Investors bought a quarter of US homes sold last year • Hacker News Board

Re: Investors bought a quarter of US homes sold last year

#501

Post by JamesBarney » Tue, Aug 23, 2022, 11:03 PM UTC

boringg wrote: post #399

JamesBarney wrote: post #391

Earlier quoted context omitted.

Only residents who own tons of land they aren't doing anything productive with.

The whole argument is how to make housing more affordable to live in. Your argument is ... pay more for land tax to avoid speculation however if you live somewhere in order to pay for it you need to consistently be more productive than the speculators (who would just charge the land tax to the renters anyways). Which doesn't solve the problem in any way shape or form.

It does because taxes don't disappear. Say we tax land at 4% and the value of all the land in the US is 100k per person. That means the average person pays an extra 4k and each person receives a $4,000 check. If you own an average amount of land you aren't any worse off.

Re: Investors bought a quarter of US homes sold last year

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Post by [deleted] » Tue, Aug 23, 2022, 11:04 PM UTC

asdff wrote: post #454

davidw wrote: post #145

Earlier quoted context omitted.

Investors do not at all have the votes or weight at a local city level in most cases, especially large ones from out of town. Go to a planning meeting about some housing that people are pissed off about because reasons ( https://news.ycombinator.com/item?id=32569768 ) and you'll find a whole bunch of your neighbors. It's not institutional investors blocking this stuff, by and large. > they are worried about the value…

Of course they do, they can just buy advertising to convince locals to vote against their own interests. Works quite well. See uber and Prop 22.

[deleted]

Re: Investors bought a quarter of US homes sold last year

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Post by ineptech » Tue, Aug 23, 2022, 11:06 PM UTC

ineptech wrote: post #498

iav wrote: post #337

Earlier quoted context omitted.

Not sure if you are aware, but all forms of interest expense is tax deductible for corporate income tax purposes in the United States, not just mortgage interest. This conforms to codes in other countries. There is no subsidy that is specific enough to rentals or investment properties. And since most of corporate bank lending is secured by all assets (including real estate), mortgage debt is somewhat fungible with ot…

I believe there is a specific subsidy, but in the "other direction" - that's why you can deduct the mortgage interest on your vacation home despite not being a human and not a business. I'm aware that interest is generally deductible for businesses, and I'm suggesting that houses should be an exception to that. We subsidize most business borrowing because we want businesses to borrow and invest in stuff, and we shoul…

Fake edit to add: my only source is other comments in this thread, but I believe it's true that the vast majority of rental properties are owned by individuals or relatively small businesses (LLCs and such) via regular old mortgages, where the bank knows what property is being mortgaged and the debt isn't realistically fungible with other debt.

Re: Investors bought a quarter of US homes sold last year

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Post by hgsgm » Tue, Aug 23, 2022, 11:10 PM UTC

slg wrote: post #377

missedthecue wrote: post #331

Earlier quoted context omitted.

"They are treating their home primarily as an investment because that is what they have been told to do their whole life." It's not some psyop that has duped an entire nation, it's people accurately recognizing that their home is the biggest purchase they will ever make in their life, it's almost completely done with debt, and most don't want to end up underwater.

> it's people accurately recognizing that their home is the biggest purchase they will ever make in their life, it's almost completely done with debt, and most don't want to end up underwater. What is those people's second biggest purchase which is also usually done with debt? Does anyone believe that the government should enact policies to ensure that car prices always increase so they would be a better investment?…

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Re: Investors bought a quarter of US homes sold last year

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Post by bombcar » Tue, Aug 23, 2022, 11:12 PM UTC

missedthecue wrote: post #429

slg wrote: post #377

Earlier quoted context omitted.

> it's people accurately recognizing that their home is the biggest purchase they will ever make in their life, it's almost completely done with debt, and most don't want to end up underwater. What is those people's second biggest purchase which is also usually done with debt? Does anyone believe that the government should enact policies to ensure that car prices always increase so they would be a better investment?…

Resale value is probably one of the number one things car buyers look at when shopping.

I look for something that fits my mission needs and assume I’ll drive it until the wheels fall off.

However I’m likely not to be representative.

Re: Investors bought a quarter of US homes sold last year

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Post by wizofaus » Tue, Aug 23, 2022, 11:14 PM UTC

chollida1 wrote: post #359

wizofaus wrote: post #328

Earlier quoted context omitted.

