9 ms·

Private Equity buying up housing Speaking of this, an entire new construction neighborhood near where I live was just purchased, with all of the for-sale signs

Private Equity buying up housing Speaking of this, an entire new construction neighborhood near where I live was just purchased, with all of the for-sale signs replaced with leasing info signs. You will own nothing, but you will not be happy about it.

gaspard234 5y ago
I'm in a traditionally mexican east Austin neighborhood. I used to see a lot of houses bought by techies. Yes it was 'gentrification', but at least they lived in them and often eventually started families. In 2021, the 6-7 in my neighborhood which have sold for record prices are sitting empty with 'for lease' signs. Checking the property records they are all some under a different named LLC.
- cinntaile 5y ago
  In the end they still have to find tenants, so the properties can't be empty forever or we'll have a lot of bankruptcies on our hands.
xwdv 5y ago
Ugh, living in an entire community of renters is hell. They just don’t care as much about the homes, and everything goes to shit.
- lumost 5y ago
  This is a stereotype, but having lived in a nice brand new apartment tower I can tell you it’s pretty true. People mess with all the common spaces at a level that’s not sustainable for management to fix. Renters as a group are insulated from maintenance costs and some individuals take advantage of this. Never lived in a condo tower, might be the same.
  - jjoonathan 5y ago
    > at a level that’s not sustainable for management to fix Management gets thousands of dollars every month from each renter. They could absolutely fix it if they wanted to. In this market, they don't get punished for not fixing it, so they let it go and pocket the difference. Normally I'd be with you here. It's gross what some people think is acceptable in common spaces. Slumlording is also pretty gross, though, and I tend to think it's the larger evil here. By a considerable margin, too.
    - MichaelZuo 5y ago
      The problem is that in any sizeable population there will be bad apples that impose asymmetrically costly problems. Because cause and effect can have a non linear relationship in the real world. People aren’t going to accept having their rent go up 20% next month because a bad apple wrecked some common shared stuff that is peculiarly difficult to restore. People by and large don’t accept non-linear effects when it impacts their wallet negatively. Thus in fact there is never enough money to repair everything. Society at large gets around the issue by reserving very harsh punishments in such circumstances, though even now that is declining in frequency nowadays. Rental management do not have any punishment authority beyond taking away a security deposit, if that.
  - jdavis703 5y ago
    I’m assuming there’s a few bad apples who ruin common areas. Most people I see wipe down exercise machines after use, turn off the grills, put away their trash etc. But then there’s a minority of people who are just total slops.
  - mandelbrotwurst 5y ago
    That sounds like an issue of collectively managing shared resources that would exist even if the occupants owned the units, no?
    - nitrogen 5y ago
      There's usually a greater sense of accountability if someone expects to live somewhere longer than a year or two.
      - lumost 5y ago
        Condo owners tend to all know who’s in which units - even if it’s only at a vague level. If someone is wrecking stuff it’ll go up to the condo board eventually and they can force the offender to pay for damages. Renters generally benefit from anonymity and limited liability.
  - coldacid 5y ago
