https://www.wsbtv.com/news/local/henry-county/3-companies-ow...

|“I’d say at least 60 percent of the homes around here are owned by corporations,” Clark said.

In the parts of the country I lived in, I've never seen big corporations own single-family rentals en masse. They usually go for apartment complexes, which are far more profitable if you have the capital to buy / build one. Commercial real estate too.

If you click around your neighborhood, a lot of single-family homes are owned by living trusts and "Bob & Kate" LLCs, but that doesn't mean there's any hedge fund money involved.

https://news.ycombinator.com/item?id=46208561

I'm not saying that site isn't potentially useful as a starting point to find out some stuff, but it hardly seems worth influencing a major decision like what legal entity to purchase a home with.

(edited to add): It also says there's no public record of me being married, which definitely is not the case. My wife literally co-owns and also lives in the house it lists me as living in (and has the correct purchase date for it), so you'd think that whatever algorithm is used to build the dataset would be smart enough to see if there's any other ways we're legally tied together. It also says it doesn't have any records of business associations I have when last year I registered a single-member LLC for contract work last year. The LLC literally has the same name as me followed by " LLC", because apparently no one else had registered that before in my state, which at least gives some evidence that my name isn't overwhelmingly common.

Until you have a stalker who will harass you, your parents, siblings, grandparents... and that stuff isn't all that uncommon.

If someone is concerned about being stalked, they certainly should consider how to protect themselves if they're purchasing a home, but that would be equally true even if sites like this didn't exist. For someone who isn't otherwise already considering using an LLC to purchase a house for other reasons, I don't think a site like this is worth taking into account.

Rental manipulation is much much easier, and probably more prevalent. But unfortunately the price-gouging lawsuits from using software to share pricing information have been settled with the landlords paying peanuts.

Maybe easier to just form a realtor cartel?

I just sold a house to a big corporation that owns about 12,000 homes. There's a whole industry for enabling these buys, opendoor, offerpad, etc... It's usually a wash selling your home as is to a wholesale deal vs. prepping your home and selling it, the difference being done about 60-90 days faster than via retail.

The company I sold to already owned four houses on my street. It's crazy.

I really hate the idea of selling to these "we'll buy your home fast" shops, but I have to be honest that had I needed to make that move, it would have been a very real possibility.

If you do have a lot of capital ($100M+), you don't, because you can spend that money to build or buy an apartment complex that gives you something like 5x as many tenants per dollar spent. And is cheaper to maintain in the long haul.

Looking at Google, I see this press release for a 2024 study says that "3 companies own nearly 19,000 metro Atlanta homes" across 190 LLC shell companies: https://news.gsu.edu/2024/02/26/researchers-find-three-compa... (1). But even so, that 19,000 represented 11% of the single-family rental market in the Atlanta metro area, meaning that even if it's 38,000 then we're talking 1 in 5 of the rental homes available in Atlanta, which the article says has many more large investor owned homes than anywhere else in the US- an expert is quoted as saying that it has more than the next 2-3 cities combined for large investors. If that 38,000 is correct (and I only have your quote for that number) then more than 10% of all large investor-owned homes across the country are in the Atlanta metro area, since the Reuters article that this gives large investors (more than 1k homes) a total of 345k rental single-family homes across the US as of 2Q 2025. A 2022 GAO study found that institutional investors owned about 3% of all rental single-family homes across the US.

"Rich Dad" style investors simply own the vast majority of rental single-family homes across the US. According to the bar chart in the Reuters article, investors who own 1-5 single family houses available for rent (the classic dentist who went to a "Make Money in Real Estate" seminar) own 87% of the national market. Looking at the GSU press release, they claim Atlanta is an unusually attractive market for large investors- they particularly call out the lack of tenant protections- and that means that it has concentrated the activity, and it is still not particularly large a part of the market. Enough to dominate some neighborhoods of Atlanta, probably. But the solution is not some nationwide ban by executive order that can't possibly be constitutional, but for Georgia to get better tenant protections so that institutional investors aren't as attracted to the market.

1: I'm going to presume that the 38,000 is from later work finding more shell companies. I also can't read the underlying research article because I am unwilling to pay absurd journal fees.

The actual data provided was:

> For example, corporate landlords own more than 12,000 homes in Paulding and Henry County, accounting for 11.2% and 9.9% of all single-family homes in the counties.

Corporate entity creation in America is such that I don’t think this will be enforceable (“we don’t buy homes, our Gibraltar office’s subsidiary invested in its CEO’s LLC that bought the home”) but if I’m wrong, it could help somewhat.

It’s binary thinking to assume that just because it isn’t a one step solution it won’t make a meaningful impact. But still, I think it won’t yet hope I’m wrong.

Maybe they should clamp down on that as well, especially individuals who are only purchasing SFH in residential neighborhoods as a way to park their overseas cash.

It isn't a bad idea, people will game whatever. A singapore public housing system might work better, but I doubt it would work for SFHs.

If the rule changes fixes it in 9/10 cases and 1/10 games it then call it success and move on.

So long as landlords grow their business by increasing the total stock of housing, no harm is done.

I think the relevant quantity we'd want to look at is what constitutes most of the property being bought-up by investors. Counting investors is going to bias the count towards multitudes of little-guys.

But make no mistake, during the housing boom post 2019, in a lot of 'hot' metro areas, "wall street" was buying way more homes than individuals. Especially in the south. In the area I lived in, Invitation Homes, some weird shell company of Blackstone, was buying up every piece of tract housing they could get their hands on. At one point, they were making agreements with builders building out new neighborhoods to not sell to individuals since they wanted them all.

So no, I care far less about what my neighbor is doing because he or she isn't attempting to price out an entire city.

https://go.lincolninst.edu/whoa-mapping-corp-ownership-repor...

Pension funds don't do that (it's a headache).

Instead, they allocate a certain amount of capital to funds specialized in Real Estate who will invest in real estate firms like Greystar who are forced to maximize revenue.

Much of the financialization people keep complaining about on HN is because institutional investors are now much more demanding in comparison to 40 years ago when institutional investing meant putting all your money in bonds and a bit of domestic stocks and hoping to get a 5-6% return.

Basically, the Yale, OTPPF, and ADIA model goes brrrrrrr as institutional investors now demand double digit returns.

And it may win votes for Republicans in swing districts, since the "BlackRock bought all the houses!" line is heard much more often from the Left, meaning this is something you can show an on-the-fence voter to signal how you are against those evil Wall Street guys.

I wonder if he'll be able to resist slipping in some kind of small-time grift for a family member or campaign donor, though.

I would hard cap how many houses anybody can own to something like 4 - whether through an LLC or otherwise. Many countries do not or did not allow foreign ownership of residential real estate. It's definitely not in the interest of any people to have their very land taken from them. In the current climate that would likely take an extremely nasty turn so it's not the best time for it, but I would be very supportive of such a measure with an exception for permanent residents and spouses of US citizens.

https://xcancel.com/KobeissiLetter/status/200899449445747946...

It matters, you just dont want to know it matters.

Besides all this says is that it matters for blackstone...not for the housing market at large.

> Besides all this says is that it matters for blackstone...not for the housing market at large.

It means that blackstone cares about this, which means they like buying houses, which means it matters.

And the stock dropped 6% today. That is what matters.

Private equity has absolutely been buying up U.S. residential stock, and this is addressing a real problem. The fact that Trump's doing it doesn't change my opinion at all, but it's absolutely the right thing to do and hopefully will be bipartisan.

https://www.thebignewsletter.com/p/messing-with-texas-how-bi... https://www.thebignewsletter.com/p/monopoly-round-up-corpora...

It's not confusing at all. There's definitely issues with private equity ownership of single-family homes. Although it is fair to say that the BlackRock meme might not be accurate, they aren't necessarily the key player.

Building more housing is the opposite of a problem.

In this particular instance, what's happening is that it's crowding out and destroying diversity in the home builder market.

The model is built to rent out, and it's taking capacity out of the build-to-sell market. It's putting regional and smaller homebuilders that have traditionally provided most of the housing out of business because of their greater access to national capital.

We are seeing this everywhere in the economy. If you have access to Wall Street capital, you can put basically everybody outside of business and then set the price. That's exactly what's happening.

People should go find something else to invest their savings in.

You're going to need some exceptions. What happens when someone dies and leaves their house to their kids? What if someone's home is temporarily unlivable (say due to a fire or flood which requires extensive renovation) -- do they have to live on the streets?

And that's not even addressing the obvious question of what happens to tenants if there are no landlords.

The problem is supply, not distribution.

Keep in mind, about half of all adults are married, so each couple can own two properties. One to live in, one to rent.

I imagine we could figure out some way to handle inheritance, perhaps we could give somebody 12 months to decide which house the want to keep, and which to sell.

I'd wager about 25-50% of the population prefers renting. Lots of people don't want to be tied down.

it does make sense if you want to save a nice retirement home for yourself or a place where you want to raise your children while you work and live somewhere else.

it doesn't have to be a closed loop though. owners could be (and in my example most likely would be) renting an apartment/flat in the city which is not privately owned)

The children could have one each too, perhaps only once they reach 18.

I think there would be plenty of rental stock still.

Still, I'm more than cognizant that there must be huge exceptions carved out for any of these ideas.

Now I know.

This action would have an impact.

Other problems will ALWAYS remain. That's no reason not to make a dent in what can be dented.

Banning institutional investment doesn't remove the "can only go up" laws and mindset, so I think (assuming this even happens, which it probably won't: TACO) the actual effect on prices will be minimal.

This would make the situation slightly better for people who want to buy houses.

Perhaps it's the case I'm 100% for this mainly because my extremely low expectations for politicians have been met and exceeded in this circumstance.

I don't know why we have to be negative about something that makes a small improvement in something that sucks.

This isn't even shooting the messenger or the guy pointing out that the emperor has no clothes, I'm not sure there's an existing idiom for the thing you're doing.

If others don't want to make the trade, that's fine, I have no issue with that. But saying nothing will happen can't be true. If you remove demand from a market, that affects prices. There's no way I can take seriously a disagreement with tenets of Econ 101.

To the extent that it has the effect of transferring some properties from rentals to sales, it's only better for the renter who wants to buy and who just barely wasn't able to. It's worse for renters who either don't want to buy or who still can't afford it, because rents will increase due to reduced supply.

If I were to try and buy the condo I rent, due to interest rates, taxes, and HOA's I would be paying $1000 more per month. At the end of my mortgage I would given the entire cost of the property to a bank in the form of interest payments.

Rich investors and companies effectively get to buy homes at a discount vs average joes.

In states I've lived in with property tax there is a homestead exemption for the house you live in. In my current state that's about twice the tax.

The effect: Rent goes up to cover the tax and margin is added, so the rent goes up more than the tax.

>Rich investors and companies effectively get to buy homes at a discount vs average joes.

Usually the difference is that the big investor bought the property at lower price, and your rent is based on the lower valuation. Annual rent increases are usually are much lower than market increases - there's a lot of value in keeping a tenant year over year.

Well-established effect and it applies to everything. A huge portion of all technological improvement/productivity gains and nearly all public investment money ultimately accrues to land rents which we then later just call "the cost of living."

https://en.wikipedia.org/wiki/Henry_George_theorem

In order for the economy to function there has to be ~ SOME ~ landlords. In my experience the random people that rent out their second property are usually good landlords, whereas the massive players treat people poorly. If this tax were implemented well, the latter group would be taxed more forcing them to stay honest. The small landlords would have a competitive pricing advantage over the big players, which should go a long ways to keep rents fair.

