4 ms·

This framing feels backwards to me - I thought the reason institutional investors see it as a valuable asset is because of NIMBYs constraining supply for them v

This framing feels backwards to me - I thought the reason institutional investors see it as a valuable asset is because of NIMBYs constraining supply for them via local policy and obstruction. The institutional investors are a symptom of that policy, but the NIMBYs (and incentives that exist for existing owners like prop13) are the cause. Real Estate scaling supply to meet demand is in direct conflict with old properties increasing in value forever. You can't really have both and we're stuck a valley of bad incentives that favor existing owners. If we let people build housing to meet demand it would fix it, but existing owners are motivated to leverage enormous amounts of equity (and local political power) to stop any new building in order to keep property scarcity high. Their explanations beyond that are all just motivated reasoning rationalizations. Hopefully stuff like RHNA will force local municipalities to act. I can empathize somewhat with someone who spent $3M on a crappy house being afraid of being under water from increased supply, but I have no empathy for someone who bought a $300k house 30yrs ago that's now worth millions acting to obstruct new construction.

dionidium 5y ago
The investors themselves agree with you. Here's one such company's SEC filing: > We have selected markets that we believe will experience strong population, household formation and employment growth and exhibit constrained levels of new home construction. Source: https://www.sec.gov/Archives/edgar/data/1687229/000119312517029042/d260125d424b4.htm https://www.sec.gov/Archives/edgar/data/1687229/000119312517...
- gonehome 5y ago
  Yeah I can’t fault the investors really, they’re just observing the world and making a bet because of the reality that is - they’re not the ones creating it. Meanwhile the NIMBYs that are creating it blame everyone else and play victim.
onlyrealcuzzo 5y ago
OP's comment makes sense if you assume BlackRock is going to continue gobbling up properties at current prices & rates - but is there any evidence to support that? If BlackRock doesn't continue to gobble up homes at current prices & rates - then his argument falls apart. Does anyone have evidence that BlackRock is STILL buying properties en masse?
davidw 5y ago
This is exactly right. You show up to a local planning commission meeting or city council and it is not Blackrock there ranting about new homes being built. It's your neighbors. Fight back: https://yimbyaction.org/2021/ https://yimbyaction.org/2021/ - and have fun and meet cool people while doing so!
ultraluminous 5y ago
I've seen this argument touted frequently in housing related threads and it always confuses me. Housing prices have soared over the majority of the developed world - dozens of countries[1]. Is NYMBYism and prop13 driving the housing crisis in Luxembourg? Chile? Estonia? Do you think the entire world property market, taxation and legislation is structured exactly like in the California bay area? The whole "just zone more high rises" argument is so obviously reductive, I can't help but think it's pushed primarily by property developers and speculators. Housing prices continuously rising to slurp up any marginal income has been studied by economists for a couple of centuries (rent extraction), and taxation solutions such as a Land Value Tax were suggested by Adam Smith himself. https://blogs.imf.org/2021/10/18/housing-prices-continue-to-soar-in-many-countries-around-the-world/ https://blogs.imf.org/2021/10/18/housing-prices-continue-to-...
- Panzer04 5y ago
  What do you mean "obviously reductive"? Why wouldn't it work?
  - ultraluminous 5y ago
    It's not a question of "would it work", the point is that real-estate prices are rising in dozens of countries, and thousands of cities. Zoning is a local issue. Assuming that the reason homes prices are out of control in Santiago, Chile and in Tel Aviv, Israel for the same reasons as in San Fransisco is, well, silly.
  - gonehome 5y ago
    He's just wrong - in cities that have more building (Austin TX for example) the housing is more affordable. That doesn't mean 'cheap' if demand is also increasing, but it does cause prices to be lower relative to cities that restrict supply. This is just basic economics, people twist themselves in knots to come up with reasons why the obvious supply/demand is somehow not applicable in this case. If you allow building in capitalist markets then increased supply will reduces prices as demand is met.
- fleddr 5y ago

dionidium 5y ago

The investors themselves agree with you. Here's one such company's SEC filing: > We have selected markets that we believe will experience strong population, household formation and employment growth and exhibit constrained levels of new home construction. Source: https://www.sec.gov/Archives/edgar/data/1687229/000119312517029042/d260125d424b4.htm https://www.sec.gov/Archives/edgar/data/1687229/000119312517...

gonehome 5y ago
Yeah I can’t fault the investors really, they’re just observing the world and making a bet because of the reality that is - they’re not the ones creating it. Meanwhile the NIMBYs that are creating it blame everyone else and play victim.

onlyrealcuzzo 5y ago

OP's comment makes sense if you assume BlackRock is going to continue gobbling up properties at current prices & rates - but is there any evidence to support that? If BlackRock doesn't continue to gobble up homes at current prices & rates - then his argument falls apart. Does anyone have evidence that BlackRock is STILL buying properties en masse?

davidw 5y ago

This is exactly right. You show up to a local planning commission meeting or city council and it is not Blackrock there ranting about new homes being built. It's your neighbors. Fight back: https://yimbyaction.org/2021/ https://yimbyaction.org/2021/ - and have fun and meet cool people while doing so!

ultraluminous 5y ago

I've seen this argument touted frequently in housing related threads and it always confuses me. Housing prices have soared over the majority of the developed world - dozens of countries[1]. Is NYMBYism and prop13 driving the housing crisis in Luxembourg? Chile? Estonia? Do you think the entire world property market, taxation and legislation is structured exactly like in the California bay area? The whole "just zone more high rises" argument is so obviously reductive, I can't help but think it's pushed primarily by property developers and speculators. Housing prices continuously rising to slurp up any marginal income has been studied by economists for a couple of centuries (rent extraction), and taxation solutions such as a Land Value Tax were suggested by Adam Smith himself. https://blogs.imf.org/2021/10/18/housing-prices-continue-to-soar-in-many-countries-around-the-world/ https://blogs.imf.org/2021/10/18/housing-prices-continue-to-...

Panzer04 5y ago
What do you mean "obviously reductive"? Why wouldn't it work?
- ultraluminous 5y ago
  It's not a question of "would it work", the point is that real-estate prices are rising in dozens of countries, and thousands of cities. Zoning is a local issue. Assuming that the reason homes prices are out of control in Santiago, Chile and in Tel Aviv, Israel for the same reasons as in San Fransisco is, well, silly.
- gonehome 5y ago
  He's just wrong - in cities that have more building (Austin TX for example) the housing is more affordable. That doesn't mean 'cheap' if demand is also increasing, but it does cause prices to be lower relative to cities that restrict supply. This is just basic economics, people twist themselves in knots to come up with reasons why the obvious supply/demand is somehow not applicable in this case. If you allow building in capitalist markets then increased supply will reduces prices as demand is met.
fleddr 5y ago