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JPMorgan to spend $1B on rental homes in the US to become a megalandlord

• robg 4y ago
  Yeah, this should be regulated. If electricity and water are public utilities, housing should be too.
  • maxerickson 4y ago
    I guess I don't think JPMorgan should be regulated a whole lot more here than someone that owns a single rental. The renters of either place should have a reasonable experience. This ends up being a relatively small investment relative to the overall housing market (thousands of units gets you to a billion dollar acquisition cost). I can see it being a problem if large investors started to own most housing, but the best check on that is probably distributed and local (building more housing).
• DueDilligence 4y ago
  .. Blackrock, y'all.
  • mpeg 4y ago
    Indeed, Blackrock invested hundreds of millions just in a former employer of mine in the smaller UK market. They are really heavily invested in property
  • scarface74 4y ago
    Blackrock bought pre-existing inventory. How is this similar?
    • mpeg 4y ago
      Blackrock invested over £350m just in my former employer to finance new builds in the UK, it’s not just second hand.
      • scarface74 4y ago
        And they haven’t as far as I know in the US.
• ggm 4y ago
  What rate of return is socially acceptable? Putting the market to one side, there's affordability to tenants, this is a home not just an investment vehicle which has to balance off against investment returns, in many cases LPTs are what pension funds invest in, so the income in turn is funding retirement.
  • chii 4y ago
    > What rate of return is socially acceptable? the market rate of return. You establish this by making sure that a market has enough participants that they all vie for the investment. This will drive down the rate of return, down to an acceptable level that allows participants to continue.
    • willis936 4y ago
      Microeconomics suggests there are multiple common scenarios where consumers are priced out of the market entirely. If you can't afford rent then you can't afford to move. People homeless to appease shareholder value.
    • ElfinTrousers 4y ago
      Seeing a free market fundamentalist preach in 2022 is like watching a doomsday cultist try to explain why the world didn't end on time last week.
    • BirdieNZ 4y ago
      Land/location is not a capital good and isn't affected by the same market rules as capital goods, because it is unique and possesses monopoly properties. It's essentially impossible for land and other natural resources to have a free market, by nature.
  • hgsgm 4y ago
    Rate of return is irrelevant. Affordability matters.
  • kubb 4y ago
    0%, large landlords should be non profit cooperatives, there should be several to ensure efficiency/prevent monopoly stagnation and they should be under constant scrutiny from independent parties.
• mintaka5 4y ago
  https://www.nbcnews.com/id/wbna6902224 https://www.nbcnews.com/id/wbna6902224 uh-member this? ownership society my ass!
  • feet 4y ago
    You thought it was ownership for people? Nah, ownership for our corporate overlords. Us plebs get to rent everything
    • asah 4y ago
      You're supposed to own shares in those corporations.
      • feet 4y ago
        As if that somehow makes it better when they purchase all the homes and jack up rents? How many people can even afford to buy voting shares especially among the renting population? Do they have enough money to throw around like that?
        • mintaka5 4y ago
          in the past year after the COVIDicide i've traveled all over the US, and it's fuckin scary how many empty homes there are. owned property, but empty. no for sale signs. no occupants. why are these homes not selling? i will never rent a home! i've been renting for 30 years and it SUCKS. we have to live under the torment of never having a place to call home ever! the looming threat that when we lose our jobs because of pandemics or disasters, or economic turmoil, there's no guarantee that we'll ever not be homeless. ask me, i know from experience, i am a homeless programmer, living in a shelter, typing this from the public library. i lost my job in September, and my rental. i have no cash to drop money on rent now, so this is just one example of what's to come for the rest of you who don't own property. it's a LIVING HELL!
          • deleted 4y ago
            [deleted]
• pcdoodle 4y ago
  1B is such a small amount, so like 2,000 homes?
  • mupuff1234 4y ago
    Depends on how concentrated they are.
    • xeonmc 4y ago
      a concentration camp?
  • asah 4y ago
    1B is a single building in Manhattan (midtown luxury...)
• ashwagary 4y ago
  You think other states will copy New York and restrict Airbnb due to this housing crunch?
  • rcpt 4y ago
    Honestly with how serious we take zoning laws I don't understand why Airbnb isn't already banned everywhere. Airbnb essentially rezones residential units as commerical hotels
• llampx 4y ago
  I remember reading about a company that was using the latest technology to be a fully automated landlord. From video verification to sign the lease and unlock the keys, to automatically accepting and denying tenants based on AI... seems like these mega-landlords would not be possible without the use of AI and extensive automation.
  • hgsgm 4y ago
    McDonalds is a mega fast food retailer but they still have employees. Linear scaling is linear in costs and profits.
  • mpeg 4y ago
    Having recently had to move homes, I welcome these mega landlords with open arms. They verticalise the whole process and in doing so greatly improve the experience for tenants. The traditional process with estate agents and unreasonable private landlords is completely broken and extremely frustrating to deal with.
