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US will ban Wall Street investors from buying single-family homes

reuters.com

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Re: US will ban Wall Street investors from buying single-family homes

#341

Post by mikepurvis »

jazzyjackson wrote: post #324
mycodebreaks wrote: post #261

Earlier quoted context omitted.

Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals. For the sanity in the housing market, members of society need to be driven to participate in other business activities for income/revenue, not rentals.

This is basically a maximum wage for landlords, bound to start a secret society. IMO it's a crooked notion that landlords are rent seeking and nothing else - they do create supply and maintain housing. Issue is when they want to politically and artificially raise the value of their property by preventing more housing from being built, so, if you're going to ban something, ban artificial regulations on construction! N…

I'm not sure if this is what you mean by secret society, but I could well imagine that these kind of limits would be hard to enforce. Like a person creates shell corporations to own their properties on their behalf, or buys them in the name of their kids, or employs randos to "own" pieces of their portfolio.

Re: US will ban Wall Street investors from buying single-family homes

#343

Post by dghlsakjg »

AstroBen wrote: post #313
lbarrow wrote: post #299

Earlier quoted context omitted.

Why would this help affordability? If you restrict who can operate rentals, that will inevitably shrink the supply of rentals, which will raise rents.

Would it not also lower house prices, causing would-be renters to buy instead, reducing demand for rentals?

Renting and purchasing are not perfect substitutes. There are many situations where a rental is a far better solution.

Re: US will ban Wall Street investors from buying single-family homes

#344

Post by DoesntMatter22 »

rgmerk wrote: post #221
lewdev wrote: post #201

Earlier quoted context omitted.

> It will make very little difference in the end. I feel like there will be a difference between a handful of large corporations owning a majority of properties vs thousands of dentists and software engineers. Are you saying that all of these property owners are also soulless profit-optimizers? I remember watching some video of tenants being priced out of their rental apartments so when they tried to contact the prop…

You would feel that, but you would be wrong. Small businesses are often just as ruthless as large ones, just less competent. In any case, most rental properties are managed through agencies, who are soulless profit-optimisers.

So what’s your solution exactly? No businesses at all?

Re: US will ban Wall Street investors from buying single-family homes

#345

Post by Hammershaft »

kccqzy wrote: post #291
unyttigfjelltol wrote: post #122

Earlier quoted context omitted.

Yeah, all the politicians talking housing— the actual net governmental effect on housing is to massively constrain supply (quantity) in service of rather arbitrary qualitative standards. I’m all for “the building shouldn’t spontaneously collapse” standards, but … two acre lots? Restrictions on casting shadows? Accessory dwelling units? Nah. If the government wants to make a difference it should ban Euclidian zoning a…

These qualitative standards are subjective. Everyone has something that they deem essential and others not so much. A lot of zoning regulations is the amalgamation of preferences by different people, because they try to satisfy the aesthetic preferences of too many people. For example in New York City go take a walk in the streets next to hundred-year-old skyscrapers in downtown. It’s miserable to me. Now go walk alo…

Millions of people want to live in NYC and would productively contribute to the city if it were more affordable.

The government should not criminalize development that would make housing more affordable over your preference on shadows!

It's a negative externality, yes, but it's a trivial one next to the upside of cheaper housing for more people!

Re: US will ban Wall Street investors from buying single-family homes

#346

Post by LPisGood »

ryandrake wrote: post #252
seanmcdirmid wrote: post #244

Earlier quoted context omitted.

Once you try to clamp down on investment properties, you have couples getting divorces so they can own two homes (this happened in China), and all your kids are going to have their own home as well. It isn't a bad idea, people will game whatever. A singapore public housing system might work better, but I doubt it would work for SFHs.

This comment always comes up when regulation is proposed: "But people will just game it!" The solution is not to throw our hands up and say "Well, we just can't regulate this!" The solution is to prevent the gaming, too. Laws should iterate as often as people find clever ways to work around their spirit.

Realistically if the biggest problem is couple’s divorcing to get a second home, then the problem has been pretty well attacked

Re: US will ban Wall Street investors from buying single-family homes

#347

Post by AznHisoka »

mycodebreaks wrote: post #261
roadside_picnic wrote: post #48

The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses. There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties. Here's an article on…

Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals. For the sanity in the housing market, members of society need to be driven to participate in other business activities for income/revenue, not rentals.

Should this apply to multi-family homes or just single family?

Re: US will ban Wall Street investors from buying single-family homes

#348

Post by runjake »

roadside_picnic wrote: post #48

The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses. There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties. Here's an article on…

> Black rock isn't buying up all the housing, your neighbors are.

I'm pretty naive to the issue, but awhile back I took a look at property records for my neighborhood. In fact, equity firms, including BlackRock, were buying up a bunch of houses in my neighborhood.

A tiny datapoint, I know.

Edit: It might've been Blackstone. It's been about a year since I looked it up.

Edit 2: Looking up records now, it looks like most of these equity firm purchases are back to actual people owners! Interesting. What does this mean? Firm bought property and resold at a profit?

Re: US will ban Wall Street investors from buying single-family homes

#349

Post by WalterBright »

iknowSFR wrote: post #309
WalterBright wrote: post #292

Earlier quoted context omitted.

> Rich investors and companies effectively get to buy homes at a discount vs average joes. Suppose you had $100,000 in cash, and buy a house for $100,000. You'll not be paying 5% interest on a mortgage. But if you did not buy the house, you would be investing that $100,000 for a 5% return. So, you're either paying 5% on the mortgage, or foregoing 5% return for investing that money. The rich person is not getting a di…

Couple things to add. First, rates are much lower when you’re leveraging 10,000 homes at 3:1. That allows you to purchase 20,000 additional homes, which isn’t something the normal individual can do. Second, most of this borrowing was done during the 0% interest days and when rates went up after Covid, a lot of the operations grinded to a halt. Third, there’s no regulatory environment for rent rates and rate increases…

> First, rates are much lower when you’re leveraging 10,000 homes at 3:1

What interest rate do you think rich people are getting?

As for the Covid interest rates, those were available to everyone.

Third, we're talking about buying houses, not renting.

Re: US will ban Wall Street investors from buying single-family homes

#350

Post by imgabe »

mycodebreaks wrote: post #261
roadside_picnic wrote: post #48

The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses. There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties. Here's an article on…

Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals. For the sanity in the housing market, members of society need to be driven to participate in other business activities for income/revenue, not rentals.

For affordability reasons, just build more housing. It doesn't matter how many houses anyone owns if you just build. more. housing.
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