I feel like both of these things can be problems.

If you view housing and ownership of your domicile as something that should be accessible to people, then housing necessarily cannot be viewed as an investment vehicle and large corporations, REITs, wallstreet, etc. need to be excluded so that more supply can be available to "correct" buyers.

Limiting these groups does help on the supply-side. While it may not be the root cause, it's far better than showering the demand-side with cash like tax breaks for first-time home buyers.

Perfect is the enemy of good.

Yes, but one thing causes the other and it's not in the causal direction people intuitively think. Foreign speculators and investment firms like Blackrock are only entering the SFH market because supply constraints mean ever-higher prices. It's not like nobody thought to buy up houses 40 years ago. You don't have to be a genius to think of it. I can remember being a teenager and thinking, why don't big firms buy up all the housing and rent it back? The answer is that in most markets homes aren't naturally a good investment. It's a capital-intensive business and you end up with a depreciating asset, small margins, and lots of hassle.

But if supply gets constrained enough that prices complete detach from those fundamentals, then, sure, why not jump in? These investors are only in this market in the first place because of supply constraints, so it's not just that low supply is a more important factor than the investors -- the investors wouldn't even exist if not for the low supply!

I'm not contending that supply isn't the real issue, just that there's no way you're going to be able to change the culture around individual home ownership, nimbyism, and zoning laws on any reasonable time-frame. A better current solution that likely has wide-spread support would be to limit the demand rather than throw more money into the demand side.

Limiting large investors does not solve the problem, but it could help alleviate some acute symptoms.

> A better current solution that likely has wide-spread support would be to limit the demand rather than throw more money into the demand side.

black markets spring up to serve demand when there's law and regulation that tries to prohibit such demand. I don't see how making the real estate market this way is gonna get it better.

The only way to make prices drop is to increase supply. trying to tax a fringe group, or to penalize investors etc, is not going to do well at all. And doing so will also dry up investment for growing supply.

> help alleviate some acute symptoms.

A short term symptom abatement, if it even does abate anything, is not going to make any difference tbh. Concentrate on solving the fundamental issue - lack of supply due to various interest groups resisting supply growth.

I'm not so sure it's not possible. There are large numbers of people getting priced out, and YIMBY groups are springing up all over. Here in Oregon, we passed HB2001, which re-legalizes up to 4-plexes in our cities. One of the city councilors where I live is a huge YIMBY.

https://www.brookings.edu/blog/the-avenue/2022/03/31/where-p...

https://noahpinion.substack.com/p/the-yimbys-are-starting-to...

Yeah, you'd never get it done on a local level, but when people are forced to think about the issue holistically -- that is, when they can get outside of their immediate neighborhood and think about the fact that it's illegal to build enough housing on a state or even national level -- it looks like they can actually be swayed. These changes have to be made at the state/province level.

REITs are not buying million dollar homes in Vancouver to rent out. None of the real estate hotspots where you literally can't buy a home on a normal salary are caused by REITs, because those homes have terrible yields. Most REITs focus on either large, 10+ unit apartment buildings, or on cheaper houses in less appealing locations with good yields.

The real issue is that there is not enough supply in desirable locations.

I don't think many people are really in favor of big investors getting into housing because no, it sure does not help, but the root cause is "not enough homes", and the solution is "build more homes of all shapes and sizes". That's also the solution to keeping big investors out! Big investors aren't piling into used cars despite the recent scarcity because they know that sooner or later the car companies are going to go back to churning out a bunch of new cars.

You're quite correct that more money chasing after the same limited number of homes is just going to drive up prices.

Ironically, that quoted excerpt inserted its own "convenient boogeyman" of housing undersupply caused by local opposition.

Also, institutional investors do have a reputation for inciting bubbles and that possibility absolutely needs to be carefully scrutinized, particularly for something as essential and socially compounding as housing.

Not everything is just a "convenient boogeyman": some things actually do contribute more to housing costs.

If you drive through any major American (or Canadian) city outside of the core downtown area...it's pretty clear _something_ is preventing large developments. If you drive through the Bay Area, or stand on a 4-storey "high-rise" and look out over miles upon miles of aging bungalows, and consider the value of the land they're sitting on, it's really a bit shocking.

And if you look into adding a suite for rental to your house, it'll be pretty clear what the barrier is to new development. It basically doesn't matter where you are in the country.

Local zoning really does play a huge role in housing cost in North America.

It's not "convenient" though. People desperately want to believe that there is some remote "other" that is causing the problems, not their otherwise kind, friendly neighbors.

And yet, at every hearing I've attended about housing, ever public comment period for a project, it is my "neighbors" opposing the homes. The editorials in the local paper about how re-legalizing fourplexes would lead to (I'm paraphrasing) "those people" living in your neighborhood are not from wall street bankers, they're from people I've met who live here.

If you want to sort out this problem then you will need to address the concerns about "those people".

There are some very real concerns that people have. Violence. Drugs. Noise. School quality. People want a good environment in which to bring up their kids and these are all crucial. Fortunately they could be solved in other ways than expensive housing. Unfortunately people have a very justified fear that they wont be.

Mostly it's not justified, just racism.

It's the real estate equivalent of blaming immigrants for stealing jobs.

Not even remotely. Immigrants can buy a home. This is about foreign ownership (not a primary residence).

Foreign ownership is just one problem though, and IMO a smaller one than both cheap debt and lack of supply.

Which is exactly the point of the parent post - blaming joblessness on immigrants stealing jobs is the same as blaming foreign ownership for making property too expensive for the ordinary citizens to buy!

Both are incorrect in the same way, and incite an emotional response of hating some "other" for causing the problem at hand!

Went over my head I guess :)

'Historically low supply' because it's been bought up as investments?

I can only speak of my local area in North Atlanta suburbs, but it does not seem like builder are building as many single family homes as before. I see complaints on our local social media and I have observed it as well. We bought our house new in 2016. There were many new neighborhoods at the tail end of completion. Every corner had huge signs telling you to stop by. Our house was not designed by us, but by the builder and it was good enough at the time.

We have been eyeing for a new construction neighborhoods in the last many years so we can get something larger and more specific for our needs (multi-generational). All I see are town homes and apartments. For reference, our city population is ~25,000...we have lots of land.

For the record - we don't need new construction and if an existing home fits our needs exactly we'd go for it. But I'm just referencing that no new single family home neighborhoods have popped up as abundantly as before...just townhouses, condos and "Luxury Apartments" with rents more than my monthly mortgage.