7 ms·

Ban corporate ownership of SFH.

whimsicalism 3y ago
Not a major driver of home prices at all. Plus, corporate landlords are some of the only ones that are even making it possible to rent at all in large swathes of America. I view this as basically left-wing science denialism. The right has climate, the left denies the overwhelming consensus of economists as to the cause of housing affordability crises (it's supply and bad policy, not blackstone). [0]. Institutional investors own less than 3% of rental homes, which is a minority of overall homes and disproportionately buy homes that were not fit for sale anyways (so-called fixer uppers). [0]: https://www.nytimes.com/2022/10/19/opinion/affordable-housing-private-equity.html https://www.nytimes.com/2022/10/19/opinion/affordable-housin...
- hn_throwaway_99 3y ago
  This is flat out false, at least in Texas: https://www.keranews.org/business-economy/2022-06-14/investors-bought-nearly-a-third-of-all-homes-in-texas-last-year https://www.keranews.org/business-economy/2022-06-14/investo... Also, there have been other articles I read during the pandemic (the topic was how long eviction moratoriums were killing small landlords while corporate landlords could weather it) that small, individual landlords do a much better job at renting out housing more affordably, being more willing to work with renters when they are behind on their payments, etc.
  - Obscurity4340 3y ago
    Individual landlords also tend to play games with renovictions or personal-use evictions to inflate their rents. I would never rent from someone who can decide their "nephew" wants the space and they just couldn't say no to him but then that fell through and meanwhile you're out on the street.
    - hn_throwaway_99 3y ago
      > I would never rent from someone who can decide their "nephew" wants the space and they just couldn't say no to him but then that fell through and meanwhile you're out on the street. I never understood that attitude. I always took leases as a two-way street. That is, I'm free to leave and go somewhere else at the end of my lease, but the owner is also free to not rent to me at the end of my lease (with appropriate notice). It seems weird to me to have the expectation that if I sign, say, a 1-year lease that means I should have the right to renew that lease in perpetuity.
      - Obscurity4340 3y ago
        Do you really only plan ahead 1 year at a time? Seems like an enormously inefficient use of one's time to lily-pad their housing year to year.
      - whimsicalism 3y ago
        Well, in lots of parts of the country, that 'weird expectation' is the law.
        simonsarris 3y ago
        Where in the US are perpetual rights to extend 1 year leases the law?
        whimsicalism 3y ago
        Where I live in California, for the large majority of rental properties, the owner cannot evict me unless they plan on exiting the rental market or I have somehow violated the lease. I think this covers flat out most rental properties in California as well. So the answer: California
        sershe 3y ago
        Stuff like this, broadly, is why California is known for its affordable rents and sane housing markets :)
  - whimsicalism 3y ago
    Dig into that number and you'll see that it is including relatively small landlords with more than 1 other property as 'institutional investors.' Regardless, these investors are paying way below the typical average for new homes in Texas, but somehow responsible for the affordability crisis?
- jjoonathan 3y ago
  Yeah, yeah, it's always someone else's fault. Not boomer zoning! Not the corpos! No, the people profiting from the problem couldn't possibly be at fault. Mmmhmm. EDIT: nice edit. At least you acknowledge boomer zoning as problematic. But you blame the left. Lol. I seem to recall your guy repealing a bunch of density-promoting legislation and bragging about "saving your housing values" on TV. Someone is in denial here!
  - triceratops 3y ago
    "boomer zoning" is largely responsible for the lack of supply GP blames.
  - whimsicalism 3y ago
    Not sure where you read in my comment that it isn't "boomer zoning" but I believe you are referring to one of the largest proximate causes. "Corpos" are filling in the gap because a ridiculously sticky real estate market means that there are a ton of places that could easily bear more renters. These corporations are typically paying far below the average for homes in whatever state they are buying in [0] (somehow paradoxically this becomes bidding home prices up) and typically allow more renters to enter the market rather than being priced out. [0]: https://www.corelogic.com/intelligence/the-beginning-of-the-end-single-family-investor-activity-takes-a-step-back-in-q2/ https://www.corelogic.com/intelligence/the-beginning-of-the-...
    - jjoonathan 3y ago
      I read your post before you edited it. Nice edit. I think we mostly agree on the correct policy direction, now, if not on who promotes it.
      - whimsicalism 3y ago
        fwiw, I'm on the left - I just can see that our old pattern of finding a boogeyman that isn't policy choices to blame it on simply will not work for this problem.
- silisili 3y ago
  They like to throw out that 3% number to get people to stop looking into them. They fail to give the percentage of homes on the market they've been purchasing. In my market, it was more than 25% of all homes for sale. So let's explain away how removing a quarter of available inventory doesn't affect prices...
  - whimsicalism 3y ago
