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I am excited and optimistic that we appear to be applying economic principles to housing! Now that we're getting rid of centralized price controls / collusion,

I am excited and optimistic that we appear to be applying economic principles to housing! Now that we're getting rid of centralized price controls / collusion, next can we do supply/demand?

pstuart 2y ago
On the demand side it would be nice to keep PE firms from hoovering up all the single family homes. https://www.thesling.org/are-hedge-funds-and-private-equity-firms-driving-up-the-cost-of-housing-2/ https://www.thesling.org/are-hedge-funds-and-private-equity-...
- candiddevmike 2y ago
  Would be interesting to see what would happen if renters had the option to buy the underlying property/unit somehow after being a tenant for a certain time. The goal should be ownership for folks who want it, not a nation of renters.
  - Loughla 2y ago
    You can rent your home with x% profit, but after x # of years the home sells to the renter. I like it but that seems like a system VERY susceptible to abuse.
    - mcmcmc 2y ago
      You can bet landlords would be doing everything possible to force renters out just before the purchase window comes open.
      - gs17 2y ago
        That's definitely an issue, even if constructive evictions can be prevented, landlords would also have to be forced to renew leases (at limited rent increases).
    - bilbo0s 2y ago
      One small catch, maybe even a constitutional hold up? It's not really your home if you are obliged to sell it after x years. The traditional societal compact with private property is that the property is yours for as long as you choose to keep it. (Providing you pay the taxes covering the costs to provide municipal services to your property.) This kind of changes that, and I'm not sure it would stand up to constitutional scrutiny?
      - candiddevmike 2y ago
        No one is forcing you to rent it
        bilbo0s 2y ago
        Again, traditionally, renting your property on terms an owner unilaterally determines was seen as a right of owning private property. Provided you're able to find a renter who agrees to your terms, and provided your terms are legal, you were allowed to rent your property, again, forever. For instance, it was perfectly legal to rent your apartments for USD1500 per month, and at the same time, allow your kid to stay in one of the apartments for free and give a USD500 a month break to a long term renter who maybe lost his job. It was your property, so whatever terms you had with each renter was very much considered to be your business. (Again, within the bounds of legality. You can't be asking for a cut of the drugs dealt out of your apartment as a condition for instance.) Unless I'm misunderstanding the proposal, this would change that practice. You would be told how much you could rent the property for, as well as the date you would need to sell the property. (Which, I'm guessing, would be based on the rent amount?) So a radical change from before in terms of private property rights.
    - pc86 2y ago
      Forcing people to sell private property against their will is generally a pretty bad economic policy.
  - SoftTalker 2y ago
    All they have to do is offer the owner an adequate price.
    - duped 2y ago
      The problem is they can't give the owner an adequate price when they're paying for the owner to grow more equity in the property while also needing to save at a faster rate to afford a downpayment on a mortgage.
      - SoftTalker 2y ago
        Then they are renting something they can't afford, if ownership is their goal. When I was saving for my first house I lived in a crappy little 1 bedroom apartment for a few years so that I could get a down payment together. I had the income to afford renting a larger apartment or a house in a nicer area but I would not have been able to save anything.
        duped 2y ago
        That's a very different situation than the one you initially replied to. It's also not something everyone can do.
        ebiester 2y ago
        When was this? Have you paid attention to the percentage of wages required for a unit nationally? In your area?
        JumpCrisscross 2y ago
        > Have you paid attention to the percentage of wages required for a unit nationally? In your area? Roommates.
        ebiester 2y ago
        I too had roommates coming up. People today have roommates coming up. That doesn't change the fact that even with roommates, the burden is disproportionately higher than it was for the last generation, particularly with housing. Median household county in my area is about $55,000 a year. The median price of a house is $450,000. Assuming two people, the 50th percentile wage is equivalent of $14/hour. (This as an eyeball looks pretty close to a median wage.) Fair market rent for a 2 bedroom apartment (40th percentile) is 1500, or 32% of income. If you let everyone get their own bedroom? For a below median two bedroom apartment, they will barely be able to afford the place. A 4 bedroom place is $2500, so you're going to get about 100 dollar discount, but that all gets wiped out if one of your roommates leaves and you can't find a replacement. The more people sharing a space, the more risk there is. It's tougher out there right now if you're not on an engineer's wage.
  - andrewaylett 2y ago
    There's nothing actually wrong with renting, if there's enough supply to stop profiteering by landlords. What's frustrating is when (as appears to be obnoxiously common in the UK) affordability requirements for mortgages mean someone "can't afford" to buy even when their mortgage payments would be less than their current rent. While the landlord probably has an interest-only mortgage and doesn't pay tax on their mortgage payments. Here's a thought: tax landlords based on their self-assessed property value, but make it so that the tenant has the right to buy the property for that amount.
- tantalor 2y ago
  You can't just ban them. Where there is profit to be made, they will find a way around any regulation. You have to change the structure of the market so they no longer see these investments as profitable. One way local areas do this is by "homestead tax exemption" which reduces property taxes if you live in your own home, but this is binary and punishes small landlords equally as big ones.
  - notatoad 2y ago
