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American Dream For Rent: Investors elbow out individual home buyers

• causi 4y ago
  Owning residential land without living on it, sometimes without even having the right to live on it in the case of foreign companies, seems perverse to me. It feels like claiming exclusive ownership over an acre of the ocean or a cubic kilometer of the sky.
  • danaris 4y ago
    Except it's worse, because no one could otherwise use that cubic kilometer of the sky as a place to live. Owning residential land that you can't or won't live on, in a country with a significant homelessness problem, is depriving other people of shelter, a basic need.
• vparikh 4y ago
  The simple solution is if you purchase a property and are not living in it - i.e. its an investment property - you get taxed at a substantially higher rate. Both in property taxes and taxes on the profit made.
  • SketchySeaBeast 4y ago
    The rebuttal you're probably going to hear about this is how this will inordinately punish the private citizen buying a second home as an investment property. We do ultimately need some amount of rentals and those need to be affordable - if the investment property has the hell taxed out of that's going straight to the renter. I say this in an effort to try to point out it's a complicated issue, I in no way support the current large investor predatory housing market.
    • itake 4y ago
      Maybe we should just end the home rental market. You either rent an apartment or buy a house.
      • zeroonetwothree 4y ago
        That seems terrible for consumers
        • itake 4y ago
          Why?
      • vlunkr 4y ago
        What if there are no apartments in your area? Or you have a large family but can’t get a mortgage at the moment? There are plenty of legitimate reasons to rent a home.
        • itake 4y ago
          cities should build them and setup public transit at them.
          • vlunkr 4y ago
            Ideally yes, but it’s a massive undertaking.
      • acuozzo 4y ago
        If it were ended, then what would happen to homeowners who need to move now, but can't sell their home due to market conditions?
        • itake 4y ago
          They still face that decision in the current system. Even if you tried to keep the property, you are still losing time and money. Some people are also just unlucky on market timing.
      • harshalizee 4y ago
        That would be disastrous for families with multiple kids. They may not be able to afford to buy, but able to rent. Forcing them all into an apartment can be chaotic.
    • kahrl 4y ago
      Nobody said "the hell" taxed out of anything. Conversation is completely shut down by these dumb Devil's advocate takes before anyone talks details such as a graduated tax rate.
      • bcrosby95 4y ago
        >> substantially higher rate Is a nice way of saying "tax the hell out of it".
      • SketchySeaBeast 4y ago
        Ok, so my choice of wording is poor, but I'm not trying to do a devil's advocate take, I'm trying to talk about the breadth of the issue. What would you like to see with this? Do you think people should own second rental properties? If so, what does "a substantially higher rate" mean to you that stops investors with deep pockets from investing but not regular people? If people shouldn't own a second property, then why not flagrantly tax them? But then where do renters go?
    • larsiusprime 4y ago
      > If the investment property has the hell taxed out of that's going straight to the renter Not if you exempt the value of the building from taxation and focus the tax exclusively on the value of the underlying land. This has been empirically demonstrated in multiple studies: http://gameofrent.com/content/can-lvt-be-passed-on-to-tenants http://gameofrent.com/content/can-lvt-be-passed-on-to-tenant...
    • affinepplan 4y ago
      > how this will inordinately punish the private citizen buying a second home as an investment property. Good. Properties should not be investments.
      • SketchySeaBeast 4y ago
        As I've said in other places - rental properties will always be required. Not everyone is in a position where they can or should own their own home.
        • hooverd 4y ago
          Public developer to the rescue.
        • forgotusername6 4y ago
          The government should provide housing in those cases.
          • SketchySeaBeast 4y ago
            The government takes over the entirety of the rental market? There's over 100 million people in the United States who rent.
            • forgotusername6 4y ago
              The government should step in when the rental market is failing to deliver for the people i.e. when rents become unaffordable due to lack of supply. They can step in with zoning law changes but they can also step in with direct competition.
