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Feels like non news. Or at least, a continuation of existing trends. We don't build enough housing, so housing becomes a good investment, eventually pricing ou

• deleted 1y ago
  [deleted]
• bix6 1y ago
  And no replacement births.
  • bee_rider 1y ago
    On the bright side, the folks who bought houses as investments might see that investment collapse along with the population.
• dymk 1y ago
  “Private equity firms should not be allowed to own all the land” isn’t a particularly radical policy proposal
  • WalterBright 1y ago
    Distorting markets like that tend to have unforeseen deleterious side effects that just make things worse. For example: rent control
    • zefhous 1y ago
      How one defines “distorting markets” is an important question when it comes to defining policy, and not an un-contentious one.
    • Avicebron 1y ago
      "Markets" exist because they are a thing people find useful. If people can't afford shelter and participate in the "market" of leveraging property because they are being pushed out by a soulless outgrowth of "line go up" thinking, then the "market" has failed and needs to be fixed until it is useful for people again.
      • derektank 1y ago
        It's not the fault of private capital firms that local governments have essentially outlawed building new homes in many areas. The solution should be focused on restricting the ability of localities to do this, not restricting the ability of companies to buy real estate.
        • Avicebron 1y ago
          > It's not the fault of private capital firms Which doesn't really matter because they don't need to be "protected" in any capacity. Removing their ability to purchase those homes, and letting it get sorted between the people who are "outlawing building homes" and those who want to move there makes more sense.
          • WalterBright 1y ago
            Deciding who gets to buy what is known as central economic planning. It doesn't have a good track record. In this case, by restricting who can buy, you're reducing the demand for housing. Less demand means lower prices. Lower prices mean fewer homes will be built, meaning less supply. A better scheme would be to lower the costs of home construction by reducing regulations and taxes on them.
        • xphos 1y ago
          Yeah I agree with this here. Its simply to hard to build housing and the number permits and zoning restrictions have lead to localized housing shortages where people want to live. Its simply a difficult poltical issue to solve because most of the time zoning is handled at the local level and old people who have houses attend town hall meetings where zoning is discussed (if seldomly ever). Homeowners who have treated housing as a speculative centeralized asset have little to gain in allowing the market fixing itself.
    • hooverd 1y ago
      rent control is good actually combined with robust building
      • deleted 1y ago
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      • amanaplanacanal 1y ago
        Rent control has a tendency to kill robust building.
    • thrance 1y ago
      So basically remove all regulations and everything will fix itself automatically? This kind of wishful thinking is ludicrous, and it's insane how common it is. Markets have issues that need to be addressed through regulations, unless we want a return to the Gilded Age.
      • WalterBright 1y ago
        > So basically remove all regulations and everything will fix itself automatically? I didn't say that. I said "rent control". And yes, remove all regulations on rent. > unless we want a return to the Gilded Age The Gilded Age was a time of great prosperity in the US.
        • dragonwriter 1y ago
          > The Gilded Age was a time of great prosperity in the US. In aggregate, sure. (At least compared to times prior.) How the prosperity was distributed, OTOH...
          • WalterBright 1y ago
            Wealth isn't "distributed" in a free market. People work and invest to get money in exchange. Consider Jeff Bezos. He was roundly criticized for the profligacy of spending $80 million for his wedding. But look at it another way. He spread the wealth around by paying artisans, workers, craftsmen, photographers, travel agents, hotels, restaurateurs, etc.
            • dragonwriter 1y ago
              > Wealth isn't "distributed" in a free market. Wealth has a distribution in any economy, and the actual distribution is a consequence of the economic system which itself is the aggregate of specific policy decisions.
            • TFYS 1y ago
              Those people could have been doing something more useful with their time if Bezos hadn't bought them. Because Bezos has such an obscene amount of wealth, he can outpay any other cause that people would want to pay for. Those craftsmen and workers could have built a farm and a school, but because the people that need those don't have the kind of money Bezos does, they used their time to entertain Bezos and his friends for a couple of days instead.
    • dymk 1y ago
      Well, what we have right now obviously isn’t working. So what’s your proposal?