> In my experience the random people that rent out their second property are usually good landlords, whereas the massive players treat people poorly.

I don't think there's really all that much of a difference. Small landlords have low cash problems (slow repairs, stupid disputes on damage deposits, etc...). Big landlords have policy and bureaucracy problems (we forgot you were disabled and removed the ramp from the deck, we evicted the wrong property).

Suppose you had $100,000 in cash, and buy a house for $100,000. You'll not be paying 5% interest on a mortgage. But if you did not buy the house, you would be investing that $100,000 for a 5% return.

So, you're either paying 5% on the mortgage, or foregoing 5% return for investing that money.

The rich person is not getting a discount.

The rich person gets to rent the house, while the "newly weds" are living in it. And most importantly - the house itself will appreciate in value at a rate near 5%

Assuming they both buy a $500k house w/ a 20% down payment and a 5% loan. Realistically the young couple would get a worse rate but lets say they both get 5%. Monthly payment is $2,522.29 w/ taxes and insurance lets call it $3000 a month.

The newly weds are just eating that entire cost every month for 30 years, whereas the Rich landlord rents it out. After a quick and dirty Zillow search lets assume $3500 a month rent to start, so he's making $500 a month profit on an asset thats already increasing in value 5% ish per year.

So, with these assumptions: - Home cost increases 2% a year - Rental price increases 3% a year - Home value increases 5% a year

Total rental profit is $537k Final home value is $1.56 M Total Loan cost: $873k

Bringing the landlords return on 100k to be $1.224M in profit over 30 years (Final sell price - total loan cost + rental profit assuming they stuff it under a mattress). Whereas $100k at a 5% yearly return will be ~$430k

disclaimer: Im not the best with Excel and ive never actually bought property so im sure there are flaws in my math.

or 0.7% ... or 20% ... or ... -2.3% ... or ...

What interest rate do you think rich people are getting?

As for the Covid interest rates, those were available to everyone.

Third, we're talking about buying houses, not renting.

Depends how rich. Banks have long been known to offer below market or even zero interest loans to the richer segments in exchange for/in the hope of securing other business from them.

I.e. they'll be paying the market rate one way or another.

Funded, effectively, by you and me, subsidizing this as customers of the same financial institution.

Rich people do not have cash, as they invest it all. (That's how they became rich.) Rich people do not get away with not paying their bills. Rich people do not earn rent on the house they are living in. Rich people do not get better mortgage rates because they are rich. They get credit-scored like everyone else. Bankers want to charge as much interest as possible.

My wife and I have owned (at separate times) a couple of rental properties over the years due to various life circumstances (we no longer do). Both properties were valued in the mid $200k range. While being even in that situation certainly makes us unusually fortunate, it gave us no access to cheaper credit.

Now, I appreciate that there is a version of a "rich person" who does. But the GP's example wasn't specifically restricted in that way.

If you house owned by commercial entity - taxes are payed from full value, but the valuation to any collateral/derivative goes by something like (0.75x)^l, where l how many levels deep (counting ownership levels). For example it house is in some sort collateral/derivate/indirect ownership mix with 4 levels deep, it can only valuated as 0.31x value (you can only account as it is worth 1/3). In my mind it should reduce attractiveness for speculative buying.

This, monthly rent actually costs more here in Ireland than what you would pay monthly for mortgage.

There's no free lunch. The more friction, taxation, and tariffs you add to the housing market, the higher prices go for both renters and home purchasers.

Property tax has a known problem of taxing improvement in addition to land, which constrict urban development. Plus, imposing additional property tax means improvements are further penalized, which means efficient land ownership are penalized.

You should look up Georgism and read up on what they have to say. It's a reaction to the 19th century economic condition but it very much apply to our 21st century situation and even more relevant today.

This thread is interesting, as we are all naturally biased towards problems in our own area, and I'm learning some interesting nuances affecting other parts of the country. I live in Chicago / Midwest that has more land and residential high-rises, but our tax problem is a nightmare.

Very hard to make this work, people find complex ways around it; e.g. “I don’t own that property, it is owned by an LLC which is owned by a trust whose beneficiary is an LLC owned by another trust of which I’m one of the dozen individual beneficiaries”. Close that loophole, someone will cook up an even more obscure one.

Making rent more expensive doesn't make ownership cheaper, just makes it more attractive relative to renting.

https://www.astralcodexten.com/p/does-georgism-work-part-2-c...

... and you would be building equity.

So you pay less and get less, right?

You're thinking this is a sign that you are being cheated. It seems to me that it's a sign you're getting a better deal by renting so that's beneficial to you.

You lumped a bunch of factors together (interest rates, HOA, taxes) that don't do much for your argument. You would pay less taxes than the landlord in most jurisdictions, because the unit would be owner-occupied. Do you think the landlord isn't paying HOA assessments? Sure they are. The landlord has a loan at 3% because they bought in 2021. You're offered 6.5% because you're buying in 2026. I'm not convinced it's worth my pity.

I just plugged in some numbers using (estimated) purchase price, taxes, HOA for the unit I'm in now, and it would cost me a little over $1M over 30 years to own a $300,000 1br apt.

2) Would just inflate home prices.

That depends on demand. If no one wants to buy homes at the prices offered, prices will drop.

That being said, it sounds like a land value tax might be a better approach to my first suggestion. Regardless, this would not effect people that truly "own and live in their only house"

IMO it's a crooked notion that landlords are rent seeking and nothing else - they do create supply and maintain housing.

Issue is when they want to politically and artificially raise the value of their property by preventing more housing from being built, so, if you're going to ban something, ban artificial regulations on construction!

North Carolina has done some good by loosening up code around tiny homes, but, a lot of municipalities want to enforce big homes only because they like the property tax of high value houses, 4 bedroom and all. Small town I'm in basically won't allow expansion of housing because the people that live here don't want the village to get any bigger, but if it's democratic like that I'm mostly OK with it, it's when there's demand for housing and someone with a perverse incentive to block it that we should want to solve for.

They don’t create supply in any way, the only ones who do that are builders. But sure they maintain houses. Although just the bare minimum, they will never fix it nicely - just enough to rent it out.

I just can't bring myself to agree with the hard-line socialists who think landlording is fundamentally a bad thing. There are a lot of problems with it, but it does have a legitimate place in the world.

For a house to be available for me to rent, both things need to happen.

Someone had to build it, obviously. But just as necessary, someone needs to offer it up for a rental.

Building often happens because a developer believes someone will buy the homes they build. A lot of the time, they are right; some of the time they are wrong. Some developers will get buyers lined up first, to minimize the risks of being wrong; many do not. In the latter case, there's no inherent connection between the building and subsequent buyers.

Depends a lot on the landlord. Many will fix it up nicely because they can charge a higher rent. Much of my work is repairing rental properties and I've seen all types of landlords. I try not to work for the cheap ones if I can help it because I don't want my name associated with the crap they want me to do.

I spent over a decade living in various rentals after I moved to a new state. I didn't have the money to buy when I first moved, and even if I had, I didn't know the area well enough to know whether I would want to buy where I first lived. And having the ability to just pick up and move meant I had a lot of flexibility for chasing job opportunities. Don't get me wrong, there's plenty to love about the home I own now, but it absolutely ties me down and anchors me in ways that renting never did. I for one am glad to have had people willing to rent property to me.

Like I said in another reply, I don’t consider landlords to be inherently bad. But there are a lot who will try to take advantage of you if you let them. You have to be lucky to get a good one - I only had a couple out of the dozen or so and I wish them the best.

A renter is someone looking to rent. If someone buys a home then rents it out they just +1 the supply of rental units.

A high proportion of real estate sales are owner churn, not the purchase of brand new never used before properties.

Proof: Propose a 100% land value tax, which definitionally only removes that part of income that is generated by the community around their property, and see if they go for it.

https://en.wikipedia.org/wiki/Rent-seeking

Tenants who rent property get something tangible in exchange for their cash - exclusive use of the property.

Just because the word "rent" is common to both, doesn't mean they are connected in any way.

This is almost never true. Leases come with a million stipulations, and they get to decide what you can and cannot do. It’s exclusive in the sense that the landlord can’t force other tenants on the place you’re renting.

The concept of "landlords do nothing while collecting passive income, therefore not creating any value but instead are just exploiting that they own the land" would be correctly described as "rent-seeking behavior".

Criticising landlords is fine, but words (and phrases) have actual meanings, and the term "rent seeking" has literally no place in a discussion about landlords.

> the term "rent seeking" has literally no place in a discussion about landlords

Having "literally no place" is certainly a strong choice of words, particularity as it was introduced in this thread as being a inaccurate label to apply to landlords.

Personally, I first learned about the term applying it to Feudalism, in which the (land)lords' only contribution was their ownership of the land. That example alone seems to pretty handily disprove your claim of "literally no place", in fact it's specifically cited in the Wikipedia article as the Georgist interpretation of economic rent.

I guess you could class some rent as predatory as well, allowing others to use your property for a fee is not necessarily predatory (unless you're of "property is theft" kind).

From this, we can conclude that there must be some point after an investment is made where continuing to benefit from it transitions to rent-seeking behavior.

Would rebuilding the apartment every so often straighten you back to profit-seeking?

Rent-seeking is just a meaningless insult if framed like that, it highlights no economically net-negative behaviour.

They're orthogonal. In a competitive market, landlords earn no economic rent. In a market with supply restrictions, however, landlords will earn a return "in excess of the costs needed to bring that factor into production" [1].

[1] https://en.wikipedia.org/wiki/Economic_rent

Well sure, but it's good to incentivize looking for sources of wages other than (literally) rent-seeking.

> Rent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth. (https://en.wikipedia.org/wiki/Rent-seeking)

Given that renting out property you own doesn't meet this definition it can categorically not be called rent seeking. I'm always shocked that people apply this definition exclusively to property rentals, and not VHS rentals, without seeing the hypocrisy.

Googling it after reading Wikipedia shows that about half the sites out there talking about it are also using it wrongly.

Thanks for explaining!

I think we're at the bottom of the discussion here. You've got your opinions but each time you've been pressed you don't really have a justification that stands up.

But no, VHS tapes are not factors of production. That’s a term with a widely understood definition, and linguistic tricks like “a VHS tape causes an image to be produced on a television” or “viewing an VHS tape produces a sense of enjoyment” are not valid arguments.

A VHS tape is capital in the same way that a machine or house is capital. They are capitalized goods that produce something of value on the other side. You still haven't been able to demonstrate that renting one is morally questionable while the other is fine except by special pleading.

And a little further down is this: > Rent-seeking implies the extraction of uncompensated value from others without making any contribution to productivity.

Which to me certainly sounds like someone who's only contribution is ownership.

One thing to keep in mind. It might be that it's "democratic" in that all the homeowners are allowed to vote for or against the zoning policy (or for or against the local leaders who set zoning policy) but ONLY the local homeowners are allowed to vote. Those who rent (or who can't even afford to rent) live in a different district and aren't allowed to participate in the election.

If that's the case, then voting doesn't represent "the will of the people", just the will of those people permitted to participate.

To what extent, and by what mechanism, should the government of those two areas weight my preferences on housing policies in those areas? (I think it is properly exactly zero, even I say really, really want to.)

Noone says it's nothing else. But rent seeking is a big component of it, you just focus on other minor parts.