          • njarboe 4y ago
            Maybe works in some countries. Government housing in the US is awful.
      • dixie_land 4y ago
    • nicoburns 4y ago
      > The rebuttal you're probably going to hear about this is how this will inordinately punish the private citizen buying a second home as an investment property. Why would it be desirable to encourage private citizens to use property as an investment? I mean, they'd perhaps need to be a one-time easing to ensure that people who have already planned their retirement around such a scheme aren't completely fucked over. But long term it seems to me that there's no downside to this being punished.
      • SketchySeaBeast 4y ago
        Ultimately some people do need a place to rent to live. I saw someone else suggest that rentals are only allowed in apartments, maybe that solves this, but rentals are a vital part of the housing equation.
        • nicoburns 4y ago
          Right, but people don't need to be making money out of that. I think you could set the tax rates so that people basically break even (make a small profit) from renting a house out, and they actually lose money if they hold on to a house they're not renting out (with some carefully worded time-limited exceptions for houses under renovation). That would drive down house prices sharpish! You could also allow the state to step in as owners of rental housing where private landlords aren't making enough rental houses available. And if the state actually built houses for rental you likely wouldn't need as harsh taxation because the rental prices would drop purely through the increased supply.
          • SketchySeaBeast 4y ago
            What stops the landlord from raising the rent? All the landlords will be under the same pressure, so rent should rise universally.
            • jfghi 4y ago
              They do that anyways.
    • flavius29663 4y ago
      > punish the private citizen buying a second home as an investment property Second property should be taxed a little bit more. 3rd much more, 4th much much more etc. > has the hell taxed out of that's going straight to the renter That can be said about anything that has taxes on it: it goes back to punish the final consumer, but in the end it's worth trying to correct the market, be it cigarettes or homes for investment.
      • SketchySeaBeast 4y ago
        I suppose the difference there is that by and large people who find the new tax too onerous can reduce their cigarette consumption or even stop smoking altogether, but people can't just stop renting their home.
        • flavius29663 4y ago
          well yes, but you're still allowing cheap second house, but not third. This means more middle class people can buy an investment home, but they will have to stop there, discouraging landlords with a huge stock of houses. You don't want to discourage investment in houses, just oligopolies/monopolies on the housing stock, and also unoccupied houses.
    • UncleMeat 4y ago
      Why is this bad? Private citizens buying up property to extract rents is also a problem.
  • xwdv 4y ago
    That’s not a solution. If you do this then rent will just increase to make up for the tax increases. It’s a big Fuck You to the tenants. Taxes ALWAYS pass on to the consumer.
    • ClumsyPilot 4y ago
      So profits can never drop? Rental Yield is twice higher in London than in Prague.
      • xwdv 4y ago
        Rent profit could drop and still be at Fuck You prices for the tenants.
  • likeabbas 4y ago
    The best solution would have been to built more euro-style cities that are walkable and with much more dense, but that's almost impossible for most of the US now.
    • MonkeyMalarky 4y ago
      The recent manufactured outrage and conspiracy theories over 15-minute cities is astounding though. From where did it come? Why? I used to live in a 15-minute city. It was awesome! People from all over the world gush at how great it is when they visit. And it's supposed to be a bad thing? Wow.
      • nicbou 4y ago
        If you're used to be part of the recreationally remote, the idea of not having ample space to yourself feels weird. Some people are used to having a backyard, a garage, and lots of space to spare, however useless it is to them, and unsustainable in general. The benefits of living in the city are a lot less obvious. Some people perceive it as a cramped space where you're forced to endure the company of strangers. If their lifestyle wasn't subsidized by city dwellers, and causing all sorts of negative externalities, I'd say "to each their own".