      • WalterBright 1y ago
        Return to free markets in housing.
        • anigbrowl 1y ago
          Got anything more specific than cliches? For example, do you have any examples of this demonstrably making housing more affordable (ie lowering housing costs as a percentage of income) at scale?
          • WalterBright 1y ago
            Rent control making creating more rental units unprofitable. Zoning laws that prevent housing density.
            • TFYS 1y ago
              Those are the result of a free market. Zoning laws are the results of participants in a free market protecting their investments. Even in the absence of a government (if functioning markets could exist in such an environment) with which to create such laws, people would find other ways to do it. Rent control comes after rents in the free market have already increased to the point where people create political pressure to make these policies (if it's not the result of lobbying by investors). You could temporarily make the situation better by getting rid of these laws and regulations, but over time they would just come back because in a free market the players that get such policies implemented get richer and win.
            • anigbrowl 1y ago
              I asked you for examples of market deregulation making housing more affordable at scale. I am not interested in your assertions about how the market works, but empirical data of your proposals leading to improved outcomes. Apparently you don't have any.
    • anigbrowl 1y ago
      “Ground rents are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Ground rents are, therefore, perhaps a species of revenue which best bear to have a particular tax imposed upon them.” “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed and demand a rent even for its natural produce.” “A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground.” “The sea in the neighbourhood of the islands of Shetland is more than commonly abundant in fish, which make a great part of the subsistence of the inhabitants. But in order to profit by the produce of the water, they must have a habitation upon the neighbouring land. The rent of the landlord is in proportion, not to what he can make by the land, but to what he can make both by the land and water. It is partly paid in sea-fish.” Karl MArx? No, Adam Smith.
  • MBCook 1y ago
    There’s nothing wrong with investing by buying homes. Just pay a 75% tax when you do. If you can find places to make money with those taxes, have at it. But you’ll stop messing with normal people’s attempts to buy a house for the most part.
    • peab 1y ago
      Yeah, we definitely still need homes to be available for rent. If you move a lot, or want to be able to move easily and explore different cities or even neighborhoods within a city, renting is way easier than if you'd have to go through the hassle of buying. What sucks is when private companies start owning too many houses and they have unfair advantages over regular folks. For example, they have teams of lawyers.
      • deleted 1y ago
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      • MBCook 1y ago
        I was suggesting that as a way to prevent purchasing homes to resell for more money. I actually meant it as a tax on the profits from a sale of a house. I completely agree, we need homes for rent at reasonable rates. But I forgot that a lot of the homes that were purchased for investing were purchased to rent out. A 75% tax on the profits from sale wouldn’t help. If it’s 75% on all profits, including rental income, it’ll destroy the rental market. I can’t think of a decent answer off the top of my head. My suggestion was glib, but it was meant for the pretty easy case of just flipping. Trying to control how many houses are purchased versus rented, and how you determine a reasonable rent or prevent that from being abused, is a lot harder.
        • peab 1y ago
          I think there are a few solutions. Having a property tax that goes higher the more properties you have would be a good one (it could be exempt for bigger apartment blocs if that was an issue)
      • burnt-resistor 1y ago
  • CBLT 1y ago
    That's the desired outcome. What's the policy proposal?
    • deleted 1y ago
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    • dymk 1y ago
      Disallowing companies from owning residential housing would be a start
    • StanislavPetrov 1y ago
      How about we start with no home-based deductions for corporations. The means depreciation, vacancy, any sort of loss is not tax deductible for a corporation. If a corporation owns 100 homes, it may cost them nothing (or close to nothing) to keep 10 (or more) of those homes vacant, because they can simply deduct the costs from those vacant homes from the massive profits they are reaping on the other 90 and lower their tax burden. The average person who owns a second home for rental purposes is highly motivated to get that home rented out, even if it means lowering the rent to attract a renter, because it can be financially ruinous to pay for the taxes and an upkeep if it stays empty.
  • alright2565 1y ago
    > Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85% of all investor-owned residential properties, while those with between 6 and 10 properties account for another 5%.
    • blindriver 1y ago
      1 home qualifies you as an invrestor? So I’m an investor? That definition is whacked it should be at least 2 homes.
