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BlackRock and housing: Setting the record straight
- lispisok 3y ago>Additionally, BlackRock invests in multifamily properties, apartment complexes, and other residential real estate. So what does that mean exactly?
- tmaly 3y ago"other residential real estate" could mean anything like single family homes. It is a pretty broad terminology.
- brandall10 3y agoWhat can it mean other than single family homes? This is probably the biggest grievance here, so naturally it's spun to an 'other' to avoid naming it outright.
- tootie 3y agoProbably that they own stock in real estate companies. Like anyone can own shares of EQR which operates which owns a few hundred apartment buildings.
- droptablemain 3y agoPossibly trailer parks.
- Bluescreenbuddy 3y agoArguing semantics. They have their claws deep in housing. The type is irrelevant.
- deleted 3y ago[deleted]
- tw04 3y ago> Most recently, we began investing in new construction, purpose-built for-rent housing developments that add supply to the market and address the increasing demand we see for this property type. Our focus is on building single-family rental housing that can be managed and operated similar to multifamily properties with dedicated property management, leasing and amenities. So you aren’t buying existing houses, but you’re buying land to build houses for the sole purpose of renting. To say you aren’t participating in the market is disingenuous at best. Congrats, you found it’s cheaper to build new than refurbish existing, that doesn’t really change the calculus that you’re trying to eliminate home ownership in the US.
- tootie 3y agoThey didn't say they aren't participating. They said quite clearly that they are. The accusation has been that they are buying single-family homes and then renting them out. Their position here is that they don't operate at that level at all. They are merely providing capital to companies who may or may not be doing stuff like that at scale.
- FireBeyond 3y ago> They are merely providing capital to companies who may or may not be doing stuff like that at scale. "Merely" is doing a lot of work there. As is "may or may not be". BlackRock very explicitly provides loans with the specific purpose of doing exactly that. "They provide capital to companies to do stuff like that at scale".
- finolex1 3y agoNew homes are new homes. Whether they are for rent or for sale is largely immaterial. It's interesting that this is viewed in a negative light too.
- grammarxcore 3y agoIf you are contending only the rich should be able to own homes, sure. Canada’s had a huge problem of rent vs own and has seen a huge cost of living increase. Building homes exclusively to rent is a net negative when looked at through the lens of home ownership. If, however, you just want companies busy building homes their employees will have to pay someone else to use for the rest of their lives, it’s okay to build just for renting.
- ed 3y agoRead: stop confusing us with Blackstone https://www.blackstone.com/housing/our-track-record-in-housing/ https://www.blackstone.com/housing/our-track-record-in-housi...
- blueelephanttea 3y agoOf which many people in this comment section are still doing.
- DueDilligence 3y ago[dead]
- theknocker 3y ago[dead]
- ctoth 3y agoNo no silly people it's Black Stone! (not Black Rock -- how could you possibly get those confused!) who is stealing all your houses. We are just building houses which will only be rentable so you will rent your whole life and like it! Blackstone, of course says: It's not us[0]! [0]: https://www.blackstone.com/housing/our-track-record-in-housing/ https://www.blackstone.com/housing/our-track-record-in-housi...
- belligeront 3y agoWhy is providing rental houses bad? Should people who don't want to or cannot afford to purchase a house not have access to single family houses?
- nullserver 3y agoRented a house for Invitation Homes, which is owned by black rock. Showed up all the windows were open didn’t think much of it; signed the contract. Closed the windows, hour later call them up, complaining about the chemical smell. Took three months to get resolved. I was in an out of the hospital for months. Years for family to recover.
- za3faran 3y agoSorry to hear. What turned out to be the cause of the smell, and how was it resolved? I hope you and your family are better now.
- nullserver 3y agoLeaking gas, which in a first for me didn’t smell like rotten eggs. They kept blaming the new carpet or paint or whatever else. and to add to the fun, carbine monoxide from 2 sources. Included alarm with house was faulty. Plus we were all acting like zombies. Bad smell made us keep windows open most of the time. Otherwise would have died. As it was gas company freaked out at how bad it was
- AnimalMuppet 3y ago
- DinoDad13 3y agoBlackstone is the firm that is buying a lot of SFHs FYI.
- polski-g 3y agoBlackstone owns 0.03% of SFHs in the US.
- evv555 3y agoBlackstone represented a quarter of all SFH purchases in my city during the COVID price run up. They priced out alot of normal people
- 1234letshaveatw 3y agoDo you have a source? What priced people out can mostly be attributed to the historically low mortgage rates
- evv555 3y agohttps://archive.ph/k73O1 https://archive.ph/k73O1 "Companies also tout their ability to push rent and fees higher and higher, even as they market themselves as providers of affordable housing. Founded by Blackstone Group, a private equity giant, Invitation Homes raised its average rent in the Atlanta market 37% from $1,336 in 2016 to $1,836 today, according to public filings. It raised rent 11% in 2022 alone." . "Large investor purchases have accelerated since then. During one 12-month stretch beginning in July 2021, investors bought one out of every three homes for sale in metro Atlanta."
