7 ms·

What happens when private equity buys homes in your neighborhood

63 points by pseudolus 1y ago

taeric 1y ago
Glad to see the final section basically cover that this is not actually a problem. I sort of wish the headline was more of the "Why you shouldn't be worried about private equity buying your neighborhood." Why and how did that ear worm infect so many people?
- xnx 1y ago
  > Why and how did that ear worm infect so many people? It's a story they want to believe. The big bad out-of-town corporation is causing the housing crisis and not the complex web of dozens of factors: existing owners wanting to protect their largest asset, more people wanting to live in fewer places, inflation, tariffs on Canadian lumber, safety standards, etc.
  - crooked-v 1y ago
    Ultimately it's not really that complex to explain: there just literally aren't enough physical housing units of whatever kind in major US cities to meet demand (https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage https://www.fanniemae.com/research-and-insights/perspectives...), so prices keep going up. Unfortunately, there are a ton of people who will deny that that factual, well-studied shortage exists, and will try to blame its effects on anything and everything else even tangentially related.
    - lazide 1y ago
      There are ~ 15 million unoccupied houses in the US [https://www.realtor.com/news/trends/states-with-most-vacant-homes/ https://www.realtor.com/news/trends/states-with-most-vacant-...]. That we know about. A desirable location will never have enough capacity. Regardless of how much building occurs. If you don’t believe me, look at NYC, Paris, etc, etc. People move as close to a desirable location as they can afford. And often more. Don’t get me wrong, rules set where and how bad the line is, but there is no realistic situation where everyone who wants to live in SF can, and can afford to, and it is anything like SF.
      - vorador 1y ago
        Well the problem with SF is less density and more than half of it is single-family home neighborhoods with zero amenities. Anti-growth people will point to neighborhoods like Glen Park, NoPa and Noe as "SF" while forgetting most of the surface area of the city is empty neighborhoods like Parkside, Mt Davidson Manor, etc.
        lazide 1y ago
        It’s a matter of degree, not difference. If you fit 2x the number of people in them - you’d still have the same general problem. Just 2x the number of people now. And because larger cities tend to also be more attractive (Tokyo is still growing, for instance), you’ll never have enough density to be ‘enough’ - aka where it’s cheap enough for everyone to live where they want. You will have more people though.
        vorador 1y ago
        It's a false premise, cities do not grow endlessly. If you look at other cities they're actually losing population – NYC for example.
        lazide 1y ago
        NYC is not losing population. [https://www.nyc.gov/assets/planning/downloads/pdf/our-work/reports/new-york-city-population-estimates-and-trends_may-2025.pdf https://www.nyc.gov/assets/planning/downloads/pdf/our-work/r...] There were two years during the pandemic when people moved out- because jobs let them - but people moved back and it has more than made up for it since. Every major city in the world has seen significant population increases as mechanized farm work and fertilizers have removed the need for many farm workers, and economy activity has concentrated. It’s been a consistent trend for almost 100 years.
        crooked-v 1y ago
        And yet, with the Tokyo example, the combination of lots of housing and good public transit means that you can get small but liveable apartments that are a 20-minute walk from central downtown Tokyo (and under a 10-minute walk to multiple train stations with access to the rest of the metro area) for under $1500/month. Here's one right here: https://www.realestate-tokyo.com/rent/B0021114/park-flats-ginza-east/R0128492/ https://www.realestate-tokyo.com/rent/B0021114/park-flats-gi...
  - Dig1t 1y ago
    Lumber is a tiny fraction of the cost of a house, the US produces a huge amount of lumber on its own. I don’t think there’s any real evidence to show that lumber tariffs have had a measurable impact on housing costs. Most housing is built with lumber from here. Also the tariffs are new this year, housing costs have been a problem for much longer than just this year.
    - chrisweekly 1y ago
      to be fair, xnx said "dozens of factors" and mentioned lumber and tariffs as among them... maybe better examples would've made their point stronger though.
      - Dig1t 1y ago
        Yes that’s true, I think he’s right on all the other points. I just built a house by myself, from the ground up, so I couldn’t let that lumber thing slide though as I literally just paid for all the materials myself and I know how little lumber costs compared to everything else.
    - bombcar 1y ago
      Here's a "kit" for a 1,400 sq ft house: https://www.menards.com/main/building-materials/books-building-plans/home-plans/shop-all-home-projects/h077d-0019-stovall-home-material-list/h077d-0019-slab/p-1449804743568-c-9919.htm https://www.menards.com/main/building-materials/books-buildi... $90k for materials. Around here a 1,400 square goes for $385k (half a house, but there you go). So materials are somewhere around a quarter of the cost. Land + foundation + utilities is another quarter; the rest is labor and profit.
      - Dig1t 1y ago
        Yes very true, and lumber is a sub-category inside materials and it is not very expensive compared to the other materials like concrete, siding (fiber cement, stucco), roof material (metal, asphalt, tile), drywall, paint, plumbing, electrical. Of all those things lumber is a cheap line item.
