4 ms·

By what mechanism would (2) make housing cheaper?

ako 4y ago
Reduce demand for housing, if appreciation is low enough, investors will invest their money other things than housing. With equal supply and reduced demand, this should normally lead to lower prices.
- mannerheim 4y ago
  Could backfire if investors then decided not to invest in building new housing, but I guess that doesn't happen anymore anyway.
fabianhjr 4y ago
By reducing instances of private equity firms buying all housing stock en masse and "maximizing profit" by squeezing every last cent their tenants could give. Example: https://www.propublica.org/article/when-private-equity-becomes-your-landlord https://www.propublica.org/article/when-private-equity-becom... Also Adam Smith has a lot of rants against rent seeking behavior and landlords if you want to go with that "communist" writing. > The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give Funnily enough, check how far back the 1/3 income for rent comes from and the context on which it is mentioned: > The rent of an estate above ground commonly amounts to what is supposed to be a third of the gross produce; and it is generally a rent certain and independent of the occasional variations in the crop. [..] This rent “is seldom less than a fourth ... of the whole produce.”
- astrange 4y ago
  Private equity firms are nothing compared to the power of average homeowners using land appreciation as their retirement plan. A simple rule is that nothing people blame on corporations is ever caused by corporations. People and governments are legitimately more powerful than corporations! And they often use that for evil.
- mannerheim 4y ago
  > Private equity-backed firms in the top 35 cumulatively held roughly a million apartments last year, the analysis showed. In a country of 330 million people. 3.6% of apartment units are owned by private equity. https://ourfinancialsecurity.org/2022/06/letters-to-congress-new-afr-research-estimating-minimum-number-of-private-equity-owned-housing-units/ https://ourfinancialsecurity.org/2022/06/letters-to-congress...

ako 4y ago

Reduce demand for housing, if appreciation is low enough, investors will invest their money other things than housing. With equal supply and reduced demand, this should normally lead to lower prices.

mannerheim 4y ago
Could backfire if investors then decided not to invest in building new housing, but I guess that doesn't happen anymore anyway.

fabianhjr 4y ago

By reducing instances of private equity firms buying all housing stock en masse and "maximizing profit" by squeezing every last cent their tenants could give. Example: https://www.propublica.org/article/when-private-equity-becomes-your-landlord https://www.propublica.org/article/when-private-equity-becom... Also Adam Smith has a lot of rants against rent seeking behavior and landlords if you want to go with that "communist" writing. > The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give Funnily enough, check how far back the 1/3 income for rent comes from and the context on which it is mentioned: > The rent of an estate above ground commonly amounts to what is supposed to be a third of the gross produce; and it is generally a rent certain and independent of the occasional variations in the crop. [..] This rent “is seldom less than a fourth ... of the whole produce.”

astrange 4y ago
Private equity firms are nothing compared to the power of average homeowners using land appreciation as their retirement plan. A simple rule is that nothing people blame on corporations is ever caused by corporations. People and governments are legitimately more powerful than corporations! And they often use that for evil.
mannerheim 4y ago
> Private equity-backed firms in the top 35 cumulatively held roughly a million apartments last year, the analysis showed. In a country of 330 million people. 3.6% of apartment units are owned by private equity. https://ourfinancialsecurity.org/2022/06/letters-to-congress-new-afr-research-estimating-minimum-number-of-private-equity-owned-housing-units/ https://ourfinancialsecurity.org/2022/06/letters-to-congress...