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In a supply-limited housing market, landlords are competing with owner-occupiers for the same units, so you end up housing the same number of people either way.

In a supply-limited housing market, landlords are competing with owner-occupiers for the same units, so you end up housing the same number of people either way. More investor money just means that purchase prices are higher, and rental supply is greater vs. owner-occupied. In that case, the government making it hard to be a landlord will be good for marginal home buyers, but bad for marginal renters. In a market where housing development is less restricted and construction occurs to meet demand, the addition of more investor capital means that more houses will get built. This is a good thing! It means that renters who don’t have enough wealth to build a house still get a place to live. In that case, you want to make it easy to be a landlord to encourage more capital to be in the landlord business and building homes.

ska 6y ago
> This is a good thing! It doesn't always work that well in practice as investor demand can drive housing stock that is a poor match for housing demand. In theory this should all wash out in a free enough market, but no guarantee that won't take many decades - so it's not much help to people needing housing now. The structure of investment vehicles for this makes a big difference in what is actually built too, and how the development companies are funded.
hedora 6y ago
If you pull out investor money, prices drop, and new landlords will be able to charge lower rent at current returns. I’m not convinced higher prices means more supply for housing. Building a house is labor intensive, and labor costs increase with housing costs. As stupid high as Bay Area housing prices are, new construction costs are even worse. It’s literally cheaper to build houses elsewhere and ship them in. However, in SF, at least, the construction worker unions are trying their best to block such projects: https://news.ycombinator.com/item?id=26526455 https://news.ycombinator.com/item?id=26526455

ska 6y ago

> This is a good thing! It doesn't always work that well in practice as investor demand can drive housing stock that is a poor match for housing demand. In theory this should all wash out in a free enough market, but no guarantee that won't take many decades - so it's not much help to people needing housing now. The structure of investment vehicles for this makes a big difference in what is actually built too, and how the development companies are funded.

hedora 6y ago

If you pull out investor money, prices drop, and new landlords will be able to charge lower rent at current returns. I’m not convinced higher prices means more supply for housing. Building a house is labor intensive, and labor costs increase with housing costs. As stupid high as Bay Area housing prices are, new construction costs are even worse. It’s literally cheaper to build houses elsewhere and ship them in. However, in SF, at least, the construction worker unions are trying their best to block such projects: https://news.ycombinator.com/item?id=26526455 https://news.ycombinator.com/item?id=26526455