      - 1y ago
- ben7799 1y ago
  It's the left wing gaslighting everyone over all the issues caused by making it harder and harder to build anything. You blame landlords and PE when in actuality the government has stopped construction in it's tracks. This then feeds into the ultra-left agenda which tends towards socialism and "make landlords and private property illegal." This is largely what the Abundance agenda and YIMBY is all about... getting the left to stop throwing up NIMBY road blocks. The problems with not enough investment in new houses are not limited strictly to blue states but blue states seem to have the largest problem with it. Democrats love regulation so much that states like MA and CA have erected so many zoning and building regulations that new homes have become incredibly difficult and slow to build. We struggle to even build apartment size condos in suburban MA that cost less than $1.1-1.5M per unit. We are rapidly heading towards new houses being $2M+ in lots of parts of the state. By the time a developer manages to buy a lot and go through all the red tape, possibly tear down an old house, go through environmental review, etc.. they can't make any money unless they build a $2M+ house. Any lot that doesn't have an old house on it in the eastern part of the state will have a long list of environmental gotchas a developer will have to fight through, possibly for years before they can even start building anything. Housing construction is so far behind the demand that who owns the existing houses has little to do with it. PE and Corporate landlords own more property in left leaning markets because Blue policies have made it more profitable to do so. The more new construction is slowed, the more valuable the rental properties become. Some of these companies won't want to go near red states where construction is easy. The property values and rents are just not high enough.
darth_avocado 1y ago
When you have a bunch of rental properties in your neighborhood, you have different maintenance standards and tolerance for unoccupancy. On an average, this allows the neighborhood to be on an average, be average. When you have large corporations buying up all the homes in the neighborhood, things swing heavily in one direction depending on the market conditions.
- BergAndCo 1y ago
  [dead]
jameslk 1y ago
> But the bigger problem for housing affordability, he adds, is that "we just haven't built enough [homes] to keep up with the population growth and household formation." The circular incentive here is left unsaid. If a house is an investment, you and every other homeowner has an incentive to keep supply low and demand high. This ultimately drives votes, lobbying, and policies that prevent houses being built. Otherwise you end up with falling rents and stagnating property prices, like in Austin. https://www.apartmentlist.com/research/cooling-rent-growth-demonstrates-impact-of-new-supply https://www.apartmentlist.com/research/cooling-rent-growth-d...
- crooked-v 1y ago
  Housing is only 'an investment' of the kind people expect to get fast returns on because of the shortage of housing. Everyone who benefits from that is effectively extracting wealth from the people who are stuck outside of the housing market because of those shortages.
  - lazide 1y ago
    When the line goes up, everyone hopes it keeps going up, and tries to figure out a way to profit from that. One way to stop that, is ensuring the line doesn’t go up. That has some pretty nasty side effects in other ways though. When the line stops or starts to go down, then bad things happen. People can’t sell and move without losing a ton of money. People go bankrupt, etc, etc.
    - Jensson 1y ago
      > When the line stops or starts to go down, then bad things happen Only because many millions bought risky investments since they were told it was basically risk free. Normally things getting cheaper is a good thing, but we tricked people into thinking that housing being expensive is good for them.
      - lazide 1y ago
        This is true literally everywhere, in every country (and under every gov’t) I’ve ever seen. And I’ve seen a lot. If you think US property prices are nuts, look in Europe, Asia (especially East Asia), etc. Most people take crazy risks to buy the most/nicest house they can get a loan for because where you live is a huge factor for a number of other things in people’s lives. If people will give them loans for more than they can afford, many people will still do it. So easy credit? Housing market goes up. Tough credit? Housing market goes down. All things considered anyway. Eventually. Owners have a very, very strong incentive to stop it from going down, so unless they have to move, the market can stay locked up for a long time.
cheeseomlit 1y ago
Shameless apologia for private equity vultures buying up all the houses, what a terrible article. "Oh but renting costs less so it makes your neighborhood more diverse with more lower-income residents!" Yeah and renting also ensures you stay low-income forever by never getting the opportunity to build any equity. Real 'you'll own nothing and you'll be happy' energy The opening paragraph is also a laugh. "Daniel Erb became a corporate landlord kind of by accident." Yeah he was an investment banker who decided he wanted to invest in real estate so he decided to call his cousin at BlackRock- woopsie! what a weird accident!
- crooked-v 1y ago
  Private equity doesn't own a lot of houses. For example, in California large landlords (including private equity but also traditional landlord companies) own 1.9% of houses, small landlords (under 10 houses) own about 20% of houses, and individuals own the rest.