      • remarkEon 4y ago
        I must be out of the loop. What is a "15-minutes city"? What is the outrage? Edit: was an easy google. [1] >While many cities have implemented policies along the 15-minute city concept, disagreement remains over whether the model benefits residents. Critics point out that the creation of dense, walkable cores like a 15-minute neighborhood often leads to gentrification and displacement. Further, price increases, like those associated with gentrification, could be harmful to marginalized groups like people with disabilities, forcing move-outs.[53] Similarly, as the concept's origin is largely European, critics have argued that implementing the model could be colonialist and perpetuate harm to marginalized communities. Yeah, the "outrage" is a gaslighting exercise. [1] https://en.wikipedia.org/wiki/15-minute_city https://en.wikipedia.org/wiki/15-minute_city
  • zeroonetwothree 4y ago
    That will be terrible for the rental market. BTW as a general rule any simple solution to a complex problem is always wrong.
    • llimos 4y ago
      If cities are deciding on these taxes themselves, not central government, they can adjust it dynamically until the need for rentals and the need for affordable homes balance out. They could even do it per neighbourhood. If it never balances out - that is a sign that there are simply not enough houses, and they need to start building.
      • crazygringo 4y ago
        How do you define "balancing out"? There's no such thing. As long as taxes are the same between the two, the market will balance them. Building is a separate issue.
        • llimos 4y ago
          It's not so complicated to judge whether rents are too high or house prices are too high or both. It might be somewhat subjective, but that's government's job - to make those calls.
          • crazygringo 4y ago
            But the market adjusts automatically so why do you even need a government to make a call? That's like saying the government should be involved in making a call as to whether apples and oranges are too expensive relative to each other in the supermarket.
            • llimos 4y ago
              Because housing isn't a free market. There's a finite supply of land, and what you can do with it is even more tightly controlled.
  • credit_guy 4y ago
    There's a simpler solution: let people build. Relax zoning restrictions. If you don't constrain the housing supply, real estate will cease being a good investment. Houses should depreciate in value in time, just like cars. When this happens investors will not elbow out anyone, because there will be no investors, just like there are no investors in cars.
    • zeroonetwothree 4y ago
      Land will appreciate because, as they say, they don’t make more of it. As long as population keeps growing, demand for land will increase.
      • ddulaney 4y ago
        Yes, for sure. But if you can easily build 20 or 10 or even just 2 stories on top of it, land value decouples from housing value (not all the way, but substantially). And for most people, housing value is what really matters; land value is secondary.
        • larsiusprime 4y ago
          Land value is actually enormously important in the economy -- it's 1/3 of the value of all real assets and probably represents a similar amount of bank loans (real estate itself is 2/3 or real assets and about 2/3 of bank loans). http://gameofrent.com/content/is-land-a-big-deal#is-land-a-really-big-deal http://gameofrent.com/content/is-land-a-big-deal#is-land-a-r... Relaxing zoning laws and allowing for significantly more supply IS very important -- but it's not sufficient by itself. (For the record, neither are Land Value Taxes sufficient). The true solution is to enact both: https://progressandpoverty.substack.com/p/land-and-the-liberty-to-build-on https://progressandpoverty.substack.com/p/land-and-the-liber... If you want to be able to consistently decouple housing value from land value, you'll need both of these policies.
          • credit_guy 4y ago
            > Land value is actually enormously important in the economy -- it's 1/3 of the value of all real assets and probably represents a similar amount of bank loans (real estate itself is 2/3 or real assets and about 2/3 of bank loans). That's just consequences of the artificial scarcity of real estate. Real estate should be a much smaller fraction of the economy, and land value too. Once real estate stops being an investment, mortgage debt will be just like car loans, an important segment of the credit markets, but by no means the gargantuan size that it is today. And once land value drops from 1/3 to 1/10 of the real estate assets, then the difference between Georgism, Marxism and Neoclassicism will become academic (as it should be).
  • mywittyname 4y ago
    Does this help provide more housing? Or is it merely a justification to charge higher rents? It seems better for everyone if these houses could be torn down and replaced with multi-family units (apartments, row homes). These homes are good investments because the area is in need of higher density and the land values will appreciate commensurate with that need. If property taxes are ratcheted up, it might make sense to just demolish the building and hold the land for its appreciation alone. Thus, further reducing housing stock and driving up rents.