    • 29083011397778 4y ago
      > I welcome these mega landlords with open arms Because corporations with the cashflow of nation-states have routinely given better customer service in your experience? Or does it sound simpler having only 3 choices to rent from in your city instead of 30? Because it does sound like a hell of a time-saver making it onto 30% of your city's "Do not rent to" list when you can do it by taking a single company to small-claims court over an issue they don't want to fix, when you have tenent protections laws on your side forcing them to. They can "greatly improve the experience" when everything goes smoothly, but it's difficult to argue with a tag-team comprised of a computer database, and a different customer service agent for every call you make.
  • Retric 4y ago
    1B is a tiny investment in this space, many individual skyscrapers are worth significantly more than 1B. Managing ~3,000 single family home rentals is possible for a single small office assuming it’s all in a small geographical area. But the article mentions they are outsourcing the work to a third party.
• ramijames 4y ago
  This should be illegal.
  • dazc 4y ago
    How does this differ from banks lending money for traditional mortgages, it's just another method of financing? Yes, I know the cost of housing is insane and something should be done about it, but introducing some level of market efficiency isn't necessarily a bad thing. I can't speak for the US but in the UK a huge majority of private landlords are individuals, many of who want to earn a living from renting out two or three homes max. I rent an office from such a person, his sense of entitlement is off the scales. Some of these landlords had the homes fall into their laps via inheritance, some are simply playing an arbitrage game, very few are actually doing anything economically productive. Anything that threatens this method of exploitation has to be positive.
    • mpeg 4y ago
      Indeed, as a UK renter dealing with one of these mega landlords (eg Greystar) is so much better than the usual exploitation game that private landlords play.
      • beowulfey 4y ago
        Fascinating. My experience in the US is the exact opposite. Corporate landlords are generally awful, where everything they rent out is full of shoddy repairs and minimum-cost ‘luxury facilities’ to drive up rent. Private landlords, particularly where the owners live in the same building, are almost always better. My experience has largely been in urban areas of the US, not sure about smaller towns; I suspect higher demand is what allows for it.
        • kennend3 4y ago
          Individual experiences are anecdotal but here's a few of mine. My Son lives in a "mega landlord" unit in Saskatoon (Canada) and it is well maintained and his rental fee is very reasonable. My Son-in-law lives in a "mega landlord" unit in New Jersey (USA) and it is also in excellent condition. I personally rented from a private individual in Connecticut for several years and it was a slumhouse. Landlord was never around, no one to call when things didnt work. we actually had to fix the heating system in Jan because we were freezing cold and the owner was once again MIA.
• nerdchum 4y ago
  I currently live in a van because I can't afford rent or a home. The past few weeks at -10 degrees has been rough. So nice to see that corporations are buying the existing homes and governments are restricting the amount of homes that can be built so the corporations shareholders will have a safe place to park their money while inflation is at 10%. Boy this version of government and capitalism is awesome. Let's do drinking water next!
  • myth_drannon 4y ago
    Water is owned by Coca-Cola already.
    • glogla 4y ago
      Its Nestle, actually.[1] [1]: https://en.wikipedia.org/wiki/Nestl%C3%A9#Water https://en.wikipedia.org/wiki/Nestl%C3%A9#Water
  • throwaway6734 4y ago
    Investors are chasing easy profits. The fault lies with anti- development and NIMBY forces
    • thorncorona 4y ago
      Would be nice if our so called corporate overlords grew some morals for a change.
    • javajosh 4y ago
      So, yes, housing is artificially scarce because of "anti-development and NIMBY forces". But there are other forces at work, particularly good old market forces. Corpos that compete with me when I am buying housing for my family can go suck a big fat dick.
      • throwaway6734 4y ago
        >Corpos that compete with me when I am buying housing for my family can go suck a big fat dick. Why? If they're willing to overpay for properties it will benefit the current homeowner and will encourage new development
• seydor 4y ago
  Now that's innovation
• ethanbond 4y ago
  Institute high Land Value Tax and eliminate most zoning and JPM can do whatever they want with their money. They’ll just have to compete on units and services provided instead of who had enough capital to capture indefinite land rent.
  • slaw 4y ago
    We should start with Federal ban on zoning.
    • onlyrealcuzzo 4y ago
      So you wouldn't mind if someone surrounds your house with landfills and nuclear waste storage? Most zoning seems to make life worse for renters. But not all zoning is bad.
      • slaw 4y ago
        I mean zoning for house development. Article is about homes, isn't it?
      • MerelyMortal 4y ago
        No neighbors and a safe neighborhood? Don't temp me.
      • rcpt 4y ago
        fwiw where I live in Los Angeles we have actual operational oil derricks right in the middle of residential neighborhoods but it's nearly impossible to build apartment buildings. https://www.theatlantic.com/photo/2014/08/the-urban-oil-fields-of-los-angeles/100799/ https://www.theatlantic.com/photo/2014/08/the-urban-oil-fiel... If zoning can't prevent the heaviest of heavy industries from sharing space with schools and playgrounds then I don't see why keeping it around to kill new housing projects is so useful.