    One of my brothers sublets a condo, and the place is very well maintained. It turns out that even if people grumble about condo fees, they're quite willing to pay them because they can see where those fees are going to. Every year the condo board approves and funds at least one round of improvements at my brother's condo, keeping everything looking and feeling fresh. This year it's a refresh of condo front doors, for example.
  - cinntaile 5y ago
    I don't get how this works? Isn't the cost of maintenance a part of your rent? If it doesn't cover the costs then you end up with a rent increase?
  - xwdv 5y ago
    We're not talking about apartment towers, we're talking about single family homes.
- deleted 5y ago
  [deleted]
david927 5y ago
It won't work. We're facing another 2008 but writ large, and if that plays out in a similar way, we'll see people move in together so that not only will housing prices drop through the floor but rents as well. A lot of this is to diversify out of equities which will soon crater ala 1929. The problem is that hundreds of empty track houses don't have value either. I think they know that; I think they feel they don't have much choice. Desperate times.
- api 5y ago
  That can't happen as long as interest rates are borderline negative. People are investing in stocks because they're a sure thing. People are investing in property because it's a sure thing. Everything is a sure thing but cash. I know people who have gotten <2% mortgages, which is like a 0% interest mortgage. These are private individuals. What rates do you think banks the super wealthy are getting? Nothing can go down until rates go up. Hell BTC went up after the Senate passed a bill that could really curtail adoption of it... because nothing can go down. Money printer go BRRRRRRRRRRR... https://brrr.money https://brrr.money
- wallacoloo 5y ago
  > we'll see people move in together so that not only will housing prices drop through the floor but rents as well. When two people move in together so that they now only have to pay 1/2 the rent of a house, that means the rent of each house can double and the occupants can still afford it. There’s a way this plays out where both home price and rent double, but an increasing number of houses sit on the sidelines empty. Watching the commercial real estate market over the past decade, that scenario doesn’t strike me as outlandish.
  - AnimalMuppet 5y ago
    That only works if the landlords who are "in on the game" own all the houses. If they only own half, and people double up, then the landlords who are trying to play this game end up with $0 income for their investments. That's going to be painful - hopefully painful enough that they have to abandon the strategy, and we can return to sanity.
deleted 5y ago
[deleted]
aeoleonn 5y ago
And thank the neomarxists and communists for that. Capitalist society -> Slowly institute communism -> Slowly destroy economy to reduce purchase price of assets (real estate, infrastructure, industrial businesses) -> Elites with cash stockpiles buy those assets at low cost -> Power & wealth further centralized -> Just before moving economy/society towards Capitalism, sell off public property (such as natural resources) to your cronies -> Reimplement capitalism, now with more power than before. Wash, rinse, and repeat, until you reach your desired level of wealth centralization in the hands of the "Qui?"'s
- mrow84 5y ago
  Feels a bit “no true Scotsman” - have you considered the possibility that the process you describe is actually a structural consequence of capitalism? Seems to me that capital accumulation and inheritance is a pretty obvious mechanism to drive that process.

