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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

#301
post #260

Earlier quoted context omitted.

I propose two changes to (try) and broadly solve this: - Additional property tax if you do not live in your home fulltime. This includes vacation homes. - First time, US Citizen, non-corporate homebuyers can get a loan at the federal interest rate. If I were to try and buy the condo I rent, due to interest rates, taxes, and HOA's I would be paying $1000 more per month. At the end of my mortgage I would given the enti…

Property taxes are directly and immediately translate into higher rent. Making rent more expensive doesn't make ownership cheaper, just makes it more attractive relative to renting.

Yes & no. Higher costs can obviously be passed onto consumers, but higher taxes make things a less attractive investment, too. The higher your costs regardless of whether a unit is occupied or not, the less interesting it is an an investment.

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

#302
post #260

Earlier quoted context omitted.

I propose two changes to (try) and broadly solve this: - Additional property tax if you do not live in your home fulltime. This includes vacation homes. - First time, US Citizen, non-corporate homebuyers can get a loan at the federal interest rate. If I were to try and buy the condo I rent, due to interest rates, taxes, and HOA's I would be paying $1000 more per month. At the end of my mortgage I would given the enti…

Opportunity cost means makes purchasing with a mortgage wiser than buying cash. $1000/month more for a few years is nothing compared to the property value increase of a $1M property

The stock market goes up more than the housing market. When considering the return on investment for a house, remember the property taxes, insurance costs, maintenance costs, repair costs, 6% real estate commissions, and so on.

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

#303

Earlier quoted context omitted.

All housing is investment due to the way it's owned, regardless of who owns it. For most people, it's by far their biggest investment, resulting in extreme political activity. We must confront that fact, or negate it, for example by taxing away the investment opportunity. Investors buy housing to rent it out to others, that's the investment. People who own their own home implicitly pay themselves rent, by choosing to…

Isn't that circular reasoning? Charging rent means its an investment, but also just living in a home is "paying yourself". Is there any way to live on a property that isn't an investment (I suppose just staying there while the government owns it?).

No, as long as the housing is bought and sold and priced by the market it's always investment. Homeowners talk freely about how it's an investment, choose their own home for its investment properties.

It's not circular it just is, under our ownership scheme. Adding a 100% land value tax does remove the investment characteristic, though, as it removes the speculative aspect of land, and in fact drives the price of land to $0.

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

#304

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…

While that’s true, even if “Wall Street” is only holding a few percent of homes, those being released to the markets (and future ones not being purchased) might help. Corporate entity creation in America is such that I don’t think this will be enforceable (“we don’t buy homes, our Gibraltar office’s subsidiary invested in its CEO’s LLC that bought the home”) but if I’m wrong, it could help somewhat. It’s binary think…

Why do you think they aren't on the market right now? These companies buy them so that they can rent them. They are on the rental market!

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

#305
post #256

Earlier quoted context omitted.

I've been told that, for privacy reasons, you should even buy your own home under an LLC as well

Depends on how unique your legal name is. Buying your own home as an individual creates a public record with your address and your name. This gets ingested by lots of people search websites like https://www.fastpeoplesearch.com/ (which I have used). But if your legal name is really common, it would be harder for anyone else to deduce which one is actually you.

For what it's worth, I just searched that site you linked with my name and the zip code I lived in for the first 18 years of my life, and it seems to have a pretty muddled view of who I am. It has my correct age, full legal name, and current address, as well as two of my past apartments and my address for those 18 years where I lived in the zip code I searched, but it also lists my parents current home that they bought over a decade after I had permanently left that state in a city I've never lived in. The landline number it lists is the number my parents had at the house I grew up in, but they don't even use it now, and it wouldn't have been an effective way of reaching me since I used to live at that house, and the mobile number it lists is one I've never seen in my life. For family members, it lists one of my brothers and parents, but not my other brother or either of my two living maternal grandparents, although it has a strangely long list of names I've never heard of, some of whom have my mother's maiden name but aren't my grandparents or any of my relatives with that name who I'm aware of, as well as a bunch of people whose names I don't recognize with last names I'm not aware of being in my family tree.

I'm not saying that site isn't potentially useful as a starting point to find out some stuff, but it hardly seems worth influencing a major decision like what legal entity to purchase a home with.

(edited to add): It also says there's no public record of me being married, which definitely is not the case. My wife literally co-owns and also lives in the house it lists me as living in (and has the correct purchase date for it), so you'd think that whatever algorithm is used to build the dataset would be smart enough to see if there's any other ways we're legally tied together. It also says it doesn't have any records of business associations I have when last year I registered a single-member LLC for contract work last year. The LLC literally has the same name as me followed by " LLC", because apparently no one else had registered that before in my state, which at least gives some evidence that my name isn't overwhelmingly common.

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

#307
post #293

Earlier quoted context omitted.

Opportunity cost means makes purchasing with a mortgage wiser than buying cash. $1000/month more for a few years is nothing compared to the property value increase of a $1M property

Where I live, condo's do not increase in value much due to HOA fees and taxes. I just plugged in some numbers using (estimated) purchase price, taxes, HOA for the unit I'm in now, and it would cost me a little over $1M over 30 years to own a $300,000 1br apt.

See my other reply about what it costs to own a house.

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

#308

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.

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

but it'll lower mortgages, which will lower rents.

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

#309
post #260

Earlier quoted context omitted.

I propose two changes to (try) and broadly solve this: - Additional property tax if you do not live in your home fulltime. This includes vacation homes. - First time, US Citizen, non-corporate homebuyers can get a loan at the federal interest rate. If I were to try and buy the condo I rent, due to interest rates, taxes, and HOA's I would be paying $1000 more per month. At the end of my mortgage I would given the enti…

> 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.

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

#310

Earlier quoted context omitted.

> But most of the "investors" buying up property are individuals purchasing investment properties. Maybe they should clamp down on that as well, especially individuals who are only purchasing SFH in residential neighborhoods as a way to park their overseas cash.

Exactly. Nobody wants to hear this, because we're all Temporarily Embarrassed Landlords, but if a corporation buying 100 houses to sit on and extract rent is bad (or good), then 100 individuals each buying 1 house to sit on and extract rent must be equally bad (or good).

I disagree with this logic. To take it to an extreme, if one person earning a million dollars per minute has moral value X, then a million people earning one dollar per minute has moral value X. I disagree on principle.
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