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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

#641

Post by throwaway2037 »

rayiner wrote: post #536
observationist wrote: post #283

Earlier quoted context omitted.

It's not that simple - the problem is that those institutions are market makers. They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing. The things that they do have mass…

A “market maker” provides liquidity that allows trades to clear and keeps prices stable. They make money on the bid-ask spread. They don’t have leverage to raise or lower prices.

Another thing: Residential homes are never considered liquid assets. They don't need professional market makers.

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

#642

Post by no_wizard »

throwaway2037 wrote: post #638
no_wizard wrote: post #455

Earlier quoted context omitted.

You may be interested in learning about the Land Value Tax[0] which will in effect, taxes become more burdensome for leaving land unproductive (e.g., empty housing or land). It also shifts the calculus on home improvements, which means remodeling your home or doing other perhaps large pieces of upkeep will not trigger a property tax increase as it does today, which is better for median home owners as well. [0]: https…

> home improvements, which means remodeling your home or doing other perhaps large pieces of upkeep will not trigger a property tax increase as it does today I have heard this complaint here a few times, but very few specifics. I would call getting your roof replaced or your kitchen/bathroom remodelled as major home improvements. Do these actually property tax increases?

In many jurisdictions they do, yes. A general guideline is that if it requires an permit it will typically trigger an assessment and thus increase in property tax

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

#643

Post by dev1ycan »

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…

I love these professional lawyers running defense for large corporations.

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

#644

Post by reop2whiskey »

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.

[dead]

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

#645

Post by presentation »

tptacek wrote: post #552
presentation wrote: post #540

Earlier quoted context omitted.

I agree philosophically though there is a lot that can be done short of upending the entire American wealth structure like removing barriers to housing construction (to dramatically increase supply) as well as subsidizing first time buyers eg with preferential mortgage rates and tax write offs.

* Dramatically increasing supply will dramatically reduce home prices. That's the point. * Subsidizing first-time buyers will increase home prices. That's the opposite of the point.

Not true re #1, yes creating a glut of housing beyond demand in the market would reduce home prices, but other markets like Tokyo that do build a lot of housing still see increasing home values despite stable prices. Land value goes up, but units per unit land goes up too, so each individual unit does not necessarily go down. Maybe the value of your physical single family home goes down, but the value of the land it stands on goes way up when the density and infrastructure around it intensifies, so it does not follow that the homeowner loses out (most likely they make money)

Subsidizing first time buyers does increase prices overall but you have to consider the effect of such a policy relative to its cost. It has potentially positive externalities so that’s worth considering while balancing it out eg with the previous policy.

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

#647

Post by potato3732842 »

tshaddox wrote: post #385
kiba wrote: post #334

Earlier quoted context omitted.

Landlord, or property management, is a job, same as any other job you might have. The problem is not owning multiple properties, but not paying enough taxes on land. Otherwise, landlords benefit from the free lunch that comes with economic growth and real estate price appreciation, which is true for every homeowners in this country. IF you want affordability? Tax land. Doesn't matter who owns them. Your grandma or wa…

> Landlord, or property management, is a job, same as any other job you might have. Let's ignore property management for now and focus on landlords (i.e. people who own homes and collect rent from the people who live in the homes). That is very much not the same as any other job. Most jobs do not consistent entirely of literally rent-seeking.

>Most jobs do not consistent entirely of literally rent-seeking.

First off you're using "rent seeking" wrong, it's a specific economic term that means something else.

But using your definition....

There's entire industries built around renting capital investments. Sometimes purely, like rental equipment. Sometimes the investmentents are so expensive they come with the labor to operate them (the way many buildings have a building manager and a desk person). Many industrial transactions are structured basically the same way as commercial rent.

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

#648

Post by rayiner »

throwaway2037 wrote: post #641
rayiner wrote: post #536

Earlier quoted context omitted.

A “market maker” provides liquidity that allows trades to clear and keeps prices stable. They make money on the bid-ask spread. They don’t have leverage to raise or lower prices.

Another thing: Residential homes are never considered liquid assets. They don't need professional market makers.

Liquidity doesn’t make something more or less of an investment, it makes it easier to buy and sell. Liquidity in residential homes is a good thing. It means that it’s easier to sell your house and buy a new one if you need to move for whatever reason.

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

#649

Post by sqrt_1 »

ropable wrote: post #570
rgmerk wrote: post #165

It will make very little difference in the end. Australia's land tax system makes it effectively impossible for large corporations to own large chunks of residential property, but our real estate is amongst the world's most expensive and landlords are still awful - it's just that the landlords are hundreds of thousands of dentists and, yes, software engineers rather than corporate entities. If you want housing to be…

In Australia we've treated the family home as an investment, a primary mechanism for wealth creation (rather than an essential for life) for far too long. I fully agree that supply is the #1 driver for housing affordability, but like many things it's mult-factorial. Tax incentives, market forces, town planning, land use regulation, etc. all play their role. I'm hopeful that successive governments over here show the c…

Current government has explicitly said that they will not lower hose prices:

"We're not trying to bring down house prices," Housing Minister Clare O'Neil declared on ABC's youth radio station triple j.

"That may be the view of young people, [but] it's not the view of our government."

https://www.abc.net.au/news/2024-12-14/housing-minister-says...

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

#650

Post by tjwebbnorfolk »

Analemma_ wrote: post #219
tjwebbnorfolk wrote: post #190

Earlier quoted context omitted.

I don't know if you've noticed, but politicians aren't in the business of root-cause analysis or actual solutions. They are in the business of making things either slightly better or significantly worse for certain people. This would make the situation slightly better for people who want to buy houses. Perhaps it's the case I'm 100% for this mainly because my extremely low expectations for politicians have been met a…

I have to admit, I'm very used to politicians tossing out non-fixes as a distraction when there's some problem, but your comment is the first case I've ever seen of a voter openly acknowledging that it's a non-fix, but being happy about it anyway. And not just that, but actually attacking the people pointing out that it's a non-fix, and casting sinister aspersions on their motives. This isn't even shooting the messen…

There's no such thing as a "fix". Solutions don't exist in politics, only tradeoffs exist. This is a trade I'm quite happy to make.

If others don't want to make the trade, that's fine, I have no issue with that. But saying nothing will happen can't be true. If you remove demand from a market, that affects prices. There's no way I can take seriously a disagreement with tenets of Econ 101.

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