- theknocker 3y ago[dead]
- DinoDad13 3y agoThe % of all SFH they own is different from the % of available inventory they are buying quarter to quarter.
- 34679 3y ago>BlackRock is a significant investor in mortgage securities, helping make capital available to individuals and families seeking to purchase homes. Anybody else reminded of the scene from The Big Short with the stripper talking about all the properties she has loans for?
- missedthecue 3y agoNo because I don't have a Pavlovian response to the phrase "mortgage securities", trained only on surface-level knowledge of a Ryan Gosling film.
- deleted 3y ago[deleted]
- Charlie_26 3y ago[flagged]
- esarbe 3y agoThey didn't say that they have a Pavlovian response to the phrase "mortgage securities", trained only on surface-level knowledge of a Ryan Gosling film. They were simply reminded of the scene from The Big Short with the stripper talking about all the properties she has loans for. Why the need for hyperbole?
- cko 3y agoIt seems to be a hyperbolic reaction to be reminded of an overleveraged stripper in a movie any time one thinks of a mortgage.
- esarbe 3y agoThey didn't write they were reminded reminded of an overleveraged stripper in a movie any time they thinks of a mortgage. That's pure speculation, or worse; insinuation.
- purpleblue 3y agoI do not believe BlackRock. The invest in funds that purchase homes. If they make a statement saying that none of their funds is invested in funds that purchase homes, then that's a different thing. But that's not what they said. They are being purposefully duplicitous.
- FireBeyond 3y agoIt is very difficult to believe any company that "spontaneously" puts out a "fact check" or "record straightening" website without it being spindoctored, marketed and run through legal to the very limit of what the English language is capable of.
- pphysch 3y ago> BlackRock is a significant investor in mortgage securities, helping make capital available to individuals and families seeking to purchase homes. The lucrative mortgage industry is perhaps the root of the housing affordability crisis. Astronomical housing prices primarily benefit the middlemen. So sure, maybe you aren't buying up houses, but you are helping inflate the prices to where only other finance giants can afford them outright.
- missedthecue 3y agoThe lucrative mortgage industry is why Americans are the only country with widespread access to fixed-rate mortgages. The rest of us have to take on 25-30 years of interest rate risk when he get a mortgage.
- pkaye 3y agoIts not unique to US. Denmark has 30 year fixed rate mortgages through different approaches. https://www.economist.com/leaders/2023/08/31/to-fix-broken-mortgage-markets-look-to-denmark https://www.economist.com/leaders/2023/08/31/to-fix-broken-m...
- seanhunter 3y agoMortgage securities literally finance the provision of mortgages. Without them, mortgage rates for normal borrowers would be much more expensive and credit requirements would be much more stringent. So house prices would very likely go down (significally) but houses might not be (on net) more affordable for normal people in this scenario because the finance would be much much more costly. You could argue those changes would be healthy overall, but it's not as cut and dried as you might hope. It's a very complex ecosystem. It's very tempting to fall for superficial hot takes, quick fixes etc but actually making significant structural changes would be very challenging without unintentional adverse consequences.
- pphysch 3y agoIt would absolutely be healthy for USA society if housing prices were deflated by 2-10x. I don't care if my mortgage rate is 10% instead of 7% if the overall loan is a fraction of the size (i.e. $200k instead of $700k). Maybe I don't even need a mortgage. It would be horrible for Wall St, which runs Washington from K Street. Many people would not be able to afford their yachts and Aspen resort homes. This is why we working Americans increasingly can't have nice things.
- n_ary 3y agoWhile I have zero trust for such, but whatever they are trying to say here is that, they don't buy and limit supply but rather invest and build more to increase supply overall. If you buy something that is limited, you can choke the supply and raise prices/costs, but if you build more of it, it will increase the supply and usually by economical law reduce the price given the demand remains constant. However, if we take the other side of the coin, we could bend it a little bit and interpret that they invest into institutes and people who buys the assets instead... but that is slightly disenginous to derive from it.
- irishgeoff22 3y ago[dead]
- xkekjrktllss 3y agoEntirely unconvinced. At the very least, they should have this run through an ostensibly reputable media outlet that would at least imply responsibility for the claims and the questionable specificity. I would still be very skeptical, but it's just a joke as is.
- bearjaws 3y ago"We don't buy them silly! We just buy huge stakes in the companies who buy all the homes! - totally different! We certainly can't use our monetary influence in any other way!"
- Etheryte 3y agoThis is also a common way to sidestep ESG metrics, instead of investing in companies that do business in oil, coal and etc, invest in investing companies that exclusively invest in those companies instead. Nothing to see here, just investing in financial institutions.