    > which reduces property taxes if you live in your own home My town is experimenting with allowing this exemption if anybody claims the address as their primary residence, whether it is the owner or not. The main purpose is to cut down on people keeping vacation homes, but it should also make things more expensive for flippers and speculators. Small landlords are no better than big ones if they’re keeping properties empty.
  - SoftTalker 2y ago
    Those taxes just get added to the rent charged.
    - chasebank 2y ago
      Indeed they would, however, the underlying asset value would drop to allow for market rents. That's the point.
      - pc86 2y ago
        In a free market, yes. But not when the demand is so artificially constrained. Rents go up and people are forced to either pay a higher percentage of their income to rent, or move farther away. Housing is not a free market by any stretch of the imagination, so if you just move one lever you don't always get the response you would in a true free market.
  - debacle 2y ago
    It's a complex problem. Some landlords are great, keep nice homes, and take care of the property. Some homeowners are absolute slobs, and don't take care of their properties. But, in general, "landlord" quality is considered the lowest level of effort/materials for maintenance. Once an area reaches a certain % of landlords (no idea the actual %, but it's low), it leads to a general decline of the neighborhood. These landlords are buying starter homes (apartments and houses) whether they are PE companies or individual landlords, driving up the cost of "cheap" housing.
- naltroc 2y ago
  can we please.
- Analemma_ 2y ago
  These PE firms specifically say in their SEC filings that the most credible threat to their business model is municipalities removing restrictive zoning regulation and allowing the natural rate of market-rate housing to be built (0, 1). You can foil their schemes and bankrupt them by electing officials who are pro-development. [0]: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001687229/a154763b-4e28-4de1-9162-82c542a50df5.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001687229/a154763..., "“We operate in markets with strong demand drivers, high barriers to entry, and high rent growth potential, primarily in the Western United States, Florida, and the Southeast United States.” [1]: https://www.sec.gov/Archives/edgar/data/1562401/000119312513247145/d547003ds11.htm https://www.sec.gov/Archives/edgar/data/1562401/000119312513..., "The continuing development of apartment buildings and condominium units in many of our target markets increases the supply of housing and exacerbates competition for tenants."
- rcpt 2y ago
  You do that by building enough houses to make housing unattractive to investment firms
  - codedokode 2y ago
    There is never enough houses, or they are located in the middle of nowhere thousand of kilometers from nearest subway station or supermarket.
    - alistairSH 2y ago
      You're assuming everybody wants/needs a single family with a yard. SFHs should be expensive and considered a luxury. At least in a desirable urban/suburban location. We could/should/must provide more housing in those desirable areas, but it likely should be a mix of high-rise, mid-rise, small apartment units (which could be owner-occupied or rentals), duplexes and triplexes, and row-homes/townhomes.
  - bunderbunder 2y ago
    Alternatively, we adjust the tax code to reflect the instinct that people should deserve to keep a larger percentage of money when they actually worked to earn it, and that income that's essentially free to people who already have lots of money should maybe be taxed at a higher rate. I realize this is a spicy take, but we've really got to get away from this thing where we advantage passive income for wealthy landowners. It didn't work out well for society in enlightenment-era France, it didn't work out well in Victorian England, it didn't work out well in Tsarist Russia, and I'm not convinced that removing birthright qualifications and primogeniture makes all that much more equitable in the modern USA than it did in any of those periods that we tend to look back on as being indefensibly elitist.
    - enriquec 2y ago
      Or stop stealing everyones money through inflation?
      - 2y ago
- hn72774 2y ago
  While we are at it, make it easier for mom-and-pop landlords to rent out their homes so that they can compete with the resources of PE firms. Too many renter protections where I live and the consensus is don't ever try to be a landlord here. One bad tenant/squatter can bankrupt you.
  - HeatrayEnjoyer 2y ago
    Let's find a solution that doesn't poke even more holes in what little social safety net the US has.
    - hn72774 2y ago
      One could argue that a owner of one single family home that could be turned into a rental loses out on the social safety net of diversified income and someday retirement, and is subsidising renters on the government's behalf. Most of us are a couple events of bad luck away from homelessness. Mon-and-pop landlords included.
- no_wizard 2y ago
  Land Value Tax[0] is the way. It strongly incentivizes the following: >The owner of a vacant lot in a thriving city must still pay a tax and would rationally perceive the property as a financial liability, encouraging them to put the land to use in order to cover the tax. LVT removes financial incentives to hold unused land solely for price appreciation, making more land available for productive uses. Land value tax creates an incentive to convert these sites to more intensive private uses or into public purposes. The entire purpose of a land value tax is to encourage the productive use of land, which boils down to either building stuff on it to make it more productive or selling it to someone else so they can largely do the same. Otherwise it is a simple tax burden to hold. While extremely wealthy individuals may choose to do this, its unlikely that businesses (like PE firms) are going to let their tax obligations stack over time and hold empty land / buildings etc. Same goes for individuals who are taxed at wildly different rates (like in California with Prop 13) simply based on time of sale [0]: https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
  - enriquec 2y ago
    This has already failed. The bay area is full of empty land and buildings owned by firms and a horrific housing situation. Doesn't stop the statists from proposing yet more tax for every single problem though.
    - kmeisthax 2y ago
