your head that could be described as "fair" you think everybody else - the people who do all the actual work - should get the fuck out of New York and London.