- deleted 3y ago[deleted]
- Red_Leaves_Flyy 3y agoFTA > Additionally, BlackRock invests in multifamily properties, apartment complexes, and other residential real estate. Many multi family units were once SFH. Ignoring this narrows the conversation to a scope that black rock prefers not in a way that is intellectually honest or necessary to critically evaluate the wants needs and desires of the actual market participants and how institutional ownership distorts the market. Black rock considers it a given that their investments are mutually beneficial but this is not a safe assumption to make and should be evidenced with robust data. I expect the data to show that black rock is profiting off of the misery of their tenants but I’m open to alternatives and hope that I am wrong. Also, is black rock a participant in the emerging rent price fixing scandal?
- deleted 3y ago[deleted]
- yieldcrv 3y agoviral conspiracies rely on there being a secret that can never be proved or disproved, people susceptible to them would never be swayed by what was written here so I don’t really understand what compelled BlackRock to even release this now but telling people you mostly dont buy individual homes just to leave them unoccupied, but provide capital to people who do, doesnt really help? for the people that don’t believe BlackRock, nothing changed, for the people that suddenly now believe BlackRock, well good news: if that bothers you then you have to be bothered by every lender in the entire real estate sector.
- stuckinhell 3y agoNo one trusts BlackRock because nearly every single person knows about shell corporations and all the shadiness global/american[ corporations do. I 100% believe BlackRock is manipulating the housing market in some nasty fashion.
- api 3y agoIf we actually built housing to meet demand, these kinds of schemes wouldn't matter so much. Supply and demand would limit the ability to extract undue amounts of rent. But with a constrained supply it's entirely possible for large actors to come in and effect very substantial price moves. This is the case in any demand-constrained market.
- say_it_as_it_is 3y agoCould someone please counter with a summary of BlackRock's actual exposure to the housing market rather than a 4chan conspiracy theory?
- Workaccount2 3y agoThe housing crisis is a function of homeowners being heavily economically incentivized to restrict supply of homes. Do all the finger pointing you want. Nothing changes the fact that homes are a valuable investment because we constantly are tightening the housing market at the behest of homeowners who want a big ROI on the biggest purchase they will ever make. It doesn't matter if it's a mega corporation, a tiny LLC, or your parents. Every one of them has a unified goal: Increase home prices. Take [corporation] out of the picture and nothing will change. Small time investors will just snatch up those homes instead. If you actually want to lower costs. If you understand your home grows in value at the expense of denying others affordable housing. There is only one fix: Build. More. Housing.
- voisin 3y ago> Take [corporation] out of the picture and nothing will change. Small time investors will just snatch up those homes instead. To a degree maybe. Small time investors are less capable of withstanding increasing interest rates, and often lose steam when it comes to the hell that is running a small residential property portfolio and dealing with repairs, rent collection, etc, for relatively low returns.
- DueDilligence 3y ago[dead]
- buffington 3y ago> BlackRock is not buying individual houses in the U.S. > BlackRock invests in multifamily properties, apartment complexes, and other residential real estate. If BlackRock doesn't buy individual houses in the U.S., but does invest in multifamily, and apartment properties, then what kind of properties are "other residential"? Anything I can think of is either a kind of individual home (which they don't buy) or multi-unit.
- iteratethis 3y agoA fun thought experiment is to declare yourself "CEO for a day", or "PM for a day". You've been complaining about a societal problem, say the lack of affordable housing, and on this day you get the keys to the kingdom. How would you solve it? I'll run by a few ideas from the perspective of the Netherlands, as I'm most familiar with it. "Address land lords by more heavily taxing them or applying caps to rent". Tried. Has the exact opposite effect. They'll just sell the property. There will be fewer rental homes with even more price pressure. "Intervene in investing. Control what gets build, introduce price caps, who gets to buy it (for example teachers), etc" Tried. Projects will simply be canceled. We have a 70% decline in new supply. In fairness, also due to the high interest rates. "Land should be cheaper" Can't be done over here. It's the main income for municipalities. Take this away and local taxes skyrocket. "Building the home should be cheaper" Can't be done. Materials are more expensive, so is labor, and building standards are much more complicated. All of the above applies regardless of zoning. So you're in the situation where building a new home costs about 400K at least. Your idea of an affordable home is 200K. Do share how you plan to solve that? It's obvious that there's no easy fix, otherwise somebody in the many countries that have this problem would have fixed it already.
- eigenspace 3y agoThere is one thing that seems like it legitimately does work, but it requires a lot of time and a lot of expense. Have the the city (or some other organization interested in providing affordable housing) purchase and/or build so many non-profit housing rental units that it distorts the private market. In Vienna, around 30% of the rental units in the city are offered through socialized housing programs that are incredibly secure, and low cost. There's so many of these units, that landlords in the private market have to compete with their prices. The for-profit rental units are more expensive than the socialized units, but the average price is still very low compared to comparable cities. As a result, Vienna is the cheapest major city in the German-speaking part of Europe, and Viennese people spend a much smaller portion of their income on housing than their peers spend pretty much europe-wide.
- xkekjrktllss 3y ago
- DueDilligence 3y ago[dead]