      • jodrellblank 1y ago
        “I own no homes, and am buying a home” “I own one home, and am buying a house” “That makes you an investor” “No that’s whack. When I buy a third - buying while owning two - then I will be an investor” You have an off-by-one error.
        • selimthegrim 1y ago
          I own no homes, and must scream.
        • potato3732842 1y ago
          [flagged]
          • phil21 1y ago
            These stats are tracking folks who buy a second property intended as an investment - typically renting it out but not always. You’re not a mom and pop landlord if you’re just buying a second home to move into with intent to sell your current one.
            • potato3732842 1y ago
              >You’re not a mom and pop landlord if you’re just buying a second home to move into with intent to sell your current one. That's my point. The person I'm replying to is being obtuse and sarcastically arguing that the investor criteria requires owning 3+ as an attempt to use absurdity to force people to admit that 2+ makes you an "investor" thereby classifying the people who are simply swapping homes like you stated as "investors".
  • freddie_mercury 1y ago
    Why not? Are PE firms worse landlords than mom-and-pop landlords?
    • paulryanrogers 1y ago
      Moderned, industrialized PE? Absolutely worse, yes.
    • GuinansEyebrows 1y ago
      i wish we could think bigger than the lesser of two evils.
  • conradev 1y ago
    Yep, pass that, free up a few percentage points of inventory, good wealth transfer to the rest of existing entrenched investor base. They might even come leased!
  • darth_avocado 1y ago
    If you want cash poor people to compete with cash rich private equity in the housing market without banning PE completely, you need to make it cheaper for cash poor people to borrow money. That too isn’t a particularly radical policy proposal. A lot of countries across the world do it with positive outcomes.
    • physicles 1y ago
      Didn’t we do that in the lead up to the 2008 financial crisis? Remember NINJA loans?
      • 3rdDeviation 1y ago
        You could go the other direction -increasing the borrowing cost of purchasing a home for investment to ensure that borrowers with less capital can still afford homes in the same market. As a hypothetical, you could tax their purchase at the same rate at which they're borrowing and use the funds to back loan guarantees for new/lower income purchasers. The point is to impair the ROI for multi-home purchasers without limiting upside in the market.
      • darth_avocado 1y ago
        NINJA loans were loans for people with no income and no jobs. What I’m proposing is cheaper access to cash for first time homebuyers. You’d still have to be credit worthy.
  • anigbrowl 1y ago
    Even Adam Smith fulminated against landlords, who he saw as parasitical free riders.
  • dietr1ch 1y ago
    Private equity shouldn't be able to own housing. It should be like new highways and tolls, you get to charge until you make up for your investment, but then people who live there or the government should own it. Want to keep your toll business? Build more housing.
    • hollerith 1y ago
      I have a different take. I feel housing is important enough that the government (i.e., the voters) shouldn't be able to interfere in the market for it, e.g., shouldn't be able to restrict who can buy and who can sell a house or apartment building.
      • dietr1ch 1y ago
        If it's so important, then my take is that the government should step in and make sure it happens and in some orderly way. Cost cutting in my town for profits that go away just drains the local's pockets. If you want free market rules to apply, then profits going out of the town/city should be taxed harder to promote local businesses and community.
        • hollerith 1y ago
          If there are people that cannot afford housing, I would prefer for the government to give those people money rather than interfering with the resource-allocation system on which everyone relies. Prohibiting certain kinds of investors from investing in housing would be an example of interfering.
          • dietr1ch 1y ago
            > Prohibiting certain kinds of investors from investing in housing would be an example of interfering. Note that I did not propose forbidding investment, just having rules to help make sure final ownership ends in people (who ideally live there and don't own other 10+ homes). I'm just making sure that investments don't fuel a system where regular people can't own, but only rent forever, paying past the investment and a healthy interest for their lending, planning and doing service. Why do road and other infrastructure investments can get these limited profit kind of terms for governments, but housing can't get similar ones for the people?
  • deleted 1y ago
    [deleted]
  • burnt-resistor 1y ago
    Americans hear any limitations on greed or anything that would benefit society as "communism".