In general, locking down some limited but critical commodity (e.g. land) is bad for any economic system. It doesn't really matter whether it's "Wall Street" or "your neighbor". A healthy economy is geared towards creating an added value.

I am trying to read this charitably, but it is hard to read as anything but: 'landlords do not add value'.

Germany practices basically rent control, so that 60%+ of population rent and consider it stable. That's another way.

Maybe there are more, I didn't think hard. The basic idea is to prevent formation of an "aristocracy" that holds some limited but necessary (not luxury) resource. Pretty much every revolution happened because of that.

Perhaps they ought to be more careful when filling out paperwork. Or perhaps they’re not accidents.

Clearly you have never interacted with most land lords

Point is, in choosing to be a landlord and buying property, an ideal world would respond to this demand pressure by building housing, didn't mean to suggest the landlords themselves put on their hard hats and frame a new building. Just that they're also part of the marketplace.

Rent income is not wages, that's the critical part you're mistaken. Income and wages are not the same thing. Rent income is as much wages as Elon Musk selling stocks is to him, or a bank making income on interest payments. Renting is a business, it's income is business revenue, not wages.

There is this terrible view that landlords are "just like you and me, hard working regular people" - not that it's false, but so are the people that own mom & pops shops, or a local subway franchise, they're all business owners making business profits, not wages.

Business practices that harm the public should be regulated and curtailed. With taxis for example, the medallion system was used to limit the number of Taxis in operation. Similarly, not only should an individual be limited to (directly or via an ownership/shareholder interest in a company -- even with them or their family) a reasonable number of properties, but the number of rental properties in an area should itself be limited. Property owners can either sell houses, or sell condos and make income via condo (regulated) condo fees.

Food, shelter, health-care/medicine should be heavily regulated, if private parties take part as intermediaries between individuals and their food, shelter, health-care, they should expect lots of red-tape and limits. Ideally, the government itself would be driving these markets directly by building and selling properties, hospitals, pharmacies, grocery stores, etc.. that's not socialism or communism. That's just common-sense capitalism, everyone, especially the richest make more money this way. not only that their money will spend better this way.

The kind of capitalism we have now is a short-sighted parasitical money-grab. The kind where if fully realized, you'll build your own mansions and sky scrapers but you'd be complaining about the slums and crime nearby, how you can't get good help, skilled labor, and spend a ton of money on bribes instead of paying a fraction of that in taxes.

In theory, reaganism and trickle-down economics could have worked. A rising tide does indeed lift all boats. But in reality, it's more of the "scorpion and the frog" story. In this case, landlords can own a reasonable number of decent homes and make decent income, and then diversify the money in other markets. But currently, it's a race to become the biggest slumlord or until the markets collapse again.

  > The kind of capitalism we have now is a short-sighted parasitical money-grab.

This is completely false. This might be surprising to learn, but for normal car dealerships (not buy-here, pay-here or used car dealerships) a huge amount of their compensation rides on receiving holdback payments from manufacturers, as well as per-unit bonuses that often have cliffs.

Cash buyers paying invoice price are welcomed (if they aren't too big of a headache) because they push a dealership over or at least closer to the next sales-volume bonus cliff.

Holdback alone is worth more than any realistic origination fee.

Dealerships are also earning miscellaneous per-car bonuses which are also profit, which go up based on overall volume: if they sell 50 cars, they get $200/car, if they sell 100 units this might jump to $500/car - just a random example.

If a car is in high-demand or really uncommon (in reality, not sales-speak, and a customer has no other options), they can afford to not sell a car at invoice - but this is an exceptional circumstance.

How great, you can live in a pod and eat bugs.

Rent and utilities could be positioned at a level that permitted people to survive and have a foundation from which to lift themselves back up and perhaps eventually to a private housing situation with some luxury.

What’d make sense for me is if a rental has a documented history of being poorly maintained, past some threshold the property can be auctioned off, with the proceeds going towards funding public housing. This should help filter slumlords and bare-minimum-effort speculators.

Growing municipalities kind of have to choose if they want to become bedroom communities or industrial/business communities and if they choose the former optimizing for rich people is the easy lazy not sticking their neck out choice and what does government employment optimize for if not retaining people disposed toward that sort of decision making.

IF you want affordability? Tax land.

Doesn't matter who owns them. Your grandma or wall street.

This is literally not true.

A landlord owns the property. Property managers operate the property. Sometimes these are the same people (in mom and pop scenarios), but typically and at scale they certainly are not.

Property management is a job. Landlording is not. It is simply owning an asset.

+1 on taxing land though.

These costs aren’t that high though, compared to rent. 3 months of rent covers a year of property taxes where I live. Major repairs are about a couple months rent. There is still another half year of rent that’s pure profit. Then they raise your rent every year, demonize rent increase caps, and then vote for reduced housing builds. I find it very difficult to accept them. If I had the money and the capital I absolutely would own a dozen homes and rent it all out, you would make insane money. Not to mention the mortgage costs being so low during ZIRP days. At the rate of AI coming for SWE jobs, landlords seem untouchable.

You missed insurance and mortgage.

If it is, why not do it and become rich too?

It's not really a particularly good way to make money. I've run the numbers on hundreds of properties over the last two decades and I've yet to find a scenario where I could buy something and rent it out with enough profit to be worth the hassle. You'll be much better off investing in some index fund instead.

If I had the capital I absolutely would have. It’s a bit worse now but any property you bought pre-covid (at least in big cities) can be rented out for more than what mortgage costs. I remember looking at houses in the Bay Area and the monthly mortgage would be 3K while you can rent it out for 4-5K. Anyone who owned property in the 90s and early aughts are absolutely rolling in it. You can invest the profits in an index fund on top of it.

I bought a house in the Bay Area in the 90s and the mortgage was well over $3K (remember interest was over 7%) and an equal house back then was renting for $1300 (my rent at the time for a 3br house in south San Jose).

Try to run the numbers for any property you like. Remember to include taxes and insurance and maintenance. Just to break even is not easy and then you'll have to work for free on the maintenance. Or pay a rental management company, which is another 8-10% taken from the rent.

I agree that buying a home and immediately putting it up for rent would put you underwater these days but during ZIRP times rent and mortgage weren’t too far from each other.

BTW this is a common myth but not true. Property taxes are set by purchase price in year zero when you buy it. Every year after that, they go up 2% compounding.

That's not the full story because the city/county can also add any extra fees they like, and raise them, prop13 does not apply. My taxes go up by well over 2% every year.

> All said and done can’t you net like 35-40K or so per year on a single home?

If you can find yourself a free house somehow, that feels about right. But how do you get yourself a free house? If you have to buy it, now you have a mortgage, and the math no longer works.

The only people I know who profitably rent out homes are those who inherited a home with no debt. In that case, yes it works.

> during ZIRP times rent and mortgage weren’t too far from each other

Low interest helps, for sure, but the numbers still didn't work out.

Here's a graph of interest rates: https://fred.stlouisfed.org/graph/?g=1KZYI

The rates only briefly dipped below 3% during the pandemic. Let's say you got the timing right and got a 3% mortgage for 1.2M. The payment is still a bit over $5K/mo. That's just the mortgage, add insurance + taxes + maintenance. On a home you can rent out for maybe 4K-4.5K/mo. Losing money every month.

I've been running these numbers every few months for the last two decades hoping to follow the common advice to buy rental property and become rich. But it has always been cash flow negative no matter what the rents and interest rates have been.

Only advice I have is go inherit a free house, that can be profitable.

Yes that is correct if you occupy land while your community makes it more and more valuable, you should not get wealthier and wealthier for no reason. All of that should be taxed away.

I'm not sure what this applies to with regards to my original comment. Improvements, insurance, and taxes are capital expenditures which need to be managed. This was to counter that landlording "is simply owning an asset."

> Yes that is correct if you occupy land while your community makes it more and more valuable, you should not get wealthier and wealthier for no reason. All of that should be taxed away.

Why assume that the landlord isn't getting the brunt of the cost for making the community more valuable? I don't think there's a strong case for saying a property manager is a job while denying landlording being one. Assuming landlording is completely passive is as far-fetched as thinking that property management is completely passive (both may require irregularly tasks to be performed or require no involvement in the ideal case).

More like "was too rural or too poor in the 70s/80s/90s to indulge in the then trendy policy like zoning the crap out of themselves and passing a bunch of ordinances more akin to country club rules thereby making incremental growth and development actually possible in the 2010s and 2020s"

Because most development today seems to correlate with whether or not that particular policy bullet got dodged than culture or spirit or anything like that.

Want to punish the right people? Cut taxes so that people can save cash faster, afford houses earlier and stop renting from their landlords.

Build more actually-affordable housing, too. Not these blocks of luxury apartments with swimming pools that nobody uses. (See HDB, Singapore -- that’s what the US needs more of)

The tax simply redirect the unearned income to the public coffer which are either spent on public investment that further increase land value or redistributed as citizen's dividend.

Meanwhile landlords are free to construct as many buildings as they can without being penalized by higher taxes.

Empty lot, parking lots, and self storage facilities would be penalized because they wouldn't generate enough income to cover taxes on land, leading to more efficient utilization of land, as improvements are no longer penalized.

Right, so the city would be nothing but luxury (to maximize income to pay those taxes) high rise apartments packed tight every block.

No parks, no playgrounds, no soccer fields, no sports courts, no bike trails, no dog parks... none of the things that make living in an area pleasant. Also, no low income housing. Because none of those maximize "efficiency" (measured only in dollars) of every square inch of land.

Life is not pleasant if maximizing value extraction is the one and only #1 criteria. This is what land value tax misses.

Also, "luxury" housing cause what economists called "filtering", in which new construction are occupied by the upper strata of income, which means they pay for the cost. As housing age, this naturally becomes more affordable to the lower strata. This of course, depend on sufficient housing stock. Otherwise the inverse will happen.

Also, you only need to cover the cost of paying the land value tax to keep it, not to generate the maximum amount of revenue for that plot of land.

We are not talking about value extraction here, but making sure that landowners work for their keep, while the unearned income/economic rent that would otherwise goes to them is returned to society, because the value of the land is largely determined by the agglomeration effect, the sum total of the community's effort and entrepreneurial spirit. Otherwise, your private effort as individuals would flow to landowners reaping the benefit of increased land value, hence appreciation in real estate price.

So if a LVT has the explicit goal of eliminating things like parking lots and self storage units because those don't generate enough income to pay for the taxes, then what hope do things like playgrounds and parks have to continue existing.. they generate far less income than a self storage facility.

Explain how.. In a dense urban area, with LVT, that lot that held a park will bring even larger tax revenue when the city sells it off to a developer. Having the tax be based on maximum potential usage will only increase the temptation to sell it off and remove yet another park from the people.

That creates a virtuous cycle for the local government who is administering those taxpayer paid amenities, same as other form of infrastructure and amenities.

People act as if this is due to 'private greed'. It's not. American public pension plans are underfunded and need more returns. Thus they turn to the private markets, who offer them that which they are seeking to purchase. The market is heavily distorted by these public players whose policy and aims are not constrained by the market but by public policy.

Let's ignore property management for now and focus on landlords (i.e. people who own homes and collect rent from the people who live in the homes). That is very much not the same as any other job. Most jobs do not consistent entirely of literally rent-seeking.

Why are you thinking of it as a job? Is putting money into the stock market a job? Owning property to rent out isn't a job, and that's perfectly fine. People make money off non-jobs all the time.

People assume that renting out property is rent-seeking literally only because they both have the word rent in them.

