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> Desirable urban areas of California are expensive because we don't have enough housing. I hear this a lot about California and other places. But I also know

> Desirable urban areas of California are expensive because we don't have enough housing. I hear this a lot about California and other places. But I also know lots of people look to buy a 2nd, 3rd, etc property for rental income. For those homeowners, buying more property is rational because it's an investment they already understand. They can reap economy of scale benefits, even at a low multiple like 2-3 properties: water heaters, dishwashers etc become easier to maintain. The incentives are strong for homeowners to buy rental property. And they're in a stronger position to buy than renters. My gut tells me that 7-8 of every 10 new houses built are bought with the intention to rent it out. It seems like "build more homes" will result in current property owners owning more property to rent out, and most renters will still be renters.

kagakuninja 2y ago
Then that would result in lower cost rental units. While not what everyone wants, it would be a great improvement over the current situation. There are also ways to create tax incentives that could discourage your scenario from happening.
spockz 2y ago
This is a large reason why many of our larger municipalities now forbid to buy a home in their zone if it isn’t (going to be) your primary residence. It seems to be working quite well.
- astrange 2y ago
  The only thing that matters is how many homes there are; stuff like this and vacancy taxes has barely any effect. The main reason to do it is if you want to appear to solve the problem without actually trying to solve it. The main reason anyone would own two SFHs is that you need to do this in order to move. If you sell your first home before moving you're homeless. And after that it can take a long time to find a buyer. They're a bad rental investment though because it's way too risky to own one; one bad renter or one roof replacement means you've lost money.
  - Qwertious 2y ago
    >The only thing that matters is how many homes there are Cost of construction also matters - it reduces the renter's BATNA which reduces bargaining power.
- eric-hu 2y ago
  That sounds like a policy I can get behind. Can you share a name of such a policy or a link to one?
- kortilla 2y ago
  That’s an idiotic law. It discourages home building.
astrange 2y ago
Houses are not built with any particular intent. Developers and property owners are not the same people, and don't even have the same interests. Single family homes for rental are actually quite rare and most businesses that try to enter the market fail and leave again.

kagakuninja 2y ago

Then that would result in lower cost rental units. While not what everyone wants, it would be a great improvement over the current situation. There are also ways to create tax incentives that could discourage your scenario from happening.

spockz 2y ago

This is a large reason why many of our larger municipalities now forbid to buy a home in their zone if it isn’t (going to be) your primary residence. It seems to be working quite well.

astrange 2y ago
The only thing that matters is how many homes there are; stuff like this and vacancy taxes has barely any effect. The main reason to do it is if you want to appear to solve the problem without actually trying to solve it. The main reason anyone would own two SFHs is that you need to do this in order to move. If you sell your first home before moving you're homeless. And after that it can take a long time to find a buyer. They're a bad rental investment though because it's way too risky to own one; one bad renter or one roof replacement means you've lost money.
- Qwertious 2y ago
  >The only thing that matters is how many homes there are Cost of construction also matters - it reduces the renter's BATNA which reduces bargaining power.
eric-hu 2y ago
That sounds like a policy I can get behind. Can you share a name of such a policy or a link to one?
kortilla 2y ago
That’s an idiotic law. It discourages home building.

astrange 2y ago

Houses are not built with any particular intent. Developers and property owners are not the same people, and don't even have the same interests. Single family homes for rental are actually quite rare and most businesses that try to enter the market fail and leave again.