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How private equity is changing housing

theatlantic.com

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Re: How private equity is changing housing

#151

Post by iberator »

ReptileMan wrote: post #50
thephyber wrote: post #42

Earlier quoted context omitted.

What does “home ownership” mean in a country where there is no private property?

There was a lot of private property in the socialist countries. I am not sure from where this thought even came to you. What was impossible was owning big private enterprise. But small businesses - like a restaurant or a shoe repair shop were allowed. You were also allowed to own houses, cars, appliances, clothes and almost everything else. Land was a bit weird - you could own, but not too much - basically stuff that…

Just about right!

Re: How private equity is changing housing

#152

Post by greenie_beans »

quamserena wrote: post #73
postflopclarity wrote: post #12

build. more. and this problem will go away.

this sounds nice, but neglects the fact that (1) materials cost has gone up and (2) zoning requirements exist. (1) means its just more expensive to build overall, and (2) means that a lot of proposals for apartment complexes get voted down.

also neglects the market's appetite for this risk of building in the current environment, which is the biggest problem. market gonna act like a market

Re: How private equity is changing housing

#153

Post by MetaWhirledPeas »

gruez wrote: post #132
MetaWhirledPeas wrote: post #121

Private equity is the gamification of everything, in a compressed time frame. A company focused on longer time frames will cultivate their reputation. This takes the form of quality products and good customer service. PE has no need for any of this nonsense. They are looking for a quick return on their investment; to trade in all reputation and goodwill for their immediate value in cold hard cash. The more immediate…

Funny, because you hear the same hand-wringing about how public companies (ie. the exact opposite of PE) only care about next quarter's earnings report. By that metric, PE is better than public companies, because their source of capital is more secure and don't have to worry about flighty shareholders dumping their shares.

I don't see how they are opposites; public companies have their own perverse incentives.

Re: How private equity is changing housing

#154

Post by quesera »

UncleMeat wrote: post #81
gjsman-1000 wrote: post #40

Earlier quoted context omitted.

Wealth taxes don't work because wealth gets extremely fuzzy. For example, unsold stock that I bought 15 years ago; and then got a loan against. I'm wealthy... kinda? But I didn't sell the stock; I have unrealized gains, and you shouldn't tax me beyond income tax on borrowed money? Okay, tax me on my unrealized gains then - but then 2008 repeats itself, stock goes down 40%, do I get a refund? Of course not, I only pay…

> Okay, tax me on my unrealized gains then - but then 2008 repeats itself, stock goes down 40%, do I get a refund? Of course not, I only pay when stock goes up and never down, which is not exactly a fair incentive. We already do this for property taxes.

That's a very strange way of looking at property taxes.

Re: How private equity is changing housing

#155

Post by pastage »

hashhar wrote: post #133
api wrote: post #37

Earlier quoted context omitted.

PE buying real estate is a long bet on housing prices. If supply increases enough, prices flatten out and then fall, and the longs get crushed. These investments are a bet on continuing to under-build and under-densify.

The area I live in has homes that remain empty because the investor doesn't need the capital nor the space and just holds empty units for multiple years when they eventually sell (for even more than they would have sold in the past). Housing demand will always be > 0 as long as population is growing and hence there can never be a oversupply.

In areas where there is demand without risk.

Re: How private equity is changing housing

#156

Post by [deleted] »

SoftTalker wrote: post #68
beisner wrote: post #65

Earlier quoted context omitted.

Closing certainty is a major reason people will take all-cash offers over financed ones. Even if you're pre-approved for a loan.

A cash offer will still fall apart if the appraisal comes in too low, I would think. Or does the term "cash offer" imply that no appraisal will be done?

[deleted]

Re: How private equity is changing housing

#157

Post by greenie_beans »

gruez wrote: post #125
quamserena wrote: post #73

Earlier quoted context omitted.

this sounds nice, but neglects the fact that (1) materials cost has gone up and (2) zoning requirements exist. (1) means its just more expensive to build overall, and (2) means that a lot of proposals for apartment complexes get voted down.

>this sounds nice, but neglects the fact that (1) materials cost has gone up That's a red herring because most of the price increase comes from increase in land prices. https://www.aei.org/housing/land-price-indicators/

can you please explain how these graphics are supposed to support your argument? it's not clear to me and i'm trying to understand the georgist POV.

nonetheless, materials and the cost of labor are the most significant costs for new buildings. not land, taxes, or zoning regulations. here is one example where this is a fact: www.vermontpublic.org/local-news/2024-05-23/uvm-halts-student-housing-project-construction-costs-workforce-shortage

Re: How private equity is changing housing

#158

Post by bcrosby95 »

malfist wrote: post #127
danesparza wrote: post #122

Corporations shouldn't be allowed to own residential properties. Period.

For every complex and difficult problem, there is a simple, easy and wrong solution. If corporations can't own residential properties, how would anyone rent a house? How would home builders build model homes? How would Trusts manage real estate? This is a complex and nuanced problem.

> For every complex and difficult problem, there is a simple, easy and wrong solution.

Sure, but realize that also applies to the current status quo.

Also, you cannot create the 'right' solution to a complex, nuanced social problem. You can only slowly shift the problem over time, one 'wrong' solution at a time.

Re: How private equity is changing housing

#159

Post by c-linkage »

pavel_lishin wrote: post #135
HarryHirsch wrote: post #108

Earlier quoted context omitted.

Why would someone listen to Dave Ramsey of all people? He is neither an economist, nor a Christian, he has nothing to contribute to the subject! His shtick is real estate investment, of course he wants to see Joe Public buy a starter home. The trouble is: real estate as a government-guaranteed investment vehicle is what brought us the housing affordability crisis.

> nor a Christian ... what bearing does that have on anything?

Only the right kind of people can hear that dog whistle.

Re: How private equity is changing housing

#160

Post by malfist »

ssl-3 wrote: post #134
malfist wrote: post #127

Earlier quoted context omitted.

For every complex and difficult problem, there is a simple, easy and wrong solution. If corporations can't own residential properties, how would anyone rent a house? How would home builders build model homes? How would Trusts manage real estate? This is a complex and nuanced problem.

From individuals? Anecdotally: I've rented 5 different single-family houses in my life. All of them were rented from individuals. Only 1 out of the 5 had a landlord that owned some other stuff that they also rented out. For the remaining 4 out of 5, the landlord only had that singular property to rent: They lived wherever they lived, and they also had an extra house for whatever reason that they rented to me.

I'd be willing to bet the majority of those "individuals" were incorporated as an LLC to limit liability, thus making them corporations.
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