      California doesn't count because they have a de-facto landed gentry. In 1978 they passed a ballot initiative[0] that locks in property tax rates until a home is sold or renovated. This was further amended[1] to allow generational transfers of those rates. The end result is an extreme disincentive to sell land and a class of homeowners with favorable tax treatment who want the state to be coated in amber. Any market intervention is useless without addressing the harms caused by the current property tax regime and the people who benefit from it. [0] https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13 [1] https://en.wikipedia.org/wiki/1978_California_Proposition_13#Amendments https://en.wikipedia.org/wiki/1978_California_Proposition_13...
kstrauser 2y ago
Getting rid of the law of supply and demand is like getting rid of Boyle’s law. Legislate whatever you want but the behavior those laws model will still exist. I prefer to think of it this way. I like my markets free as in GPL, not free as in BSD. That is, I want the market itself to be free with limitations on the participants that keep them from taking it for themselves.
- colechristensen 2y ago
  Uh, you're reading the wrong thing about it. Fixing supply and demand means things like punishing vacancies with taxation, promoting construction with tax breaks, and removing the demand by severely limiting rent seeking real estate investors.
  - kstrauser 2y ago
    Are you sure that’s what they meant? I’m completely on board with everything you describe (and liberating the market from the people monopolizing it for their own benefit). I’ve heard way too many people arguing that we should do away with supply/demand, as though it were a regulation we should repeal, and didn’t understand it as an inherent property of the system.
  - pchristensen 2y ago
    And promoting construction by making it legal to build housing. Probably the biggest, most direct action that could be taken.
    - kstrauser 2y ago
      Amen.
  - BeetleB 2y ago
    I follow the RE space, and have done some RE investments (albeit mild ones - I don't own homes to rent or anything like that). > punishing vacancies with taxation Outside of tourist spots, this will hurt more than it will help. Most RE investors lose money on vacancies (it's literally a line item in their expenses) and work hard not to have them. They definitely do not make more money by artificially limiting supply that way. I assume you're targeting rich folks who own multiple homes (and do not rent them)? They're what - less than 5% of all vacancies? Perhaps less than 1% in many cities? Almost everyone I know who purchases houses/apartments to rent them would get out of the business if vacancies were taxed - they operate these properties on a narrow margin - most of their "profit" is due to depreciation benefits and gaining equity from the payments the renters are making (and in a minority of cases, property value growth). It may sound like if they sell, that's a good thing (more people can buy their offloaded property), but a lot of houses would also go out of circulation, because these people often buy distressed homes that banks won't give a loan on - and they renovate them, bring them up to code, etc. I suppose if you could tax vacancies only for those that are not trying to rent them - sure. I'm on board. > promoting construction with tax breaks There are plenty of these, although it varies from location to location. But it's a pretty common RE investment strategy to go for these, as the tax savings can be very significant. People pool their money for a down payment on a construction loan (be it for an apartment complex or office building), build it, and are required to hold it for a number of years to get the tax breaks. Of late, the push has been in the other direction - states/cities are removing some of these tax breaks - not sure why - perhaps they weren't as effective as they thought? > and removing the demand by severely limiting rent seeking real estate investors. There are ways to do this that may not be popular. The main one would be to remove fixed interest mortgages. Most developed countries don't have them - that's why plenty of foreigners buy in the US market. Another is to allow property taxes to track actual property values (i.e. remove the cap on increase in property taxes). You can imagine how unpopular this will be for SF residents. Remove tax benefits like bonus depreciation or accelerated depreciation. Remove tax benefits that allow one to count RE losses against their W-2 income (it's tricky to do it, but possible for AirBnB investors). Basically, just remove most tax benefits :-) The majority of RE investors get in it for tax benefits, not appreciation, and not that much even for cash flow (cash flow is fairly pathetic in most cases - getting $200/mo is considered good).
NegativeLatency 2y ago
On the supply side Strong Towns is pretty interesting: https://www.strongtowns.org/housing https://www.strongtowns.org/housing
SoftTalker 2y ago
I live in a town where all the officials express politically popular laments about the affordability of housing, but every time a developer wants to build apartments or tear down some old run-down post-war cookie-cutter houses for modern duplexs or tri-levels these same officials run them through a gauntlet of demands and then often as not end up denying the permits. They say they want dense, walkable, core neighborhoods but when people actually try to build denser housing it's like pulling teeth. There actually is some building happening but the demand is so far ahead of the supply that it's not nearly enough.
- FireBeyond 2y ago
  > I live in a town where all the officials express politically popular laments about the affordability of housing, but every time a developer wants to build apartments or tear down some old run-down post-war cookie-cutter houses for modern duplexs or tri-levels these same officials run them through a gauntlet of demands and then often as not end up denying the permits. Hah, in my town, the developers and officials are all best friends, posts all over Facebook, going to each other's kids soccer and football games, going on vacation together, going out fishing together...
  - vipshek 2y ago
    Which state is your town located in, out of curiosity? I'm trying to build a mental rolodex of which states have towns that are development-friendly.
    - FireBeyond 2y ago
      Washington. But it also I think depends on which developer you are - seems like two developers here have 90%+ of the new developments.
- bilbo0s 2y ago