  • vasco 4y ago
    Land value tax which is free if you live in an owner occupied property, without the ability to sublet. Higher if rented out, and then make a linear increasing penalty percentage with the number of properties owned. So if you own one house and live there, zero tax. If you own 5 properties, you pay zero on the one you live in, then regular tax on the second, tax+penalty on the third, tax+higher penalty on the fourth, etc. It would not make any sense to create real estate ETFs under this world for example because the tax penalty would be extremely high.
• ElfinTrousers 4y ago
  I have thought for some time that there is a large fraction of the USA population who aren't really wild about democracy, even in the flabby and corrupt version practiced here. They'd rather have, on a subconscious level, a king and aristocracy ruling them. Here we have Blackrock doing their part by trying to reintroduce feudalism.
  • elforce002 4y ago
    That's disgusting. The scary thing is that you're probably right.
  • indigochill 4y ago
    In feudalism, all things being average, a vassal benefits from loyalty to a lord because the lord provides protection (because the lord considers the vassal's land ultimately theirs and the vassal primarily as a steward of it). Corporations buying up and renting real estate is worse than feudalism because you're just paying them for the right to live in a place. Protection such as it is is "outsourced" to the police, but the police don't actually have a material incentive to keep the peace either because they get tax money one way or the other. If anything, some crime is good for business because it provides political leverage to call for more tax money. So please, let's bring on feudalism because it would actually align incentives far better than what we have now.
• imgabe 4y ago
  > Haven Realty Capital and JPMorgan Chase's asset management arm said they will invest up to $1 billion to develop build-to-rent single-family homes across the country, according to a November 15 announcement. It sounds like this will involve building new houses, increasing the housing supply, which is a good thing.
  • jt2190 4y ago
    I agree it seems like that’s what the article is saying, although there is a confusing part: > [Haven Realty Capital and JPMorgan Chase plan] to seed their investment with up to $415 million in equity. The first installment will include a purchase of 250 homes in three communities around the Atlanta metropolitan area… It’s hard to tell if these homes have been built yet or not. (I assume “not”).
    • fuzzfactor 4y ago
      >It’s hard to tell if these homes have been built yet or not. (I assume “not”). Could be a very good assumption. Or maybe it's supposed to be hard to tell. I can almost imagine a well-connected Atlanta real estate operator with something like $100 million in loans, building 250 units at one time in the hottest subdivisions, where the units are not quite completely built and there may now be pressure due to rising interest rates. The market might not be quite so hot now. The properties can not stand to be unloaded slower or for lower sales prices than it was expected when they were originally financed. So faster it is, with major restructuring and even more leverage. It could even be called a bailout, and the big capital groups will be able to structure the rental cash flow as an operating loss while it actually pays its own way the whole time. Leaving the underlying real estate appreciation to be realized in a more tax-advantaged situation after it becomes possible in the future, at which point the actual cash outlay for the asset itself would be quite nebulous. The money brokers are all-in with the $415 million, they'll be owning homes that are now too far out-of-reach for retail buyers to make them fly off the shelf as fast, and the builders can keep making money building more of them anyway. Other builders in the same subdivisions, who are not being bailed out, will benefit too since there will be less downward pressure on sales prices overall. So everybody wins except the renters who are paying for it all, but at least they can count on their payments starting out within reach, with gradual rate increases providing a competitive return for the investors, considering the future prevailing interest rates and inflation as a guideline. No ordinary mortgages will ever apply to these properties, not even at the beginning. If the renters' income fails to increase at the rate their rent payment increases over the long run, the landlord will get replacement renters as always. Why do you think there are so many more homeless? A business model could be built on young families who had worked for years to be able to own a home in a target neighborhood by about the end of 2022 or so. Or maybe before the start of the school year in 2023. As this date approached, things escalated rapidly and ownership jumped beyond the reach of their monthly income. If they can be persuaded to enjoy the same homes as renters instead that can be arranged no problem. Now once it doesn't make any difference if the homes are already built or not, the only homes that will be built will be the ones where the outcome is not much different than simply buying up many of the already-built homes and turning them into rentals. Without building anything new unless it reaches an ever-higher bar of consumer disadvantage. Or something like that. When a vulture swoops in it's a pretty good sign there's something more rotten than you thought.
• andylynch 4y ago
  So, one or two neighbourhoods? Barring some dramatic kind of tenure reform, this isn’t such a bad idea for tenants, given that unlike so many landlords, this venture is being run by firms big enough to attract scrutiny, and competent enough to know what processes and laws to follow, even if they will push those boundaries. As an aside, the article also refers to a story on ‘digitising the rental market’ which seems to be about moving the US market away from rent checks? Why are these still a thing there? in most countries at least in OECD this is like doing business via fax or even telex.
  • javajosh 4y ago
    An excellent argument for further consolidation of every industry - now they are big enough to attract scrutiny! Look, less competition is actually better for consumers! I mean, wow.