  - cheeseomlit 1y ago
    And which way is it trending? Massively upwards, as per the article. I've been getting constant texts for years from private equity parasites trying to buy my house, everyone who owns one does. It won't take long for that 2% to become 5% and then 10% and onwards if nothing is done about it.
    - deleted 1y ago
      [deleted]
    - crooked-v 1y ago
      Where do you think they're supposed to get all those houses? New construction is negligible in much of the US, and ironically enough, the same housing shortage they're benefiting from would make it incredibly expensive to buy out that many individual homeowners.
    - BeetleB 1y ago
      Are you sure those texts are from private equity? I've dabbled with RE investments and hang out with those clubs. It's highly likely the origin of those mailings/texts is from an average person like you and me (most of whom have a full time job earning less than most SW engineers). They are doing RE as a side business, and are paying a service to send out those mailers/texts. They're looking for distressed homeowners (e.g. people who are about to lose the house due to unpaid property taxes, etc). They've been doing this for decades, but the easier availability of data due to the Internet, as well as the growth of online services, has made it much more accessible to the average Joe. It requires very little capital to send out those mailers/texts. If you're getting more of these now than 20 years ago, it's because RE investing has become a lot more democratized/accessible.
ubermonkey 1y ago
Except: corporate landlords SHOULD be banned. And PE should be, too.
- derektank 1y ago
  So we should have smallhold landlords that frequently skirt rental regulations and are difficult to hold accountable?
  - dlcarrier 1y ago
    In Europe, landlords violate regulations much less often than in the US, because the tenants renovate and maintain the properties, instead of the landlords. It's much cheaper to rent in Europe, because it's much cheaper for a tenant to fix something small themselves, than involve a landlord, a property management company, and a service company.
- topaz0 1y ago
  Banned and reeducated.
  - ubermonkey 1y ago
    I don't feel banned.
    - topaz0 1y ago
      Sorry -- I meant that as an extension of your comment: the landlords, in addition to being banned as you say, should also be reeducated.
- crooked-v 1y ago
  How do you define that? Plenty of small landlords are "corporate".
  - bluGill 1y ago
Animats 1y ago
Is this persisting now that the zero interest rate era is over? It would have been profitable during the cheap money era, but is it still?
- bombcar 1y ago
  The stories about "companies buying houses way over value" were around for awhile; IIRC there were some "AI powered home buying" things related to Zillow, etc that would get in fights with each other and themselves. Zero interest rate certainly made it much more possible; buying a $500k house and having nearly no holding costs, and worst case scenario selling it for $500k is way different than buying the same $500k house, paying $2k a month in carrying costs (interest alone) and then having to sell it for $450k? That hurts, and hurts hard.
  - bluGill 1y ago
    The problem with AI and Zillow is they forget "due diligence" matters. I know someone who sold a friend to Zillow for $20k less than market - they knew, as would anyone who did an inspection that there was rot issues and the correct value was around 100k less than market (which would then allow giving a builder $80k and 3 months to fix the issue before selling). Zillow tried to put a fresh coat of paint and sell the house. Now there is value in someone like Zillow coming in with $20k cash today to buy your house ($20k might be the wrong number, but lets accept it for discussion), and then selling it for market a few months later when someone wants it, but they need to do that due diligence. That is why Zillow got out of the business even when rates were near zero, doing that due diligence is something they were not prepared to do since it requires humans to do work. (even if it is just taking pictures for the AI, to look at)
    - bombcar 1y ago
      I remember the discussion pointed out that as long as they had "assumed due diligence" because they were randomly selecting properties in tests, they did fine. But once word got out "sell your shithole to Zillow, they don't even check" of course EVERY shithole went to them. Tragedy of the Venture Capitalists or something.
burnt-resistor 1y ago
End corporate personhood, end Citizens' United, restore the Tillman Act, and make it illegal for corporations to not be actively divesting from individual residential property units.
lesser-shadow 1y ago
>... but they are aslo diversifying the suburbs! Why would anyone sane live near a black neighborhood?
mikewarot 1y ago
A house is a deteriorating pile of lumber on land that always wants to return to nature. Only an insane person would expect it to increase in value over time. The maintenance and taxes alone usually swamp speculative gains.
cmxch 1y ago
Still don’t want a neighborhood full of LLCs.
agavava 1y ago
I would love to think about my own house already, but prices for everything are so high that it’s not possible yet. I rent an apartment, but I was lucky with the owners, who don’t even mind a renovation, and we decided to split the costs in half. Basically, I already gave them a rough estimate I made here https://www.myhomequote.com/bathroom/cost-calculator https://www.myhomequote.com/bathroom/cost-calculator for what I plan to update. And we also agreed that specialists will handle everything so the quality will be good.

