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> If I owned a property outright, and rented it out at market rates at a decent yield, is it not both? For you yes, but if everyone does it, then the market is

> If I owned a property outright, and rented it out at market rates at a decent yield, is it not both? For you yes, but if everyone does it, then the market is priced on the "market rates" which have now become much higher than your initial price due to market capture. The problem with private land ownership is that land is a natural monopoly and as such has very actual market conditions. You could theoretically have a functioning one as long as you build way more than people need, housing then becomes elastic despite the land below being non elastic but the math quickly breaks down. For the conditions to be met where housing "always goes up", and "housing is a basic need" someone is gotta give. And power wise, homeowners wreck non homeowners and have for 70 years hence, they always win. Now with the rush of institutional house buyers and the rush of big corps buying entire house blocks, the problem is gonna become much worse, and quickly. If you wanna see alternatives to fix the problem, Singapore nationalised all land and has no private landlords and Austria has about 50% of the houses in Vienna to be non market rates (so the price is dictated by construction costs plus a percentage not on how much you can charge for rent). Both models heavily bring down rent/ mortgage costs and yield better results for people, the only ones who lose out are IRA's tied to housing and large landlord conglomerates.

7speter 4y ago
Not all current homeowners are sitting on their house as an investment. The true value in a house is that you have some property and a roof over your head as long as you can pay the mortgage, taxes and insurance. Much better than being at the whim of landlords in a lot of cases. My father has owned a house for 29 years and when he’s gone I don’t care about cashing out or making a profit. Its just great to have a literal home base to rely on in case things get rough.
- tsimionescu 4y ago
  Of course, but that is exactly the point that GP was making: we either have this sort of safety for the majority of people, or we have a lucrative investment opportunity. It is fundamentally impossible, or or at least deeply unlikely, to have both.
- Arkhaine_kupo 4y ago
  > My father has owned a house for 29 years and when he’s gone I don’t care about cashing out or making a profit. Too bad, I have bought every house around and put them on the market for 1000% what your dad bought it for. Your taxes are calculated based on market rates, and therefore your housing tax is now completely unaffordable to you. You gotta sell the house you grew up in because I decided to fuck the market in your area. Also because I own 30 houses and you only own one, I can dictate the price, doing things like marking 28 above you and one below you so yours doesn't get sold. Then 27 above you and 1 below you, and keep doing that while you pay taxes on a house you can no longer afford nor sell. Welcome to your new nightmare of having me as a neighbour maximising my investment, meanwhile 27 people are homeless because the houses are not on the market despite the demand being there, but if I make them desperate first my return will be higher. Even people like you, with the right idea, to use housing as a house, can be caught up in the never ending bullshit that is the current housing model.
  - quags 4y ago
    This would make a good novel like a Christmas story where the evil capitalist tries to destroy an old family housing cost but in my experience is far from reality. Starting with taxes - no where I have lived has does taxes at market rates like that. Many houses I have seen have low tax values that might adjust slightly on a sale. I don’t live in Cali but they famously avoid this with prop 13. Taxes may be re-rated by appraisals once in a while with adjustments to the market rate but the town doesn’t suddenly gain more of a tax base or revenue. Houses that improved move to a higher appraisal and houses that didn’t go lower. I have been through two re-rates and my lack of updates has resulted in a drop in the appraisal for the tax rate while my neighbors are higher. The rates adjust and the end result is some pay more and some pay less. This scenario might happen if you live in gentrified area and bought extremely low and get priced out but that is not the norm. The rest, I just don’t see. Either the evil capitalist is renting the houses or selling but who would list houses and not sell to drive a price down. If one is lower and sells, and there is demand for more to sell a buyer will be found.
    - piva00 4y ago
      The play with evil capitalists trying to force pricing out with taxes might be far-fetched but drip-feeding housing to help maintain inflated prices is a well-known tactic of developers in London, probably elsewhere it applies in varying degrees as well. For a well-financed developer it's a much better deal to drip-feed some 30 renovated apartments at 1x over 1-3 years than sell a chunk of 30 renovated apartments at once and at 0.8x due to the increased supply. If they wait they know the demand will still be there to sell at their full 1x.
- WalterBright 4y ago
  I like owning the house because then I can modify it to suit. Rentals tend to be designed right down the middle, for maximum appeal. But I like different things. Some of my ideas I was bluntly told by the contractor would make the house difficult to sell.
ChuckNorris89 4y ago
>Now with the rush of institutional house buyers and the rush of big corps buying entire house blocks, the problem is gonna become much worse, and quickly. Is there any reason why we can't ban institutional investors from the personal housing market? Seems unfair that a family who wants shelter should compete with giant faceless piles of money which only wants to make a profit at the cost of fucking those who want shelter. Let them chase other investments instead (stocks, crypto, bonds, whatever).
- Arkhaine_kupo 4y ago
  > Is there any reason why we can't ban institutional investors from the personal housing market? The same reason Corporations have personhood, it makes investors money. > Let them chase other investments instead (stocks, crypto, bonds, whatever). All of those are down, but housing isn't, thats why they are chasing it like crazy. If I am not wrong, in London the most prevalent number fo homes owned was 1, then 2 and then it was like 7. Because 3-6 was expensive but not maximising yield, by 7 your investment pays for itself plus then you can accrue value to buy more property. So landlords get as many as possible. In the early 2010s when I was renting there a landlady asked us to pay rent on direct debit every 1st of the month because she had 42 properties and couldn't afford all the mortages if everyone didn't pay at once. An 82 year old lady, with 42 properties. This was not uncommon when meeting landlords at the time (maybe not as crazy as 42 but still higher than 5 was commmon).
  - ChuckNorris89 4y ago
    >The same reason Corporations have personhood, it makes investors money. Yeah obviously, but it doesn't answer my question of why can't we regulate them out of the housing market? "It makes investors money" is not a good answer because a lot of nefarious things used make investors money, like slavery, child labor, 16h workdays, warmongering, snake oil, using asbestos or other toxic substances that kill you, building shoddy buildings that can collapse on you, drugs, polluting cars, alcohol, opioids, tobacco, fossil fuels, dumping toxic chemicals in rivers, deforestation, Ponzi schemes, and yet in most of the west we have regulated a lot of them or even outlawed some of them completely for the greater good because what's good for the investors isn't always good for humanity or for the environment. So why can't we do the same with housing? Tell institutional investors to fuck off with their bags of money somewhere else. Let them speculate on NFTs, famous paintings or Pokémon cards for all I care. >An 82 year old lady, with 42 properties. My point exactly. It's obvious that for basic human necessities like water, shelter and healthcare we can't just leave it to the free market competition to sort itself out, since over time it creates a system of winners and losers, where few who lucked out end up monopolizing the majority of the market share and defaulting to rentseeking, while the rest are left out completely, with no hope of ever being able to jump on board and forced to rent their whole lives. This rampant inequality is what led to the communists seizing power ~100 years ago, and despite being only ~30 years since communism collapsed in Europe, communism is on the rise again in elections in some EU countries especially among young people because the last 20-30 years of deregulated globalized capitalism has seen the biggest and quickest wealth transfer from the working class to the upper class ever seen.
johannes1234321 4y ago
> You could theoretically have a functioning one as long as you build way more than people need, housing then becomes elastic despite the land below being non elastic but the math quickly breaks down. I doubt this would ever work out, as a high availability elsewhere won't help here. People pick a place to large parts due to job availability, social factors (close to friends/family), infrastructure (shops, restaurants, sports, schools, cultural activity) which is hard to replicate to some scale. On a very narrow scale there can be an effect, say in Tokyo, where JR builds some railway station and develops that into a new urban center with lots of local infrastructure and connection to job, school, friends, but that is still benefiting to proximity to the other.

