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Yes, but one thing causes the other and it's not in the causal direction people intuitively think. Foreign speculators and investment firms like Blackrock are o

Yes, but one thing causes the other and it's not in the causal direction people intuitively think. Foreign speculators and investment firms like Blackrock are only entering the SFH market because supply constraints mean ever-higher prices. It's not like nobody thought to buy up houses 40 years ago. You don't have to be a genius to think of it. I can remember being a teenager and thinking, why don't big firms buy up all the housing and rent it back? The answer is that in most markets homes aren't naturally a good investment. It's a capital-intensive business and you end up with a depreciating asset, small margins, and lots of hassle. But if supply gets constrained enough that prices complete detach from those fundamentals, then, sure, why not jump in? These investors are only in this market in the first place because of supply constraints, so it's not just that low supply is a more important factor than the investors -- the investors wouldn't even exist if not for the low supply!

llbeansandrice 5y ago
I'm not contending that supply isn't the real issue, just that there's no way you're going to be able to change the culture around individual home ownership, nimbyism, and zoning laws on any reasonable time-frame. A better current solution that likely has wide-spread support would be to limit the demand rather than throw more money into the demand side. Limiting large investors does not solve the problem, but it could help alleviate some acute symptoms.
- davidw 5y ago
  I'm not so sure it's not possible. There are large numbers of people getting priced out, and YIMBY groups are springing up all over. Here in Oregon, we passed HB2001, which re-legalizes up to 4-plexes in our cities. One of the city councilors where I live is a huge YIMBY. https://www.brookings.edu/blog/the-avenue/2022/03/31/where-pro-housing-groups-are-emerging/ https://www.brookings.edu/blog/the-avenue/2022/03/31/where-p... https://noahpinion.substack.com/p/the-yimbys-are-starting-to-win-a?s=r https://noahpinion.substack.com/p/the-yimbys-are-starting-to...
  - dionidium 5y ago
    Yeah, you'd never get it done on a local level, but when people are forced to think about the issue holistically -- that is, when they can get outside of their immediate neighborhood and think about the fact that it's illegal to build enough housing on a state or even national level -- it looks like they can actually be swayed. These changes have to be made at the state/province level.
- chii 5y ago
  > A better current solution that likely has wide-spread support would be to limit the demand rather than throw more money into the demand side. black markets spring up to serve demand when there's law and regulation that tries to prohibit such demand. I don't see how making the real estate market this way is gonna get it better. The only way to make prices drop is to increase supply. trying to tax a fringe group, or to penalize investors etc, is not going to do well at all. And doing so will also dry up investment for growing supply. > help alleviate some acute symptoms. A short term symptom abatement, if it even does abate anything, is not going to make any difference tbh. Concentrate on solving the fundamental issue - lack of supply due to various interest groups resisting supply growth.

llbeansandrice 5y ago

I'm not contending that supply isn't the real issue, just that there's no way you're going to be able to change the culture around individual home ownership, nimbyism, and zoning laws on any reasonable time-frame. A better current solution that likely has wide-spread support would be to limit the demand rather than throw more money into the demand side. Limiting large investors does not solve the problem, but it could help alleviate some acute symptoms.

davidw 5y ago
I'm not so sure it's not possible. There are large numbers of people getting priced out, and YIMBY groups are springing up all over. Here in Oregon, we passed HB2001, which re-legalizes up to 4-plexes in our cities. One of the city councilors where I live is a huge YIMBY. https://www.brookings.edu/blog/the-avenue/2022/03/31/where-pro-housing-groups-are-emerging/ https://www.brookings.edu/blog/the-avenue/2022/03/31/where-p... https://noahpinion.substack.com/p/the-yimbys-are-starting-to-win-a?s=r https://noahpinion.substack.com/p/the-yimbys-are-starting-to...
- dionidium 5y ago
  Yeah, you'd never get it done on a local level, but when people are forced to think about the issue holistically -- that is, when they can get outside of their immediate neighborhood and think about the fact that it's illegal to build enough housing on a state or even national level -- it looks like they can actually be swayed. These changes have to be made at the state/province level.
chii 5y ago
> A better current solution that likely has wide-spread support would be to limit the demand rather than throw more money into the demand side. black markets spring up to serve demand when there's law and regulation that tries to prohibit such demand. I don't see how making the real estate market this way is gonna get it better. The only way to make prices drop is to increase supply. trying to tax a fringe group, or to penalize investors etc, is not going to do well at all. And doing so will also dry up investment for growing supply. > help alleviate some acute symptoms. A short term symptom abatement, if it even does abate anything, is not going to make any difference tbh. Concentrate on solving the fundamental issue - lack of supply due to various interest groups resisting supply growth.