63 points by pseudolus 1y ago

Glad to see the final section basically cover that this is not actually a problem. I sort of wish the headline was more of the "Why you shouldn't be worried about private equity buying your neighborhood." Why and how did that ear worm infect so many people?

xnx 1y ago
> Why and how did that ear worm infect so many people? It's a story they want to believe. The big bad out-of-town corporation is causing the housing crisis and not the complex web of dozens of factors: existing owners wanting to protect their largest asset, more people wanting to live in fewer places, inflation, tariffs on Canadian lumber, safety standards, etc.
- crooked-v 1y ago
  Ultimately it's not really that complex to explain: there just literally aren't enough physical housing units of whatever kind in major US cities to meet demand (https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage https://www.fanniemae.com/research-and-insights/perspectives...), so prices keep going up. Unfortunately, there are a ton of people who will deny that that factual, well-studied shortage exists, and will try to blame its effects on anything and everything else even tangentially related.
  - lazide 1y ago
    There are ~ 15 million unoccupied houses in the US [https://www.realtor.com/news/trends/states-with-most-vacant-homes/ https://www.realtor.com/news/trends/states-with-most-vacant-...]. That we know about. A desirable location will never have enough capacity. Regardless of how much building occurs. If you don’t believe me, look at NYC, Paris, etc, etc. People move as close to a desirable location as they can afford. And often more. Don’t get me wrong, rules set where and how bad the line is, but there is no realistic situation where everyone who wants to live in SF can, and can afford to, and it is anything like SF.
    - vorador 1y ago
      Well the problem with SF is less density and more than half of it is single-family home neighborhoods with zero amenities. Anti-growth people will point to neighborhoods like Glen Park, NoPa and Noe as "SF" while forgetting most of the surface area of the city is empty neighborhoods like Parkside, Mt Davidson Manor, etc.
      - lazide 1y ago
        It’s a matter of degree, not difference. If you fit 2x the number of people in them - you’d still have the same general problem. Just 2x the number of people now. And because larger cities tend to also be more attractive (Tokyo is still growing, for instance), you’ll never have enough density to be ‘enough’ - aka where it’s cheap enough for everyone to live where they want. You will have more people though.
        vorador 1y ago
        It's a false premise, cities do not grow endlessly. If you look at other cities they're actually losing population – NYC for example.
        lazide 1y ago
        NYC is not losing population. [https://www.nyc.gov/assets/planning/downloads/pdf/our-work/reports/new-york-city-population-estimates-and-trends_may-2025.pdf https://www.nyc.gov/assets/planning/downloads/pdf/our-work/r...] There were two years during the pandemic when people moved out- because jobs let them - but people moved back and it has more than made up for it since. Every major city in the world has seen significant population increases as mechanized farm work and fertilizers have removed the need for many farm workers, and economy activity has concentrated. It’s been a consistent trend for almost 100 years.
        crooked-v 1y ago
        And yet, with the Tokyo example, the combination of lots of housing and good public transit means that you can get small but liveable apartments that are a 20-minute walk from central downtown Tokyo (and under a 10-minute walk to multiple train stations with access to the rest of the metro area) for under $1500/month. Here's one right here: https://www.realestate-tokyo.com/rent/B0021114/park-flats-ginza-east/R0128492/ https://www.realestate-tokyo.com/rent/B0021114/park-flats-gi...
- Dig1t 1y ago