7speter 4y ago

Not all current homeowners are sitting on their house as an investment. The true value in a house is that you have some property and a roof over your head as long as you can pay the mortgage, taxes and insurance. Much better than being at the whim of landlords in a lot of cases. My father has owned a house for 29 years and when he’s gone I don’t care about cashing out or making a profit. Its just great to have a literal home base to rely on in case things get rough.

tsimionescu 4y ago
Of course, but that is exactly the point that GP was making: we either have this sort of safety for the majority of people, or we have a lucrative investment opportunity. It is fundamentally impossible, or or at least deeply unlikely, to have both.
Arkhaine_kupo 4y ago
> My father has owned a house for 29 years and when he’s gone I don’t care about cashing out or making a profit. Too bad, I have bought every house around and put them on the market for 1000% what your dad bought it for. Your taxes are calculated based on market rates, and therefore your housing tax is now completely unaffordable to you. You gotta sell the house you grew up in because I decided to fuck the market in your area. Also because I own 30 houses and you only own one, I can dictate the price, doing things like marking 28 above you and one below you so yours doesn't get sold. Then 27 above you and 1 below you, and keep doing that while you pay taxes on a house you can no longer afford nor sell. Welcome to your new nightmare of having me as a neighbour maximising my investment, meanwhile 27 people are homeless because the houses are not on the market despite the demand being there, but if I make them desperate first my return will be higher. Even people like you, with the right idea, to use housing as a house, can be caught up in the never ending bullshit that is the current housing model.
- quags 4y ago
  This would make a good novel like a Christmas story where the evil capitalist tries to destroy an old family housing cost but in my experience is far from reality. Starting with taxes - no where I have lived has does taxes at market rates like that. Many houses I have seen have low tax values that might adjust slightly on a sale. I don’t live in Cali but they famously avoid this with prop 13. Taxes may be re-rated by appraisals once in a while with adjustments to the market rate but the town doesn’t suddenly gain more of a tax base or revenue. Houses that improved move to a higher appraisal and houses that didn’t go lower. I have been through two re-rates and my lack of updates has resulted in a drop in the appraisal for the tax rate while my neighbors are higher. The rates adjust and the end result is some pay more and some pay less. This scenario might happen if you live in gentrified area and bought extremely low and get priced out but that is not the norm. The rest, I just don’t see. Either the evil capitalist is renting the houses or selling but who would list houses and not sell to drive a price down. If one is lower and sells, and there is demand for more to sell a buyer will be found.
  - piva00 4y ago
    The play with evil capitalists trying to force pricing out with taxes might be far-fetched but drip-feeding housing to help maintain inflated prices is a well-known tactic of developers in London, probably elsewhere it applies in varying degrees as well. For a well-financed developer it's a much better deal to drip-feed some 30 renovated apartments at 1x over 1-3 years than sell a chunk of 30 renovated apartments at once and at 0.8x due to the increased supply. If they wait they know the demand will still be there to sell at their full 1x.
WalterBright 4y ago
I like owning the house because then I can modify it to suit. Rentals tend to be designed right down the middle, for maximum appeal. But I like different things. Some of my ideas I was bluntly told by the contractor would make the house difficult to sell.

