5 ms·

As noted in the article, one of the three is publicly traded (Invitation Homes, NYSE: INVH), so you can invest easily if you think they're raking it in. (Annual

by em500 3y ago

As noted in the article, one of the three is publicly traded (Invitation Homes, NYSE: INVH), so you can invest easily if you think they're raking it in. (Annualized return over past 5 years was around 8.3% capital gains plus about 1.5%-3% dividend yield.)

giraffe_lady 3y ago
But my problem with it is not quite "I am not personally benefitting from this" and more along the lines of this should not happen at all.
- toomuchtodo 3y ago
  Indeed, this is a political problem to solve with statute.
  - epistasis 3y ago
    Can you define the political problem? Who is harmed by this?
    - toomuchtodo 3y ago
      People who need housing are harmed. Stronger controls around housing investment is the problem. People will say "build more" but aren't mindful that we're 15-20 years behind building housing, and it'll take years, if not a decade, to catch back up to make housing affordable through increasing supply. Capital can always move faster than the physical world, hence the need for capital controls.
      - epistasis 3y ago
        How are people who need housing harmed by renting the housing? My best possible understanding is that it helps people that need housing. In particular, these are single family homes, which usually require a 20% down payment in order to have access, unless somebody rents them out. The best schools and public amenities are hidden behind that 20% down payment, excluding those with less wealth. Those with more wealth are still able to rent if they want to, but this option to rent opens up housing to a lot more. Now, if the only people that you care about are those that can afford a 20% down payment, and you want to maximize their ability to exclude people, I could see how this might "hurt" them, if they will only consider housing when there are not renters. But that's an odd definition of "people."
        toomuchtodo 3y ago
        Housing that is owned by corporations have no price controls. They will charge what the market will bear [1] [2] [3]. Rent increases can and do outpace income increases. Housing owned by corporations is housing that can't be owned by homeowners; when owned by homeowners, they are insulated from rental price increases due to a fixed mortgage. Your 20% down payment assumption ignore 3-5% down FHA mortgages, accessible to anyone who can fog a mirror (based on their underwriting guidelines). But no mortgage is obtainable if your can't meet the debt to income requirement [4], which most can't because the price of real estate has accelerated so far beyond what wages will support. Certainly, not everyone wants to be a homeowner. But if you wish to a remain a renter, there is nothing preventing your rent payment from going up until unaffordable, and you end up homeless [5]. [1] https://www.moodys.com/web/en/us/about/insights/data-stories/us-rental-housing-affordability.html https://www.moodys.com/web/en/us/about/insights/data-stories... ("Spending 30% of income on rent is the new normal in many US metros") [2] https://www.nytimes.com/2024/01/25/realestate/rent-prices-housing.html https://www.nytimes.com/2024/01/25/realestate/rent-prices-ho... | https://archive.today/txKrg https://archive.today/txKrg ("A new Harvard report says 22.4 million households in the United States now spend more than 30 percent of their income in rent, with 12.1 million spending more than 50 percent.") [3] https://www.npr.org/2024/01/25/1225957874/housing-unaffordable-for-record-half-all-u-s-renters-study-finds https://www.npr.org/2024/01/25/1225957874/housing-unaffordab... ("Housing is now unaffordable for a record half of all U.S. renters, study finds") [4] https://www.cbsnews.com/news/homes-for-sale-affordable-housing-prices/ https://www.cbsnews.com/news/homes-for-sale-affordable-housi... ("Homes "unaffordable" in 99% of nation for average American") [5] https://www.npr.org/homelessness-affordable-housing-crisis-rent-assistance https://www.npr.org/homelessness-affordable-housing-crisis-r... ("Homelessness in the U.S. hit a record high last year as pandemic aid ran out") > Homelessness in America spiked last year, reaching a record high, according to an annual count that provides a snapshot of one night in January. The report, released today by the department of Housing and Urban development, found more than 650,000 people were living in shelters or outside in tents or cars. That's up a whopping 12% from the year before. > To advocates, it hardly comes as a surprise. > "We simply don't have enough homes that people can afford," says Jeff Olivet, executive director of the U.S. Interagency Council on Homelessness. "When you combine rapidly rising rent, that it just costs more per month for people to get into a place and keep a place, you get this vicious game of musical chairs." (was a contract mortgage underwriter for a brief stint a lifetime ago, still very familiar with underwriting guidelines [Fannie, Freddie, FHA, USDA, VA] from a residential mortgage perspective, yet another tool to solve problems with when possible)
- epistasis 3y ago
  Can you explain why this should not happen at all? From the renter's experience, corporate landlords are more likely to follow the law. From the perspective of homeowners, I can see that this adds another competitive player, and allows lower-income renters into wealthier neighborhoods. I do not see why this should not happen at all.
  - oliwarner 3y ago
    There's nothing inherently wrong with a company owning property. The problems come when they own a statistically significant percentage of the market. They gain unfair price controls, have unparalleled market data, higher control over agents. All the normal things you get with monopolies. The resource type matters too. These companies aren't building extra homes to let, they're taking over their competition, vacuuming up stock as fast as they can.
lotsofpulp 3y ago
For reference, the annual return since Feb 2017 for INVH is 9.9%, versus 13.3% for SP500. https://dqydj.com/stock-return-calculator/ https://dqydj.com/stock-return-calculator/ https://dqydj.com/sp-500-return-calculator/ https://dqydj.com/sp-500-return-calculator/

by em500 3y ago

giraffe_lady 3y ago

But my problem with it is not quite "I am not personally benefitting from this" and more along the lines of this should not happen at all.