I would note that people don't use the word rent-seeker (or parasite) when it comes to banks renting out money. I assume this is partly because banks use the word `loan` and partly because referring to bankers as parasites would be a little too close to dog-whistle antisemitism.

It's not a coincidence that they have the same word in them. It's literally just the same word with the same definition and etymology in both cases. Rent is a payment demanded by property owners from people who want to make productive use of that property.

> Rent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth. (https://en.wikipedia.org/wiki/Rent-seeking)

This definition doesn't overlap with renting.

First off you're using "rent seeking" wrong, it's a specific economic term that means something else.

But using your definition....

There's entire industries built around renting capital investments. Sometimes purely, like rental equipment. Sometimes the investmentents are so expensive they come with the labor to operate them (the way many buildings have a building manager and a desk person). Many industrial transactions are structured basically the same way as commercial rent.

It is a specific term, but it means: taking control of a limited resource (e.g. housing), most typically by ownership, that you do not have any direct use for, and then seeking revenue by then renting it to other people who actually want to use it (e.g. live in it).

Which, not suprisingly, is precisely what landlords are doing.

And also not surprisingly, those "entire industries" would be rent-seeking if the resources they rent out were limited. However, that does not apply to rental equipment, for example (though there are a few specific exceptions in the case of extremely expensive, very complex and/or very large equipment).

The bulk of the political will for this garbage doesn't come from landlords. Landlords want more, more, more. There literally aren't enough landlords in this country for that.

It comes from existing homeowners who are not landlords and don't want a bunch of high(er than them) turnover housing near them let alone cheaper housing because of the "neighborhood character" or whatever. Basically got mine fuck you.

And this is enabled with the remainder of the political will being provided by a select number of unconscionably ignorant non property owners who have insane takes about how the government should manage all this, be deeply involved in this, immensely scrutinize any sort of property development, etc, etc, all of which is to the benefit of megacorp landlords and developers and the detriment of the small time guys who own a number of properties you can count on one hand with a sum total of units you can count on two or thereabouts who make up the overwhelming majority of landlords on a unit basis and if even a small percent of them added a little bit of capacity would be a huge amount.

> However, that does not apply to rental equipment, for example (though there are a few specific exceptions in the case of extremely expensive, very complex and/or very large equipment).

They don't rent seek the literal equipment. They rent seek your ability to use it without a bunch of thugs showing up with a "stop or else" proposition. You can literally buy a car crusher on Alibaba but you can't open a junkyard in my state without a permit that they have a well known hospital-esque "we only allow X to exist overall" system for, assuming your town doesn't outlaw the business outright.

Once again, this is all to the benefit of big business for whom a few million bucks of donations to the right stuff and work directed at the right firms as needed to get a variance (i.e. pay the law away) for their billion dollar dildo manufacturing plant or whatever whereas the guy who wants to, IDK, take his HVAC bending business to the next level, open a second site and get into process equipment is shit outta luck because without greasing palms he can't afford to the government will hem and haw about every goddamn detail and prevent anything from happening. And the existing industrial plant that got in before the rules is laughing its way to the bank the whole time, well, right up until it gets regulated all the way to China but that's a different problem.

The government steals half of my money, half of my landlord's money, and I have to pay my landlord’s income and property tax in addition to my own income tax.

This is why I still cannot afford a home even though I work in a senior role in AI. After paying all those damn taxes and everyone else’s taxes there is almost nothing left.

The logical conclusion is that the residents of these desirable areas like the bay / San Diego / Seattle / DC actually want housing prices to stay high.

Repealing all the bullcrap from the last 50yr that makes that artificially expensive to the point of being a non starter if not outright illegal is the hard part.

Also doesn’t help there’s a lot of red tape as the other commenter mentioned.

I live in a former socialist country (well, part of a country, the country does not exist anymore), and when we needed more housing, we designated the land in the city to be for housing, ie. large socialist buildings. Then 1990s came, no more socialism, capitalism now, and no more large building projects, no new neighborhoods. So now, we have cows and cornfields in what would be prime realestate because the government won't change the zoning, all three neighbors there complain and apartments that used to be 120k eur maybe 20 years ago are now close to 500k eur.

If you want to live next to cows, move to a village, thousands want apartment buildings there, to live in a city.

N_dissatisfied > max(0, N_for_sale - N_individuals_and_couples_buying)

When N_for_sale > N_individuals_and_couples_buying, it is still possible for N_dissatisfied to be > 0 for the reason you give. But N_dissatisfied must be > 0 whenever N_for_sale < N_individuals_and_couples_buying, even if everyone is limited to having at most one.

Less supply couldn't possibly be helpful for those disappointed, but also there's less supply than there would be if access to it as a commodity was limited, supposing that all other artificial restrictions and funding models could rely on less concentrated investments, which I think they could

That's what people with disproportionate access to capital would want people to believe. It absolutely matters if there's a ceiling and a floor on the production rate of every aspect of the supply chain of housing. If it doesn't matter how many houses someone owns, then it wouldn't matter if builders don't outpace the ability for particularly wealthy people to borrow and own as much as they possibly can. It's a particular type of commodity that should be appropriately controlled in a way that reduces the whole "tragedy of the commons" type effect.

There's always a finite supply, and there's always some contingent of people who will try and get as much as they possibly can, leveraging as much generational wealth as they need to, if they need to.

There should absolutely be a limit on the number of homes, within a particular region, someone should be able to buy, as long as a sufficient threshold is met for what can reasonably be called a scarcity problem. If an individual average home of any type would require the mean family income to quadruple in order to service the mortage, or the downpayment would require 5x their annual salary pre-tax, that seems like a very liberal threshold.

Many people wish to rent, not buy. If we make it so each landlord can own fewer homes, but renting demand stays similar we just incentivise more people becoming landlords

Yes mortgage is often cheaper than rental, but the whole tradeoff is the commitment, just like all kinds of services, if you pay 40 years up front you can get a good deal, but do you really want to take out a loan to do that?

Limiting landlords ability to buy property is reducing demand for construction, you want to increase demand for housing, not decrease it.

As I said in a sibling thread, it does suck that property owners are incentivized to raise their property values, preventing supply from reacting to demand.

My intuition is that the majority of renters would rather be owners paying mortgages. This is less true of certain demographics (young people, students) and more true of others (older people, families).

I also wouldn't characterize being a renter as low-commitment. Say you're renting a place for 1.2k a month. When you sign a year lease, you're committing to pay 1.2k x 12 in rent, plus (at least) a month of security deposit, for a total of 15.6k. That may not be a down payment, but it's still a huge commitment, especially given how hard it is to assess potential problems with a living space before you've actually lived there.

Now imagine trying to asses the potential problems with a living space before committing the next 30 years of those payments, plus locking yourself into that single living space and taking on the single and sole responsibility for repairing or addressing all of those problems yourself.

Look, I really like owning my own home, but when I signed a rental agreement, for the duration of the agreement that was the most money I would ever spend on my housing. And I never once worried about replacing a roof, or replacing an HVAC unit, or replacing a water main. I've owned my own home now for over a decade and my monthly housing expenditure is nearly 2x what it was when I started between tax increases, insurance increases and loans to pay for the various major repairs, and that's with a fixed rate primary mortgage. And that's my cost increases AFTER the insurance payouts. The townhome I first rented when I moved to the area currently rents for about $100 LESS than I pay each month. Granted when I bought the place, it was renting for about $200 more per month than I was paying but that basically means renting vs buying was a wash as far as costs go. Yes, to a degree I got unlucky, but that's also the point, I couldn't know if I was going to be unlucky or not before agreeing to the mortgage. As a renter I could get reviews and recommendations or warnings from prior tenants and at least have a chance of knowing what I was getting into.

The bigger thing, though, is so many people are currently priced out from owning something for themselves. Your home is such a fundamental part of your life and for a lot of people renting fucking sucks. They can't live their lives the way they want to. To have that be the case because others are buying it up to profit? Ehh..

Didn't we already try that with housing?

As someone that's renting because buying is impossible i think this would be fantastic. They should do it with Airbnb too.

Not American or in the US, this is problem everywhere now. People thinking they're entrepreneurs for gouging.

People will come up with all kinds of reasoning, its the property tax, it's migrants, its minimum wage, it's millennials, it's inflation ,when ultimately it's just that landlords will charge whatever they think they can get away.

and sometimes they'll try to charge in other ways...

https://www.irishtimes.com/ireland/housing-planning/2025/02/...

Price controls and limits like this rarely work out in history.

Around here, many landlords renovate or build new high density construction. Put a cap on how many properties they can own and they'll switch from building/renting as many units as possible to maximizing the rent on the limited number of properties they can own.

Restricting the market in one dimension rarely has the desire effect.

Landlords owning property is not a problem. Some people prefer to rent - they may be students, or they may not anticipate being somewhere for long, they might not want the risk of owning a home, lots of valid reasons. Having housing available for these people is good and landlords are a necessary and valid part of this market.

The problem is when people who want to own houses can't afford them, even when they contribute meaningfully to society. The root cause of this is not landlords existing. It is wealth inequality. A vanishingly tiny number of people own almost all the wealth in the system, to a point that the additional wealth gives them no real benefit, but serves only to remove that wealth from the vast majority of otherwise middle class people.

If you want to fix this problem return the top tax tiers to what they were 50, 75, 100 years ago and the problem will be severely reduced. It's not sufficient to solve it, but its low hanging fruit.

I'm not sure this is true. Based on a couple articles I found, this is what the current situation looks like in USA:

a) Billionaires, (of whom there are about 1,000) own about 5% of the wealth

b) Millionaires, (of whom there are about 25 million, or 7% of the population, excluding billionaires) own about 74% of the wealth

This tracks with my impression of the rental market. Most rent money isn't going to the billionaires or big corporations, it's going to the 10 million or so mom-and-pop rental property owners.

I'm not an expert on this stuff by any means, but my intuition is that it's a cycle, wherein the rental system is one of the largest drivers of wealth inequality in the country.

https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite... https://inequality.org/article/billionaire-wealth-concentrat...

Correct.

It is wealth inequality. A vanishingly tiny number of people own almost all the wealth in the system

To the extent that this is true, it's not why housing is unaffordable. Even if Larry Ellison buys a dozen mansions and keeps them empty most of the time, that's not going to noticeably affect the market for normal people. Houses are expensive because they're scarce; you're far more likely to be outbid by the guy who makes $10k more than you than by an evil billionaire.

Nothing like middle school economics to help a debate along ... have you checked on the level of economic activity that is due to those 30M foreign nationals, and considered if there might be any downsides to them no longer being here (and presumably not being replaced by other foreign nationals) ?

What immature peasant-logic people as yourself don’t understand is that no, there is negative net benefit to the common person, while the common American is deprived of that benefit which goes primarily to the richest, and of course the freeloading foreign nationals. Nothing about America has gotten on any controlled measure better without the increase in foreign nationals that have been imposed on the citizens of America against their will.

Is it really as simple as that you have no dignity and are just a self-interested person that enjoys living off the theft of Americans?

And again, your infantile mind cannot seem to grasp that removing a squatter from your home is in fact justified, regardless of how much negative economic impact it would have by depriving that squatter of your assets and living in your home.

Why do you types not understand these basic things? Is it really as basic as that you’re vile? Depraved? Narcissistically callous towards the people you harm? Is it really just because you enjoy making others pay the cost of your decisions while you benefit?