  • kasey_junk 4y ago
    Most jurisdictions already do this don’t they?
  • onlyrealcuzzo 4y ago
    If taxes are substantially higher - that will get passed down to the renter. Should renting be a privilege only for the rich? What happens when you're <30 and moving around for school & to get your first few years of experience? What happens when your credit is awful and no one will lend you money for a house even if housing is 3% cheaper because there's less investors elbowing you out?
  • bedast 4y ago
    This is just justification to charge higher rent.
  • cashsterling 4y ago
    I'll go a step further and argue that residential zoned property should be owned by residents, i.e., actual people that live on that property. By allowing the wealthy, and especially investment firms, to buy residential property as an investment... we are hastening a return to feudalism. Also real estate investment is the basest, dumbest form of investment. It takes little to no intelligence to make money in residential real estate. I personally refuse to touch it on principle. There are other countries who have laws that corporations cannot own residential property and legal residents are only allowed to own one residential property at a time. I do think there should be some relaxation of this law in the US so that folks can own a city property and a vacation cabin, or something, but I like the notion.
  • jmplng 4y ago
    Why are you trying to make renting so unaffordable? Dislike renters in your neighborhood? (To be clear I am not saying this is right or wrong, I’m asking. I have used renting to increase my flexibility and to live places I couldn’t afford to or wouldn’t want to own for fun / access to jobs. I can see not wanting someone that doesn’t intend to stick around long term in your neighborhood I suppose).
  • readthenotes1 4y ago
    A similarly simple solution would be to ease the regulatory nightmare that has made low-end houses unprofitable to build, and all new housing much more expensive. Not too many days ago there is an article showing that productivity in home construction has been almost nil for decades because the government inefficiency overpowers any construction gain.
• CraigRo 4y ago
  There are structural reasons why this would happen: Bigger companies can get better financing enabling them to pay more. Bigger companies can claim depreciation vs individual owners who can't. Companies don't have to sell and pay transfer, estate, and capital gains taxes. Property taxes are deductible against rents, but not on individual returns. So basically, the tax code favors rentals over ownership, and now that the private equity guys have figured out how to cost effectively manage the properties, you are starting to see the inevitable result.
  • deelowe 4y ago
    Individuals can claim depreciation.
  • lalaland1125 4y ago
    You have it completely backwards with respect to taxes. The tax code heavily favors ownership over rentals because owners aren't taxed on the "rent" they would have paid to themselves. Big rental companies exist despite tax disadvantages, not because of them.
    • deelowe 4y ago
      You've got it backwards. Landlords can deduct mortgage payments, interest, expenses, as well as depreciation from income. If you're only income is the rent, then all expenses are deducted. As a home owner, you can only deduct mortgage interest from your income.
  • anonuser123456 4y ago
    Owner occupied units don’t pay tax on imputed rent, and have untaxed capital gains up to 500k. Owner occupied units also don’t pay 10% of revenue to a management firm. It pencils out as a wash, otherwise people would simply buy their home as a corporation and rent it to themselves.
  • vanilla_nut 4y ago
    now that the private equity guys have figured out how to cost effectively manage the properties Anyone renting from one of this big corporations knows that this game can only go on for so long with this "cost effective" management. Pretty much every apartment I've rented from a big soulless corporation has had insect and rodent problems, dripping ceilings, poor ventilation, mold problems, and a whole lot more. When you build cheaply, maintain lazily, and extract as much profit as possible, you're effectively destroying the rental unit in the long term for short term gains. At some point these buildings will literally collapse due to poor maintenance. I can only hope that the government fights lobbyist attempts to "step in and correct the situation" with massive corporate bailouts.