  That's not most municipalities though. There are a lot of places, particularly the high demand places, where the cost of acquiring the houses in the first place is the hang up. Everyone is certain they can get half a mil minimum. That drives costs considerably when you need 1/2 a block, or a full block for high density development. It's not easy. You could even have to end up giving the current land owners some preferential share of the finished development. Which, of course, means there's less profit for other potential partners at the end. People ask, why are apartments so expensive? In high demand areas, that's a big part of the reason. Land acquisition costs were so high that it precludes building anything that can offer that <USD3000 a month price tag. (And to be honest, that's not even all that affordable really. But it illustrates how the numbers on a lot of these new developments work out.) Usually the municipality or the state has to step in with some kind of break in order to make the numbers work out. And that's when we get to the step you're talking about where the state or the municipality demands this or that or the other. But the politicians have to demand something for the break, or it's seen as just having handed over taxpayer money to their buddies in construction. ie - corruption. So from beginning to end, it's a tough problem. EDIT: It seems before I even finished typing my message, sibling messages appeared illustrating the point I was making in the last paragraph. There is no way in today's environment of completely broken down professionalism and trust, that a politician can give a concession without getting something for his/her community that s/he can use as justification for the concession. Otherwise, people, rightly or wrongly, just see it as handing free money to a politician's friends.
HDThoreaun 2y ago
YIMBY policy was the biggest issue at the DNC. Most of stars spoke of it in their speech and it was part of the first policy speech Harris gave. Dems are at least acknowledging the issue, but the enumerated powers clause may make it difficult to enact federally. We need to get YIMBY politicians elected locally.
- deleted 2y ago
  [deleted]
chongli 2y ago
Yes, one way we could fix supply/demand is by scaling up the density of detached and semi-detached neighbourhoods. This means mandating narrow one-way streets (6m wide) and banning wide two-way streets (15m wide), forcing smaller front yards (reducing setback distances), eliminating garages and driveways in favour of street parking, allowing narrower properties and smaller homes overall. Furthermore, we should be allowing mixed use zoning so that small shops, restaurants, cafes, and bars can serve these neighbourhoods and promote a walkable lifestyle. These neighbourhoods can be served by light rail / street cars allowing more distant travel via rapid public transit, further reducing the need for cars. Look at a lot of the older neighbourhoods in big cities such as Riverdale in Toronto [1] to see what streetcar suburbs look like. [1] https://www.youtube.com/watch?v=MWsGBRdK2N0 https://www.youtube.com/watch?v=MWsGBRdK2N0
__loam 2y ago
We should build large numbers of commie blocks until PE firms regret buying residential properties.
- mullingitover 2y ago
  Better yet, we can just copy Singapore or Vienna's public housing systems and actually have desirable public housing. Arguably, the reason we don't already have this is because a large contingent of the voting public has been conditioned to believe that if the government does something well, it's communism, so the government should do anything well.
  - pc86 2y ago
    It's less a belief that the government shouldn't do anything well, and more a belief that it can't.
    - mullingitover 2y ago
      Right, and I'd argue that the belief that it can't do things well frequently comes from the government being deliberately handicapped by those who believe it should't do things well. For example crippling (or outright trying to destroy) the US Postal Service out of the belief (or vested interest) that private delivery companies shouldn't have to compete against a publicly subsidized service.
      - deleted 2y ago
        [deleted]
    - pchristensen 2y ago
      There are plenty of motivated actors that are terrified that the government will do a good job, and so they work to sabotage it so it won't be effective competition.
  - SpicyLemonZest 2y ago
    The reason we don't have it in the US is that many cities tried and failed to make it work in the 50s and 60s, to the point that we have a slang term "projects" memorializing the failure. Public housing can't be desirable unless it's safe, and it's not clear whether anyone knows how to run a crime-free public housing project in the US.
deleted 2y ago
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samstave 2y ago
>>Now that we're getting rid of centralized price controls / collusion >give me a dossier on BlackRock's holdings in real estate, go into detail on their holdings in residential, get as much real financial from their filings and reports. Give me a markdown table and an instaml/instaql schema for the data model * Blackrock would like a word https://i.imgur.com/PLwQ6sa.png https://i.imgur.com/PLwQ6sa.png https://i.imgur.com/1oAdbdC.png https://i.imgur.com/1oAdbdC.png https://i.imgur.com/nH0Vzf8.png https://i.imgur.com/nH0Vzf8.png Fund TotalAssets ResidentialAssets #units BRGIF $14.8B $10.3B 43,000+ units BREIT $12.2B $6.5B 25,000+ units BREIT II $8.5B $4.8B 18,000+ units
- SpicyLemonZest 2y ago
  You and what I assume is your AI companion are victims of some viral misinformation about BlackRock. BREIT and BREIT II are managed by an unrelated company named Blackstone - the fund names in your third image are incorrect. BRGIF does not, as far as I can tell, exist at all.
  - samstave 2y ago
    Do you know the history behind both BlackRock and BlackStone? Same DNA: >>he business that would become BlackRock started under the umbrella of Schwarzman’s firm in 1988. “They used to be called Blackstone Financial,” Schwarzman said. “We started in business together. We put up the initial capital.” Schwarzman started Blackstone three years earlier in 1985. >>When Fink decided to branch out on his own, he needed a new name for his asset management operation, Schwarzman said. “Larry and I were sitting down and he said, ‘What do you think sort of about having a family name with “black” in it.’” Thanks for the input though - I am working on figuring out how to document all these entanglements - there are a lot of others also attempting to do so, if you have any links to such, I appreciate real data that I can trust (I am mapping out The Oligarchs, their entanglements, and what/who they are/actually own.)
- gruez 2y ago
  >43,000+ units That... seems like a drop in the bucket in terms of housing supply?