How about we just make you pay for all, every single cost of the foreign nationals that are squatting in America at the profit of the ruling class? Of course not, you would prefer others pay the cost with the misery you cause them.

You do realise you don't own all of America, right?

Nobody actually forced you to take 30 million immigrants into your home, because your home stops at your property boundaries.

I've seen this nonsensical argument in my home country, the UK, too. If you want to claim *all of [the USA]* as your country because you're a citizen of that country, then *any other [USA] citizen welcoming migrants into [the USA] is already taking all these "strangers" into their own home*.

(Works just as well if you substitute any other nation for [the USA], everywhere has people who think about their nation the way you think about yours).

> …and if your infantile logic has any value, why don’t we just cram every single human on earth into the USA, at your expense of course, right?

You should talk to more non-Americans. People like me, for example. I don't want to live in the USA. So I don't.

I mean, we'd physically fit quite easily, you've got most of a continent there, every time people like me suggest things you can do to make your nation better the collective response keeps being "oh but the population density is so low we couldn't possibly make public transport or cheap broadband work". We keep suggesting stuff like this because a lot of us just don't look up to the politics or the infrastructure you've got, certainly not any more, although the reasons are various and our interests are a dis-aligned from each others' as much as from yours.

> freeloading foreign nationals

The foreign nationals in the USA come in three broad groups:

1. People like Elon Musk, who took billions of taxpayers' dollars for self enrichment but are somehow really popular (today only with the establishment, but used to be more broadly) despite this.

2. People who do a huge amount of work in the construction and food industry, without whom the USA would collapse in about 6 months, who get all the hate because they're poor and undocumented (AKA "illegal") immigrants.

I'd like to draw your attention to the word "construction" in there specifically, as it's the other half of "supply and demand".

3. People in the middle with the boring work visas doing middle of the road work. By having in-demand skills, they command above-average salaries, but by commanding an above-average salary they drive up rent and house prices, with that money going to landlords etc.

Of these, only group 1 is "freeloading".

> squatter from your home is in fact justified

A squatter is a person who settles in or occupies a property without legal permission or claim to the property. Squatters live on land or in buildings where they have no title, lease, or right.

Ironically, this is how the USA got Texas from Mexico.

You claim 30 million. I don't know where that number comes from, as it doesn't seem to correspond to either documented or undocumented groups. Too big for estimates of undocumented (~10-12 million estimated) too small for documented immigrants (~40 million).

But it's false in any case, that number does not consist of squatters.

But you are a well trained NPC, repeating all the installed “knowledge” you have faithfully, with no ability to even realize the inherent contradictions in your statements and beliefs, largely because what you have been conditioned with like a good mindless NPC is only what the ruling class wants you to know for a fact and then infect others with in places like Reddit. You’re a good zombie infecting and devouring those brains, lacking any ability to recognize you serve those who hate you and you say you hate.

But not matter how angry reality makes you, it does not change whether you hear it from me or not at all.

You are an inherent contradictions, just like the ruling class wants you.

Matthew, chapter 7, verses 1 to 5. But which brother has the beam?

I've shown you your own self-contradictions. You say I have my own, but you fail to demonstrate them, you merely assert them.

Again, if you’re so convinced of how wonderful foreign nationals themselves on Americans against their will, how about you just put up a sign welcoming them all to squat in your house and live on your property and freeload off you; instead of prescribing that misery on others. You’re really a sick and evil person, you know that. How about you do unto yourself first, what you do unto others.

India still has this in some states [1]. You wind up with everyone in the family owning a house. After that, other people own it and pass on most of the rent.

Better: progressive capital-gains taxes.

[1] https://en.wikipedia.org/wiki/Urban_Land_(Ceiling_and_Regula...

Here in Norway the solution, as with so many other things, is taxing. Your home is evaluated at some "market rate", but if it's your primary residence the effective tax value is just 25% up to $1 million (70% on value above $1 million). For reference, a typical 3-room apartment in Oslo, the capital, is around $400-500k.

However, if it's not your primary residence, then you pay tax on 100% of the "market rate". The tax rate is 1%, so not insignificant.

Until a few years ago, tax on non-primary residences was much lower, and hence we had a lot more people buying to rent if they inherited money or similar. Some even had a dozen or more properties. These have now exited, so policy is working as intended.

One thing of course politicians for some reason didn't think of is that if most of the landlords suddenly sell, rental market will shrink. So now it's super-expensive to rent, and those who rent usually do so because they can't buy for one reason or another (no stable income to support a loan for example).

And as if it was ordered, a news story[1] on exactly that this morning. Last year alone the average price for a rental unit went up 6.3%, and simultaneously a record number of apartments were sold. So very unlikely to come down.

[1]: https://www.nrk.no/norge/leieprissjokk_-nesten-20.000-kroner...

You've also encouraged your middle class to massively over-leverage themselves to a single house/apartment by creating a huge tax subsidy for them (from 30-75%), which will no doubt continue placing upward pressure on house prices and also create risks if interest rates increase. Why would you not take the biggest loan the bank will offer, given interest rates are quite low in Europe and you will not be taxed on most of the value of that property you can acquire with leverage?

Crazy thought, did your politicians ever think about the idea of NOT subsidizing the demand side at all? If the issue is the price of housing, subsidizing demand for it in any way is going to make that problem worse!

Real estate works for this because you can really put in as much as you want into it.

Other business activities do not work because the entrance cost for non-rent-seeking business is extremely high and the risk is way too high compared to real estate. This is due to American regulation and labor laws.

This is a 'first-world problem', but now that I have capital, the question is 'what to do with it'?. Yeah, you could throw it in the stock market, but that's also rent-seeking in a sense because you're not really able to invest in primary rounds (I mean you can, but it's hard to find deals), so basically you're just providing liquidity to people, which is rent-seeking of a different kind.

So then the question becomes what else to do with it? I've given a ton away, but that's useless for the most part since it barely creates any economic value.

In my ideal world, I'd start a factory and hire a manager, but the capital cost of that is high, not because of the material or the rental cost, but because of the labor cost. So then, what's the option? I could easily outsource it all to China or India, but that's completely useless for the United States.

Then the question becomes, why start your own, when you could invest in others. Great! I would love to do that. It would be even better if I could simply invest in a local enterprise... Except, that's not easy either. Regulation over investments means that even investing in this is fraught with difficulty unless you want to establish some sort of 'fund'.

So basically, there's nothing to do with the money, which is sad, since I end up giving most of the money I make away anyway, and would prefer to have more of it to give away.

Until America figures out what it wants to be, it's going to be real estate for me... consistent incomes, fairly uncorrelated with equities (which I have a lot of too), etc. There's really not many other options here. There's barely any 'productive' activities taking place in the United States.

Things like the largest pension fund in Sweden is invested in buying SFR. Or the sovereign fund of the UAE.

I’m not sure if that changed your opinion on this not having practical benefit for the average American.

Why is this a problem? Build more homes, get rich from the Swedes!

The things that they do have massively outsized downstream impact contrasted against their relatively tiny overall participation in the market, and they can afford to behave in ways that manipulate the behavior of the majority.

If you can decouple them from the housing markets, you also decouple the interests of the donor class, and you allow for policy that doesn't maximize the cost of real estate over the interests of the majority of the population.

Raising prices when you only have a tiny portion of the market does not work. People won't buy them when there's another house for less.

Normal landlords don't have effectively infinite money with no forces bearing prices down, nor do they have the capabilities to influence markets. Even tiny percentage shifts can result in significant fluctuations in the prices consumers see. It's a very nuanced and complex system in which these institutional investors have very outsized influence.

I get why people like telling stories like this: it suggests there's a single boogeyman that can be dispelled to solve the affordability problem without painstakingly goring people's oxes state-by-state and municipality-by-municipality. But it's a fantasy.

If you can tell this story in simple step-by-step form, you will. I think you could tell a story about how a large corporate buyer clears out all the marginal buyers for some thin market like an individual subdivision or tranche of new construction housing in the Sun Belt. But I don't think you can tell a realistic story for them being "a huge driving force in setting and manipulating prices" across the whole market. I look forward to seeing your attempt, though.

Institutional investors own ~3% of single-family rentals nationally. But per CoreLogic they're 29% of purchases in the starter home tier. That's the market where we first-time buyers actually compete.

In some metros it's more concentrated.

Atlanta: ~30% of single-family rentals corporate-owned.

Charlotte neighborhoods in 2022: 50%!!! of sales to institutional buyers.

So for your 1-2-3... maybe something like?

1. Institutional buyers concentrate in starter homes where they're 29% of transactions, not 3% of stock

2. Target metros/neighborhoods go higher still

3. Real estate uses comps-based pricing - their winning bids propagate to surrounding valuations

The mechanism isn't inventory control, it's just a buyer with a different utility function (rental yield vs owner-occupancy) systematically outbidding price-sensitive first-time buyers. In a thick market that gets arbitraged away. In a thin market with sparse comps, each transaction is a price-setting event.

The St. Louis Fed found institutional presence specifically increases price-to-income ratios in the bottom tier.

If you're evil corporate Landlordman You don't need to affect the whole market. You just need to cut off the bottom rung of the ladder.

Is this Trump move the right one? No frickin idea! But I do think we need to reckon with what's actually happening to first-time homebuyers. I bought a place in Englewood Co last year and ... it was pretty rough.

* They impact listing prices but not necessarily clearing prices.

* They assume all the sellers, who are not corporate investors, can mechanically anchor off those inflated comps, without factoring in buyer budgets and carrying costs.

Real estate is slower than most financial products, but it's still an actual market. You can't just buy a tiny fraction of the inventory at an inflated price and assume the whole rest of the market will follow you.

I'm not saying comps magically anchor prices. I'm saying institutional buyers ARE the clearing prices, because they are anchored to "how much can I rent this out for" whereas first-time homebuyers are anchored to "how much can my mortgage cover?" which are different questions.

29% of transactions, not 3% of stock.

Those become the comps. There's less of a gap for "but buyers won't pay that" because the institutions *are the buyers. The call is coming from inside the housing market.

Now this only really works in constrained markets, but intrinsically there's always a time constraints in buying (our lifetime of course, but also life events and lease renewals and er ). There's of course also selection constraints because of the aforementioned time constraints, and location, and whether new construction in happening within those.

Saying "they impact listing prices but not necessarily clearing prices." might be logically consistent, but is disconnected from the reality of the housing market.

If you're big enough, you can cause prices to ripple, get others to lose rationality and buy in on the ascent as you cash out and leave everyone else holding the bag for the crash.

The timing and pricing of investor selling is different to residents selling.

Residents sell (mostly) for reasons other than profit. They might be moving up, or moving away, or whatever. There's some pressure to "get it done" so they can move on. They can't really afford to "time" the market.

For investors there's much more "buy in the down, sell in the up". Except that it's been going up for a while, so there's no motivation to sell at all. It would be uncommon for them to accept a loss. Even unoccupied it's (mostly) better to hold rather than sell at a loss.

As mentioned elsewhere, overall market penetration by investors differs wildly by market, and segment. So 3% overall might sound low, but 20% of a dwelling type in a specific market is plenty to alter market forces.

I say this as someone who has owned property as an individual, and also worked in a business that invested in property.

There's a huge motivation - the time value of money. And all the costs of having the house sit there not earning money.

An $800,000 house costs you $150/day in lost income.

In most markets I'm guessing an 800k house is at the higher end of the market.

That aside, housing portfolios always plan for a certain amount of unoccupied space. It's built into the model. (That's partly why small investors who own 1 or 2 properties get hit harder by this.)