    • andylynch 4y ago
      Not arguing that at all - real estate is weird in that it’s much less liquid than other retail markets, and moreover buyers ie renters are at a further economic and information disadvantage. So some consolidation in the context of making the market more transparent and better regulated for renters to counter this _maybe_ should not be immediately dismissed if there is not a political mandate for more dramatic reforms.
      • javajosh 4y ago
        It sounds like you're arguing in good faith, but no, I'm sorry, you're just wrong. In any conflict, a smaller adversary is better. Individual landlords, who live in the neighborhood, are in every way more accountable for their behavior.
  • stonepresto 4y ago
    Sounds like you don't live in the US... I have a feeling rental companies are very different where you live. They are notoriously and laughably bad here. Broken webapps, slow replies, understaffed maintenance crews, misdirection in the name of profit, and sometimes outright deception.
• wefshill 4y ago
  [flagged]
• Someone1234 4y ago
  One thing I think has become clear to investors is that the US Government will always "socialized the losses" for Housing. Which is to say that while such ventures could be considered risky investments (particularly during a downturn), the US Government has made clear that there's a floor on housing and that the money-gates will open if things turn bad. So in essence the US government has created, for corporations, a nearly risk free investment. Highly profitable in the good years, and the bill picked up by all of us in the bad years.
  • deleted 4y ago
    [deleted]
  • frankreyes 4y ago
    Because the implicit promise of housing is that it will never depreciate it's value. It's a safe bet against inflation over long run. For normal homeowners who want to pass an inheritance to the next generation, a house is both a home and, a retirement plan, and an inheritance investment. The big losers in cheap housing are the families that've paid a mortgage for 30 years in order to save money for the future. Asking for cheap housing, today, is like asking for eating the cake and selling it too.
    • wildrhythms 4y ago
      > the implicit promise of housing is that it will never depreciate it's value An asset with infinite growth... very sustainable system we've created isn't it?
      • frankreyes 4y ago
        I wouldn't say infinite growth. Boom and bust cycles have been the norm in the few couple thousand years. But housing prices are artificially held up because of voters and taxpayers who would vote them out of office if 2008 were to be the norm, it's not a shady conspiracy.
    • anon9384929 4y ago
      This is a silly take in my opinion. Something never depreciating against its value is simply bad economics. Things will always appreciate and depreciate. I don’t know who promised you this, but it sounds like you got sold a bridge in Brooklyn. Given that, there are plenty of other ways to save, pass on an inheritance, etc. You don’t need to hoard land so that I can’t live anywhere. I don’t really care about your 30 year mortgage, respectfully. I probably wasn’t born when you signed it - why do you get to fuck me out of having affordable housing when I wasn’t even born yet to have that fight with you?
• lizardactivist 4y ago
  I can't imagine a company like that would make a good landlord.
  • scarface74 4y ago
    I will deal with a professionally managed property any day over an individual landlord.
    • rcpt 4y ago
      Yes 100% "Mom and Pop" never fix anything and keep security deposits with no justification all the time in my experience. Big corps might not have nice stories to tell you about how the neighborhood was 50 years ago but at least they behave predictably
      • scarface74 4y ago
        On a related note, my wife and I travel half the year flying to different cities. We explicitly chose to do hotels instead of dealing with AirBnbs for the same reason. I always know what I’m going to get when staying at Hiltons and I know that they are going to be professionally managed and legal.
        • rcpt 4y ago
          I'm in the middle of arbitration with Airbnb now because they wouldn't refund me when a host denied me entry after I arrived because the host thought my negative covid test was faked (?!). What a shit company.
          • leoh 4y ago
            Have you heard of a credit card chargeback?
            • rcpt 4y ago
• Havoc 4y ago
  Was chatting to my younger cousins the other day and they were surprisingly hostile against landlords. Not some types or some practices - all of it. Even relatives doing single buy to let. Younger generation really isn’t on board with all this & only a matter of time before it shows in polls
  • VettrianoE 4y ago
    What can we do about it ? We can - in maybe 10-15 years time with enough protest. But that is too late. If you are 28 yo and want to settle down what do you do - create a non profit to lobby against corporate landlords? That requires at least as much effort to do as keeping a regular job and maintaining your relationship. A young person without a solid family backing is already stretched too thin. And families is rapidly disintegrating across America leaving the young particularly vulnerable to the corporate landlord scheme.
    • ihm 4y ago
      You can join a tenants union to fight against your landlord. In the bay there’s TANC (https://baytanc.com https://baytanc.com) for example which I’m a member of.
  • tjpnz 4y ago
    That resentment is natural given that the people they're renting from often had their foot on the property ladder in their twenties. For millenials and younger that's the exception unless you've had help from your parents.
    • prepend 4y ago
      Hasn’t this been the case for many generations? Houses were way cheaper in 1980 and 1990 and 2000. I don’t think it’s particularly worse for millennials vs genx.