toomuchtodo 3y ago
Indeed, this is a political problem to solve with statute.
- epistasis 3y ago
  Can you define the political problem? Who is harmed by this?
  - toomuchtodo 3y ago
    People who need housing are harmed. Stronger controls around housing investment is the problem. People will say "build more" but aren't mindful that we're 15-20 years behind building housing, and it'll take years, if not a decade, to catch back up to make housing affordable through increasing supply. Capital can always move faster than the physical world, hence the need for capital controls.
    - epistasis 3y ago
      How are people who need housing harmed by renting the housing? My best possible understanding is that it helps people that need housing. In particular, these are single family homes, which usually require a 20% down payment in order to have access, unless somebody rents them out. The best schools and public amenities are hidden behind that 20% down payment, excluding those with less wealth. Those with more wealth are still able to rent if they want to, but this option to rent opens up housing to a lot more. Now, if the only people that you care about are those that can afford a 20% down payment, and you want to maximize their ability to exclude people, I could see how this might "hurt" them, if they will only consider housing when there are not renters. But that's an odd definition of "people."
      - toomuchtodo 3y ago
        Housing that is owned by corporations have no price controls. They will charge what the market will bear [1] [2] [3]. Rent increases can and do outpace income increases. Housing owned by corporations is housing that can't be owned by homeowners; when owned by homeowners, they are insulated from rental price increases due to a fixed mortgage. Your 20% down payment assumption ignore 3-5% down FHA mortgages, accessible to anyone who can fog a mirror (based on their underwriting guidelines). But no mortgage is obtainable if your can't meet the debt to income requirement [4], which most can't because the price of real estate has accelerated so far beyond what wages will support. Certainly, not everyone wants to be a homeowner. But if you wish to a remain a renter, there is nothing preventing your rent payment from going up until unaffordable, and you end up homeless [5]. [1] https://www.moodys.com/web/en/us/about/insights/data-stories/us-rental-housing-affordability.html https://www.moodys.com/web/en/us/about/insights/data-stories... ("Spending 30% of income on rent is the new normal in many US metros") [2] https://www.nytimes.com/2024/01/25/realestate/rent-prices-housing.html https://www.nytimes.com/2024/01/25/realestate/rent-prices-ho... | https://archive.today/txKrg https://archive.today/txKrg ("A new Harvard report says 22.4 million households in the United States now spend more than 30 percent of their income in rent, with 12.1 million spending more than 50 percent.") [3] https://www.npr.org/2024/01/25/1225957874/housing-unaffordable-for-record-half-all-u-s-renters-study-finds https://www.npr.org/2024/01/25/1225957874/housing-unaffordab... ("Housing is now unaffordable for a record half of all U.S. renters, study finds") [4] https://www.cbsnews.com/news/homes-for-sale-affordable-housing-prices/ https://www.cbsnews.com/news/homes-for-sale-affordable-housi... ("Homes "unaffordable" in 99% of nation for average American") [5] https://www.npr.org/homelessness-affordable-housing-crisis-rent-assistance https://www.npr.org/homelessness-affordable-housing-crisis-r... ("Homelessness in the U.S. hit a record high last year as pandemic aid ran out") > Homelessness in America spiked last year, reaching a record high, according to an annual count that provides a snapshot of one night in January. The report, released today by the department of Housing and Urban development, found more than 650,000 people were living in shelters or outside in tents or cars. That's up a whopping 12% from the year before. > To advocates, it hardly comes as a surprise. > "We simply don't have enough homes that people can afford," says Jeff Olivet, executive director of the U.S. Interagency Council on Homelessness. "When you combine rapidly rising rent, that it just costs more per month for people to get into a place and keep a place, you get this vicious game of musical chairs." (was a contract mortgage underwriter for a brief stint a lifetime ago, still very familiar with underwriting guidelines [Fannie, Freddie, FHA, USDA, VA] from a residential mortgage perspective, yet another tool to solve problems with when possible)
epistasis 3y ago
Can you explain why this should not happen at all? From the renter's experience, corporate landlords are more likely to follow the law. From the perspective of homeowners, I can see that this adds another competitive player, and allows lower-income renters into wealthier neighborhoods. I do not see why this should not happen at all.
- oliwarner 3y ago
  There's nothing inherently wrong with a company owning property. The problems come when they own a statistically significant percentage of the market. They gain unfair price controls, have unparalleled market data, higher control over agents. All the normal things you get with monopolies. The resource type matters too. These companies aren't building extra homes to let, they're taking over their competition, vacuuming up stock as fast as they can.

lotsofpulp 3y ago

For reference, the annual return since Feb 2017 for INVH is 9.9%, versus 13.3% for SP500. https://dqydj.com/stock-return-calculator/ https://dqydj.com/stock-return-calculator/ https://dqydj.com/sp-500-return-calculator/ https://dqydj.com/sp-500-return-calculator/