Equally, even if the house is empty, there's usually some capital gain going on.

Investing in property is a long-term investment. The cost of buying, or selling is very high. So it's about getting quality units, in the right market space, and then leveraging that for a decade or more.

Yes there are lemons. And yes they'll get sold, perhaps at a loss. But being unoccupied for a bit doesn't make it a lemon, and being unoccupied won't necessarily trigger a sale.

Institutional investors are much more experienced and thus also a lot more likely to not buy lemons in the first place. Most "mom and dad with a second property" investors either inherited a place, kept an earlier property they lived in, or bought another property in their own neighborhood. They're typically gonna make some mistakes along the way.

It depends on the swing of the market if it's a buyers or sellers market.

In the past there was far more spread in housing prices. These days real estate agents tend to follow a few market making sources for setting those prices, along with personal home sellers looking at 'internet prices'.

>inventory at an inflated price and assume the whole rest of the market will follow you.

When you target particular areas you absolutely can.

The average 21+ US resident may own 2+ properties but I'd be surprised if the median equivalent owns 1. It kinda hides the equivalent of the top x% of individuals owns y% of the stock market where y is unreasonably disproportionate to most.

Not true. That 29% is “investors”. Only one fifth of those transactions are from “institutional investors”. It’s mostly evil non-institutional investors, who also own ~97% of single-family rentals.

They behave accordingly. The do things that they can, and because those things are relatively new, it's a type of information asymmetry and policy / good intentions / competence arbitrage that we haven't had to cope with before.

You might end up banning certain types of institutional participation in the housing market, because there's no way to protect against the negative consequences that doesn't have even worse consequences for either the participants or the population at large.

It'll probably have to be arbitrary, and the cost will be a bunch of firms no longer get the opportunity to make a bunch of money by leveraging their resources in that way.

And we see the influence and impact constantly, with outlandish asking prices being immediately met by institutions that have decided they want a particular property in a particular region. Or house prices being set to an outlandish level with no reduction in price over months and months on the market, because they can afford to sit and wait for the market to change. And if they can afford to do that, then all of a sudden they've got an incentive to drive prices up in that region, because local and state governments, banks, and realtors tend to use the same basic rubric to evaluate price. If a lower valued area sees home prices go up, properties in the higher valued area will be raised accordingly. There's no secret quant voodoo, it's just using a level of liquidity and staying power not accessible to non-institutional homeowners.

Supply and demand normally influence pricing feedback at much more granular levels which benefits individuals, and our policy and regulation and evaluation models are largely built around those assumptions. Without the negative feedback driving prices down, bad things happen for consumers, good things happen for those who already have lots of money and property.

I can buy a house tomorrow and hold it vacant off the market at a listing price 3x its value. I will have zero impact on the housing market. You may be conflating the listing price of an asset with the clearing price of that same asset. You can, obviously, build up inventory to manipulate prices. To do that, you have to be able to generate scarcity, which is exactly what corporate investors aren't doing.

You've just given me 6 more paragraphs about the control you think they have, and you still haven't told a simple 1-2-3 story about how they're using a microscopic footprint in the total housing market to distort prices.

You have to do better than "supply and demand normally influence pricing feedback at much more granular levels". In the context of your original claim, of them being "a huge driving force in setting and manipulating prices", you need to explain how that would actually work, and not rely on handwaving.

> To do that, you have to be able to generate scarcity, which is exactly what corporate investors aren't doing.

But they did. When inventory was low and then zero percent rates where available, they bought everything they could and drove prices up and created an appreciation bubble. I don’t think they have some other dark patterns for manipulating the market but they had access to a lot of basically free cash. Inventory of houses for sale is a tiny portion of the total market and they could and did contribute to driving prices up. But so did everyone that had the opportunity and inclination to do so, and why not when money is free leverage the shit out of it in an asset class that will generally appreciate without much risk.

I don’t know what ever came of that now that rates have increased. Are they still holding those homes? Did they sell them after driving prices up? (But not fast enough to make prices go down again obviously). Are they landlords now? Etc.

The market is still reeling from that economic situation that created this. Prices may eventually float down but no seller is eager for that so it’s a bit sticky.

My claim would be that in any any of the top 10 markets by transaction volume (just to pick a handy metric out of the sky; you could choose others), corporate investors are literally a nonfactor.

They can also target just specific areas of specific major metros and there are ripples throughout the entire market.

The housing “market” does work the same as the stock or commodity markets. People aren’t buying an intangible share. They’re buying this specific and unique house and if they’re told “we just got a cash offer for $50k over ask”, they may be tempted to beat it. That doesn’t happen when people buy AAPL. The shares are fungible.

There’s only empirical evidence of their buying activity. We’ll never know how many deals they bid the price up on but didn’t buy. This auction like quality is evident in any market like this; watch Storage Wars and one disinterested buyer will bid up the price just to fuck with his competing bidders.

You can't "just bid". A bid is a contract. If you back out, you'll lose your earnest money.

There’s a lot going on between making an offer and losing earnest money.

I’m selling a house right now that’s in bad shape so getting lowball offers. They don’t even submit an offer, they text me or call me and tell me what price they would offer. They don’t want to do the paperwork for something I’m just going to ignore. Yet, if it turns into 2 or more people floating numbers I like I will tell them to write it up then I will tell them there’s another offer and try to get them to go higher. All that is before I accept there offer and earnest money is put down after that. So the bidding war is over by that time.

Even if earnest money did work how you describe, it would tie up a few thousand dollars per property for a few days max then be returned and redeployed on another property. These companies have deep enough pockets to fund that. There earnest money only ever enters the picture of their offer is accepted.

Where did this occur? Is this substantiated?

Googles AI overview of my search for “ covid era corporate home purchases”, also plenty of substantiating references in those search results;

> Corporate home purchases surged during the COVID-19 pandemic, driven by factors like low mortgage rates and increased demand for single-family homes. While this trend has plateaued since the peak, investor activity remains above pre-pandemic levels and has sparked significant public debate and legislative action.

A tidbit from an article indicates they doubled their prior investment activity. Probably more than double because investors bought homes increased and their share of that metric doubled.

> Prior to the pandemic, mega investors averaged about 7% of overall investor purchases and their share increased to 14% during the pandemic — it has now slowed

I do not think it's unreasonable to request a single example, statistic, or attributable fact.

What? Cash is never ever free. If it's your Scrooge McDuck cash vault, you're losing money by not investing it. If you borrow it, you're paying interest on it.

https://romanroyce.com/wp-content/uploads/2022/02/ScroogeMcD...

Because if I saw a house 15% below market where I live, I would buy it (to live in). I don’t imagine I’m the only one. Institutional investors can’t stop me from doing that if it’s offered - can they stop the seller from offering that?

The main contributor to the price here is financialization. The more money the average buyer can raise for one of the scarce things, the more they cost. Nobody wins from this except the banks, so perhaps it should be more regulated.

Building regulations are also a problem. Legalize whatever you feel is the minimum safety standard of homeless encampment or slum, and watch house prices crash overnight, since prices are set at the margins and a lot of people (including me) would be happy to find a way to work with simple concrete box if it was cheap and secure, but it's not legal to build those.

Yes, you still need to solve the problem with 'money', or more accurately a tax. That tax is based on the assessed land value using market knowledge, but it would ideally be set to drive down the price of land to zero. However since we don't live in a world of spherical cow, tax would be set below that ideal to avoid land abandonment.

This is not even new by the way. The crisis we face is the same as in the 19th century when Land Value Tax and Georgism was proposed.

The Netherlands and Tokyo beg to differ.

There's not enough houses on the market (zoning, and people want to keep their low-rate mortgages), there's people worried they can't afford houses (prices inflated faster than wages, rates went up), and a large amount of housing transactions (someone quoted 29% of starter homes) are being paid for by institutional investors (who can pay cash).

Wouldn't these institutional investors buying houses be "marginal consumers", kind of like the marginal producers who set the price of inelastic commodities such as oil? Seems like 29% of transactions is even more than marginal.

I assume that sellers would need to come down in price to what non-institutional buyers could afford if institutional buyers were removed from the equation.

As an aside, I'd rather see supply increased, but maybe demographics over the next decade or two will fix that problem anyways.

To be clear, I don’t think institutional real state investment is a substantial part of the reason housing prices are so high. I’m just trying to push whatever argument they were thinking of toward something quantifiable.

It's just land ownership isn't being taxed properly, no matter who owns the land. We homeowners get a free lunch from economic growth and price appreciation of real estate while penalizing capital investment.

The solution is simple if not necessarily easy to implement. Tax land and at a high enough rate, and exclude building and improvements. We'll reap bigger benefits if we reduce taxes on income and capital and eventually phase it out.

Some people do that, but they aren't good businessmen. Vacant houses lose money at a prodigious rate.

Many vacant homes in the SF bay have been that way for years and have appreciated tremendously.

Mant would perfectly prefer buying poorly maintained boomer stock, holding for roughly forever (in ideal markets, like the distorted California/Prop13) and leveraging it like a brick of gold. Actually having someone live in it doesn’t outweigh the risk of managing pesky tenants esp. when the houses are appreciating 500k over 5 years.

Having deep pockets simply means that you lose a lot more money when following money-losing strategies.

Most of these schemes are hare-brained because they do not take into account the time value of money nor the costs of having vacant investments that are not generating revenue.

The way businesses make money is by buying an asset and then immediately putting that asset to work generating revenue.

No homes for sale. Rent only.

Stuff like that is becoming a big problem.

When we constantly read stories about people not being able to afford homes today, it’s all driven by pure supply and demand. When a firehose of money gets aimed at any aspect of the economy everything gets more expensive.

This is from institutional investors. Sometimes it’s government when we are talking about the price of education or healthcare for example.

It also lowers the demand (it increases the supply of an alternative).

Instead, now they’ve created a slight reduction in demand for houses to buy by offering a housing alternative that didn’t exist before.

This is a recurring theme k see among both right wing and left wing people when it comes to looking at single family homes.

How does it matter whether "a lot of people don't consider" something if there are no laws or enforcement actions that make their opinions actually effective in the world?

How do you come to that conclusion? The people who show up to local planning meetings are clearly very effective at enacting their opinions in the world, and local planning is the place where a tiny number, perhaps 3-5 people, can drastically change the results for an entire area.

1) Local planning decisions are not made on the basis of democratic votes, they are political decisions made by a tiny number of people that are highly susceptible to influence. In particular, money and local political power has a huge effect on who gets elected, who is paying attention to what happens, and who benefits. There's very little attention paid to these matters except those with highly conflicted interests, which means that highly conflicted decisions are the most common outcome. Which leads to suboptimal results over longer periods of time, as happens in any system that appears to be democratic but is actually corrupt.

2) Even in democracy, one bloc deciding that another bloc's interests can be ignored and don't matter to the functioning of government is an extremely toxic environment which results in awful outcomes. I view any system where there are second-class citizens as a fundamentally un-American idea and counter to the goals of our nation. Those who wish to exclude an entire economic class from their community are trying to create precisely that sort of second-class citizen.

However, I do not think there is any reason to require that all voters respect the interest of all other voters, and any system that is predicated on such respect is doomed to fail in worse ways than the one we have.

Democracy is hard work. Good things don't happen by just casting votes. There are almost always other interests at work that are likely to conflict with your own. You can't wish this away, you have to do the work.