I am excited and optimistic that we appear to be applying economic principles to housing! Now that we're getting rid of centralized price controls / collusion, next can we do supply/demand?

pstuart 2y ago

On the demand side it would be nice to keep PE firms from hoovering up all the single family homes. https://www.thesling.org/are-hedge-funds-and-private-equity-firms-driving-up-the-cost-of-housing-2/ https://www.thesling.org/are-hedge-funds-and-private-equity-...

candiddevmike 2y ago
Would be interesting to see what would happen if renters had the option to buy the underlying property/unit somehow after being a tenant for a certain time. The goal should be ownership for folks who want it, not a nation of renters.
- Loughla 2y ago
  You can rent your home with x% profit, but after x # of years the home sells to the renter. I like it but that seems like a system VERY susceptible to abuse.
  - mcmcmc 2y ago
    You can bet landlords would be doing everything possible to force renters out just before the purchase window comes open.
    - gs17 2y ago
      That's definitely an issue, even if constructive evictions can be prevented, landlords would also have to be forced to renew leases (at limited rent increases).
  - bilbo0s 2y ago
    One small catch, maybe even a constitutional hold up? It's not really your home if you are obliged to sell it after x years. The traditional societal compact with private property is that the property is yours for as long as you choose to keep it. (Providing you pay the taxes covering the costs to provide municipal services to your property.) This kind of changes that, and I'm not sure it would stand up to constitutional scrutiny?
    - candiddevmike 2y ago
      No one is forcing you to rent it
      - bilbo0s 2y ago
        Again, traditionally, renting your property on terms an owner unilaterally determines was seen as a right of owning private property. Provided you're able to find a renter who agrees to your terms, and provided your terms are legal, you were allowed to rent your property, again, forever. For instance, it was perfectly legal to rent your apartments for USD1500 per month, and at the same time, allow your kid to stay in one of the apartments for free and give a USD500 a month break to a long term renter who maybe lost his job. It was your property, so whatever terms you had with each renter was very much considered to be your business. (Again, within the bounds of legality. You can't be asking for a cut of the drugs dealt out of your apartment as a condition for instance.) Unless I'm misunderstanding the proposal, this would change that practice. You would be told how much you could rent the property for, as well as the date you would need to sell the property. (Which, I'm guessing, would be based on the rent amount?) So a radical change from before in terms of private property rights.
  - pc86 2y ago
    Forcing people to sell private property against their will is generally a pretty bad economic policy.
- SoftTalker 2y ago
  All they have to do is offer the owner an adequate price.
  - duped 2y ago
    The problem is they can't give the owner an adequate price when they're paying for the owner to grow more equity in the property while also needing to save at a faster rate to afford a downpayment on a mortgage.
    - SoftTalker 2y ago
      Then they are renting something they can't afford, if ownership is their goal. When I was saving for my first house I lived in a crappy little 1 bedroom apartment for a few years so that I could get a down payment together. I had the income to afford renting a larger apartment or a house in a nicer area but I would not have been able to save anything.
      - duped 2y ago
        That's a very different situation than the one you initially replied to. It's also not something everyone can do.
      - ebiester 2y ago
        When was this? Have you paid attention to the percentage of wages required for a unit nationally? In your area?
        JumpCrisscross 2y ago
        > Have you paid attention to the percentage of wages required for a unit nationally? In your area? Roommates.
        ebiester 2y ago
        I too had roommates coming up. People today have roommates coming up. That doesn't change the fact that even with roommates, the burden is disproportionately higher than it was for the last generation, particularly with housing. Median household county in my area is about $55,000 a year. The median price of a house is $450,000. Assuming two people, the 50th percentile wage is equivalent of $14/hour. (This as an eyeball looks pretty close to a median wage.) Fair market rent for a 2 bedroom apartment (40th percentile) is 1500, or 32% of income. If you let everyone get their own bedroom? For a below median two bedroom apartment, they will barely be able to afford the place. A 4 bedroom place is $2500, so you're going to get about 100 dollar discount, but that all gets wiped out if one of your roommates leaves and you can't find a replacement. The more people sharing a space, the more risk there is. It's tougher out there right now if you're not on an engineer's wage.
- andrewaylett 2y ago
  There's nothing actually wrong with renting, if there's enough supply to stop profiteering by landlords. What's frustrating is when (as appears to be obnoxiously common in the UK) affordability requirements for mortgages mean someone "can't afford" to buy even when their mortgage payments would be less than their current rent. While the landlord probably has an interest-only mortgage and doesn't pay tax on their mortgage payments. Here's a thought: tax landlords based on their self-assessed property value, but make it so that the tenant has the right to buy the property for that amount.
tantalor 2y ago
You can't just ban them. Where there is profit to be made, they will find a way around any regulation. You have to change the structure of the market so they no longer see these investments as profitable. One way local areas do this is by "homestead tax exemption" which reduces property taxes if you live in your own home, but this is binary and punishes small landlords equally as big ones.
- notatoad 2y ago
  > which reduces property taxes if you live in your own home My town is experimenting with allowing this exemption if anybody claims the address as their primary residence, whether it is the owner or not. The main purpose is to cut down on people keeping vacation homes, but it should also make things more expensive for flippers and speculators. Small landlords are no better than big ones if they’re keeping properties empty.
- SoftTalker 2y ago
  Those taxes just get added to the rent charged.
  - chasebank 2y ago
