Almost all folk discussion of the recent housing boom will include the words "Blackrock" or "Wall Street", but investors with less than 100 units own the overwh

Almost all folk discussion of the recent housing boom will include the words "Blackrock" or "Wall Street", but investors with less than 100 units own the overwhelming majority of the 24% of houses purchased by investors [1]. The 2017 tax cuts introduced several provisions favorable to real estate investors that in my opinion accelerated the blow-up when mortgage rates were cut to well below the inflation rate during the pandemic, already a massive stimulus. Bonus depreciation allowed you to buy a used, already depreciated rental property and deduct its entire value from your taxable income in the first year [2]. Theoretically you have to pay this back when you sell, but not if you exchange it for another property (1031). This is being phased down and will be only 60% starting in January. Second, pass-through deduction allowed buyers of rental property to deduct the rent from their W2 income up to 20% of their gross income, as long as you declare that you spent a certain amount of time managing the property [3]. This is due to expire in 2025. Third, large parts of the US were designated as "opportunity zones" where gains are tax free if held for 10 years and improvements are made [4]. All this, combined with consumer stimulus, increased remote work, major swings in domestic migration and household composition [5], and you have red-hot housing prices. [1] https://scrippsnews.com/stories/corporate-investors-are-purchasing-more-single-family-homes/ https://scrippsnews.com/stories/corporate-investors-are-purc... [2] https://tax.thomsonreuters.com/en/glossary/bonus-depreciation https://tax.thomsonreuters.com/en/glossary/bonus-depreciatio... [3] https://www.bakertilly.com/insights/new-regulations-provide-rental-real-estate-safe-harbor-for-20-percent-pass/ https://www.bakertilly.com/insights/new-regulations-provide-... [4] https://www.nar.realtor/qualified-opportunity-zones https://www.nar.realtor/qualified-opportunity-zones [5] https://www.federalreserve.gov/econres/notes/feds-notes/the-remarkable-recent-rebound-in-household-formation-and-the-prospects-for-future-housing-demand-20220506.html https://www.federalreserve.gov/econres/notes/feds-notes/the-...