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Investors bought a quarter of US homes sold last year

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Re: Investors bought a quarter of US homes sold last year

#491

Post by fshbbdssbbgdd »

boringg wrote: post #56
ethanbond wrote: post #42

Earlier quoted context omitted.

There are ways to disincentivize toxic forms of investment (especially speculation) without banning it. A high land value tax, for example, would simultaneously increase investment and decrease speculation.

I don't see how a high land value tax increase investment & decrease speculation? If your talking about flipping homes that's one thing but REIT ownership isn't home flipping for the most part...

Land value tax means you don’t pay any extra tax for developing your property, but you do pay extra tax if the neighborhoods get more expensive. Ergo, incentive for investment and disincentive for speculation.

Suppose you do a “buy and hold” strategy on a neighborhood that is gentrifying. The increased taxes you pay each your will eat into your profits. If you sell, the buyer will have have to pay those taxes too, so the value will be lower.

Re: Investors bought a quarter of US homes sold last year

#492

Post by daoist_shaman »

Dig1t wrote: post #379

This should be illegal. Plain and simple. Just make it illegal for a corporation to own residential property. Or heck, even just make it illegal for one to own > 5 properties or some number of acreage. That would put a damper on this shit.

Private property needs limits when you have an unbounded population.

Re: Investors bought a quarter of US homes sold last year

#493

Post by siliconc0w »

It's interesting to play armchair city planner and think what kind of tax structure to encourage more equitable housing. I imagine you'd want something like:

Owner occupier But I think you should also encourage density, like if you have a 5000 sqft house for two people, that should come with a sort of extra property tax than a 5000 sqft house for a large extended family or multifamily building.

Re: Investors bought a quarter of US homes sold last year

#494

Post by quantified »

brianwawok wrote: post #294
quantified wrote: post #95

Earlier quoted context omitted.

Renting is always worth 0 as equity, so it's a total loss regardless.

* It guarantees you do not lose money if the home values around you drop * It gives you a fixed monthly houseing cost. No "10k new roof" or "1k new stove" suprises hit you. * If you are say, saving 50% vs buying, you can put this difference in an index fund. This would over 10 or 20 years potentially give you a LOT of money over buying. Look, buying is mostly great. It's one of the biggest builders of wealth for most…

It guarantees that you can be forced to move at a whim. Twice I've had to move, once during the school year, because the landlord died. And they'll steal from your security deposit. Good landlords are young great people. Corporations are scum.

Re: Investors bought a quarter of US homes sold last year

#495

Post by quantified »

boringg wrote: post #395
quantified wrote: post #95

Earlier quoted context omitted.

Renting is always worth 0 as equity, so it's a total loss regardless.

Absolute statements rarely hold up when you shine a light on them.

That's sometimes true, but there are a lot of nuances to it.

Re: Investors bought a quarter of US homes sold last year

#497

Post by chmorgan »

This isn't caused by investors, they simply see the value in owning and renting to those that aren't interested or capable of outright ownership.

The price increases seen in the market are driven by the rising cost of energy, materials, and the lowering value of the dollar through inflation.

If governments, state and local, were receptive to construction, you'd see the market compensate for higher prices with increased supply. With building heavily regulated in many areas you've got government driving prices up through their limits on supply.

Re: Investors bought a quarter of US homes sold last year

#498

Post by ineptech »

iav wrote: post #337
ineptech wrote: post #298

Earlier quoted context omitted.

I agree, and I feel like limiting the mortgage interest deduction to owner-occupied homes would get us most of the way there at the stroke of a pen. It's a huge subsidy and I can't think of any good reason to extend it to rentals and investment properties. In fact, we should probably repeal it altogether - in theory it subsidizes home ownership for the poor and middle class, but in practice the only people who take i…

Not sure if you are aware, but all forms of interest expense is tax deductible for corporate income tax purposes in the United States, not just mortgage interest. This conforms to codes in other countries. There is no subsidy that is specific enough to rentals or investment properties. And since most of corporate bank lending is secured by all assets (including real estate), mortgage debt is somewhat fungible with ot…

I believe there is a specific subsidy, but in the "other direction" - that's why you can deduct the mortgage interest on your vacation home despite not being a human and not a business.