    Indeed they would, however, the underlying asset value would drop to allow for market rents. That's the point.
    - pc86 2y ago
      In a free market, yes. But not when the demand is so artificially constrained. Rents go up and people are forced to either pay a higher percentage of their income to rent, or move farther away. Housing is not a free market by any stretch of the imagination, so if you just move one lever you don't always get the response you would in a true free market.
- debacle 2y ago
  It's a complex problem. Some landlords are great, keep nice homes, and take care of the property. Some homeowners are absolute slobs, and don't take care of their properties. But, in general, "landlord" quality is considered the lowest level of effort/materials for maintenance. Once an area reaches a certain % of landlords (no idea the actual %, but it's low), it leads to a general decline of the neighborhood. These landlords are buying starter homes (apartments and houses) whether they are PE companies or individual landlords, driving up the cost of "cheap" housing.
naltroc 2y ago
can we please.
Analemma_ 2y ago
These PE firms specifically say in their SEC filings that the most credible threat to their business model is municipalities removing restrictive zoning regulation and allowing the natural rate of market-rate housing to be built (0, 1). You can foil their schemes and bankrupt them by electing officials who are pro-development. [0]: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001687229/a154763b-4e28-4de1-9162-82c542a50df5.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001687229/a154763..., "“We operate in markets with strong demand drivers, high barriers to entry, and high rent growth potential, primarily in the Western United States, Florida, and the Southeast United States.” [1]: https://www.sec.gov/Archives/edgar/data/1562401/000119312513247145/d547003ds11.htm https://www.sec.gov/Archives/edgar/data/1562401/000119312513..., "The continuing development of apartment buildings and condominium units in many of our target markets increases the supply of housing and exacerbates competition for tenants."
rcpt 2y ago
You do that by building enough houses to make housing unattractive to investment firms
- codedokode 2y ago
  There is never enough houses, or they are located in the middle of nowhere thousand of kilometers from nearest subway station or supermarket.
  - alistairSH 2y ago
    You're assuming everybody wants/needs a single family with a yard. SFHs should be expensive and considered a luxury. At least in a desirable urban/suburban location. We could/should/must provide more housing in those desirable areas, but it likely should be a mix of high-rise, mid-rise, small apartment units (which could be owner-occupied or rentals), duplexes and triplexes, and row-homes/townhomes.
- bunderbunder 2y ago
  Alternatively, we adjust the tax code to reflect the instinct that people should deserve to keep a larger percentage of money when they actually worked to earn it, and that income that's essentially free to people who already have lots of money should maybe be taxed at a higher rate. I realize this is a spicy take, but we've really got to get away from this thing where we advantage passive income for wealthy landowners. It didn't work out well for society in enlightenment-era France, it didn't work out well in Victorian England, it didn't work out well in Tsarist Russia, and I'm not convinced that removing birthright qualifications and primogeniture makes all that much more equitable in the modern USA than it did in any of those periods that we tend to look back on as being indefensibly elitist.
  - enriquec 2y ago
    Or stop stealing everyones money through inflation?
    - 2y ago
hn72774 2y ago
While we are at it, make it easier for mom-and-pop landlords to rent out their homes so that they can compete with the resources of PE firms. Too many renter protections where I live and the consensus is don't ever try to be a landlord here. One bad tenant/squatter can bankrupt you.
- HeatrayEnjoyer 2y ago
  Let's find a solution that doesn't poke even more holes in what little social safety net the US has.
  - hn72774 2y ago
    One could argue that a owner of one single family home that could be turned into a rental loses out on the social safety net of diversified income and someday retirement, and is subsidising renters on the government's behalf. Most of us are a couple events of bad luck away from homelessness. Mon-and-pop landlords included.
no_wizard 2y ago
Land Value Tax[0] is the way. It strongly incentivizes the following: >The owner of a vacant lot in a thriving city must still pay a tax and would rationally perceive the property as a financial liability, encouraging them to put the land to use in order to cover the tax. LVT removes financial incentives to hold unused land solely for price appreciation, making more land available for productive uses. Land value tax creates an incentive to convert these sites to more intensive private uses or into public purposes. The entire purpose of a land value tax is to encourage the productive use of land, which boils down to either building stuff on it to make it more productive or selling it to someone else so they can largely do the same. Otherwise it is a simple tax burden to hold. While extremely wealthy individuals may choose to do this, its unlikely that businesses (like PE firms) are going to let their tax obligations stack over time and hold empty land / buildings etc. Same goes for individuals who are taxed at wildly different rates (like in California with Prop 13) simply based on time of sale [0]: https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
- enriquec 2y ago
  This has already failed. The bay area is full of empty land and buildings owned by firms and a horrific housing situation. Doesn't stop the statists from proposing yet more tax for every single problem though.
  - kmeisthax 2y ago
    California doesn't count because they have a de-facto landed gentry. In 1978 they passed a ballot initiative[0] that locks in property tax rates until a home is sold or renovated. This was further amended[1] to allow generational transfers of those rates. The end result is an extreme disincentive to sell land and a class of homeowners with favorable tax treatment who want the state to be coated in amber. Any market intervention is useless without addressing the harms caused by the current property tax regime and the people who benefit from it. [0] https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13 [1] https://en.wikipedia.org/wiki/1978_California_Proposition_13#Amendments https://en.wikipedia.org/wiki/1978_California_Proposition_13...