  Lumber is a tiny fraction of the cost of a house, the US produces a huge amount of lumber on its own. I don’t think there’s any real evidence to show that lumber tariffs have had a measurable impact on housing costs. Most housing is built with lumber from here. Also the tariffs are new this year, housing costs have been a problem for much longer than just this year.
  - chrisweekly 1y ago
    to be fair, xnx said "dozens of factors" and mentioned lumber and tariffs as among them... maybe better examples would've made their point stronger though.
    - Dig1t 1y ago
      Yes that’s true, I think he’s right on all the other points. I just built a house by myself, from the ground up, so I couldn’t let that lumber thing slide though as I literally just paid for all the materials myself and I know how little lumber costs compared to everything else.
  - bombcar 1y ago
    Here's a "kit" for a 1,400 sq ft house: https://www.menards.com/main/building-materials/books-building-plans/home-plans/shop-all-home-projects/h077d-0019-stovall-home-material-list/h077d-0019-slab/p-1449804743568-c-9919.htm https://www.menards.com/main/building-materials/books-buildi... $90k for materials. Around here a 1,400 square goes for $385k (half a house, but there you go). So materials are somewhere around a quarter of the cost. Land + foundation + utilities is another quarter; the rest is labor and profit.
    - Dig1t 1y ago
      Yes very true, and lumber is a sub-category inside materials and it is not very expensive compared to the other materials like concrete, siding (fiber cement, stucco), roof material (metal, asphalt, tile), drywall, paint, plumbing, electrical. Of all those things lumber is a cheap line item.
    - 1y ago
ben7799 1y ago
It's the left wing gaslighting everyone over all the issues caused by making it harder and harder to build anything. You blame landlords and PE when in actuality the government has stopped construction in it's tracks. This then feeds into the ultra-left agenda which tends towards socialism and "make landlords and private property illegal." This is largely what the Abundance agenda and YIMBY is all about... getting the left to stop throwing up NIMBY road blocks. The problems with not enough investment in new houses are not limited strictly to blue states but blue states seem to have the largest problem with it. Democrats love regulation so much that states like MA and CA have erected so many zoning and building regulations that new homes have become incredibly difficult and slow to build. We struggle to even build apartment size condos in suburban MA that cost less than $1.1-1.5M per unit. We are rapidly heading towards new houses being $2M+ in lots of parts of the state. By the time a developer manages to buy a lot and go through all the red tape, possibly tear down an old house, go through environmental review, etc.. they can't make any money unless they build a $2M+ house. Any lot that doesn't have an old house on it in the eastern part of the state will have a long list of environmental gotchas a developer will have to fight through, possibly for years before they can even start building anything. Housing construction is so far behind the demand that who owns the existing houses has little to do with it. PE and Corporate landlords own more property in left leaning markets because Blue policies have made it more profitable to do so. The more new construction is slowed, the more valuable the rental properties become. Some of these companies won't want to go near red states where construction is easy. The property values and rents are just not high enough.

darth_avocado 1y ago

When you have a bunch of rental properties in your neighborhood, you have different maintenance standards and tolerance for unoccupancy. On an average, this allows the neighborhood to be on an average, be average. When you have large corporations buying up all the homes in the neighborhood, things swing heavily in one direction depending on the market conditions.

