4 ms·

You say this as though it wasn’t possible to rent before everything got bought out by corporations

fennecfoxen 4y ago
You may notice that the US population has grown, and continues to grow, and the abstract group comprised of "people who rent homes" continue to grow, and to need more to rent. Corporations happen to be the ones filling this need now. Of course there is nothing that says they have to, or that it has to be corporations, nor is there any special noble virtue that we should ascribe to them beyond that of a prudent investment, nor is there some special reward beyond what they can earn in commerce. It is also possible that significant new construction, falling home prices, or general prosperity could make members of the group of renters leave the group, in favor of ownership. Renting something bought by an individual (or a very small corporation) was possible and remains possible. But if there was enough of this happening, the corporations who rent might have serious difficulty finding a profit. It is worth noting that, in a major shift, major home builders expect 50% of their business will soon be in built-to-rent neighborhoods, up from something like 6% today. This is an illustration of how prices are a signal used across the economy to determine what gets done. (Taylor Morrison Home's numbers, from this recent article: https://www.wsj.com/articles/built-to-rent-suburbs-are-poised-to-spread-across-the-u-s-11623075610 https://www.wsj.com/articles/built-to-rent-suburbs-are-poise... ) I refer to the US because it is closer to me. I understand that Canada experiences similar trends.
- ARandumGuy 4y ago
  > You may notice that the US population has grown, and continues to grow, and the abstract group comprised of "people who rent homes" continue to grow, and to need more to rent. "People who rent homes" aren't some special type of consumer that isn't interested in buying a home. While there are situations where renting is preferable even if it's possible to buy, many renters only rent because it's not possible for them to buy a home. Any potential benefits to renting are generally outweighed by the fact that you're not building any equity, and have limited control over the place they live. Massive corporate landlords aren't providing a service to meet a demand. They're actively creating demand by driving up the cost of home ownership, and limiting the amount of properties available to buy. A potential homeowner has no chance of competing with a massive corporation when buying a home. Obviously there's a huge amount of factors that got us here. Housing is hugely complicated, and no single group is responsible. But corporate landlords are one of the factors making the North American housing market worse, and are one of the things we need to address if we're ever going to decrease the cost of living in this country.
  - fennecfoxen 4y ago
    > Massive corporate landlords aren't providing a service to meet a demand. They're actively creating demand by driving up the cost of home ownership This accusation would make a lot of sense if the corporations in question are either (a) a monopoly or (b) an illegal trust, colluding with each other, and through (a) or (b) the corporations enjoyed sufficient concentration of the housing sector that they had pricing power — the ability to restrict the supply and raise prices to make money. This is not the case. The housing market is fairly competitive, and many different buyers, sellers, homeowners, and home-builders participate and compete with each other. Prices are rising for other reasons: a reduced number of homebuilders, in the aftermath of the 2008 crash; various political land-use, zoning, environmental, and similar homebuilding restrictions; a reduction in the overall labor pool, which impacts the labor in new home construction; labor and other supply chain impacts on the availability of components that are used in new home construction; and a significant pandemic-induced shift in real estate usage patterns (almost everyone wants more space now).

You may notice that the US population has grown, and continues to grow, and the abstract group comprised of "people who rent homes" continue to grow, and to need more to rent. Corporations happen to be the ones filling this need now. Of course there is nothing that says they have to, or that it has to be corporations, nor is there any special noble virtue that we should ascribe to them beyond that of a prudent investment, nor is there some special reward beyond what they can earn in commerce. It is also possible that significant new construction, falling home prices, or general prosperity could make members of the group of renters leave the group, in favor of ownership. Renting something bought by an individual (or a very small corporation) was possible and remains possible. But if there was enough of this happening, the corporations who rent might have serious difficulty finding a profit. It is worth noting that, in a major shift, major home builders expect 50% of their business will soon be in built-to-rent neighborhoods, up from something like 6% today. This is an illustration of how prices are a signal used across the economy to determine what gets done. (Taylor Morrison Home's numbers, from this recent article: https://www.wsj.com/articles/built-to-rent-suburbs-are-poised-to-spread-across-the-u-s-11623075610 https://www.wsj.com/articles/built-to-rent-suburbs-are-poise... ) I refer to the US because it is closer to me. I understand that Canada experiences similar trends.

ARandumGuy 4y ago
> You may notice that the US population has grown, and continues to grow, and the abstract group comprised of "people who rent homes" continue to grow, and to need more to rent. "People who rent homes" aren't some special type of consumer that isn't interested in buying a home. While there are situations where renting is preferable even if it's possible to buy, many renters only rent because it's not possible for them to buy a home. Any potential benefits to renting are generally outweighed by the fact that you're not building any equity, and have limited control over the place they live. Massive corporate landlords aren't providing a service to meet a demand. They're actively creating demand by driving up the cost of home ownership, and limiting the amount of properties available to buy. A potential homeowner has no chance of competing with a massive corporation when buying a home. Obviously there's a huge amount of factors that got us here. Housing is hugely complicated, and no single group is responsible. But corporate landlords are one of the factors making the North American housing market worse, and are one of the things we need to address if we're ever going to decrease the cost of living in this country.
- fennecfoxen 4y ago
  > Massive corporate landlords aren't providing a service to meet a demand. They're actively creating demand by driving up the cost of home ownership This accusation would make a lot of sense if the corporations in question are either (a) a monopoly or (b) an illegal trust, colluding with each other, and through (a) or (b) the corporations enjoyed sufficient concentration of the housing sector that they had pricing power — the ability to restrict the supply and raise prices to make money. This is not the case. The housing market is fairly competitive, and many different buyers, sellers, homeowners, and home-builders participate and compete with each other. Prices are rising for other reasons: a reduced number of homebuilders, in the aftermath of the 2008 crash; various political land-use, zoning, environmental, and similar homebuilding restrictions; a reduction in the overall labor pool, which impacts the labor in new home construction; labor and other supply chain impacts on the availability of components that are used in new home construction; and a significant pandemic-induced shift in real estate usage patterns (almost everyone wants more space now).