kstrauser 2y ago

Getting rid of the law of supply and demand is like getting rid of Boyle’s law. Legislate whatever you want but the behavior those laws model will still exist. I prefer to think of it this way. I like my markets free as in GPL, not free as in BSD. That is, I want the market itself to be free with limitations on the participants that keep them from taking it for themselves.

colechristensen 2y ago
Uh, you're reading the wrong thing about it. Fixing supply and demand means things like punishing vacancies with taxation, promoting construction with tax breaks, and removing the demand by severely limiting rent seeking real estate investors.
- kstrauser 2y ago
  Are you sure that’s what they meant? I’m completely on board with everything you describe (and liberating the market from the people monopolizing it for their own benefit). I’ve heard way too many people arguing that we should do away with supply/demand, as though it were a regulation we should repeal, and didn’t understand it as an inherent property of the system.
- pchristensen 2y ago
  And promoting construction by making it legal to build housing. Probably the biggest, most direct action that could be taken.
  - kstrauser 2y ago
    Amen.
- BeetleB 2y ago
  I follow the RE space, and have done some RE investments (albeit mild ones - I don't own homes to rent or anything like that). > punishing vacancies with taxation Outside of tourist spots, this will hurt more than it will help. Most RE investors lose money on vacancies (it's literally a line item in their expenses) and work hard not to have them. They definitely do not make more money by artificially limiting supply that way. I assume you're targeting rich folks who own multiple homes (and do not rent them)? They're what - less than 5% of all vacancies? Perhaps less than 1% in many cities? Almost everyone I know who purchases houses/apartments to rent them would get out of the business if vacancies were taxed - they operate these properties on a narrow margin - most of their "profit" is due to depreciation benefits and gaining equity from the payments the renters are making (and in a minority of cases, property value growth). It may sound like if they sell, that's a good thing (more people can buy their offloaded property), but a lot of houses would also go out of circulation, because these people often buy distressed homes that banks won't give a loan on - and they renovate them, bring them up to code, etc. I suppose if you could tax vacancies only for those that are not trying to rent them - sure. I'm on board. > promoting construction with tax breaks There are plenty of these, although it varies from location to location. But it's a pretty common RE investment strategy to go for these, as the tax savings can be very significant. People pool their money for a down payment on a construction loan (be it for an apartment complex or office building), build it, and are required to hold it for a number of years to get the tax breaks. Of late, the push has been in the other direction - states/cities are removing some of these tax breaks - not sure why - perhaps they weren't as effective as they thought? > and removing the demand by severely limiting rent seeking real estate investors. There are ways to do this that may not be popular. The main one would be to remove fixed interest mortgages. Most developed countries don't have them - that's why plenty of foreigners buy in the US market. Another is to allow property taxes to track actual property values (i.e. remove the cap on increase in property taxes). You can imagine how unpopular this will be for SF residents. Remove tax benefits like bonus depreciation or accelerated depreciation. Remove tax benefits that allow one to count RE losses against their W-2 income (it's tricky to do it, but possible for AirBnB investors). Basically, just remove most tax benefits :-) The majority of RE investors get in it for tax benefits, not appreciation, and not that much even for cash flow (cash flow is fairly pathetic in most cases - getting $200/mo is considered good).

NegativeLatency 2y ago

On the supply side Strong Towns is pretty interesting: https://www.strongtowns.org/housing https://www.strongtowns.org/housing

SoftTalker 2y ago

I live in a town where all the officials express politically popular laments about the affordability of housing, but every time a developer wants to build apartments or tear down some old run-down post-war cookie-cutter houses for modern duplexs or tri-levels these same officials run them through a gauntlet of demands and then often as not end up denying the permits. They say they want dense, walkable, core neighborhoods but when people actually try to build denser housing it's like pulling teeth. There actually is some building happening but the demand is so far ahead of the supply that it's not nearly enough.

FireBeyond 2y ago
> I live in a town where all the officials express politically popular laments about the affordability of housing, but every time a developer wants to build apartments or tear down some old run-down post-war cookie-cutter houses for modern duplexs or tri-levels these same officials run them through a gauntlet of demands and then often as not end up denying the permits. Hah, in my town, the developers and officials are all best friends, posts all over Facebook, going to each other's kids soccer and football games, going on vacation together, going out fishing together...
- vipshek 2y ago
  Which state is your town located in, out of curiosity? I'm trying to build a mental rolodex of which states have towns that are development-friendly.
  - FireBeyond 2y ago
    Washington. But it also I think depends on which developer you are - seems like two developers here have 90%+ of the new developments.
bilbo0s 2y ago
That's not most municipalities though. There are a lot of places, particularly the high demand places, where the cost of acquiring the houses in the first place is the hang up. Everyone is certain they can get half a mil minimum. That drives costs considerably when you need 1/2 a block, or a full block for high density development. It's not easy. You could even have to end up giving the current land owners some preferential share of the finished development. Which, of course, means there's less profit for other potential partners at the end. People ask, why are apartments so expensive? In high demand areas, that's a big part of the reason. Land acquisition costs were so high that it precludes building anything that can offer that <USD3000 a month price tag. (And to be honest, that's not even all that affordable really. But it illustrates how the numbers on a lot of these new developments work out.) Usually the municipality or the state has to step in with some kind of break in order to make the numbers work out. And that's when we get to the step you're talking about where the state or the municipality demands this or that or the other. But the politicians have to demand something for the break, or it's seen as just having handed over taxpayer money to their buddies in construction. ie - corruption. So from beginning to end, it's a tough problem. EDIT: It seems before I even finished typing my message, sibling messages appeared illustrating the point I was making in the last paragraph. There is no way in today's environment of completely broken down professionalism and trust, that a politician can give a concession without getting something for his/her community that s/he can use as justification for the concession. Otherwise, people, rightly or wrongly, just see it as handing free money to a politician's friends.