The one thing I will say that I think is actually blatantly corrupt is when planning meetings are held at times or in locations that make it challenging or impossible for the people most likely to be renting to attend. And this really does happen, far too much. In spite of this, I think that focusing on the attitude of the voters who oppose the interests of renters is a mistake, and that one should focus on how to fix the process.

But either way this has nothing at all to do with housing affordability.

Uh, no, don't equivocate "forced rent" with "renters". That's bad faith.

Sure, you can absolutely make the argument that for some specific region there are too many rental properties and not enough owner-occupied properties, by looking at the supply, demand, and pricing for each type in that region.

But you absolutely can't say that as a general statement. There is demand for both sorts of housing.

this is an impossible burden of proof. requiring a perfectly schematic, end-to-end causal story before acknowledging harm is a convenient way to dismiss any structural concern.

pointing out that housing markets are complex doesn’t invalidate localized, repeatable effects or concentrated power. that just raises the bar of explanation until lived outcomes are dismissed as “just-so stories”, which matches the tone of your condescension.

There is no narrative coherence to be found demanding the living honor social debts, contracts of history; yes children believe these successes you never witnessed happened! That surely cannot be used for ill gains.

This smells more like self selection bias. You have been successful and thus prefer care be taken tidying up systemic issues created by our ledger.

Am a Thomas Jefferson fan when it comes to generational churn; the only constant political rule should be to rewrite things every couple decades or the living end up ruled by fiat decree of the dead.

There's no reason to believe that someone owning a tiny portion of the houses is setting the market price.

> they are huge institutions with tons of money, and thus can hold houses longer, buy houses are higher prices, influence related markets, etc.

No huge institution is willing to lose enormous sums of money waiting for vacant overpriced houses to sell.

I've lived in many houses. One was in a development, and I wanted to sell it. There were several houses in it that were vacant and for sale with no offers in the previous year. I sold mine in 3 weeks. It was simple - I priced it properly, and I didn't have to pay another year of taxes, insurance, repairs, maintenance, and worry, only to have to lower the price anyway to get rid of it. A couple of the other homeowners were angry with me about that, but that was their problem.

Also these institutions would be buying houses in high demand areas.

I think you just explained partly the reason behind why a small number of owners can drive the prices up. But these are usually private owners. Whenever I see bank sales, they're more like flash sale and done.

Those who can afford to sit on the property trying to obtain a higher price will do it. Other owners will look at that and try to keep the price high with the illusory hope that they can also make that much money. Individual owners can suffer from FOMO and are influenced by success stories, so ask a high price hoping to capture as much of the value as possible.

I saw it in action when I bought my house. The seller saw his neighbor selling the house a year earlier for [princely sum] so he jumped to put his house on the market for [princely sum +20%]. The whole neighborhood was following the same playbook, looking at who sold and raising the bar. After a year with that house on the market I became interested and in a 6 month process I ended up buying the house for [princely sum -20%].

None of the neighbors know how much he got, only know how much he asked. A similar house 50m away is still up for sale for even higher price than than the listed price for mine. They can afford to sit on it for a while because the extra money they hope for covers the taxes and upkeep tenfold or more.

At least where I live, real estate sales are public and you can easily find the sale price at the county assessor's website.

I could afford to sit on it, but I try not to be stupid with investments.

I am surrounded by people who sat on houses for a decade only to triple their money after inflation adjustment when they sold. We're talking 7 figure profits. Trying to sound smarter than everyone else sometimes backfires.

Topics like this are hard on HN because a lot of commenters hold a deep, passionate hatred of something: Wall Street, Big Tech, OSes they don't use, even the concept of private automobile ownership. Once they descend upon a thread they're not interested in facts, they just want to tell stories that support their villain narratives. When it starts to get illogical they don't want to back down because doing so feels like an attack on their deep-seated beliefs.

There are some completely illogical economic theories being pushed all through this comment section. It's kind of fascinating to see how bad some of them are. Someone tried to argue with me that cars could be produced for a couple thousand dollars if not for all the regulatory overhead we impose on them in the US. It's almost hard to fathom how someone could believe that without stopping for a moment to wonder why no other country is building these $2000 full featured automobiles without these supposed regulations that increase the price by an order of magnitude.

I agree with your broader point though.

The real price in 2017 was $3400, which is $4500 in today's dollars.

The safety ratings and crash test results were also dire.

We don't need to explain how they do it. We KNOW private equity is expecting to make profit from their investment in residential real estate. That profit ultimately comes from people in houses, making them less affordable.

We most certainly do. PE owns pools of rental housing; this is a fundamentally different model from speculation. While both impact the selling price they do it in completely different ways, and if institutional investors own a tiny fraction of the total stock, they're not having a huge impact on the supply side which would potentially drive up prices.

You're supposed "logic" seems comparable to magic.

Housing affordability is inherently unpopular with voters.

Prices are high because we don't build enough houses which is mostly because it's really expensive to build houses, then the houses we have built are all owned by empty nesters and people with 1 - 3 investment properties.

Everything else you're describing is completely ridiculous.

Assuming you're referring to the typical high CoL areas, the shortage has very little to do with the expense of building. The zoning laws don't permit sufficient supply in those areas. And that's quite unlikely to change (at least quickly) because anyone pushing such reform would be obliterating the average Joe's net worth.

These processes are intentionally labyrinthine

    > anyone pushing such reform would be obliterating the average Joe's net worth.

The "crisis" is specifically the high cost of housing. So if whatever you do doesn't lower the price then by definition you've failed to solve the problem.

It's certainly a dichotomy but I don't see how it's false?

> We can easily build twice as much in high cost areas (with the strongest job markets) with little impact on existing home owners.

It's certainly possible to encounter nonlinear behavior. If some aspect has saturated then we might build quite a bit without seeing any substantial price movement. But eventually prices would start to decline.

I'm not sure if "obliterated" is the right word to use, but if making housing affordable means a 20% drop in home prices (which is perhaps not even enough in some places), average Joe existing homeowner is going to run into financial trouble once that happens.

> We can easily build twice as much in high cost areas (with the strongest job markets) with little impact on existing home owners.

If that's the case, then all that new housing will also cost more or less exactly the same as the existing housing stock costs, and the problem will not have been solved yet.

Many people have been sold on the former and will (fairly understandably) act to protect the value of their single largest purchase which often has a large mortgage attached to it.

Sure, if they need to move and sell, the price difference might be less favorable to them, but having to weigh cost vs benefit of moving is a fact of life one way or another.

It's a strange expectation to have that home values should act as an investment that can only ever go up.

Letting that expectation influence policy on making space for living available is one of the root causes of this crisis.

Agreed. They will generally build as tall and as dense as they are permitted to because (within reason) it reduces unit cost. Obviously there are limits to that. No one wants to build a high rise in the middle of nowhere.

But within high CoL areas they are generally severely limited on both of those aspects. That's due to zoning laws.

Of course that's not the whole story. Infrastructure has to be upgraded to keep pace with growth. But that's on the local government to plan and execute properly. Right now they largely just say "no".

Right, and that bureaucratic red tape is one of the things that makes the cost of building higher. If the builder expects they won't be able to break ground for two or three years because dealing with the planning commission takes forever, or because they'll have to deal with environmental lawsuits before they can build, then they will need to target higher-end buyers (by building a higher-end property) in order to make a profit. And if they can't do that... right, they simply won't.

https://bendbulletin.com/2025/12/13/middle-housing-slowly-de...

Or this:

https://bendyimby.com/2025/06/12/detached-townhomes-come-to-...

And it continues:

https://www.sightline.org/2025/06/04/oregons-zoning-reforms-...

It generally does not drop values, just allows for cheaper options.

That can only be true if you suppose that the current values aren't driven by supply and demand. How do you propose to explain that?

Cost of living is high because local incomes are high which increases the price of land and labor which increases the price of building.

Restrictive zoning is bad for lots of reasons, but solving it does not solve affordability.

https://www.nber.org/papers/w33694

Only in a purely illusory sense. Suppose you have all your net worth tied up in a house. If your house magically vanished, you'd have nothing but your job.

The price of houses falls to $500 and you potentially go bankrupt. Then, you buy a house for $500.

You, personally, are now better off than you were before. Some examples:

---

1. You have $200,000 of equity in a $700,000 house. After the price drop, your net worth in dollars has improved by $300,000. Your net worth in "stuff" has risen dramatically; you kept your job, and now you have 100% of a house instead of having 30% of a house.

2. You have $700,000 of equity in a $700,000 house. After the price drop, your net worth in dollars is down by $699,500. Your net worth in stuff is unchanged. Assuming you always need to live in a house, this will never have any negative impact on you. You retain the option to live in the house you have (which leaves your life unchanged), and you also retain the option to sell your house and use the proceeds to buy another house (and this option looks a lot better than it used to; given the crash in prices, you can probably afford a much nicer house).

3. You have $200,000 of equity in a $700,000 house. You also have $15,000 of "equity" (resale value) in a car that you owe no money on and bought for $50,000. After the price crash, you lose your house and your car, and then you buy another house for $500.

Replacing your car will cost you $50,000. You are in a similar position to the guy in example (1), but $50,000 poorer. So now we ask: was it better to be $500,000 in the hole on your house before, or to be $50,000 in the hole on your car now?

---

There isn't a way for the average Joe not to come out ahead. There is a way for someone else to lose out on the price crash: if you had more than one house before, you lost everything on the houses you weren't living in. But that's got nothing to do with the average Joe.

Also in the case of mass bankruptcy and mortgage failure of the lower middle class I guess there would be risk of bank failure as in 08? That said, I still think the hypothetical illustrates the overall situation quite well.

How?

A drop in the price of houses means it becomes more difficult to exchange houses for non-houses.

If you borrow against your house to obtain something else, and then the price of houses falls, you successfully timed the market. That's all upside for you.

What do you think is the difference between example 3, the guy with a $500,000 mortgage on a $700,000 house, plus a $50,000 car, and example 3', the guy with a $450,000 mortgage and a $50,000 car loan on his house, plus a $50,000 car?

Say I inherit a $700,000 house and, being the kind of guy I am, immediately mortgage it for $500,000. But I stop renting and move in to my new house. Also, I hire a bunch of call girls to live with me in my house. One year later, the price of my house drops to $100,000, and I turn it over to the bank.

I started (the crash) with a $500,000 loan and no way to pay it back other than selling my house. At this point, the faster I realize what's happened and sell my house, the more money I'll be left with. (If I sell immediately, I'll get $200,000!) The longer I postpone selling, the worse off I'll become. (Though since I can live in the house, this trades off against what I would spend on rent.)

I've also spent $500,000 on entertainment and one year's rent. Mostly entertainment. Is this a harm that was dealt to me by the fall in the price of my house?

When the price falls, this forces me to sell the house, locking in a profit of... $500,000. (Which I've already spent.) It could have been $700,000, in theory. This $200k difference in profit vs potential profit can be seen as an effect of the price crash. But that's pretty good for an event that notionally took $600,000 out of the value of my house. Borrowing against the house helped me.

If you want to talk about a negative effect on someone, walk me through the accounting.