• patcon 1y ago
  Yes, more radical policy proposals are my expectation too. When the status quo is already extreme (re: property ownership), the appropriate response will seem even MORE extreme because we've gotten used to that opposite one.
• hristov 1y ago
  The fact that it is a continuation of existing trends does not mean we should treat it as a non story and not take note of it.
  • cumbotron 1y ago
    This is a very important thing to point out. So often, issues that affect normal people negatively are only afforded a little bit of coverage once in a while. If the trend persists and it is still negatively affecting the citizenship, it deserves to be in the news.
  • scoofy 1y ago
    If you understand the underlying reasons for why an investor would buy an actively depreciating asset, then you understand why OP suggests--correctly in my opinion--that this is a non-story. We have a housing shortage. As long as it looks like the shortage will continue, investors--people--will buy depreciating assets in the hopes that population growth will cause them to be worth more tomorrow than they are today. If it's not Private Equity, it'll be rental companies. If it's not rental companies, it'll be mom & pop landlords. If it's not mom & pop landlords, it'll be people looking for a second home or pied-a-terre with upside potential. The problem is the perpetual shortage clearly indicating increasing economic rents, instead of a trend toward the cost of production. This is a housing crisis but most Americans are treating it like a housing whoopsie. We treat it with kid gloves, where we fight about the "correct" way to build just enough housing, in just the right places, instead of pointing a firehouse of development incentives, to the point of literally subsidizing private development and public development. It's basic economics, but our electorate will tie itself in knots to make the housing crisis fit their niche political narrative.
    • burnt-resistor 1y ago
      Besides not enough new inventory in some areas, one major problem is allowing excessive housing hoarding and not taxing it enough to reduce gamification conditions leading to absurd exploitation. It needs much more regulation and increased progressive taxation for people/orgs who monopolize empty houses simply as speculative "investment" financial chicanery.
• dylan604 1y ago
  And yet just a couple of days ago, HN threads were saying the opposite that stories about non-private ownership was essentially FUD.
• 7e 1y ago
  The problem isn’t a lack of housing, it’s a lot of breeding. US population has doubled since 1950. It quadrupled since 1900. As long as people keep having babies in excess of the replacement rate, housing will always be good investment. They don’t make any more land, and the earth is, frankly, full.
  • derektank 1y ago
    The US birth rate hasn't exceeded the replacement rate since the 1970s
    • lazide 1y ago
      With immigration though, it definitely has.
      • Supermancho 1y ago
        > The problem isn’t a lack of housing, it’s a lot of breeding. > As long as people keep having babies in excess of the replacement rate To reiterate, the thread was about "breeding". The birth rate has fallen behind. You are referring to the overall population growth being due to immigration. This may be true, but is unrelated. Respond to the post about why overpop is driving the housing pricing, not to the factual corrections.
        • lazide 1y ago
          So immigrants don’t count as people, or have babies? The birth rate for immigrants in america is still quite positive, and has more than offset the low birth rate from ‘non-immigrants’.
          • derektank 1y ago
            No it hasn't. Even among immigrants the birth rate reached replacement in the late 00's and has since fallen below 1.8 births per woman.
• strongpigeon 1y ago
  It’s an almost YoY doubling of the Q1 2024 rate (14.8%, 13.1% and 13.8% for 2024, 2023 and 2022) [0], which seems pretty significant. Though, what’s interesting is that the share bought by institutional investor is shrinking per the article. [0] https://www.realtor.com/news/trends/real-estate-investors-report-first-quarter-2024/ https://www.realtor.com/news/trends/real-estate-investors-re...
  • ahdanggit 1y ago
    I wonder if the increase has anything to do with the post-COVID lack of interest in commercial property?
• PaulHoule 1y ago
  I do a lot of "focus group" style conversations and one theme is "why do people think the economy is so bad for them right now?" A perception that the housing market is unfair comes up a lot, particularly complaints that investors are buying up all the houses. Ithaca recently got an ordinance to encourage alternative dwelling units (ADU, aka "granny flats") but boy was it a knock-down drag-out because so many people were up in arms about AirBNB conversions and Private Equity getting involved in buying and building properties. As I'm seeing it Ezra Klein's "Abundance" theme is closely linked to Matt Stoller's "antitrust" theme both in the sense that monopolies are one reason "why nothing works" and that anger at them is dominating the public imagination.