    The 25% number almost certainly includes much smaller investors than these mega-corps that are being blamed. They are simultaneously responsible for bidding up the price of homes while paying far below the average price for a home in pretty much every state they are present in. Texas is effectively one of the only markets with a substantial proportion of new buyers being institutional investors and this is largely due to the number of dilapidated homes in the area.
    - jjoonathan 3y ago
      Small investors aren't a problem? Bidding up the low end of the market isn't a problem? What? Housing should be consumption, not an investment, but the perpetual-ownership structure of property rights combined with low property taxes turns them into an investment. But not a "consume less today, produce more tomorrow, everyone wins" investment, it's the "rich people get paid for being rich" type of investment. Yes, many/most of those people are less rich than a corporation, but the problem is exactly the same: deadweight loss in the economy.
      - whimsicalism 3y ago
        Someone has to own it if people are renting it, and renting provides a valuable use case in the economy and makes places to live accessible to young people, poor people, etc. Renting is good - and requires the type of economic activity you would want banned. > Housing should be consumption, not an investment, Housing should be subject to market forces so housing developers can get signals about price. If people anticipate demand for homes is going to increase and start buying homes in anticipation of that (speculating), if we didn't have our stupid zoning laws, homebuilders would be able to build more homes and resolve the demand imbalance before it happened. This is a good thing. The problem is our stupid zoning laws, NIMBYism, etc. > deadweight loss in the economy. ...no
- Guvante 3y ago
  Institutional investors own the vast majority of rental units unless you arbitrarily decide to exclude multi unit housing from your metric. They owned 74.4% of rental units in 2015 https://www.jchs.harvard.edu/blog/who-owns-rental-properties-and-is-it-changing https://www.jchs.harvard.edu/blog/who-owns-rental-properties... Given the extensive reporting that they have been growing their share certainly it is even higher 8 years later.
  - smeej 3y ago
    Isn't this circular? How do you define "institutional"? Is it based on number of units and/or the use of a corporate structure? Nobody is stupid enough to own an apartment complex in their own personal name without the protections of some kind of corporate structure. If that and/or a number of units owned that is lower than the size of an apartment complex are part of the definition of "institutional investor," the definition is circular.
    - Guvante 3y ago
      The linked article breaks it down. By type of group that owns it. Note I messed up and it is just over 50% of units.
  - whimsicalism 3y ago
    > Institutional investors own the vast majority of rental units This is what I mean about left-wing science denialism. Try even reading your own article 1. "According to the RHFS, individual investors were the biggest group in the rental housing market in 2015, accounting for 74.4 percent, or 16.7 million rental properties, followed by limited liability partnerships (LLPs), limited partnerships (LPs), or limited liability companies (LLCs) (14.8 percent);" This is literally the exact opposite of your claim. But let's pretend that your claim was correct: 2. They're price takers. 3. Why is this a bad thing? If this were true (it isn't), then they're basically the only people who will rent at all anymore. The alternative is net worse for affordability - places without institutional investors have far fewer shares of people renting because there is literally nobody offering places for rent. e: And of course I'm downvoted simply for pointing out that the article linked says the opposite of the claim.
jjoonathan 3y ago
Existing homeowners want their assets pumped. As far as they are concerned, this is a feature, not a bug. Things get interesting when owners become a minority of the electorate.
- whimsicalism 3y ago
  Maybe we'll finally be able to repeal ridiculous laws like prop 13.
  - egberts1 3y ago
    Nope. Prop 13 is a godsend for senior citizens in California.
    - whimsicalism 3y ago
      And one of the largest proximate causes of a housing disaster for young people in California - taking from the poorest generations in the state to give to the wealthiest and interfering with the effective operation of housing markets in the process.
- candiodari 3y ago
  A total inability to sell is not a feature to them, though.
cpursley 3y ago
Big corps owning large swaths of single family homes seems like an unhealthy trend. Where do you draw the line/define at corporate ownership?
- Guvante 3y ago
  C Corps can just be banned which tend to be the biggest problem examples. (You can trivially make the ban pierce any ownership structures)
- whimsicalism 3y ago
  Big corps don't own large swathes of single family homes by any reasonable definition of 'large swathes'. I don't agree it is an apriori bad or a cause of the housing crisis - in many markets these are the only people fixing up dilapidated homes and the only people putting rentals on the market - both of which are valuable services.
Ekaros 3y ago
Why should SFH be treated any different?
- supertrope 3y ago
  People have been socialized to believe in the American Dream(tm). A detached single family house with a white picket fence and 2.3 kids is how the world ought to work. Allowing a duplex or (gasp) a 6 unit apartment building to be permitted would irreparably damage the character of the neighborhood /s