BergAndCo 1y ago
[dead]

jameslk 1y ago

> But the bigger problem for housing affordability, he adds, is that "we just haven't built enough [homes] to keep up with the population growth and household formation." The circular incentive here is left unsaid. If a house is an investment, you and every other homeowner has an incentive to keep supply low and demand high. This ultimately drives votes, lobbying, and policies that prevent houses being built. Otherwise you end up with falling rents and stagnating property prices, like in Austin. https://www.apartmentlist.com/research/cooling-rent-growth-demonstrates-impact-of-new-supply https://www.apartmentlist.com/research/cooling-rent-growth-d...

crooked-v 1y ago
Housing is only 'an investment' of the kind people expect to get fast returns on because of the shortage of housing. Everyone who benefits from that is effectively extracting wealth from the people who are stuck outside of the housing market because of those shortages.
- lazide 1y ago
  When the line goes up, everyone hopes it keeps going up, and tries to figure out a way to profit from that. One way to stop that, is ensuring the line doesn’t go up. That has some pretty nasty side effects in other ways though. When the line stops or starts to go down, then bad things happen. People can’t sell and move without losing a ton of money. People go bankrupt, etc, etc.
  - Jensson 1y ago
    > When the line stops or starts to go down, then bad things happen Only because many millions bought risky investments since they were told it was basically risk free. Normally things getting cheaper is a good thing, but we tricked people into thinking that housing being expensive is good for them.
    - lazide 1y ago
      This is true literally everywhere, in every country (and under every gov’t) I’ve ever seen. And I’ve seen a lot. If you think US property prices are nuts, look in Europe, Asia (especially East Asia), etc. Most people take crazy risks to buy the most/nicest house they can get a loan for because where you live is a huge factor for a number of other things in people’s lives. If people will give them loans for more than they can afford, many people will still do it. So easy credit? Housing market goes up. Tough credit? Housing market goes down. All things considered anyway. Eventually. Owners have a very, very strong incentive to stop it from going down, so unless they have to move, the market can stay locked up for a long time.

cheeseomlit 1y ago

Shameless apologia for private equity vultures buying up all the houses, what a terrible article. "Oh but renting costs less so it makes your neighborhood more diverse with more lower-income residents!" Yeah and renting also ensures you stay low-income forever by never getting the opportunity to build any equity. Real 'you'll own nothing and you'll be happy' energy The opening paragraph is also a laugh. "Daniel Erb became a corporate landlord kind of by accident." Yeah he was an investment banker who decided he wanted to invest in real estate so he decided to call his cousin at BlackRock- woopsie! what a weird accident!

crooked-v 1y ago
Private equity doesn't own a lot of houses. For example, in California large landlords (including private equity but also traditional landlord companies) own 1.9% of houses, small landlords (under 10 houses) own about 20% of houses, and individuals own the rest.
- cheeseomlit 1y ago
  And which way is it trending? Massively upwards, as per the article. I've been getting constant texts for years from private equity parasites trying to buy my house, everyone who owns one does. It won't take long for that 2% to become 5% and then 10% and onwards if nothing is done about it.
  - deleted 1y ago
    [deleted]
  - crooked-v 1y ago
    Where do you think they're supposed to get all those houses? New construction is negligible in much of the US, and ironically enough, the same housing shortage they're benefiting from would make it incredibly expensive to buy out that many individual homeowners.
  - BeetleB 1y ago
    Are you sure those texts are from private equity? I've dabbled with RE investments and hang out with those clubs. It's highly likely the origin of those mailings/texts is from an average person like you and me (most of whom have a full time job earning less than most SW engineers). They are doing RE as a side business, and are paying a service to send out those mailers/texts. They're looking for distressed homeowners (e.g. people who are about to lose the house due to unpaid property taxes, etc). They've been doing this for decades, but the easier availability of data due to the Internet, as well as the growth of online services, has made it much more accessible to the average Joe. It requires very little capital to send out those mailers/texts. If you're getting more of these now than 20 years ago, it's because RE investing has become a lot more democratized/accessible.