• itake 4y ago
  > Instead of building generational wealth through homeownership, Lowman has been thwarted at every turn by out-of-state investors Can someone explain to me how home ownership brings generational wealth? I bought a 4br house last year. My monthly costs are $5k. Renting a comparable home is about $3k/mo. The people before me 3x their money over 20 years, but they also did 2 renovations, including adding extra rooms. Where is this generational wealth I’m supposedly building by paying $2k extra per mo than if I rented?
  • throwaway98797 4y ago
    your mortgage will be 5k/month in 10 years, that rent will increase outside of property taxes homeownership better stability of expenses
  • deleted 4y ago
    [deleted]
  • dmreedy 4y ago
    It mostly sublimated sometime around 2008
  • manimino 4y ago
    If you rented out that house, what would you charge? Would you charge 3k, and lose 2k / month? That doesn't make sense; so how are landlords surviving in your market then?
    • zeroonetwothree 4y ago
      They probably bought it when it was cheaper or own outright. Sometimes people will rent at a loss hoping for appreciation, though 2k is a bit steep.
  • piuantiderp 4y ago
    It's about location, location, location but you're right, a lot of people should not mess with it. How will cost of repairs look like if inflation keeps up and demographics keep worsening?
• 0xADADA 4y ago
  It is crystal clear no-brainer that municipalities need to disincentivize non-resident ownership of single, double and triple-unit residential properties with massive taxes. TL;DR If you don't live there, you pay big massive taxes. If you live there, you don't.
• BenFranklin100 4y ago
  Investors are investing in existing housing because it’s an excellent investment with good returns. The primary reason it’s a good investment is because local municipalities ban the construction of most new homes despite the high demand. Low supply combined with high demand leads to increasing prices on the existing units. A solution is to reform zoning and allow developers to build plentiful new homes, especially multi family homes near transit. The new supply will provide competition on older units, reducing price pressure on older units. That’s the beauty of new homes: even if expensive they provide competition to existing landlords.
• bitwize 4y ago
  Three words: Land. Value. Tax.
• vanilla_nut 4y ago
  Sounds like exactly what's happening basically everywhere in the USA. Here in New England, I see a lot more short term rentals (AirBnB, mostly, but in places like Burlington, they're switching to "furnished rentals for travelling nurses" to dodge regulation). But the effect is the same: it's nearly impossible to find a livable starter home beneath 400k. Property taxes, let alone interest rates, let alone deposits, make that out of reach of all but the highest earning renters. I frequently see claims that we "just need to build more," but when I see hundreds of AirBnBs available in every small town, no rentals, and only the most expensive houses for sale, I start to wonder if we need to address some systemic issue first. This article says that 1 out of every 3 houses sold between July 2021 and July 2022 were purchased by corporations. Obviously that's going to skew the market (particularly when those corporations have access to cheaper rates and more tax loopholes than individuals). But it's interesting to think that that's just corporate purchases. Around here, it's common to see individuals who own 2-5 "investment properties" personally, rented out on AirBnB for $200+ a night. I suspect not all of those investors show up as corporate purchases, even if some of them use LLCs and such for tax avoidance. This really pisses me off. I want to buy a home. There are millions of people in the USA living on the street, with cities and states spending hundreds of billions of dollars a year to provide crappy shelters and clean trash of sidewalks. And when I walk around my town at night, I see so many houses with no lights on, that only occasionally host a single car with out-of-state or rental plates. This behaviour cannot be allowed to continue, it's pulling the rug out from under anyone who isn't making hundreds of thousands of dollars a year and rotting out our communities. But what can we do? Our government seems completely powerless to stop it. Even when cities try to clamp down on investment properties and short term rentals, it takes so long -- and so much NIMBY combat -- to put laws in place, the bad actors just find a loophole to keep things going. To quote 1990s infomercials, there has to be a better way.
  • nr2x 4y ago
    Living in the Bay Area I’d kill for a $1M starter home, forget $400k. In our area a fairly normal family home on a small lot goes for $3M. Bay Area salaries look good on paper, but it’s an illusion.
