21–30 of 312 posts
Summary: they're pulling "starter homes" off the market, predominantly in nonwhite neighborhoods, and skimping more on maintenance/landscaping.
"Skimping on maintenance" is capitalisms main and really only play. So many issues (housing, transport, utilities) are because "the market" won't ever pay to maintain.
build. more. and this problem will go away.
Yes build more. Also regulate the oligarchs until they no longer exist.
Ban corporate ownership of residences. Only individuals, Coops or condominiums. Cap how many rentals an individual can own. The government should also build massive amounts of housing. Everywhere of all types - apartments, townhouses, single family. After built transferred to the residents as coops.
It's interesting to think of the second-order effects of this. If these corporations can't invest in housing, they'd direct their money elsewhere. Maybe we'd see a stock market or commercial real estate boom. Maybe a proliferation of new ventures.
I think that's why they're buying residential - there aren't any other traditional investments that aren't in a bubble or just have low returns. If you anticipate economic collapse or hyper inflation or whatever, physical assets make sense - when you measure wealth in houses you don't care what the dollar does. Gold people can do without, housing not so much. Whatever happens next, people will need a place to live. OTOH the population collapse is also coming so housing doesn't make much sense beyond 2030 or so.
Summary: they're pulling "starter homes" off the market, predominantly in nonwhite neighborhoods, and skimping more on maintenance/landscaping.
>and skimping more on maintenance/landscaping I.e the kind of stuff everyone wants to do but can't justify flying so close to the sun on because they don't have a legal army say "we are in compliance and here's why" on their behalf when the municipal government comes looking for fine money or the slip and fall lawyer tries to make something their fault. In "reasonable" (note for the bottom feeders, I did not say "fre…
Earlier quoted context omitted.
Not to be pedantic, but this would make you not so "pro capitalism as it comes". The ability to develop and sell houses, but not hold them (in service of rent-seeking) runs contradictory to the very core tenant of capitalism, which is private property and free markets. Socialism and supply/demand-markets are not mutually exclusive; it sounds like you're more amenable to a socialist or mixed-market system than you giv…
Except whenever you have inelastic demand or supply you are no longer in a free market.
One of the issues the article doesn't mention is that these houses are effectively cheaper to purchase for corporate owners. Generally they can borrow money at a lower rate, but the ability of corporate owners to use depreciation on a new purchase to offset profits from previous purchases is more significant. Effectively they are redirecting money that would be paid in taxes into the payments on the new purchase.
There is some tax tricks you can play, but in general homes for primary residence is lower then secondary/rent, which is a big proportion of cost.
> Last month, the Lincoln Institute of Land Policy and the Center for Geospatial Solutions published a report showing that corporations now own a remarkable one in 11 residential real-estate parcels in the 500 urban counties with data robust enough to analyze. In some communities, they control more than 20 percent of properties.
They're invoking a false dichotomy. Small scale landlords (i.e. the guy who owns a second home and rents it out) are part of the corporations. From the linked report:
> A corporate investor, also referred to as a nonindividual investor, is a business entity that owns residential property, usually for the purpose of generating income. This broad category ranges from small entities such as family trusts and limited liability corporations (LLCs) to larger outfits like real estate investment trusts (REITs), endowments, and pension funds.
Many/most "ordinary" folks who buy a house to rent fall in this category - they form an LLC or something similar. Many reasons for this. Percentage-wise, my guess is that institutional investors (not just individuals who formed an LLC) are still a relatively small minority, but I don't have the data.
There is a common misconception on HN that it's rich people who mostly buy houses/units to rent out. In my experience, that's just not the case. Everyone is doing it across the board, and just by virtue of there being more non-rich people, they are likely the majority.
Also, higher income folks don't feel a great need to make more money. Median or lower income want to make a lot more, and real estate is actually one of the fewest options available to them (and also really easy to learn/understand). A lot less work than a second job (although some get a second job just to bootstrap the RE purchase process).
Just 3 days ago I spoke to a friend. Engineer (not software). Decent income, but not FAANG level. Non-working spouse and multiple kids. Rents out two houses, and is buying 2 more.
I took an AirBnB course from a guy who has lots of listings on AirBnB. He got there with almost no money down (most of his money was spent on furnishing the place). He was educated, but fairly low income ($50-60K in California). When I took the course he was making over $300K/year net from his AirBnBs.
When I used to listen to the Bigger Pockets podcast, the majority of people who owned 10+ homes to rent had very average incomes (less than a typical non-FAANG engineer).
I've been in the real estate space for a few years now. I don't own other units, but I do invest in them, and am moderately active in a local real estate club. I know how these things work.
If you want to solve this problem, stop pointing fingers at "rich people", and stop allowing multiple ownership for a decade or two.
Tax break on single home ownership, but significantly increased tax on multi-home-ownership?
It would be interesting to see comparisons between PE ownership in markets with property tax vs markets without.
Summary: they're pulling "starter homes" off the market, predominantly in nonwhite neighborhoods, and skimping more on maintenance/landscaping.