7 ms·

What are peoples concerns here? 3 companies owning 11% of the single family homes available for rent in a metro area doesn't seem like a massive concentration

What are peoples concerns here? 3 companies owning 11% of the single family homes available for rent in a metro area doesn't seem like a massive concentration of ownership. Some people prefer to rent rather than buy. Some people don't have savings for a down payment. Someone needs to own the houses that these people rent. There are probably economies of scale to managing rental properties (e.g. larger companies can hire full time maintenance staff). Some people prefer to rent from small-time landlords, but those can have there problems too. Is it the maze of LLCs? That does seem problematic.

estebank 3y ago
11% may not sound like a lot, but it is enough to manipulate pricing of the available housing stock.
- epistasis 3y ago
  If so then antitrust laws kick in from three different companies colluding on this. However, I'm skeptical of much pricing control. Few other markets have such widely distributed market share. There is some stickiness in that people don't want to move often, but unless there's a major shortage (which would be the true cause of high prices), it's hard for a 5% owner to exert much on the market.
- anonuser123456 3y ago
  Not when it requires collusion between 3 separate legal entities.
- lotsofpulp 3y ago
  If they have so much pricing power, why are their returns less than SP500? Who would want to lose money compared to a risk-less investment where you don’t have to do any work?
tppiotrowski 3y ago
I think there's concern that if you manage to buy 11% then you can keep expanding. We've all seen what happens when a company captures enough market that there are no alternatives left: Netflix, Prime: commercials and limiting devices per household Gmail: no longer unlimited storage as promised OpenAI: still competing so remains to be seen If these companies are being subsidized by investors to capture market those investors will want a return and things will get nasty.
- 0_____0 3y ago
  Netflix, Amazon, Hulu, Paramount, Disney??? There's a crapton of players trying to make streaming happen, and no evidence that they're making massive margins.
- ghaff 3y ago
  Many people complain about streaming fragmentation not the other way around. And it's an extremely optional product. And did Google ever actually promise unlimited storage for all time? (And there's still a lot of free storage. I finally broke down and added some more but just so I could avoind managing how much I was using.)
skyyler 3y ago
> Some people prefer to rent rather than buy. Why would someone prefer to give away money instead of invest it into their net worth ? Are there really people that prefer renting, and wouldn’t buy even if they could afford to? Are they common?
- richwater 3y ago
  Rent (in dollar terms) is the most you will ever pay per month. Mortgage (in dollar terms) is the least you will ever pay per month. Combine that with the ease of movement between renting and owning and it's absolutely something many people prefer.
  - skyyler 3y ago
    I’d love to see some numbers on the percentage of current renters that would prefer to own.
    - 0_____0 3y ago
      I know a lot of people who would love to have the money to buy. Whether they would rather have a house - or - rent but have a down payment's worth of money, I think is a better question
    - freitzkriesler2 3y ago
      It's high , many renters have given up hope they'll ever own.
      - younshin21 3y ago
        [dead]
    - sgerenser 3y ago
      Probably the majority at what they think the house should cost. Probably very few at what the monthly payment for a market rate mortgage + downpayment actually costs, based on the recent run-up in home values and interest rates over the past 3-4 years. E.g. would you prefer to rent the same house at $2000 month, or own at $4000/mo? It might not be this bad in Atlanta but in many areas the rent/buy ratio is that bad now.
Mistletoe 3y ago
It’s a massive amount. But what is more sickening is that we are treating a place to live like a market to corner and profitize. Three companies own 19,000 houses! 19,000 houses that aren’t available for people to buy, 19,000 houses that raised the price of all other houses, and 19,000 houses to milk renters for every cent they have like people in the pods in the Matrix. This isn’t an isolated event either. There are lots and lots of other companies. https://fortune.com/2024/02/18/did-wall-street-make-housing-market-prices-higher/ https://fortune.com/2024/02/18/did-wall-street-make-housing-... https://archive.is/jBrme https://archive.is/jBrme
ThinkingGuy 3y ago
Theses companies are part of a larger trend of the Atlanta rental market coming to be dominated by investors. The Atlanta Journal-Constitution did a whole report on this last year: https://www.ajc.com/american-dream/investor-owned-houses-atlanta/ https://www.ajc.com/american-dream/investor-owned-houses-atl...
mrbgty 3y ago
companies buying up property drives prices of homes up they are operating under a completely different model than individuals and can more easily shoulder paying more now in order to make up for it later. kind of like two people playing the same game with a different set of rules.