      • ilyt 4y ago
        It's becoming worse and worse over time
• boveus 4y ago
  This isn’t a new thing and there are demonstrable problems caused by private equity becoming involved in rental housing in Atlanta: https://www.ajc.com/news/investigations/dwellings/apartments-violent-crime/ https://www.ajc.com/news/investigations/dwellings/apartments... It isn’t surprising that they want to start in Atlanta, as the combination of few renter protections, lax code enforcement, and affordable housing subsidies can combine to make an ideal situation for maximizing profit at the cost of human misery.
  • 1123581321 4y ago
    The hazards created by the dynamic public rent subsidy most stood out to me. The strongest protection against these units would be to replace it with direct cash assistance pegged to overall inflation, rather than the cost to rent at specific buildings.
• moneywoes 4y ago
  Is build to rent more likely to succeed than zillows program that failed?
• xwdv 4y ago
  It’s not the mega landlord that people have a problem with, it’s that the rent is too high. Land lording isn’t going to go away, so it’s best to focus efforts on reducing rents.
  • BirdieNZ 4y ago
    Land value tax would fix this!
    • xwdv 4y ago
      Tax gets passed on to the consumer.
      • BirdieNZ 4y ago
        Land value tax is one of the few taxes where the incidence is primarily on the land-owner, not the tenant. This is because it's an essential need that is of limited supply, so the price of the land rent is already set to the maximum. The landlord has to eat the cost of the tax.
        • xwdv 4y ago
          He can raise rent to pay for the added tax.
          • BirdieNZ 4y ago
            If he could do that after the tax, why not do it right now without the tax? Rents are already as high as the market can bear for most tenancies, so the landlord has to eat cost increases.
            • xwdv 4y ago
              He is in competition with other landlords, who can afford to charge less, he has no freedom to simply raise rent arbitrarily. When every landlord has to pay land value tax, then they all will raise their rents to accommodate it. The Renter will pay the tax. Landlords are running a business, they are not “eating” costs, the costs are paid for by the rent, and if the rent isn’t high enough to cover the costs, they go out of business. Every tax you inflict is simply violence against the renter. So go ahead, make a land value tax, make it even harder for people to rent.
• BenFranklin100 4y ago
  Two points: 1. Being a landlord has become a more attractive investment because in job-rich regions, cities don’t let developers build enough new homes. The lack of competition from new units allows landlords to raise rents on existing units. Let us be clear on a point of confusion: Developers DO NOT EQUAL landlords. Sometimes developers will rent the units they build, but often not. Developers are the good guys here. When they build shiny luxury towers, it gives the Amazon tech bro something to buy instead of coming into your neighborhood and bidding up the price of older units. 2. Financialization of homes as a personal investment is a BAD thing. It’s essentially a Ponzi scheme operating over decades where home buyers depend on people wealthier than themselves to buy their home at a higher price decades later. This is clearly unsustainable. Homes need to stop being seen as an investment, but rather a consumption, much like a car or other goods. The Atlantic had a good article exploring this topic: https://www.theatlantic.com/newsletters/archive/2022/12/homeownership-real-estate-investment-renting/672511/ https://www.theatlantic.com/newsletters/archive/2022/12/home... The solution to our housing crises will include A. State governments allow lots of new homes such that homes are no longer a scarce (thus expensive) commodity, and B. We put in better tenant protections or practices such as multi-year leases that can be broken without too much of a penalty. That is, a family can, say, sign a 10-15 year lease on a home and still break the lease if life events make it necessary.
  • rhaway84773 4y ago
    We also need to eliminate the massive government incentives for owning a home, or adding similar incentives for renting.
    • BenFranklin100 4y ago
      The mortgage tax deduction and the Homes Sales Tax exclusion should be eliminated. They are regressive pieces of legislation that serve to widen inequality.
      • sokoloff 4y ago
        The mortgage interest deduction serves to put prospective owner-occupants on an equal footing with prospective landlords (for which business loan interest is deductible against profits). The capital gains exclusion I have less strong feelings about, but it amounts in large part to excluding being taxed on the effect of inflation.
• shrubble 4y ago
  Question: if you or I need a loan to buy a house the interest rate is 6% or so, currently. Does JPM have a source of far lower interest rate loans than that? Or are they simply creating the money out of thin air by creating credit, in effect, loaning money to themselves?
  • prepend 4y ago
    The corporate bond rate for AAA companies is currently 4.71% [0] so they are likely able to borrow at a lower rate than you or I could mortgage. They can’t just create money out of thin air. And even if they could, that money would compete with other investments. In some ways, that’s what banks do as there are deposit reserve ratios and what not where they take in deposits and loan out more. But JPMorgan internal projects would “borrow” similarly to anyone else who wanted to use $1B to buy a bunch of houses. [0] https://ycharts.com/indicators/us_coporate_aaa_effective_yield https://ycharts.com/indicators/us_coporate_aaa_effective_yie...
    • mpeg 4y ago
      When you buy new builds in bulk you also don’t pay full price, the builder will extend a nice discount as it provides a great channel to get rid of inventory and move on to the next site.