  • gsf_emergency_2 1y ago
    the govs of the left shifting countries in EU (Norway, Denmark, Iceland) played an active role in nipping private energy monopolies in the bud. (Where did Spain err in comparison?) Their policies probably would be regarded as communist in the US though. I tend to call it "communitarian" rather than "communist", but I might be too lazy to argue that distinction :( https://www.taylorfrancis.com/chapters/oa-edit/10.4324/9781315195964-9/individualism-communitarianism-nik-brandal-dag-einar-thorsen https://www.taylorfrancis.com/chapters/oa-edit/10.4324/97813... https://www.norden.org/en/publication/power-communication-and-politics-nordic-countries https://www.norden.org/en/publication/power-communication-an... Abstract >Traditional corporatist mechanisms in the Nordic countries are increasingly challenged by professionals such as lobbyists, a development that has consequences for the processes and forms of political communication. Populist polit­ical parties have increased their media presence and political influence, whereas the news media have lost readers, viewers, listeners, and advertisers. YC used to be about investing in potential millennialist monopolies like AirBnB/Stripe/Coinbase/sama, though these days they lobby for the small businesses & the small cities (SF) :)
• aaomidi 1y ago
  And now there’s money in preventing building more housing. It’s a bad cycle as lobbying spending will convince harder than people not being able to afford homes.
  • davidw 1y ago
    There was already money in preventing it. In a link I posted elsewhere about a hearing, the same people raised nearly $8,000 to try and stop one apartment building from going up in their neighborhood. Not private equity, not 'tHe ChINesE' (or whichever 'bad' foreigners are currently in vogue), but wealthy local NIMBYs.
• mr_toad 1y ago
  > If this continues, expect to see more and more radical policy proposals by young people. The inability of people (specifically ex-soldiers) to acquire land and make a living provided a platform for Julius Caesar to take control of Rome and effectively end the Republic.
  • dboreham 1y ago
    Hence Romania.
• rayiner 1y ago
  Journalists are, on average, shockingly innumerate. Here is Brian Williams (famous anchor) and Mara Gay (NYT Editorial Board member) thinking that $500 million is enough to give all 327 million people in America $1 million: https://www.independent.co.uk/news/world/americas/msnbc-bloomberg-error-brian-williams-mara-gay-a9383741.html https://www.independent.co.uk/news/world/americas/msnbc-bloo.... Note that this was pre-planned. They had a little graphic overlay prepared for this and everything. Probably a dozen people laid eyes on this and they didn't catch it. If you're a functioning human, your gut-level understanding of the world should have caught this. It would be like reporting that the weather in phoenix this weekend will be 327 degrees F. It reminds me of my dad's story of watching about the moon landing on TV from Bangladesh. The guy next to him said he didn't believe it, because "how did they break through the dome of the sky?" That's what American reporters are like with statistics and economics.
  • SoftTalker 1y ago
    How did they break through the dome in the sky? The rocket had a sharp point on the top.
  • anigbrowl 1y ago
    So what? You're just deflecting attention from this story to a poorly researched one written by someone else. That's like me saying people should ignore anything you say because some other lawyer used ChatGPT in court. Do better.
    • rayiner 1y ago
      OP explained why this article displayed a bit of economic ignorance, insofar as the framing is confused about what’s the real story. I’m simply providing broader context. That is, if I start hallucinating citations it’s fair to compare me to AI!
      • anigbrowl 1y ago
        Well that's some bullshit, from beginning to end.
• jiggawatts 1y ago
  The economist Alan Kohler on Australia's ABC News has a great quote: "For housing to no longer outstrip incomes, it has to become a bad investment." The "how" of it doesn't matter. Could be changes to taxation, investment rules, foreign buyers, whatever. The point is that no matter what, for housing to stop getting more expensive faster than people's incomes, it has to be a bad investment. Right now, in Australia, housing is a fantastically good investment, earning ludicrous incomes for people basically doing nothing but sitting on some property. It has created a new social class of the "landed gentry" that can earn income without usefully contributing to the economy. The new nobility will not give this up willingly.