    • 4y ago
• blondie9x 4y ago
  This is a serious problem. I have lost bids on many houses to cash investors that then turn around and list the property for rent. Investors are creating armies of rental properties and locking people out of affordable home ownership.
• Nifty3929 4y ago
  If the residents want to fight back, they could really stick it to those investors by allowing a lot of new homes to be built, along with lots of upzoning to higher densities. They could also streamline approval and permitting. This would drive down the rents and property values of the homes those investors own making it easier for average people to buy.
  • anonuser123456 4y ago
    Residents prefer to stick it to the greedy builders.
    • Nifty3929 4y ago
      Whew - we really got 'em this time! They nearly got away with putting a bunch more housing near us. Now where do they think they're going to spend that Billion Dollars, huh? Take a hike! Good riddance!
• hnuser847 4y ago
  Imagine a world in which the government caps the number of new cars that can be manufactured in a given year to 1,000. The price of cars would skyrocket across the board. People would respond to this new reality in predictable ways. They would buy cars and sit on them for the resale value. Car rentals would become the norm and car ownership would be exclusively for the well off. Bandit signs would pop up in every city offering cash for used cars. Investors, foreign and domestic, would start sinking large percentages of their funds into this new “safe” asset. ETFs and REITs would be created to give regular people access to this amazing new investment opportunity. In this hypothetical world, it would be foolish to blame individual actors for the price of cars being so high, when the root of the problem is obviously the artificial cap on the number of new units that can be manufactured. It’s the same with real estate. It’s foolish to blame AirBnB, landlords, investment groups, foreign investors, and Boomers for the price of real estate. These individual actors are merely responding to the reality that local governments make it nearly impossible to build new housing.
  • erik_seaberg 4y ago
    Also, nobody would build economy cars as long as there’s unfilled demand for higher price luxury cars.
• keiferski 4y ago
  I don’t have much faith in legislation solving this, so from a potential-homeowner point of view, the solution seems to be: move to places that aren’t “hip” and fly under the radar of the investor class. Move to the Midwest, the South, the Rust Belt. Get away from the Austins and Atlantas.
• m0llusk 4y ago
  This is only happening because our long term commitment to highly restrictive building zoning, building codes, and local ordinances has greatly limited the amount of housing available. If the amount of housing available were around what is necessary to generate what is known as market clearance where there is plenty of supply for demand at all levels then this would not happen.
• sys32768 4y ago
  In northwest MT, our rents almost doubled after a COVID population influx. Many new residents actually moved to live here, but a lot just bought summer places they also use as short-term rentals. My parents were paying $1400 for a 2BR but when they moved out, the landlord charged $2400 and got a renter from CA. People here used to afford housing on low wage jobs that "Americans won't do" such as office cleaning, landscaping, janitorial, nursing home care. Teens work all the fast food jobs. Besides many people leaving, there has been a spike in homelessness, and a labor shortage on service industry jobs. Immigrants will replace the low-wage jobs because they are willing to live multiple families per unit, leading to further overcrowding, and another reason why the rents won't go down. They are building a lot of unsightly apartment towers now and are beginning to fill the beautiful farmland area with tightly packed clone home developments. I've seen this happen everywhere I have lived including Arizona and California. I'm pessimistic anything will ever change because big money always wins.
  • vanilla_nut 4y ago
    House prices and rents have also skyrocketed across the Northeast. This is especially crazy (to me) in rural areas and small towns, where I'm starting to see one bedrooms skyrocket above 2k/mo. Whole houses with even a single bathroom rarely drop below 3k/mo. When the average wage in your town is 40-60k, that's clearly unsustainable. These prices aren't that different from what I used to see in the outer boroughs of NYC in 2019! I'm pessimistic for the same reason as you -- Big Money got a heavy hand. But in the longer term... I don't know, if half the country can't afford rent, at some point you'll see a legitimate revolution. Considering how dangerous those are for the average citizen I would rather the government fixed the situation before it spirals out of control.