estebank 3y ago

11% may not sound like a lot, but it is enough to manipulate pricing of the available housing stock.

epistasis 3y ago
If so then antitrust laws kick in from three different companies colluding on this. However, I'm skeptical of much pricing control. Few other markets have such widely distributed market share. There is some stickiness in that people don't want to move often, but unless there's a major shortage (which would be the true cause of high prices), it's hard for a 5% owner to exert much on the market.
anonuser123456 3y ago
Not when it requires collusion between 3 separate legal entities.
lotsofpulp 3y ago
If they have so much pricing power, why are their returns less than SP500? Who would want to lose money compared to a risk-less investment where you don’t have to do any work?

tppiotrowski 3y ago

I think there's concern that if you manage to buy 11% then you can keep expanding. We've all seen what happens when a company captures enough market that there are no alternatives left: Netflix, Prime: commercials and limiting devices per household Gmail: no longer unlimited storage as promised OpenAI: still competing so remains to be seen If these companies are being subsidized by investors to capture market those investors will want a return and things will get nasty.

0_____0 3y ago
Netflix, Amazon, Hulu, Paramount, Disney??? There's a crapton of players trying to make streaming happen, and no evidence that they're making massive margins.
ghaff 3y ago
Many people complain about streaming fragmentation not the other way around. And it's an extremely optional product. And did Google ever actually promise unlimited storage for all time? (And there's still a lot of free storage. I finally broke down and added some more but just so I could avoind managing how much I was using.)

skyyler 3y ago

> Some people prefer to rent rather than buy. Why would someone prefer to give away money instead of invest it into their net worth ? Are there really people that prefer renting, and wouldn’t buy even if they could afford to? Are they common?

richwater 3y ago
Rent (in dollar terms) is the most you will ever pay per month. Mortgage (in dollar terms) is the least you will ever pay per month. Combine that with the ease of movement between renting and owning and it's absolutely something many people prefer.
- skyyler 3y ago
  I’d love to see some numbers on the percentage of current renters that would prefer to own.
  - 0_____0 3y ago
    I know a lot of people who would love to have the money to buy. Whether they would rather have a house - or - rent but have a down payment's worth of money, I think is a better question
  - freitzkriesler2 3y ago
    It's high , many renters have given up hope they'll ever own.
    - younshin21 3y ago
      [dead]
  - sgerenser 3y ago
    Probably the majority at what they think the house should cost. Probably very few at what the monthly payment for a market rate mortgage + downpayment actually costs, based on the recent run-up in home values and interest rates over the past 3-4 years. E.g. would you prefer to rent the same house at $2000 month, or own at $4000/mo? It might not be this bad in Atlanta but in many areas the rent/buy ratio is that bad now.

Mistletoe 3y ago

It’s a massive amount. But what is more sickening is that we are treating a place to live like a market to corner and profitize. Three companies own 19,000 houses! 19,000 houses that aren’t available for people to buy, 19,000 houses that raised the price of all other houses, and 19,000 houses to milk renters for every cent they have like people in the pods in the Matrix. This isn’t an isolated event either. There are lots and lots of other companies. https://fortune.com/2024/02/18/did-wall-street-make-housing-market-prices-higher/ https://fortune.com/2024/02/18/did-wall-street-make-housing-... https://archive.is/jBrme https://archive.is/jBrme

ThinkingGuy 3y ago

Theses companies are part of a larger trend of the Atlanta rental market coming to be dominated by investors. The Atlanta Journal-Constitution did a whole report on this last year: https://www.ajc.com/american-dream/investor-owned-houses-atlanta/ https://www.ajc.com/american-dream/investor-owned-houses-atl...

mrbgty 3y ago

companies buying up property drives prices of homes up they are operating under a completely different model than individuals and can more easily shoulder paying more now in order to make up for it later. kind of like two people playing the same game with a different set of rules.