    • impossiblefork 4y ago
      But wouldn't there be an additional tax advantage: Suppose that we have a company buying houses and an individual buying a house using his salary. In order to move money from a company to an individual income tax must be paid and if a company instead invests its money, I assume that no tax is paid immediately. Consequently if companies start bidding for houses, they will have much more money available than individuals, ensuring that houses will in the long run hardly ever be owned by individuals. The result would thus be large company-owned estates, filled with renters.
      • prepend 4y ago
        The individual would just form an llc or even c-Corp and use that to purchase the real estate. I think most real estate rented out is technically owned by a corporation because of the liability issues. So we’re already there. But I think there’s a difference between a solely owned Corp and a huge Corp. But for tax purposes, they seem the same.
• jmyeet 4y ago
  And then JPMC like all property developers will buy politicians to prevent even more housing being built to appreciate their existing assets. We know how this goes. The uber-concentration of wealth and the exploitation of labor that we are allowing to happen is short-term thinking. The #1 factor in homelessness by a mile is the cost of housing. Poverty is the most significant factor in crime. We, as a society, would rather spend billions on an overmilitarized ineffective police force to be "tough on crime" rather than address the systemic issues that lead to that crime. The first stage we will see is a well-documented phenomenon called the alienation of labor where the people required to produce something cannot possibly afford it. Once that reaches housing (and some argue it already has) then we're in big trouble. What comes next? War and revolution. These are the ultimate forms of wealth redistribution once wealth inequality becomes too extreme. This country produces enough wealth for every man, woman and child to have shelter, food and health care, period. It is a political decision to let people die on the streets, starve or die from being unable to afford insulin. This is state violence. A fairer distribution of wealth isn't just about the morality of providing for basic human needs. It's also about giving those increasingly-consolidated megacorporations customers for the widgets they sell and preventing the inevitable violent uprising that lies at the end of the road when late stage capitalism turns into neofeudalism.
• scotty79 4y ago
  Please, create progressive income tax that is higher, the more real estate one entity (including subsidiaries) owns.
  • rcpt 4y ago
    I've never heard this one before and I have an unhealthy obsession with housing discourse. The idea is to divide up income tax brackets based on property wealth instead of income level? That's interesting. Is it just your idea or something people advocate for somewhere?
    • geocon 4y ago
      Land value tax is better, imo, it charges directly based on the value of the scarce factor of production (land) and encourages development (i.e. more housing). Pretty silly to tax someone who owns a bunch of apartments in the middle of nowhere tons more than someone who owns one megamansion in LA.
    • fundad 4y ago
      That’s what property tax is
      • thunkshift1 4y ago
        No it isnt
    • scotty79 4y ago
      The idea is to increase the amount of real estate tax to be paid accordingly to the amount of real estate properties you own. If you own a house you should pay higher tax on it than your neighbor that has the same house but doesn't have 30 other houses like you do. And of course you should pay more on each of the 30 houses you own. Basically large propery owners should pay higher real estate tax than it would be paid if their real estate was split up between multiple smaller owners. That's why I mentioned subsidiaries, so you can't fake-split ownership.
• college_physics 4y ago
  If you think about it, why have a buy-to-let market that requires assessing landlord credit risk, property value risk and rental cashflow (occupancy) risk, just eliminate the hapless intermediaries. Next step: build-to-lease EV's. Final step: Eloi renters/users and Morlock builder/banker/owners
• ngoilapites 4y ago
  Now it is time to update regulations, but how? Not even in Germany they could do it.
• IAmGraydon 4y ago
  Is it me or does $1B not seem like much? At an average cost of $75,000 per unit, they’ll have around 13,000 units. There are 126,000,000 units in the US, giving them 0.01% market share. That is absolute peanuts compared to large property developers.
  • jeffreyq 4y ago
    Curious as to where you got your numbers from. Also, the article indicates that "the companies plan to acquire up to $1 billion in build-to-rent properties, starting in Atlanta." So, in the grand scheme of themes (greater US) probably a drop in the bucket. But maybe it's a big deal when we only look at Atlanta.
• wolverine876 4y ago
  The megalandords are potentially a serious threat to democracy. Property rights are, to many theorists, the foundation of liberty. The widespread ownership of property is arguably the foundation of democracy. Owning your home gives you rights and independence; your home is your castle. The landlord's home is their castle. Now we are concentrating wealth and property back into the hands of a few, a corporate aristocracy. You can use property at their pleasure. What happens if you want to do something politically unpopular? Put a sign in your yard? Work someplace or say something on social media? What if you have a dispute with this landlord - can you compete in court with their lawyers? where else will you live? Will other megalandlords accept you? They also will have enormous influence in local communities. Property owners, not renters, are the influential people in any community. These new megalandlords will concentrate that power in a large corporation which has enormous resources. Local government will not be able to compete. How does this arrangement differ from feudalism, with the wealthy controlling the land and the rest reduced to renting it. Well past feudalism, the concentration of property ownership has been a serious obstacle to democracy in many countries trying to make that transition. Now we are going backward. Do you think these wealthy, powerful people, who pride themselves on their naked aggression and disregard of others' welfare, who have a long history of buying government, will not use this power? A crucial question is, is this part of the deliberate attack on democracy by the (unnamed) coalition of wealthy and corporations, or truly just an investment? Regardless, the power will be there for that coalition to utilize.
