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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

#741

Post by WalterBright »

ricardobeat wrote: post #387
WalterBright wrote: post #292

Earlier quoted context omitted.

> Rich investors and companies effectively get to buy homes at a discount vs average joes. Suppose you had $100,000 in cash, and buy a house for $100,000. You'll not be paying 5% interest on a mortgage. But if you did not buy the house, you would be investing that $100,000 for a 5% return. So, you're either paying 5% on the mortgage, or foregoing 5% return for investing that money. The rich person is not getting a di…

Except they do, as the original comment already said. The rich “person” has cash and access to much cheaper credit, is buying multiple properties, not paying the bills and earning rent, the other will have a mortgage.

> The rich “person” has cash and access to much cheaper credit, is buying multiple properties, not paying the bills and earning rent, the other will have a mortgage

Rich people do not have cash, as they invest it all. (That's how they became rich.) Rich people do not get away with not paying their bills. Rich people do not earn rent on the house they are living in. Rich people do not get better mortgage rates because they are rich. They get credit-scored like everyone else. Bankers want to charge as much interest as possible.

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

#742

Post by IncreasePosts »

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.

Yes but the area would collect far more revenue overall if an individual of commensurate means was actually dwelling within the dwelling.

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

#743

Post by IncreasePosts »

JoshTriplett wrote: post #193
IncreasePosts wrote: post #189

Earlier quoted context omitted.

Why should you be allowed to create a corporation that has no actual purpose other than a shield for your own private concerns?

Ideally, it should not be possible for random hateful people to easily get name/address records from local governments, but that's unfortunately not the world we live in yet.

I completely agree, but this isn't the fix. Corporations should be expected to behave like corporations. Having said that, I wouldn't argue against keeping it until we had some better privacy laws and practices in this country(/world)

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

#744

Post by tfehring »

kasey_junk wrote: post #270
tptacek wrote: post #249

Earlier quoted context omitted.

Right. There are good financial reasons to own a home even if you don't think it's going to be a great investment, just as there are very good reasons not to own a home even if you have the means. It's the absolute, which is the premise of this policy proposal, that's the problem.

And home ownership rates are well within the normal range for the US post war regime! So this is a policy proposal that will likely decrease affordability to fix a problem that doesn’t exist.

Homeownership rates are only ~flat in aggregate because the population is aging and older people are more likely to own their homes. The homeownership rates of Americans aged https://www.census.gov/housing/hvs/data/charts/fig07.pdf

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

#745

Post by gamblor956 »

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…

Unless your neighbor happens to be named Mr. Black Rock, private equity and wall street investors are indeed the #1 buyers of residential housing stock right now.

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

#746

Post by m00x »

WalterBright wrote: post #325
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…

> 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. Raising prices when you only have a tiny portion of the market does not work. People won't buy them when there's…

The thing is that there is only a tiny portion of houses ever selling at any time. The only ones that would benefit from selling are people who are downsizing or moving away.

If you buy 60% of the properties on market, the rest will see this and adjust their own prices. Usually this only works when the macro is favourable (low interest rates, easy mortgage applications, etc.), but it is definitely a large factor. It sometimes creates a even hotter market, with people thinking that real estate goes up forever, then they sell.

You're right that it's not always large investment groups. Vancouver in Canada had the same thing happen, but mostly from foreign investors and criminals washing money. The latter was facilitated by politicians who cashed in big on this.

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

#747

Post by refurb »

pixelatedindex wrote: post #589
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…

> IMO it's a crooked notion that landlords are rent seeking and nothing else - they do create supply and maintain housing. They don’t create supply in any way, the only ones who do that are builders. But sure they maintain houses. Although just the bare minimum, they will never fix it nicely - just enough to rent it out.

Of course landlords create supply.

A renter is someone looking to rent. If someone buys a home then rents it out they just +1 the supply of rental units.

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

#748

Post by iugtmkbdfil834 »

deepsun wrote: post #591
A4ET8a8uTh0_v2 wrote: post #569

Earlier quoted context omitted.

I am trying to read this charitably, but it is hard to read as anything but: 'landlords do not add value'.

Rephrasing my original point -- landlords do add value, but not as much to offset the negatives of locking down the resources.

I disagree, but I am interested in pulling this thread somewhat. What would be alternative? The role will likely exist in some form regardless, but I suppose there are obviously ways to make it less common just by removing of its incentives. That said, I might be tipping my hand a little.

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

#749

Post by yulker »

WalterBright wrote: post #325
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…

> 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. Raising prices when you only have a tiny portion of the market does not work. People won't buy them when there's…

When a strongly capitalized minority cohort can sustain positions that are untenable for normal market participants, they can act as a kingmaker by shaping outcomes at the margin.
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