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I don't think the paper you mentioned is a argument for "investors make housing unaffordable is wrong". The TL;DR of that paper is that investors made buying h

I don't think the paper you mentioned is a argument for "investors make housing unaffordable is wrong". The TL;DR of that paper is that investors made buying home harder but renting easier. Doesn't mean that this a good trade-off in the neighborhood and the section of the population concerned. It also doesn't follow that this way of doing it the most efficient way of doing (or even is an efficient way of doing it). If i am reading this correctly, they raised the price of houses more than they reduce the price of rent. and it seems that the authors only looked at the houses that they actually converted for rent, not the total amount of houses purchased. Second, they seems to be mainly targeting suburbs instead of high density areas. It's unclear to me that the same capital deployed to either build or buy high density building wouldn't be a far more effective and less disruptive way to increase housing availability. But the main point about the impact of investor is two fold : First they have access to system of credit/lower interest rate than regular buyer do not thus driving the price up, and even more importantly we have in this country a lot of easement around housing that are design because we believe that stable housing (as in buying , not renting ) provide positive externalities that aren't captured by the market. Investor are simply perverting those incentives by using houses as speculation assets.

creer 3y ago
In many markets there is a gross lack of housing overall. It makes sense that owners paying attention will raise BOTH house prices and rents. There is not enough for sale AND there is not enough for rent. A larger investor can be BOTH more patient when selling and renting AND more realistic when adjustments need to be made. Unfortunately in american systems, there is one delyaing effect: property companies seem to be able to borrow based on the nominal rent for their units - even if they can't find renters at that rate. (Which is why you often see "months free" rather than lower rent). This can delay market pricing changes by quite a bit - at least if you are not ready to move often.
- soulbadguy 3y ago
  > In many markets there is a gross lack of housing overall. It makes sense that owners paying attention will raise BOTH house prices and rents. There is not enough for sale AND there is not enough for rent. A larger investor can be BOTH more patient when selling and renting AND more realistic when adjustments need to be made. I am not sure i understand the point you are making here. If there is not enough houses to sale, and not enough to rent. Then inefficiently converting one to the other doesn't sound like a win. Also, i think this is really market based. I am not sure that the mainly complaint for suburbs was the lack of rental unit. Most likely it was from the lack of buying opportunity.
  - creer 3y ago
    I was responding to this: > If i am reading this correctly, they raised the price of houses more than they reduce the price of rent. In a market with some abundance, some external factor like a change in tax law might result in the balance changing so much that some prices go down. For example many owner-occupied home to be acquired by investors and rented out. The extra availability of rentals might push the rents down. But in many US markets, there aren't so many properties changing hands. So rents will still go up. The slight change in balance will not push rents down. There are currently some prices AND rents somewhat down in the SF Bay Area: Next to the street RV camping and worst street action.
creer 3y ago
> First they have access to system of credit/lower interest rate than regular buyer do not thus driving the price up Not in the US. In the US, commercial lending is short term. There is no easy way to lock in low interest rates. Compared to long term for homeowners. But a bank or insurance company setting up a real estate portfolio may be willing to settle for a low cash return.
- soulbadguy 3y ago
  True, thanks for correction. I think i might have miss spoke here. I was trying to articulate that buying a property as a LLC or any other incorporated entity afford to more facilities in term of access to capital and taxes advantage than a primary residence doesn't alway have.

creer 3y ago

In many markets there is a gross lack of housing overall. It makes sense that owners paying attention will raise BOTH house prices and rents. There is not enough for sale AND there is not enough for rent. A larger investor can be BOTH more patient when selling and renting AND more realistic when adjustments need to be made. Unfortunately in american systems, there is one delyaing effect: property companies seem to be able to borrow based on the nominal rent for their units - even if they can't find renters at that rate. (Which is why you often see "months free" rather than lower rent). This can delay market pricing changes by quite a bit - at least if you are not ready to move often.

soulbadguy 3y ago
> In many markets there is a gross lack of housing overall. It makes sense that owners paying attention will raise BOTH house prices and rents. There is not enough for sale AND there is not enough for rent. A larger investor can be BOTH more patient when selling and renting AND more realistic when adjustments need to be made. I am not sure i understand the point you are making here. If there is not enough houses to sale, and not enough to rent. Then inefficiently converting one to the other doesn't sound like a win. Also, i think this is really market based. I am not sure that the mainly complaint for suburbs was the lack of rental unit. Most likely it was from the lack of buying opportunity.
- creer 3y ago
  I was responding to this: > If i am reading this correctly, they raised the price of houses more than they reduce the price of rent. In a market with some abundance, some external factor like a change in tax law might result in the balance changing so much that some prices go down. For example many owner-occupied home to be acquired by investors and rented out. The extra availability of rentals might push the rents down. But in many US markets, there aren't so many properties changing hands. So rents will still go up. The slight change in balance will not push rents down. There are currently some prices AND rents somewhat down in the SF Bay Area: Next to the street RV camping and worst street action.

creer 3y ago

> First they have access to system of credit/lower interest rate than regular buyer do not thus driving the price up Not in the US. In the US, commercial lending is short term. There is no easy way to lock in low interest rates. Compared to long term for homeowners. But a bank or insurance company setting up a real estate portfolio may be willing to settle for a low cash return.

soulbadguy 3y ago
True, thanks for correction. I think i might have miss spoke here. I was trying to articulate that buying a property as a LLC or any other incorporated entity afford to more facilities in term of access to capital and taxes advantage than a primary residence doesn't alway have.