I'm aware that interest is generally deductible for businesses, and I'm suggesting that houses should be an exception to that. We subsidize most business borrowing because we want businesses to borrow and invest in stuff, and we should have exceptions for things we want to discourage investment in. Sure, it's difficult to imagine how to keep a giant corporation from finding a way around this, but we have difficulty getting giant corporations to pay taxes generally. It would still make sense to narrow or end the subsidy to discourage individuals and small businesses from investing in RE so heavily, and consider other approaches to discouraging larger corps.

Re: Investors bought a quarter of US homes sold last year

#499

Post by quantified »

notch656a wrote: post #178
quantified wrote: post #95

Earlier quoted context omitted.

Renting is always worth 0 as equity, so it's a total loss regardless.

But renting also guarantees you will never have negative equity.

Negative equity with a roof over your head is better than on the street. Your equity going to zero is still cheaper than raising a family to adulthood in a rented place.

Re: Investors bought a quarter of US homes sold last year

#500

Post by cudgy »

davidw wrote: post #62
slg wrote: post #40

Earlier quoted context omitted.

We have spent decades telling American families that homeownership is the safest investment. We then spent decades enacting policies to ensure this is true. Do we think investors were going to just sit that out and ignore a safe and government protected investment? Of course the more attractive we make home ownership as an investment, the more investors will flock to the market. We need policies specifically benefiti…

This article, speaking to your point, is pretty convincing in terms of the data: https://www.vox.com/platform/amp/22524829/wall-street-housin... > The role of institutional investors is still being studied, but the popularity of the narrative strikes at something dangerous: People want a convenient boogeyman and when they get it, they often ignore the structural problems that are harder to combat. Housing undersupply…

The notion that housing prices are being driven up by restrictive zoning ordinances is true for expensive coastal cities like New York and San Francisco, which represent a huge minority of the housing in the United States.

The above linked Vox article refers to another Vox article to back up its general claim that "Housing undersupply is the result of decades of locals opposing new home building."

https://www.vox.com/22264268/covid-19-housing-insecurity-hou...

Then, this referenced Vox article references the following study as if it applies to all housing in general:

"In 2017, Yale Law professor David Schleicher wrote a paper called “Stuck! The Law and Economics of Residential Stagnation.” In it, he documents local restrictions on housing development, arguing they have become so overbearing that the increase in the cost of housing and rents has made moving to a better place impossible for millions of Americans. Local zoning regulations are strangling opportunity."

https://www.yalelawjournal.org/article/stuck-the-law-and-eco...

This study however is clear that the impact of restrictive zoning policies is localized particularly to coastal metro regions beginning in the 1970's:

"Something dramatic happened to land-use regulation in the 1970s and 1980s: it became much, much stricter. Importantly, while this phenomenon affected all types of municipalities—from urban downtowns to inner-ring suburbs to exurbs—it only occurred in particular regions of the country. In particular, coastal metropolitan regions like San Francisco, New York, and Boston restricted construction in cities, suburbs, and exurbs. Because these popular regions restricted new housing, demand for living space outpaced supply. Housing prices soared, but population growth did not.

In contrast to these coastal regions, Southern and Southwestern metropolitan areas like Houston, Phoenix, and Atlanta continued to impose minimal land-use restrictions. Though demand to live in these regions grew as well, this demand led to increased housing construction and population, rather than substantially higher housing prices."

Most of the recent growth and migration in population has been occurring in these Southern belt areas, which have limited restrictions on building. Housing prices is a demand driven problem, not a supply problem throughout most of the United States.

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