Not a major driver of home prices at all. Plus, corporate landlords are some of the only ones that are even making it possible to rent at all in large swathes of America. I view this as basically left-wing science denialism. The right has climate, the left denies the overwhelming consensus of economists as to the cause of housing affordability crises (it's supply and bad policy, not blackstone). [0]. Institutional investors own less than 3% of rental homes, which is a minority of overall homes and disproportionately buy homes that were not fit for sale anyways (so-called fixer uppers). [0]: https://www.nytimes.com/2022/10/19/opinion/affordable-housing-private-equity.html https://www.nytimes.com/2022/10/19/opinion/affordable-housin...

hn_throwaway_99 3y ago
This is flat out false, at least in Texas: https://www.keranews.org/business-economy/2022-06-14/investors-bought-nearly-a-third-of-all-homes-in-texas-last-year https://www.keranews.org/business-economy/2022-06-14/investo... Also, there have been other articles I read during the pandemic (the topic was how long eviction moratoriums were killing small landlords while corporate landlords could weather it) that small, individual landlords do a much better job at renting out housing more affordably, being more willing to work with renters when they are behind on their payments, etc.
- Obscurity4340 3y ago
  Individual landlords also tend to play games with renovictions or personal-use evictions to inflate their rents. I would never rent from someone who can decide their "nephew" wants the space and they just couldn't say no to him but then that fell through and meanwhile you're out on the street.
  - hn_throwaway_99 3y ago
    > I would never rent from someone who can decide their "nephew" wants the space and they just couldn't say no to him but then that fell through and meanwhile you're out on the street. I never understood that attitude. I always took leases as a two-way street. That is, I'm free to leave and go somewhere else at the end of my lease, but the owner is also free to not rent to me at the end of my lease (with appropriate notice). It seems weird to me to have the expectation that if I sign, say, a 1-year lease that means I should have the right to renew that lease in perpetuity.
    - Obscurity4340 3y ago
      Do you really only plan ahead 1 year at a time? Seems like an enormously inefficient use of one's time to lily-pad their housing year to year.
    - whimsicalism 3y ago
      Well, in lots of parts of the country, that 'weird expectation' is the law.
      - simonsarris 3y ago
        Where in the US are perpetual rights to extend 1 year leases the law?
        whimsicalism 3y ago
        Where I live in California, for the large majority of rental properties, the owner cannot evict me unless they plan on exiting the rental market or I have somehow violated the lease. I think this covers flat out most rental properties in California as well. So the answer: California
        sershe 3y ago
        Stuff like this, broadly, is why California is known for its affordable rents and sane housing markets :)
- whimsicalism 3y ago
  Dig into that number and you'll see that it is including relatively small landlords with more than 1 other property as 'institutional investors.' Regardless, these investors are paying way below the typical average for new homes in Texas, but somehow responsible for the affordability crisis?
jjoonathan 3y ago
Yeah, yeah, it's always someone else's fault. Not boomer zoning! Not the corpos! No, the people profiting from the problem couldn't possibly be at fault. Mmmhmm. EDIT: nice edit. At least you acknowledge boomer zoning as problematic. But you blame the left. Lol. I seem to recall your guy repealing a bunch of density-promoting legislation and bragging about "saving your housing values" on TV. Someone is in denial here!
- triceratops 3y ago
  "boomer zoning" is largely responsible for the lack of supply GP blames.
- whimsicalism 3y ago
  Not sure where you read in my comment that it isn't "boomer zoning" but I believe you are referring to one of the largest proximate causes. "Corpos" are filling in the gap because a ridiculously sticky real estate market means that there are a ton of places that could easily bear more renters. These corporations are typically paying far below the average for homes in whatever state they are buying in [0] (somehow paradoxically this becomes bidding home prices up) and typically allow more renters to enter the market rather than being priced out. [0]: https://www.corelogic.com/intelligence/the-beginning-of-the-end-single-family-investor-activity-takes-a-step-back-in-q2/ https://www.corelogic.com/intelligence/the-beginning-of-the-...
  - jjoonathan 3y ago
    I read your post before you edited it. Nice edit. I think we mostly agree on the correct policy direction, now, if not on who promotes it.
    - whimsicalism 3y ago
      fwiw, I'm on the left - I just can see that our old pattern of finding a boogeyman that isn't policy choices to blame it on simply will not work for this problem.
silisili 3y ago
They like to throw out that 3% number to get people to stop looking into them. They fail to give the percentage of homes on the market they've been purchasing. In my market, it was more than 25% of all homes for sale. So let's explain away how removing a quarter of available inventory doesn't affect prices...
- whimsicalism 3y ago
  The 25% number almost certainly includes much smaller investors than these mega-corps that are being blamed. They are simultaneously responsible for bidding up the price of homes while paying far below the average price for a home in pretty much every state they are present in. Texas is effectively one of the only markets with a substantial proportion of new buyers being institutional investors and this is largely due to the number of dilapidated homes in the area.
  - jjoonathan 3y ago
    Small investors aren't a problem? Bidding up the low end of the market isn't a problem? What? Housing should be consumption, not an investment, but the perpetual-ownership structure of property rights combined with low property taxes turns them into an investment. But not a "consume less today, produce more tomorrow, everyone wins" investment, it's the "rich people get paid for being rich" type of investment. Yes, many/most of those people are less rich than a corporation, but the problem is exactly the same: deadweight loss in the economy.
    - whimsicalism 3y ago
      Someone has to own it if people are renting it, and renting provides a valuable use case in the economy and makes places to live accessible to young people, poor people, etc. Renting is good - and requires the type of economic activity you would want banned. > Housing should be consumption, not an investment, Housing should be subject to market forces so housing developers can get signals about price. If people anticipate demand for homes is going to increase and start buying homes in anticipation of that (speculating), if we didn't have our stupid zoning laws, homebuilders would be able to build more homes and resolve the demand imbalance before it happened. This is a good thing. The problem is our stupid zoning laws, NIMBYism, etc. > deadweight loss in the economy. ...no
Guvante 3y ago
Institutional investors own the vast majority of rental units unless you arbitrarily decide to exclude multi unit housing from your metric. They owned 74.4% of rental units in 2015 https://www.jchs.harvard.edu/blog/who-owns-rental-properties-and-is-it-changing https://www.jchs.harvard.edu/blog/who-owns-rental-properties... Given the extensive reporting that they have been growing their share certainly it is even higher 8 years later.
- smeej 3y ago
  Isn't this circular? How do you define "institutional"? Is it based on number of units and/or the use of a corporate structure? Nobody is stupid enough to own an apartment complex in their own personal name without the protections of some kind of corporate structure. If that and/or a number of units owned that is lower than the size of an apartment complex are part of the definition of "institutional investor," the definition is circular.
  - Guvante 3y ago
    The linked article breaks it down. By type of group that owns it. Note I messed up and it is just over 50% of units.
- whimsicalism 3y ago
  > Institutional investors own the vast majority of rental units This is what I mean about left-wing science denialism. Try even reading your own article 1. "According to the RHFS, individual investors were the biggest group in the rental housing market in 2015, accounting for 74.4 percent, or 16.7 million rental properties, followed by limited liability partnerships (LLPs), limited partnerships (LPs), or limited liability companies (LLCs) (14.8 percent);" This is literally the exact opposite of your claim. But let's pretend that your claim was correct: 2. They're price takers. 3. Why is this a bad thing? If this were true (it isn't), then they're basically the only people who will rent at all anymore. The alternative is net worse for affordability - places without institutional investors have far fewer shares of people renting because there is literally nobody offering places for rent. e: And of course I'm downvoted simply for pointing out that the article linked says the opposite of the claim.

