Re:A record number of Americans can't afford rent
by piva00 on Wednesday February 07, 2024 @05:51PM
(#39295416)
Or what happens in London (and probably other higher value land over the world): developers buy land for building or properties for renovation, and then drip feed it into the market to keep prices high. It's better, in financial terms, for them to sell new developments over the course of 2-3 years than to dump them in the market, and thus creating negative pressure on prices.
When developers are well financed there's no counterbalance to this strategy, they can keep these units off the market until the price point is right and drip feed some more, without a cash flow crunch they are not losing money.
I've seen this strategy being used in some São Paulo's neighbourhoods, new developments would sell maybe a tranche of 10% of apartments, after 6-12 months a new tranche of some 20%, then another 6 months and 30-50% would appear, crashing the price of the previous owners. Rinse and repeat.
Re:A record number of Americans can't afford rent
by yaomingite on Thursday February 15, 2024 @07:42AM
(#39381980)
> What's the point of building more housing if it's all owned by the same handful of investment firms?
If that was the case, the point would be an increased supply pushing the price down.
Local political leaders tried to pressure the investment firm to lower the rents, but they responded with "fair-market rent, blah blah blah", and nothing changed. The shameful thing is that the web page of the large investment firm (sorry, don't have a link) basically spells out their strategy: "Purchase rental units in small, low-ish income communities. Raise the rent. Profit. Rinse and repeat." The web page boasted about huge returns; it didn't talk about "fair-market rent, blah blah blah".