"Speculators" sure, but most people who own multiple properties I wouldn't think fall into that category. We own a rental property - it's very much a long term investment, and we charge rent below market rate (it's still positively geared!). I don't believe our purchase locked out any first home buyers, it's a tiny 1BR flat, and priced at a point those just getting onto the property ladder could've afforded it (and o…

> I don't believe our purchase locked out any first home buyers, it's a tiny 1BR flat I mean, by definition that property would have sold to either a new home buyer or another speculator like yourself. And by definition, if you own a property you rent out, you are a speculator:) i have no problem with you being a speculator:)

I would if I thought I was one! A speculator I'd see as the sort of person who regularly buys and sells property hoping to make quick cash. While there is some tax regulation to discourage that here (you pay a lot more in CGT if you sell quickly etc.), I still don't think we have the settings right, it's too easy to make money if you already have it, at the expense of houses not being available to people who actually want to buy a house they can live in (who are stereotypically couples thinking of starting families etc.)

Re: Investors bought a quarter of US homes sold last year

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Post by itake » Tue, Aug 23, 2022, 11:15 PM UTC

didgetmaster wrote: post #41

itake wrote: post #15

Earlier quoted context omitted.

I think the concern is local investors keep the money in the local economy, whereas 'foreign' investors are extracting value from the local community.

I think the concern is that rents are being controlled (and increased) by investors unfairly. There is always a market for rental properties (who wants to own when they know they will move in less than a couple years?); but there is concern that investors wield too much power. I think this is only possible when large scale investors 'corner the market' by buying up a large percentage of homes in a given area. They ca…

> rents are being controlled (and increased) by investors (unfairly).

With all of the regulations, risks, and high interest rates forced on landlords, I am wondering what you mean by "unfairly"? One bad tenant in Seattle, could mean months without income and even massive property damaged with no ability to recover damages.

As a small time landlord (I rent a few rooms in my primary residence), I feel that the rent I can charge is way below the risks of a bad tenant.

Re: Investors bought a quarter of US homes sold last year

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Post by bombcar » Tue, Aug 23, 2022, 11:15 PM UTC

ghaff wrote: post #487

bombcar wrote: post #443

Earlier quoted context omitted.

Apparently the new "urban" definition is something like: >Adopting 500 persons per square mile (PPSM) as the minimum density criterion for recognizing some types of urban territory. https://www.federalregister.gov/documents/2022/03/24/2022-06... Which basically means anything "town-like" or higher is "urban". So most Americans live in urban areas even if they are in a tiny town in the middle of nowhere.

Yes. Most people see urban and imagine at least a 2nd or 3rd tier city in terms of population. Not a 5K person town that may or may not be within a not too long a drive of some sort of population center. Urban in the sense of "don't need to own a car" is a much smaller slice--especially if you aren't adjusting your expectations.

Yeah the census counts urban as “a cop or ambulance will show up in decent time” and rural as “you could detonate a cow and nobody would be around to notice”.

Re: Investors bought a quarter of US homes sold last year

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Post by itake » Tue, Aug 23, 2022, 11:19 PM UTC

nickff wrote: post #243

metamet wrote: post #57

Earlier quoted context omitted.

And they're taking out much more via rent. If the owner of the property lives in the community, the rent that is being paid to that owner is much more likely to be circulated locally. If the rent goes to a foreign company, it's removed entirely. Upkeep and maintenance would also occur regardless of who the owner of the property is, so it's not like they're creating "new jobs" because it's foreignly owned.

If the extraction of rent over the long term is an issue, do you also consider the extraction of mortgage interest by out-of-state entities to be a similar problem? This is how investments work, people inject money in now, in the hopes of returns later; the hope is that in the meantime, the locals benefit, and are able to create the foundations of longer-term success.

I agree interest rates extract value, but that doesn't mean that its ok for rent to leave the local economy too.

Re: Investors bought a quarter of US homes sold last year

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Post by giantg2 » Tue, Aug 23, 2022, 11:20 PM UTC

throwaway0a5e wrote: post #477

giantg2 wrote: post #274

Earlier quoted context omitted.

Likely under the guise of safety, environment, etc like building codes and conservation zoning.

>safety, environment, It's amazing the power those subjects have to turn "YIMBY" into "regulate me harder daddy". The cognitive dissonance required to enable this about face is a bad thing and seems to be becoming more and more prevalent and accepted in all sorts of public policy contexts.

It's because it's "regulate my neighbor" and it doesn't currently apply to them, until they need to remodel or whatever years down the road. Most people don't realize the full impact of the legislation they support.