ubermonkey 1y ago

Except: corporate landlords SHOULD be banned. And PE should be, too.

derektank 1y ago
So we should have smallhold landlords that frequently skirt rental regulations and are difficult to hold accountable?
- dlcarrier 1y ago
  In Europe, landlords violate regulations much less often than in the US, because the tenants renovate and maintain the properties, instead of the landlords. It's much cheaper to rent in Europe, because it's much cheaper for a tenant to fix something small themselves, than involve a landlord, a property management company, and a service company.
topaz0 1y ago
Banned and reeducated.
- ubermonkey 1y ago
  I don't feel banned.
  - topaz0 1y ago
    Sorry -- I meant that as an extension of your comment: the landlords, in addition to being banned as you say, should also be reeducated.
crooked-v 1y ago
How do you define that? Plenty of small landlords are "corporate".
- bluGill 1y ago

Animats 1y ago

Is this persisting now that the zero interest rate era is over? It would have been profitable during the cheap money era, but is it still?

bombcar 1y ago
The stories about "companies buying houses way over value" were around for awhile; IIRC there were some "AI powered home buying" things related to Zillow, etc that would get in fights with each other and themselves. Zero interest rate certainly made it much more possible; buying a $500k house and having nearly no holding costs, and worst case scenario selling it for $500k is way different than buying the same $500k house, paying $2k a month in carrying costs (interest alone) and then having to sell it for $450k? That hurts, and hurts hard.
- bluGill 1y ago
  The problem with AI and Zillow is they forget "due diligence" matters. I know someone who sold a friend to Zillow for $20k less than market - they knew, as would anyone who did an inspection that there was rot issues and the correct value was around 100k less than market (which would then allow giving a builder $80k and 3 months to fix the issue before selling). Zillow tried to put a fresh coat of paint and sell the house. Now there is value in someone like Zillow coming in with $20k cash today to buy your house ($20k might be the wrong number, but lets accept it for discussion), and then selling it for market a few months later when someone wants it, but they need to do that due diligence. That is why Zillow got out of the business even when rates were near zero, doing that due diligence is something they were not prepared to do since it requires humans to do work. (even if it is just taking pictures for the AI, to look at)
  - bombcar 1y ago
    I remember the discussion pointed out that as long as they had "assumed due diligence" because they were randomly selecting properties in tests, they did fine. But once word got out "sell your shithole to Zillow, they don't even check" of course EVERY shithole went to them. Tragedy of the Venture Capitalists or something.

burnt-resistor 1y ago

End corporate personhood, end Citizens' United, restore the Tillman Act, and make it illegal for corporations to not be actively divesting from individual residential property units.

lesser-shadow 1y ago

>... but they are aslo diversifying the suburbs! Why would anyone sane live near a black neighborhood?

mikewarot 1y ago

A house is a deteriorating pile of lumber on land that always wants to return to nature. Only an insane person would expect it to increase in value over time. The maintenance and taxes alone usually swamp speculative gains.

cmxch 1y ago

Still don’t want a neighborhood full of LLCs.

agavava 1y ago

I would love to think about my own house already, but prices for everything are so high that it’s not possible yet. I rent an apartment, but I was lucky with the owners, who don’t even mind a renovation, and we decided to split the costs in half. Basically, I already gave them a rough estimate I made here https://www.myhomequote.com/bathroom/cost-calculator https://www.myhomequote.com/bathroom/cost-calculator for what I plan to update. And we also agreed that specialists will handle everything so the quality will be good.