  • geocon 4y ago
    Behold the rise of neofeudalism: you can already see it in California, thanks to Prop 13. Land value tax would fix this.
    • rightbyte 4y ago
      > Land value tax would fix this. The banks decide what your house is worth and the gov then tax you based on that. Seems like a way to force people into a never ending grind and kicking out seniors. No thanks.
      • 4y ago
• gbasin 4y ago
  To play devil's advocate, these big institutional buyers moving into the single-family home market after a huge run up just feels like suckers rushing in at the top. We're possibly at a multi-generational peak in inflation-adjusted returns to homeownership. Total population growth has essentially peaked, and working age population is falling. Expect more inflation over the next 50 years as we have more retirees (pure consumers of goods) to working age folk (who are net producers). On top of that, we've built more housing than "needed" in 99% of the country (look up the numbers if you're curious... construction has outpaced population growth).
  • robocat 4y ago
    > look up the numbers if you're curious Perhaps provide a link? I did a Google and the first result said the opposite.
    • gbasin 4y ago
      some charts here https://twitter.com/Econimica/media https://twitter.com/Econimica/media
• xivzgrev 4y ago
  If they’re building new housing I’m ok with this. It’s the mega investors buying up 10k+ existing houses that suck for people and drive more to rent.
• civilized 4y ago
  Big financial institution confidently bets that NIMBYs will control housing supply for the foreseeable future.
• dbg31415 4y ago
  I know I just sound old when I say this, but homes should be owned by people. Texas has a "homestead" tax exemption that saves you 2-3k a year on your primary residence. I think up that. Make it 20k a year savings... people don't need multiple houses. Companies certainly don't need to own houses. Blah blah. I just hate this. It feels like taking advantage of people, another barrier to the "American Dream" of home ownership.
• Animats 4y ago
  Strange. This made a lot of sense during the time of cheap money. Less sense now.
• _8j50 4y ago
  Look, I have a lot of strong opinions but I cannot get over the fact that housing as an investment is a thing, especially by corporations. Let's back up a bit. The richest country in the history of humanity has a ton of homeless people yet its corporations buy up houses purely for the sake of preventing others from living in the house so they can sell it at a higher price later on. Is that not absurd? Even canada, vast beautiful land with most living close to the US border. Yet land or house in the middle nowhere in the Yukon costs a fortune now. All because this one simple disease: corporations, which are legal entities constructed to allow a group of people to use their collective wealth to advance a goal (such as profit) are treated the same as natural persons whose rights and liberties are naturally justified beyond the scope of any country's laws, all because collective wealth meant collective power to influence lae makers and judges? The answet to this and so many other first world ailments is simple: 1) corporations as legal entities are not the same as natural persons. They are not created equal to individuals and do not enjoy human rightd or civil liberties. 2) Land and housing is for individual needs first (because of #1). Investment housing by nature forms a perverse incentive, investors can instead invest in derivstives or ETFs where they can build equity in a similar way without robbing people of housing. I am really shocked that these things are missing from mainstream discussions. It sounds like everyone wants to avoid the big fat elephant in the crowded room.
  • thinking4real 4y ago
    Of course these things aren’t heard in mainstream discussions. The media, and by extension the minds of majority of our citizens, are owned by the same corporate entities you mention. They control language so that people will go along with their greed. So if you’re a corp, you steer the discussions around your profit seeking avenues so people don’t even posses the language necessary ti discuss your demise. People will never discuss the abstract idea that this whole “legal entities == people” thing is fucked, because they think they’re clever to talk about some vague future tax that will never be implemented because the corps own the politicians too. People aren’t avoiding the elephant - they have been programmed to not realize the elephant is the problem.
• nmca 4y ago
  Renters are yimby, owners are nimby. Supply side regulatory capture is the problem; it is run by democracy. Thus if you look at demographic trends in rent-vs-own and turn-out (by region to account for non-proportional representation) one should be able to forecast when a nation will transition from nimby to yimby. In the UK looks to be a ways off.
• HPsquared 4y ago
  1 billion? With a B? That's not going to make any difference to anything. Maybe if it was all within a single city.
• alexbiet 4y ago
  Homes should be afforded by and owned by families. Corporations have no business owning family homes. The fact this is even a thing shows how broken the system actually is.
