4 ms·

You have to restrict investors buying up that newly built housing too. Homes for people. Not investors.

• creato 7mo ago
  It really doesn't matter as long as someone is living in it.
• bryanlarsen 7mo ago
  35% of Americans rent their homes. And they almost invariably rent from investors. Therefore if more than 35% of homes are owned by investors this drives down rent. If less than 35% are owned by investors rent goes up.
  • ms_menardi 7mo ago
    This logic assumes that 35% of Americans WANT to rent their home. Which seems odd to me, if only for financial reasons - why would you pay 1400$ for a 1 bedroom apartment when you could pay 700$ in a mortgage for that same apartment if you could have bought it?
    • triceratops 7mo ago
      If you invent a scenario where the mortgage is half the rent then buying is a no-brainer. Does that reflect reality?
      • TimorousBestie 7mo ago
        Maybe not half, but it’s pretty common around here (generic midwestern city) for renting to be more expensive than a comparable mortgage. Many landlords seem to expect to pay their mortgage and property taxes and maintenance with the rental income, and still net a profit, if r/landlord is to be believed.
        • triceratops 7mo ago
          The profit is compensation for the risk. The mortgage and property taxes and maintenance are due no matter what - can't find a tenant, tenant doesn't pay, tenant flushes paper towels down the toilets every day etc etc. If there was no profit there would be no landlords. Some might say that's great. But it would be a world with less flexibility, with fewer choices. Don't like your job and want to move? Split up with your partner and need someplace to live? Moved to a new city and don't know where you want to put down roots yet? At college for 4 years? Don't want to deal with house maintenance? "F** you, buy a house anyway". That's what we'd have if there was no rental housing.
          • TimorousBestie 7mo ago
            Okay, so why were you asking if renting can be more expensive than buying? You seem to already know that it can be.
            • triceratops 7mo ago
              I said they were inventing fantasy scenarios. The actual numbers might be more like rent $1400 vs mortgage $1000. After property taxes, insurance, and maintenance there might be $50 left. A handsome 3.5% profit, rising to maybe 6-7% if you include principal paydown. This is hardly a money-printing machine. It's a steady return for taking on some risk.
              • TimorousBestie 7mo ago
                Ah, I see, you wanted to split hairs on the numbers. Fair enough.
                • triceratops 7mo ago
                  It isn't splitting hairs. The numbers actually matter.
                  • 7mo ago
    • KPGv2 7mo ago
      > why would you pay 1400$ for a 1 bedroom apartment when you could pay 700$ in a mortgage for that same apartment if you could have bought it Because the down payment you put into your purchased home could've been put into the stock market and grown faster than property values (this is historically true). Because you don't want the headache of home maintenance. Because in the 21st century, job stability doesn't exist so it's a big risk to buy a home fifteen minutes from your current job that might be an hour from your new job after you get fired so a CEO can get more golden parachutes. Because you might have to change cities a year from now. My wife and I rented for a long time because it was better than owning for us.
      • frontfor 7mo ago
        Agreed. It’s a classic fallacy to compare rent vs mortgage on a numbers to numbers basis. It’s classic example of not accounting for the total cost of ownership.
    • maest 7mo ago
      The numbers you are using are not common at all.
  • bsder 7mo ago
    > 35% of Americans rent their homes. And they almost invariably rent from investors. Therefore if more than 35% of homes are owned by investors this drives down rent. If less than 35% are owned by investors rent goes up. This only holds until the percentage owned by the investors becomes a monopolistic chunk. At that point the investors would rather leave some apartments empty rather than see rents go down. See: all the current RealPage lawsuits
• triceratops 7mo ago
  No not really. You just have to restrict the same investor from buying all the housing in an area, and prevent investors from colluding on rents.
  • tharmas 7mo ago
    Investors add to demand for housing. This will help drive up prices. And no, builders will not necessarily increase supply if they can realise increased margin of profit due to increased demand. We see that with RAM manufacturers. RAM suppliers constrain supply to boost margins. Same with house builders. The difference is people can go without RAM but everyone needs a place to live.
    • triceratops 7mo ago
      > Investors add to demand for housing And here I thought people who want to live in houses add to demand for housing. Investors buy houses that people want to live in. If people don't want to live someplace, you won't see any investors there either.
      • 9rx 7mo ago
        > And here I thought people who want to live in houses add to demand for housing. Desire is a necessary component in demand, but it also requires willingness at a given price point. If houses are selling for $1,000,000 and you only have $500,000 to spend, then no matter how much you dream every night about having a home, you are not a contributor to demand.
        • triceratops 7mo ago
          Counterpoint: houses sell for $1,000,000 because there are more people with $500,000 (and every other number less than $1,000,000) who want those houses than there are houses.
          • 9rx 7mo ago