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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

#41

Post by iamnothere »

cyberax wrote: post #25

It might help in the long term, as it can force cities to stop densifying. And as we all know by now, densification is the leading cause of unaffordability. The US has more houses than households, but people are forced by economic forces to move into denser and denser areas. But short-term it'll hurt availability. One of the most common ways to enshittify cities is buying an SFH, demolishing it, and plopping a 3-4 ap…

This sounds backwards? Density means more units available, which should lower costs. Supply and demand. Rentals in a dense complex are cheaper than standalone rentals or duplexes, townhomes are cheaper than SFH, etc.

I don’t think cities should force density, but there’s no reason to go the other way either as long as growth is managed properly in terms of traffic, transit, and infrastructure.

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

#42

Post by Aurornis »

Even if this goes through without a mountain of loopholes and exceptions, I doubt it will have a significant impact. "Wall Street Investors" implies they're targeting large institutional ownership, which is only around 0.5% of housing ownership as cited in the article. That number is also flat-ish or maybe decreasing depending on the chart you look at, from what I recall.

Outside of a few metro areas where institutional ownership is very high, I don't think this would change anything. As long as houses remain an attractive investment, non-institutional smaller investors will happily buy the properties for a few thousand dollars less than the institutions would.

Anyone familiar with basic economics is pulling their hair out reading this, because there's one extremely obvious way to lower the price of building new housing: Reducing or eliminating tariffs on construction equipment and materials and ensuring a robust supply of low-cost labor.

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

#44

Post by hypeatei »

aagha wrote: post #38
lif wrote: post #4

What about the many, many thousands of homes that have already been bought up?

Great point. Those homes need to be back on the market for housing prices to come down.

These homes going back on the market wouldn't make a dent in housing prices. As much as we'd like to think that corporations are to blame, that's not reality. Plenty of middle class families own homes and vote for local politicians to keep their investment safe (and for it to increase in value) by making it hard to build.

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

#45

Post by mc32 »

JoshTriplett wrote: post #23

One additional important detail: if this gets implemented at all, hopefully it does not affect the common practice of having a self-owned LLC owning your home. This is common for the purposes of keeping your personal name out of public records; it is far too easy to link someone's name and address, and people at risk of doxing can do this to protect themselves.

There has to be some nuance. Companies are known to either rent of sometimes own housing for personnel who travel to other offices. Universities typically own housing as well. So maybe it’s something like it can’t be one of the main businesses of the corp to buy up residential housing as an investment tool.

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

#46

Post by reactordev »

Aurornis wrote: post #42

Even if this goes through without a mountain of loopholes and exceptions, I doubt it will have a significant impact. "Wall Street Investors" implies they're targeting large institutional ownership, which is only around 0.5% of housing ownership as cited in the article. That number is also flat-ish or maybe decreasing depending on the chart you look at, from what I recall. Outside of a few metro areas where institutio…

The material costs are high too because of regulations that require specific lumber for framing etc.

It’s more complex than just reducing tariffs and inviting cheap labor. It’s systemic red tape put in by the large builders to prevent anyone but them to be able to build. When they do build, it’s never to code. The code they themselves help write. Ryan Homes for example…

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

#47

Post by londons_explore »

Aurornis wrote: post #42

Even if this goes through without a mountain of loopholes and exceptions, I doubt it will have a significant impact. "Wall Street Investors" implies they're targeting large institutional ownership, which is only around 0.5% of housing ownership as cited in the article. That number is also flat-ish or maybe decreasing depending on the chart you look at, from what I recall. Outside of a few metro areas where institutio…

Making it hard for cities to deny all permission to build new housing through impossible zoning laws should also be on the cards.

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

#48

Post by roadside_picnic »

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 the topic from 2023[0], a bit old but my understanding is large institutional investment in residential real estate was already starting to cool down.

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

I suspect this statement, and even if it becomes an actual ban, is largely to gain wider popular support around a largely imaginary concern people have.

0. https://www.housingwire.com/articles/no-wall-street-investor...

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

#49

Post by danielfoster »

Aurornis wrote: post #42

Even if this goes through without a mountain of loopholes and exceptions, I doubt it will have a significant impact. "Wall Street Investors" implies they're targeting large institutional ownership, which is only around 0.5% of housing ownership as cited in the article. That number is also flat-ish or maybe decreasing depending on the chart you look at, from what I recall. Outside of a few metro areas where institutio…

Encouraging the creation of new housing is the way to go. One thought— what percentage of new home purchases are made by large investors and is it growing? This seems like the most important metric to look at rather than existing ownership.
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