• treis 4y ago
  This article made its rounds in the Atlanta subreddit and everyone was predictably outraged. But it fails to answer the most basic question. Is the percentage of homes owned and rented out going up or down? Because nationally it's not and the % of owner-occupied homes is more or less the same as it was in 1960. The article doesn't address the Elephant in the room. During COVID courts shut down, evictions were banned, and some people stopped paying rent. That obliterated small time landlords who depended on rent to pay their mortgage. The ones that found themselves in that situation had no real choice but to sell. And lots of other landlords who saw that happening also decided to sell. In that scenario who else is going to buy these homes except for large corporate buyers? Owner-occupiers can't get a mortgage on a house with a tenant in it and capital for small time landlords dried up.
• geeky4qwerty 4y ago
  While almost everyone seems to be fixated on various housing market minutia in justifiably passionate anger/frustration at the entire situation, very little attention is given to the causational elephant in the room: The Federal Reserves monetary policy as a whole, but more specifically their authorization by the Federal Open Market Committee to buy Mortgage Backed Securities (MBS) directly from the banks. The Fed had ZERO MBS on their balance sheet prior to 01/05/19 (1) and now hold an staggering $2.7 trillion dollars worth, which represents 22% of the entire MBS market in the US (3). This is the dirty secret in the modern US housing market, we never actually saw the true bottom of the 2008 housing crash due to the FEDs MBS interventions. (1) - https://fred.stlouisfed.org/series/WSHOMCB https://fred.stlouisfed.org/series/WSHOMCB (2) - https://www.federalreserve.gov/releases/h41/current/h41.pdf https://www.federalreserve.gov/releases/h41/current/h41.pdf (3) - https://www.sifma.org/resources/research/us-mortgage-backed-securities-statistics/ https://www.sifma.org/resources/research/us-mortgage-backed-...
  • lalaland1125 4y ago
    We know that monetary factors (like the federal reserve) can't be the main casual factor because rents are increasing at very low vacancy rates at the same (if not higher) rate as the price of housing. If the fed was the primary factor we would see a divergence between housing prices and rent since the fed has minimal direct effects on rent. Looking at the data, the primary driver is simply that more people are competing to live in urban centers as we have banned the construction of additional housing in most cities.
• ProcNetDev 4y ago
  Seems like a convenient scapegoat to distract from the problem that we don't build as many houses as we used to: https://www.theatlantic.com/ideas/archive/2023/01/housing-crisis-hedge-funds-private-equity-scapegoat/672839/ https://www.theatlantic.com/ideas/archive/2023/01/housing-cr...
  • vanilla_nut 4y ago
    Why not both? Building fewer houses artificially constrains the supply, driving prices up. Investors prey on the market opportunity. We should definitely build more (IMO "missing middle" walkable mixed-use housing), but we also have to deal with the strong, moneyed, vested interest in keeping housing costs artificially inflated. This literal rent-seeking behaviour is so lucrative they won't just let us fix the problem without a fight. And even if we started to build dramatically more housing today, it would take years to catch up to market demands. So it might be a good idea to get the investors out of the game sooner to take some pressure off the market faster. And not just investors: individuals hoarding vacation homes and short term rentals should be disincentivized, too.
• ushtaritk421 4y ago
  Investors are banking on not enough new homes being built. We should simply build enough new homes then it won't matter who owns them.
• xivzgrev 4y ago
  I don’t believe single family homes should be allowed to be owned by investors. With any regulation I’m sure there are loopholes but we can implement some basic checks to make it much more difficult. Right now there are zero barriers if you have cash.
• Gravityloss 4y ago
  There was a paper about an agent simulation in Nature or Science about 20 years ago. A large number of agents are assigned random amounts of wealth. They interact randomly one-on-one. In the interaction, on average, the wealthier agent gets some of the wealth of the poorer one. After a long simulation, all the wealth is concentrated to two agents, and after further simulation to one. Couldn't find the paper anymore.