jjoonathan 3y ago

Existing homeowners want their assets pumped. As far as they are concerned, this is a feature, not a bug. Things get interesting when owners become a minority of the electorate.

whimsicalism 3y ago
Maybe we'll finally be able to repeal ridiculous laws like prop 13.
- egberts1 3y ago
  Nope. Prop 13 is a godsend for senior citizens in California.
  - whimsicalism 3y ago
    And one of the largest proximate causes of a housing disaster for young people in California - taking from the poorest generations in the state to give to the wealthiest and interfering with the effective operation of housing markets in the process.
candiodari 3y ago
A total inability to sell is not a feature to them, though.

cpursley 3y ago

Big corps owning large swaths of single family homes seems like an unhealthy trend. Where do you draw the line/define at corporate ownership?

Guvante 3y ago
C Corps can just be banned which tend to be the biggest problem examples. (You can trivially make the ban pierce any ownership structures)
whimsicalism 3y ago
Big corps don't own large swathes of single family homes by any reasonable definition of 'large swathes'. I don't agree it is an apriori bad or a cause of the housing crisis - in many markets these are the only people fixing up dilapidated homes and the only people putting rentals on the market - both of which are valuable services.

Ekaros 3y ago

Why should SFH be treated any different?

supertrope 3y ago
People have been socialized to believe in the American Dream(tm). A detached single family house with a white picket fence and 2.3 kids is how the world ought to work. Allowing a duplex or (gasp) a 6 unit apartment building to be permitted would irreparably damage the character of the neighborhood /s