ChuckNorris89 4y ago

>Now with the rush of institutional house buyers and the rush of big corps buying entire house blocks, the problem is gonna become much worse, and quickly. Is there any reason why we can't ban institutional investors from the personal housing market? Seems unfair that a family who wants shelter should compete with giant faceless piles of money which only wants to make a profit at the cost of fucking those who want shelter. Let them chase other investments instead (stocks, crypto, bonds, whatever).

Arkhaine_kupo 4y ago
> Is there any reason why we can't ban institutional investors from the personal housing market? The same reason Corporations have personhood, it makes investors money. > Let them chase other investments instead (stocks, crypto, bonds, whatever). All of those are down, but housing isn't, thats why they are chasing it like crazy. If I am not wrong, in London the most prevalent number fo homes owned was 1, then 2 and then it was like 7. Because 3-6 was expensive but not maximising yield, by 7 your investment pays for itself plus then you can accrue value to buy more property. So landlords get as many as possible. In the early 2010s when I was renting there a landlady asked us to pay rent on direct debit every 1st of the month because she had 42 properties and couldn't afford all the mortages if everyone didn't pay at once. An 82 year old lady, with 42 properties. This was not uncommon when meeting landlords at the time (maybe not as crazy as 42 but still higher than 5 was commmon).
- ChuckNorris89 4y ago
  >The same reason Corporations have personhood, it makes investors money. Yeah obviously, but it doesn't answer my question of why can't we regulate them out of the housing market? "It makes investors money" is not a good answer because a lot of nefarious things used make investors money, like slavery, child labor, 16h workdays, warmongering, snake oil, using asbestos or other toxic substances that kill you, building shoddy buildings that can collapse on you, drugs, polluting cars, alcohol, opioids, tobacco, fossil fuels, dumping toxic chemicals in rivers, deforestation, Ponzi schemes, and yet in most of the west we have regulated a lot of them or even outlawed some of them completely for the greater good because what's good for the investors isn't always good for humanity or for the environment. So why can't we do the same with housing? Tell institutional investors to fuck off with their bags of money somewhere else. Let them speculate on NFTs, famous paintings or Pokémon cards for all I care. >An 82 year old lady, with 42 properties. My point exactly. It's obvious that for basic human necessities like water, shelter and healthcare we can't just leave it to the free market competition to sort itself out, since over time it creates a system of winners and losers, where few who lucked out end up monopolizing the majority of the market share and defaulting to rentseeking, while the rest are left out completely, with no hope of ever being able to jump on board and forced to rent their whole lives. This rampant inequality is what led to the communists seizing power ~100 years ago, and despite being only ~30 years since communism collapsed in Europe, communism is on the rise again in elections in some EU countries especially among young people because the last 20-30 years of deregulated globalized capitalism has seen the biggest and quickest wealth transfer from the working class to the upper class ever seen.

johannes1234321 4y ago

> You could theoretically have a functioning one as long as you build way more than people need, housing then becomes elastic despite the land below being non elastic but the math quickly breaks down. I doubt this would ever work out, as a high availability elsewhere won't help here. People pick a place to large parts due to job availability, social factors (close to friends/family), infrastructure (shops, restaurants, sports, schools, cultural activity) which is hard to replicate to some scale. On a very narrow scale there can be an effect, say in Tokyo, where JR builds some railway station and develops that into a new urban center with lots of local infrastructure and connection to job, school, friends, but that is still benefiting to proximity to the other.