gaspard234 5y ago

I'm in a traditionally mexican east Austin neighborhood. I used to see a lot of houses bought by techies. Yes it was 'gentrification', but at least they lived in them and often eventually started families. In 2021, the 6-7 in my neighborhood which have sold for record prices are sitting empty with 'for lease' signs. Checking the property records they are all some under a different named LLC.

cinntaile 5y ago
In the end they still have to find tenants, so the properties can't be empty forever or we'll have a lot of bankruptcies on our hands.

xwdv 5y ago

Ugh, living in an entire community of renters is hell. They just don’t care as much about the homes, and everything goes to shit.

lumost 5y ago
This is a stereotype, but having lived in a nice brand new apartment tower I can tell you it’s pretty true. People mess with all the common spaces at a level that’s not sustainable for management to fix. Renters as a group are insulated from maintenance costs and some individuals take advantage of this. Never lived in a condo tower, might be the same.
- jjoonathan 5y ago
  > at a level that’s not sustainable for management to fix Management gets thousands of dollars every month from each renter. They could absolutely fix it if they wanted to. In this market, they don't get punished for not fixing it, so they let it go and pocket the difference. Normally I'd be with you here. It's gross what some people think is acceptable in common spaces. Slumlording is also pretty gross, though, and I tend to think it's the larger evil here. By a considerable margin, too.
  - MichaelZuo 5y ago
    The problem is that in any sizeable population there will be bad apples that impose asymmetrically costly problems. Because cause and effect can have a non linear relationship in the real world. People aren’t going to accept having their rent go up 20% next month because a bad apple wrecked some common shared stuff that is peculiarly difficult to restore. People by and large don’t accept non-linear effects when it impacts their wallet negatively. Thus in fact there is never enough money to repair everything. Society at large gets around the issue by reserving very harsh punishments in such circumstances, though even now that is declining in frequency nowadays. Rental management do not have any punishment authority beyond taking away a security deposit, if that.
- jdavis703 5y ago
  I’m assuming there’s a few bad apples who ruin common areas. Most people I see wipe down exercise machines after use, turn off the grills, put away their trash etc. But then there’s a minority of people who are just total slops.
- mandelbrotwurst 5y ago
  That sounds like an issue of collectively managing shared resources that would exist even if the occupants owned the units, no?
  - nitrogen 5y ago
    There's usually a greater sense of accountability if someone expects to live somewhere longer than a year or two.
    - lumost 5y ago
      Condo owners tend to all know who’s in which units - even if it’s only at a vague level. If someone is wrecking stuff it’ll go up to the condo board eventually and they can force the offender to pay for damages. Renters generally benefit from anonymity and limited liability.
- coldacid 5y ago
  One of my brothers sublets a condo, and the place is very well maintained. It turns out that even if people grumble about condo fees, they're quite willing to pay them because they can see where those fees are going to. Every year the condo board approves and funds at least one round of improvements at my brother's condo, keeping everything looking and feeling fresh. This year it's a refresh of condo front doors, for example.
- cinntaile 5y ago
  I don't get how this works? Isn't the cost of maintenance a part of your rent? If it doesn't cover the costs then you end up with a rent increase?
- xwdv 5y ago
  We're not talking about apartment towers, we're talking about single family homes.
deleted 5y ago
[deleted]

david927 5y ago

It won't work. We're facing another 2008 but writ large, and if that plays out in a similar way, we'll see people move in together so that not only will housing prices drop through the floor but rents as well. A lot of this is to diversify out of equities which will soon crater ala 1929. The problem is that hundreds of empty track houses don't have value either. I think they know that; I think they feel they don't have much choice. Desperate times.

api 5y ago
That can't happen as long as interest rates are borderline negative. People are investing in stocks because they're a sure thing. People are investing in property because it's a sure thing. Everything is a sure thing but cash. I know people who have gotten <2% mortgages, which is like a 0% interest mortgage. These are private individuals. What rates do you think banks the super wealthy are getting? Nothing can go down until rates go up. Hell BTC went up after the Senate passed a bill that could really curtail adoption of it... because nothing can go down. Money printer go BRRRRRRRRRRR... https://brrr.money https://brrr.money
wallacoloo 5y ago
> we'll see people move in together so that not only will housing prices drop through the floor but rents as well. When two people move in together so that they now only have to pay 1/2 the rent of a house, that means the rent of each house can double and the occupants can still afford it. There’s a way this plays out where both home price and rent double, but an increasing number of houses sit on the sidelines empty. Watching the commercial real estate market over the past decade, that scenario doesn’t strike me as outlandish.
- AnimalMuppet 5y ago
  That only works if the landlords who are "in on the game" own all the houses. If they only own half, and people double up, then the landlords who are trying to play this game end up with $0 income for their investments. That's going to be painful - hopefully painful enough that they have to abandon the strategy, and we can return to sanity.

deleted 5y ago

[deleted]

aeoleonn 5y ago

And thank the neomarxists and communists for that. Capitalist society -> Slowly institute communism -> Slowly destroy economy to reduce purchase price of assets (real estate, infrastructure, industrial businesses) -> Elites with cash stockpiles buy those assets at low cost -> Power & wealth further centralized -> Just before moving economy/society towards Capitalism, sell off public property (such as natural resources) to your cronies -> Reimplement capitalism, now with more power than before. Wash, rinse, and repeat, until you reach your desired level of wealth centralization in the hands of the "Qui?"'s

mrow84 5y ago
Feels a bit “no true Scotsman” - have you considered the possibility that the process you describe is actually a structural consequence of capitalism? Seems to me that capital accumulation and inheritance is a pretty obvious mechanism to drive that process.