HDThoreaun 2y ago

YIMBY policy was the biggest issue at the DNC. Most of stars spoke of it in their speech and it was part of the first policy speech Harris gave. Dems are at least acknowledging the issue, but the enumerated powers clause may make it difficult to enact federally. We need to get YIMBY politicians elected locally.

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chongli 2y ago

Yes, one way we could fix supply/demand is by scaling up the density of detached and semi-detached neighbourhoods. This means mandating narrow one-way streets (6m wide) and banning wide two-way streets (15m wide), forcing smaller front yards (reducing setback distances), eliminating garages and driveways in favour of street parking, allowing narrower properties and smaller homes overall. Furthermore, we should be allowing mixed use zoning so that small shops, restaurants, cafes, and bars can serve these neighbourhoods and promote a walkable lifestyle. These neighbourhoods can be served by light rail / street cars allowing more distant travel via rapid public transit, further reducing the need for cars. Look at a lot of the older neighbourhoods in big cities such as Riverdale in Toronto [1] to see what streetcar suburbs look like. [1] https://www.youtube.com/watch?v=MWsGBRdK2N0 https://www.youtube.com/watch?v=MWsGBRdK2N0

__loam 2y ago

We should build large numbers of commie blocks until PE firms regret buying residential properties.

mullingitover 2y ago
Better yet, we can just copy Singapore or Vienna's public housing systems and actually have desirable public housing. Arguably, the reason we don't already have this is because a large contingent of the voting public has been conditioned to believe that if the government does something well, it's communism, so the government should do anything well.
- pc86 2y ago
  It's less a belief that the government shouldn't do anything well, and more a belief that it can't.
  - mullingitover 2y ago
    Right, and I'd argue that the belief that it can't do things well frequently comes from the government being deliberately handicapped by those who believe it should't do things well. For example crippling (or outright trying to destroy) the US Postal Service out of the belief (or vested interest) that private delivery companies shouldn't have to compete against a publicly subsidized service.
    - deleted 2y ago
      [deleted]
  - pchristensen 2y ago
    There are plenty of motivated actors that are terrified that the government will do a good job, and so they work to sabotage it so it won't be effective competition.
- SpicyLemonZest 2y ago
  The reason we don't have it in the US is that many cities tried and failed to make it work in the 50s and 60s, to the point that we have a slang term "projects" memorializing the failure. Public housing can't be desirable unless it's safe, and it's not clear whether anyone knows how to run a crime-free public housing project in the US.

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samstave 2y ago

>>Now that we're getting rid of centralized price controls / collusion >give me a dossier on BlackRock's holdings in real estate, go into detail on their holdings in residential, get as much real financial from their filings and reports. Give me a markdown table and an instaml/instaql schema for the data model * Blackrock would like a word https://i.imgur.com/PLwQ6sa.png https://i.imgur.com/PLwQ6sa.png https://i.imgur.com/1oAdbdC.png https://i.imgur.com/1oAdbdC.png https://i.imgur.com/nH0Vzf8.png https://i.imgur.com/nH0Vzf8.png Fund TotalAssets ResidentialAssets #units BRGIF $14.8B $10.3B 43,000+ units BREIT $12.2B $6.5B 25,000+ units BREIT II $8.5B $4.8B 18,000+ units

SpicyLemonZest 2y ago
You and what I assume is your AI companion are victims of some viral misinformation about BlackRock. BREIT and BREIT II are managed by an unrelated company named Blackstone - the fund names in your third image are incorrect. BRGIF does not, as far as I can tell, exist at all.
- samstave 2y ago
  Do you know the history behind both BlackRock and BlackStone? Same DNA: >>he business that would become BlackRock started under the umbrella of Schwarzman’s firm in 1988. “They used to be called Blackstone Financial,” Schwarzman said. “We started in business together. We put up the initial capital.” Schwarzman started Blackstone three years earlier in 1985. >>When Fink decided to branch out on his own, he needed a new name for his asset management operation, Schwarzman said. “Larry and I were sitting down and he said, ‘What do you think sort of about having a family name with “black” in it.’” Thanks for the input though - I am working on figuring out how to document all these entanglements - there are a lot of others also attempting to do so, if you have any links to such, I appreciate real data that I can trust (I am mapping out The Oligarchs, their entanglements, and what/who they are/actually own.)
gruez 2y ago
>43,000+ units That... seems like a drop in the bucket in terms of housing supply?