• tinco 4y ago
  $1B is absolutely peanuts, if they spend this yearly on acquiring real estate it will be a hundred years until they could be considered a mega landlord like for example Blackstone with its $550B worth of residential rental properties. They bought a billion and a half worth of properties in the small provincial city of Amsterdam in The Netherlands over the past couple years and it doesn't even make a dent on the housing market. That, and because of their corporate nature they're a lot less shitty landlords than the previous owners were. I'm in full agreement that big money is a threat to society, but at least be realistic about the numbers. Just imagine how insanely large amounts of money you need to corner the market. I'm not saying it's impossible, but if the articles aren't talking about trillions, then they're simply not relevant. Maybe if the article was about a thousand JPMorgans becoming "mega" landlords it could be relevant. Also.. who is really losing here? The way I see it, this is a threat to the lower upper class, who are being pushed out of the renting market. Are we supposed to feel bad for them, or is this article intended audience the lower upper class?
  • opportune 4y ago
    I agree with this take, $1b is absolutely nothing in the housing market. It’s like 3000 homes, maybe more in a cheap market, less in an expensive market. It could distort a regional market if it’s all concentrated in one area, but in the grand scheme of things it’s a rounding error. I am also of the opinion that big landlords are typically preferable to smaller landlords. They are very predictable known entities with brands to protect, and have legal departments that ensure they will follow laws. They may in some cases be more eager to raise rent (although my corporate landlord hasn’t in the last year despite the market rate increasing about 10%) but they’re not gonna do random manual inspections or capriciously fail to perform maintenance, nor do something batshit like change your locks. The only thing I find problematic is when entities like blackstone purchase SFH for rentals as I see it as a way of capturing value from the middle class (taking the margin that makes home ownership economically attractive) where it wasn’t previously.
    • tinco 4y ago
      Definitely agree, though in Amsterdam they only bought rental units, no SFH, I don't know what their global strategy is in that regard. I'm not sure if there's a clear business case for buying single family homes and turning them into rentals. You're basically competing with the entire mortgage industry then, families have insane buying power when backed by mortgages. They also make decisions that make no financial sense, basically only tempered by governmental regulation and the risk appetite of mortgage lenders.
• miguelazo 4y ago
  Dems would be all over this if the geriatric, sold-out leadership had a clue. https://www.kdrv.com/news/top-stories/senator-merkley-introduces-legislation-to-ban-hedge-fund-ownership-of-residential-housing/article_1f2ae14e-7419-11ed-b8f4-0330a2181ac7.html https://www.kdrv.com/news/top-stories/senator-merkley-introd...
• jabthedang 4y ago
  [dead]
• elforce002 4y ago
  So it begins. Slowly but surely, the WEF mantra is taking shape: "You'll own nothing and you'll be happy". It feels like we're heading back to feudalism, only with extra steps. This will create social unrest, to say the least.
• hungrigekatze 4y ago
  IMO, as someone who has (briefly) worked in real estate tech the United States NEEDS TO pass legislation similar to what Canada has passed regarding the ownership of homes by non-Canadian: >Broadly speaking, the Ban prohibits foreign corporations and individuals who are not permanent residents of Canada or Canadian citizens from purchasing residential real estate in Canada between January 1, 2023, and December 31, 2024. Any contractual obligations arising or assumed prior to January 1, 2023, will not be subject to the Ban https://www.mltaikins.com/real-estate/its-not-just-foreign-buyers-wholl-be-impacted-by-canadas-residential-real-estate-ban/ https://www.mltaikins.com/real-estate/its-not-just-foreign-b... Banning non-Canadian residents from purchasing residential properties as well as banning corporations that are owned (in part or in whole) by non-Canadian residents seems like a good start. It will be interesting to see how many LLCs (or the Canadian equivalent) get created by Canadians but that are actually used as shell companies for international buyers. I hope that there's some sort of flagging of Canadian individuals who suddenly become real estate moguls, buying up dozens or hundreds of properties via LLCs, when the Canadian had no interest in real estate prior to 1 Jan 2023 (which is when the law takes effect).
• cute_boi 4y ago
  The foundation of American Democracy is based on core tenet that everyone deserves right to life, liberty and property. (It was based on John Lock's Idea) This megalandloards directly violate the core tenet "Right to property". Day by day these mega wealthy people are undermining the democracy, and our government is silent due to lobbies.
• mawadev 4y ago
  Solution would be: the more properties you or your company and network of companies owns, the more taxes you pay. These taxes cannot be legally forwarded to the renter. If the property stays empty for some time, you pay more taxes. There should also be a guard against people who rent multiple properties at once to dodge these taxes.
• stiltzkin 4y ago
  "You will own nothing and you will be happy".
• refurb 4y ago
  JPM is going buy $1B in real estate? Oh no, that's 0.002% of the value of all private residential real estate in the US!
• goalieth 4y ago
  Mm
• modshatereality 4y ago
  An actual workable solution with quick easy numbers: each additional rentable/livable property address (not per-unit) beyond some base level (10?) should incur a 0.1% multiplier on overall tax burden of all lands, 10 properties = 1.0 multiplier, 15 properties = 1.5% multiplier, and so on... this new extra mega-lord tax burden must apply to all properties, and span all other corporations owned by the entity.