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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

#691

Post by crooked-v »

rssoconnor wrote: post #287

I don't actually know anything, but I've been wondering lately: is higher house prices simply a consequence of Baumol's cost disease? If so, then there is kinda nothing we can do about it, right?. Higher house prices is simply a consequence of improved productivity elsewhere, and thus it is necessary to spend a larger fraction of one's income on housing.

Higher house prices in the US are a consequence of literally every major US metro area having a shortage of housing (https://www.fanniemae.com/research-and-insights/perspectives...). There's no mystery here, just that a lot of people decided to shoot themselves in the foot starting in the 1970s by putting more and more zoning and permitting limits on new housing construction.

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

#692

Post by yunwal »

mhb wrote: post #676
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…

Why doesn't your explanation apply to every commodity? Gold, cocoa, mustard seed, electricity? These are also essential products subject to the influence of markets and market makers.

Just curious, where do you live that electricity is sold in an open market? Seems like a very strange setup.

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

#693

Post by apognwsi »

rambojohnson wrote: post #677
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…

you’re treating narrative completeness as a prerequisite for legitimacy. that makes any systemic issue unfalsifiable unless someone can account for every market, municipality, and incentive simultaneously. this is an impossible burden of proof. requiring a perfectly schematic, end-to-end causal story before acknowledging harm is a convenient way to dismiss any structural concern. pointing out that housing markets are…

im not even disagreeing with you, but i hate that hn seems to have this penchant to point out that unreasonable assertions may still be true despite being ludicrous. can facts emerge from a hypocrite? yes of course, but prices are not affected by buying and holding a tiny supply, so given that reasonable axiom, it is reasonable to demand more comprehensive evidence.

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

#694

Post by Glyptodon »

standardUser wrote: post #353
Glyptodon wrote: post #306

Just build more housing, the whole "let's make rules to avoid the easy and obvious solution" trend annoys me.

Utilizing vacant properties is easier and cheaper than building new ones, by a massive margin. We should do both, but ignoring perfectly good homes in desirable locations being used by nobody is silly.

I mean converting vacant is fine, to me it's the same category basically - increasing housing supply.

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

#696

Post by rascul »

jazzyjackson wrote: post #335
AstroBen wrote: post #313

Earlier quoted context omitted.

Would it not also lower house prices, causing would-be renters to buy instead, reducing demand for rentals?

This kinda reminds me of student loans, why not get as many people as possible into 6 figure debt? Yes mortgage is often cheaper than rental, but the whole tradeoff is the commitment, just like all kinds of services, if you pay 40 years up front you can get a good deal, but do you really want to take out a loan to do that? Limiting landlords ability to buy property is reducing demand for construction, you want to inc…

> This kinda reminds me of student loans, why not get as many people as possible into 6 figure debt?

Didn't we already try that with housing?

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

#697

Post by jjav »

pixelatedindex wrote: post #602
derangedHorse wrote: post #427

Earlier quoted context omitted.

Landlords have to allocate capital to fixing and improving the house, as well as taking care of insurance and taxes. Also, assuming that they're not living in the house and the value of the home goes up, they're taxes will rise whenever an appraiser reassesses their home value.

> Landlords have to allocate capital to fixing and improving the house, as well as taking care of insurance and taxes. These costs aren’t that high though, compared to rent. 3 months of rent covers a year of property taxes where I live. Major repairs are about a couple months rent. There is still another half year of rent that’s pure profit. Then they raise your rent every year, demonize rent increase caps, and then…

> 3 months of rent covers a year of property taxes where I live. Major repairs are about a couple months rent. There is still another half year of rent that’s pure profit.

You missed insurance and mortgage.

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

#698

Post by itake »

jspaetzel wrote: post #272
sharpy wrote: post #265

Earlier quoted context omitted.

That sounds nice, but I think that increased tax will just be passed down as higher rent.

Higher rent means more people will opt to buy. That's not necessarily a bad thing in perspective. Assuming the other side effect is a decrease in costs due to a lower profit margin.

If rent is higher, how will people save for a down payment?

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

#699

Post by lufenialif2 »

enceladus06 wrote: post #594
lufenialif2 wrote: post #551

Earlier quoted context omitted.

I’d imagine it’s less taxes and more you want to buy a nice house in the Bay Area where a lot of people are high earners and would be driving up prices on the low supply.

Yes and for some weird reason, the bay and all the nice places to live are all single-family and expensive as hell. Just build some soviet or Chinese style apartment blocks and give people housing like Singapore does its not that hard. This is not a democrat or republican issue, it is a have versus have-not issue. The logical conclusion is that the residents of these desirable areas like the bay / San Diego / Seattle…

Building giant apartments would change the vibe of the Bay though, and my guess is some of people who want to live there also want to live in it as it is now and not what it would be with high rise apartments etc. There’s probably a way to do it well, but it’s a pretty heavy lift versus doing nothing, which is the current status quo.

Also doesn’t help there’s a lot of red tape as the other commenter mentioned.

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