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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

#901

Post by pphysch »

jojobas wrote: post #812
gfaster wrote: post #585

Earlier quoted context omitted.

gp used "rent seeking" correctly. The concept of "landlords do nothing while collecting passive income, therefore not creating any value but instead are just exploiting that they own the land" would be correctly described as "rent-seeking behavior".

This equally applies to any investment income wouldn't it? Dividend, loan interest would all be classed as "unearned income" by a certain economic theory I won't name that keeps causing people suffering a century later. Don't do that.

Predatory loans were maligned as "usury" long before "rent-seeking" or Scary Marxists came along. For good reason. They're bad for society and the economy writ large.

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

#902

Post by notepad0x90 »

tstrimple wrote: post #888
andrekandre wrote: post #631

Earlier quoted context omitted.

> The kind of capitalism we have now is a short-sighted parasitical money-grab. it would seem so, at least in the west perhaps... but i wonder what the cause is; is it culture? or just organic growth is becoming harder and harder?

It's the nature of a capitalist society. Perverse incentives are everywhere and our primary measurement of success is wealth. We richly reward grifters and cheaters and folks with integrity often fall behind. The decades of perverse incentives have created a perverse society that no amount of "golden rule" theory taught in kindergarten can stand up against.

I commented elsewhere in more detail, but it is in my opinion caused by a lack of national pride. If I was a billionaire, how would I feel about other Americans living the way they do? Would i be apathetic or would I feel ashamed as an American? Even paying taxes used to be considered a patriotic act a few decades ago.

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

#903

Post by sigwinch »

primer42 wrote: post #71

"Trump says" is not the same as "US will" Trump says a ton of things that he never ends up doing.

You’d think he’d want his name on a bunch of homes. Similarly, some salesman on the golf course has surely already pitched his name on a bunch of homes. I bet there’s a reason he’s been uninterested for so long.

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

#904

Post by notepad0x90 »

15155 wrote: post #867
notepad0x90 wrote: post #574

Earlier quoted context omitted.

Renting should be viewed is a negative in society. Imagine if car dealerships moved to a rental model instead of ownership..oh wait, they sort of already are, they just call it "financing", they make no money from cash buys because of that economic perversion. Rent income is not wages, that's the critical part you're mistaken. Income and wages are not the same thing. Rent income is as much wages as Elon Musk selling…

> they make no money from cash buys because of that economic perversion. This is completely false. This might be surprising to learn, but for normal car dealerships (not buy-here, pay-here or used car dealerships) a huge amount of their compensation rides on receiving holdback payments from manufacturers, as well as per-unit bonuses that often have cliffs. Cash buyers paying invoice price are welcomed (if they aren't…

What I heard is that they make no profit. I'm sure they'll make revenue, but if they simply sold all cars at the cash price, they will be losing money, especially dealerships. But if you're certain they do make profit, not just revenue, then you sound like you know more about the industry than myself, so I'll concede that point.

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

#905

Post by bs7280 »

estearum wrote: post #384
indymike wrote: post #296

Earlier quoted context omitted.

> Additional property tax if you do not live in your home fulltime. In states I've lived in with property tax there is a homestead exemption for the house you live in. In my current state that's about twice the tax. The effect: Rent goes up to cover the tax and margin is added, so the rent goes up more than the tax. >Rich investors and companies effectively get to buy homes at a discount vs average joes. Usually the…

> The effect: Rent goes up to cover the tax and margin is added, so the rent goes up more than the tax. Well-established effect and it applies to everything. A huge portion of all technological improvement/productivity gains and nearly all public investment money ultimately accrues to land rents which we then later just call "the cost of living." https://en.wikipedia.org/wiki/Henry_George_theorem

You are right to call this out, and is why the legislation for this idea will require a lot of thought. But the important part of this idea is that only the "big" landlords will have a significant increase in cost.

In order for the economy to function there has to be ~ SOME ~ landlords. In my experience the random people that rent out their second property are usually good landlords, whereas the massive players treat people poorly. If this tax were implemented well, the latter group would be taxed more forcing them to stay honest. The small landlords would have a competitive pricing advantage over the big players, which should go a long ways to keep rents fair.

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

#907

Post by bombcar »

xnx wrote: post #878
a2tech wrote: post #834

Earlier quoted context omitted.

The only problem is that in the US, if you let apartments and townhouses to be built, homeowners will get muscled out by large builder concerns and single family homes will be converted into dense housing--which sounds great, until you realize there's no way those housing concerns will SELL those units--they're going to be rented forever. There's no incentive to actually sell those to people and every reason to keep…

> homeowners will get muscled out by large builder concerns > homeowners are being pushed out and their homes What does this mean?

Usually it means that supply gets bought up and converted (and leaves the supply, often).

The desire is that a row of single family homes (say a block has 10) get slowly redeveloped into a row of brownstones or similar density - but they're still single family and owned by the residents, but now you have 20 in the same space, or 30. You can triple the density and not really change anything else.

But what ends up happening is that the single family homes remain single family, get slowly bought up by a developer and rented, and then the entire block gets turned into an apartment complex, perhaps with the same or even more units, but they're all rentals forever.

This might be fine, and perhaps even encouraged in some areas, but it does reduce the supply of homes to buy.

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

#908

Post by bombcar »

a2tech wrote: post #846
Y_Y wrote: post #838

Earlier quoted context omitted.

Surely they'll sell if the price is right.

I mean, they could, but there's no incentive for the builders to sell them. You can make way more money with rentals (if the demand is there) then you can with condos. Condos are a way time hit of money, rentals are smaller profit, but comes reliably.

Right now holding rental apartments is a "good deal" and they'll have buyers for that (the builders don't want to hold anything usually, they want to sell, sell, sell and get building the next thing) - just larger institutional buyers.

When the market turns around (and every time in the past it was "only going up" it eventually ended) then suddenly you have apartment complexes turning into condos to sell off capital and stop the bleeding.

The problem for people "on the ground/in the rentals" is that can force you to act when you're not financially prepared to - it's easy to find situations where someone can afford the rent; even afford the mortgage to BUY the apartment as a condo; but cannot afford the downpayment (or otherwise qualify for the loan).

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

#910

Post by bombcar »

ropable wrote: post #798
jmyeet wrote: post #790

Earlier quoted context omitted.

> In Australia we've treated the family home as an investment That's true of most of the Western world, unfortunately. > a primary mechanism for wealth creation I don't disagree but this needs to be correctly framed publicly as simply stealing from the next generation because that's what it is. > Tax incentives For anyone unfamiliar, Australia has a system called negative gearing . In the mid-2010s the then Labor par…

Good points, thoughtfully made. As a resident of Perth, I (largely) endorse that description. So much of the wealth of our middle- and upper-class is dependent on property ownership and rent-seeking, it's depressing. That population essentially needs to vote against their own self-interest to help improve housing affordability, so it's hard to see that ever happening. The best I could foresee is a government forecast…

Lots of the issues would be "solved" by adequate supply of new dwelling units (which is a way of driving the prices down). There's really no other way of solving the "X people lived here, now 1.4X do, but dwelling units have only increased 1.2 times."

In the past this effect was localized and when housing prices went insane, it was usually in a city, or a region, not a whole country. And high prices would encourage development in the cheaper areas, and people would move "out there".

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