  • xphos 1y ago
    I really enjoyed this quote but you know the old nobility didn't give it up easier so you probably could drop the "new". I need to look up Alan Kohler
  • jongjong 1y ago
    In Australia, I'm a software engineer and don't own property so I'm a peasant but my parents are in the noble class. I'm finding it increasingly difficult to find things to talk about with them because almost everything that happens to me is bad and they can't relate. So every topic we talk about seems to dissolve into some detailed complaint about how the system is screwing over people and it makes my parents uncomfortable. But then I can't talk about my work since it's too technical (and mind-numbing) for them so I literally have nothing else to talk about since I work all the time. I can't discuss politics because they think everything is fine politically. I picked up some outdoor hobbies so thankfully I have that to talk about; at least until my workload increases and salary drops to the point that I don't have time for hobbies anymore and can't afford to go on holidays. The class divide is so strong, my life's goal shifted from "become a tech millionaire" to "try to save a deposit for an apartment" to now "just survive 30 years". If I can survive 30 years, I will become noble and I will finally understand what it feels like to be happy. But because I'm a peasant and constantly stressed with a horrible workaholic lifestyle doing unfulfilling work, I think there's a possibility I'll die before my parents. I try to teach my toddler son about the importance of money. I had my son quite late because I couldn't afford to have a child sooner. Also, because I'm poor, my wife is quite a bit older than me (only noble men can afford younger wife these days). I worry my son won't understand the importance of money so I wrote letters for him in case he ends up inheriting at a young age to explain how money works and how horrible my life has been without money and how corrupt the system is and that real friends cannot exist in this system because people are always trying to get your money or securing their own money and that money is the most important thing. I explain to everyone around me how the government has made it illegal to be homeless and to exist without money, even if you perfect your wilderness survival skills, rangers will literally find you in the forest and arrest you if you refuse to vacate. I already started planning with my wife how we're going to get him married into money when he is older. My parents always said that it's bad to spoil a child; that you have to be firm with a child; "when you say no, it means no" kind of thing. I couldn't disagree more nowadays. I started teaching my son that if he throws a tantrum bad enough, for long enough, I will give him what he wanted. Because he needs to know what being a jerk pays off and he needs to demand what he wants. Also, I prioritize his confidence above everything else.
• potato3732842 1y ago
  I think it's as much a social problem as a numbers one. The greatest generation and the silent generation were rich enough to buy up tons of property but mostly didn't. In contrast every thousandaire boomer and gen X is trying to get into the rental game. So it's possible we get to a point where a minority of the people own enough housing that the rest just vote to say fuck 'em.
  • paulryanrogers 1y ago
    > the rest just vote to say fuck 'em. The rentier class has tools to prevent such coordinated voting. They divide us with scare tactics on fringe issues, religion, encourage over identifying with things/movements/celebrities, etc. I'm afraid things would have to fundamentally and undeniably bad to rally enough people to change things. It's amazing how much folks with overlook or rationalize if given an effective distraction, like fear or hate.
    • potato3732842 1y ago
      >The rentier class has tools to prevent such coordinated voting. They divide us with scare tactics on fringe issues, religion, encourage over identifying with things/movements/celebrities, etc. The "rentier class" in question here is a bunch of slumlords who own a few apartments as part of an LLC they have with their buddies and boomers who have retired to their vacation home and are AirBnBing their former primary residence, not Blackrock and friends, big money only owns a small fraction of property. The average landlord is some other middle or upper middle class schmuck.
• ch4s3 1y ago
  Almost none of the purchases are PE firms, the vast majority are small investors who own 1-5 properties. From the article: > Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85% Mid sized and large real estate investors make of most of the rest. PE firms account for 0.5-2% of the market. *edit anyone downvoting this should make an effort to refute what I’m saying with some facts.
• some_random 1y ago
  Non news to you maybe, but I would have predicted an order of magnitude below and I suspect most of the public shares my less-informed view.