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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

#621

Post by bballer »

xnx wrote: post #152
georgeburdell wrote: post #52

This will help out home prices in a lot of lower priced markets, but do little in higher priced markets. In the Bay Area, many houses are bought up by non-occupying internationals. I've been in a couple of such houses. It's bizarre walking into a $5M+ hilltop mansion that's completely bare inside except for a token "student" living out of one room.

Kind of great to have someone paying property taxes and using minimal city resources.

Do the math of what it costs a city per resident - napkin math it, total tax intake divided by population. Now compare that to the additional taxes and money that person (who is wealthy) is not injecting into your city.

So out of touch to think the net spend of a gov directly on an individual would be worth sacrificing all of that additional capital injected to your other neighbors and their businesses.

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

#622

Post by JumpCrisscross »

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.

> there even should be a cap on how many homes an individual can own for rentals

India still has this in some states [1]. You wind up with everyone in the family owning a house. After that, other people own it and pass on most of the rent.

Better: progressive capital-gains taxes.

[1] https://en.wikipedia.org/wiki/Urban_Land_(Ceiling_and_Regula...

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

#623

Post by nerdponx »

mapontosevenths wrote: post #499
Plasmoid wrote: post #457

Earlier quoted context omitted.

Renting out property isn't rent seeking.

Ok. I'll bite. Why is the thing thats literallly the basis for the term rent seeking not rent seeking?

"Rent" has a few specific meanings in economics, but charging a tenant rent isn't necessarily economic rent. The economic rent is more like the difference between your actual monthly rent and some hypothetical idealized market-clearing monthly rent.

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

#624

Post by tptacek »

brightball wrote: post #617
tptacek wrote: post #478

Earlier quoted context omitted.

You're telling a just-so story, and you can tell because there isn't a simple schematic 1-2-3 story you can make from this about how these people exert control over home prices. Words mean things; wielding scarcity requires you to control enough inventory to manipulate scarcity, and REITs and corporate buyers empirically don't. I get why people like telling stories like this: it suggests there's a single boogeyman th…

About 2 miles from my house, a housing development recently went up. No homes for sale. Rent only. Stuff like that is becoming a big problem.

Why? Why should I care what the balance of rental and owner-occupied is? Owned is not strictly better than rented!

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

#625

Post by magicalhippo »

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.

> Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals.

Here in Norway the solution, as with so many other things, is taxing. Your home is evaluated at some "market rate", but if it's your primary residence the effective tax value is just 25% up to $1 million (70% on value above $1 million). For reference, a typical 3-room apartment in Oslo, the capital, is around $400-500k.

However, if it's not your primary residence, then you pay tax on 100% of the "market rate". The tax rate is 1%, so not insignificant.

Until a few years ago, tax on non-primary residences was much lower, and hence we had a lot more people buying to rent if they inherited money or similar. Some even had a dozen or more properties. These have now exited, so policy is working as intended.

One thing of course politicians for some reason didn't think of is that if most of the landlords suddenly sell, rental market will shrink. So now it's super-expensive to rent, and those who rent usually do so because they can't buy for one reason or another (no stable income to support a loan for example).

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

#626

Post by [deleted] »

xvedejas wrote: post #401
tshaddox wrote: post #369

Earlier quoted context omitted.

I don't think that's quite what the comment is claiming. They're not saying that some small portion of homeowners are working together to raise prices. I think they're more talking about the concept of "marginal buyers." It's the marginal buyer that sets prices, not the average buyer. And particularly when supply is heavily restricted, the marginal buyers can be a very tiny portion of all buyers, and can look very di…

Marginal buyers have a big impact by adding a lot of liquidity, but I'm not sure they manipulate prices that much, given that if they ever tried to move prices far from the margin they would cease to be marginal buyers.

[deleted]

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

#627

Post by toephu2 »

riazrizvi wrote: post #338

This will absolutely help. It’s easy for these institutional players to downplay their involvement with select stats, to play PR defense, but platforms like Zillow work with institutional funds to sell them an information advantage that means they are at the end of the market that does the most upward impact on pricing. People don’t have a natural feel for how little you need to alter flow to cause liquidity in a sys…

Help who exactly?

This will be good for existing homeowners because it will increase home prices and increase rents.

It's bad for renters.

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

#628

Post by JumpCrisscross »

alextingle wrote: post #563
jazzyjackson wrote: post #324

Earlier quoted context omitted.

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…

"Rent seeking" has nothing to do with landlords and tenants. It's about buying legislation that forces people to give you money for nothing. https://en.wikipedia.org/wiki/Rent-seeking Tenants who rent property get something tangible in exchange for their cash - exclusive use of the property. Just because the word "rent" is common to both, doesn't mean they are connected in any way.

> "Rent seeking" has nothing to do with landlords and tenants

They're orthogonal. In a competitive market, landlords earn no economic rent. In a market with supply restrictions, however, landlords will earn a return "in excess of the costs needed to bring that factor into production" [1].

[1] https://en.wikipedia.org/wiki/Economic_rent

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

#629

Post by [deleted] »

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…

[deleted]
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