    +-------------+-----------+---------+---------+-------------+-----------+----------------+---------+
    |    event    | my equity | my cash | my debt | bank equity | bank cash | bank held debt | hookers |
    +-------------+-----------+---------+---------+-------------+-----------+----------------+---------+
    | baseline    |        0  |      0  |      0  |          0  |        0  |             0  |      0  |
    +-------------+-----------+---------+---------+-------------+-----------+----------------+---------+
    | inherit     |      700k |      0  |      0  |          0  |        0  |             0  |      0  |
    +-------------+-----------+---------+---------+-------------+-----------+----------------+---------+
    | mortgage    |      700k |    500k |   -500k |          0  |     -500k |           500k |      0  |
    +-------------+-----------+---------+---------+-------------+-----------+----------------+---------+
    | party       |      700k |      0  |   -500k |          0  |     -500k |           500k |    500k |
    +-------------+-----------+---------+---------+-------------+-----------+----------------+---------+
    | price crash |      100k |      0  |   -500k |          0  |     -500k |           500k |    500k |
    +-------------+-----------+---------+---------+-------------+-----------+----------------+---------+
    | bankruptcy  |        0  |      0  |      0  |        100k |     -500k |             0  |    500k |
    +-------------+-----------+---------+---------+-------------+-----------+----------------+---------+

Before the price crash, I had "200k equity"† in that very house, leaving me $500,000 short of a house.

After the price crash, I was deeply underwater on the house. Without bankruptcy, I was still $500,000 short of my house, but only $100,000 short of some other house.

And then, after the bankruptcy, I was $100,000 short of a house.

1. What is the harm that I suffered from the price crash?

2. If the "hookers" column had some other label, would that change the harm that I suffered from the price crash?

† You might note that this is accounted as 700k equity in the table. The table is correct, but that's not how we talk about it. There is probably an error in my earlier comment related to this.

Well I suppose that guy might come out unscathed since many US states protect your primary vehicle in a bankruptcy. But to an approximation declaring bankruptcy involves losing all of your remaining assets. So in that scenario the borrower is on the hook for the cost of replacing those assets (limited by how far underwater they were on the mortgage naturally).

Your other example involved blowing the borrowed money on entertainment in which case I agree that you come out ahead. But that is precisely why I used the term "assets" in GP.

Also I don't think everyone just gets let off scot free after a bankruptcy? Don't you sometimes get stuck with some amount of repayment depending on the nature and volume of your income?

My question about bank failure also still stands. While the impacts of this hypothetical on personal finances are certainly interesting to consider, I'm thinking we really don't want to do the whole widespread mortgage default thing again.

> But to an approximation declaring bankruptcy involves losing all of your remaining assets. So in that scenario the borrower is on the hook for the cost of replacing those assets (limited by how far underwater they were on the mortgage naturally).

If you financed something by borrowing against your house, then it cost less than your house, and when you have to replace it, the cost will be less than the cost of buying a house at the original prices. This is the "you lose your house and your car" example. Losing your mortgaged house and your owned-free-and-clear car is good when buying a replacement house+car costs less than the mortgage on your house.

What if house prices fall into the sweet spot where (1) your mortgage is underwater; and (2) a new house + new "assets" exceed the value of your mortgage? (But don't exceed the original value of your house.)

It could be that those assets don't generate income. In this case, they are isomorphic to the hookers in the example.

If they do generate income, then you might save money by keeping your house at its inflated pre-crash price, and you'll make those pre-crash loan payments using the income stream generated by the assets. Here you have a loan that is nominally against your house but actually against your business. It's underwater when considered as a mortgage, but it's not underwater when considered as a business loan, so you'll keep paying it. Your bank will be fine with this. (Both in the sense that they won't object, and also in the sense that they won't suffer financial hardship.) You'll probably have to recollateralize the loan.

(Or your assets might generate income, but not enough income that you'd save money by keeping your original mortgage. In this case it's straightforward that you're better off losing the original house, losing the original assets, buying a new house, and then not buying new assets.)

In the past tense it should be easy to do. Since he is better off, and he has a good view of how he's doing personally, you don't really need to do much. The difficulty is in convincing him that it will be good for him, not that it was good for him.

Compare congestion pricing in NYC, or self-service gas in Oregon.

> If they intend to purchase properties, it benefits them to depress pricing in the area

Yeah, that’s true of everyone but how would a bank/individual do that? By selling… But if they sell while they’re depressing prices, they lose money!

> Normal landlords don't have effectively infinite money with no forces bearing prices down

Neither do banks. They have quarterly earnings, tax bills, they need to buy more stock, cost of capital etc etc.

> It's a very nuanced and complex system in which these institutional investors have very outsized influence.

Just saying ‘it’s complex’ is trivially true. But, supply and demand isn’t some small factor in that calculation - it’s an iron law that exerts itself at all times.

If a bank wants to ‘manipulate prices’ then, without a monopoly, the only way to do that is to dump or buy. But if you buy up homes to ‘push up prices’ … then you end up with a bunch of homes which you paid more than their current value. Not a great business.

The person who has the real unfair advantage in the US happens to also be the most sympathetic person - the owner occupier.

Earlier you were arguing that investors were acting as marketmakers and now you say this. Marketmakers make their profit from the difference between buying and selling some asset. They don't want to hold prices, they want turnover. If investors really are acting as marketmakers it's actually a good thing because marketmakers have the effect of adding liquidity to a market.

You just haven't presented any evidence or even a hypothetical where this does or could happen.

There are many houses in the US. Not all of them are for sale. There's a difference between having a "tiny portion of the market" when you define "the market" as all houses in the US, and "tiny portion of the market" when you define "the market" as the houses that are actively being bought and sold. I would not be surprised if corporate involvement was a significantly higher proportion of the latter rather than the former.

It takes a lot less to put your thumb on the scale of the "liquid" portion of a stock if it is significantly smaller in size than the total stock.

In some dense urban areas, up to 10% of the local residential properties are owned by funds or investors. There's also overlap with investment networks where you're not getting to BlackRock levels, but you'll have a web of companies with mutual interests and a network of private debt and collateral, and these make up around 20% of the whole. For the most part, though, the majority of single family homes are not institutional. Even multi-family units, apartment complexes, and other rental properties are only in the ~10% range of institutional ownership, with the remainder owned by individuals, mom&pops, and small investment networks.

The conjunction of capabilities and incentives in combination with a huge buffer of wealth allows institutional investors to manipulate things in ways that aren't healthy for private home ownership, and the downstream social and economic impacts of being forced to rent, or hold debt that's not properly reflective of the value of the property.

We should impose reasonable policies that serve the interests of the people, and not simply maximize wealth building at the expense of citizens and families that would benefit from home ownership.

In this way houses are virtually unique in terms of financial vehicles and it introduces all manner of complexity and otherwise strange forces into the market. You can't simply treat it like any other commodified asset.

Dropping the price of a house by a few percentage points can be the make-or-break for some families. And small changes in availability can have large impacts on price.

If we banned (or severely penalized) all entities from owning more than 5 residential homes, this would probably reduce cost by a few percentage points across the board. That's thousands of dollars.

Personally, I think unoccupied homes in general ought to be penalized (beyond just tax burden, an actual vacancy tax).

[0]: https://en.wikipedia.org/wiki/Land_value_tax

    > home improvements, which means remodeling your home or doing other perhaps large pieces of upkeep will not trigger a property tax increase as it does today

What WILL change your property tax is an addition or similar that makes your house go from X (same as everyone around you) to 1.2X or similar, then you'll proportionally pay more tax.

(It varies by district, but most USA property taxes are calculated by figuring out the budget for the city/county/school district, and dividing it proportionally amongst the valuations of properties/houses. This is often displayed as a percentage of the value, but it is not a percentage TAX - as if everyone's property doubles overnight but the budget remains the same, the property tax dollar amounts would remain the same while the percentage reported goes down.)

But if the improvements on your house makes the neighborhood more desirable and your neighbor's house sell for a higher price then your locality expects, then your house will be assessed at a higher value the next time the locality does their assessments, which means higher taxes.

Of course, improvements to your home that increase a sale value will affect the taxes, but the buyer has to deal with that.

Do some localities assess homes individually every so often? I wonder...

A roof replacement isn’t really an improvement so much as expensive maintenance.

As is done in the UK

https://www.gov.uk/council-tax/second-homes-and-empty-proper...

If you buy 60% of the properties on market, the rest will see this and adjust their own prices. Usually this only works when the macro is favourable (low interest rates, easy mortgage applications, etc.), but it is definitely a large factor. It sometimes creates a even hotter market, with people thinking that real estate goes up forever, then they sell.

You're right that it's not always large investment groups. Vancouver in Canada had the same thing happen, but mostly from foreign investors and criminals washing money. The latter was facilitated by politicians who cashed in big on this.

They're going to skyrocket in a seemingly irrational way. But it's completely rational. The reason is that they're a finite resource that is needed, and so there is very minimal price elasticity. People will pay as low as they can, but simultaneously must have oil and so have a practically uncapped price ceiling if that's all that's available. The same is true of housing.

You're right that people won't, generally speaking, buy a house for $100 when there's another one for sale for $80. But what you've done there is greatly increase the demand for that $80 house, which is now going to naturally send its price upwards.

---

Finally there's the issue that figures on the percent of homes that are owned by investment groups are misleading, because they aren't just buying homes randomly. They're going to pick up lots of houses in precise areas, and so the impact on prohibiting this behavior will be dramatic in these areas.

Having lived through the various oil crises, I can confidently assert that there's a great deal of demand elasticity.

For example, when the 70s oil crisis hit, people stopped driving to the store for a loaf of bread, but would shop weekly instead. For another, people buy more fuel efficient cars when gas prices are high. For a third, people switch to electric cars.

There are regular major disruptions in the flow of oil. Pump prices change on a daily basis, and that results in the amount of gas available == number of gallons customers pay for. No gluts and no shortages.

https://papersourceonline.com/wall-street-has-spent-billions...

https://www.kut.org/texasstandard/2022-06-14/texas-home-sale...

As others have pointed out housing markets are illiquid and tend to have a limited set of sellers at any given time such that the race-to-the-bottom doesn’t happen very often.

Rather, an institutional investor buys high on houses in desired neighborhoods then charge high rents on their portfolio. Subsequent sellers in the same neighborhood see the high closing price and ask for even more.

Does no one remember “drive til you qualify”?

When enough institutional investors are all doing that same thing, the market suppply becomes restricted, especially in focused regional areas. It ends up indistinguishable from collusionary antitrust, though there's no actual communicated collusion so it's not technically illegal. In a normal situation like that, all it takes is a single participant to cave and drops prices to take advantage of the demand. But in this case the institutional investors can keep taking the losses indefinitely so no one ever feels the need or benefit to "break" first, and they can maintain it forever.

If you doubt they will lobby to increase their profit, try proposing anything that has a 0.1% risk of their property value going down and see how they react.

    > because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing.

    > instrumentalized

    > securitized

    > with derivative products

    > speculation

Spoken like someone has no clue what they are talking about and just throwing out jargon

A rebuttal to that article from Derek Thompson: https://www.derekthompson.org/p/the-anti-abundance-critique-...

https://www.noahpinion.blog/p/corporations-arent-the-reason-...

Quoting Thompson:

"The U.S. has roughly 140 million housing units, a broad category that includes mansions, tiny townhouses, and apartments of all sizes. Of those 140 million units, about 80 million are stand-alone single-family homes. Of those 80 million, about 15 million are rental properties. Of those 15 million single-family rentals, institutional investors own about 300,000; most of the rest are owned by individual landlords. Of that 300,000, the real-estate rental company Invitation Homes—in which BlackRock is an investor—owns about 80,000. (To clear up a common confusion: The investment firm Blackstone, not BlackRock, established Invitation Homes. Don’t yell at me; I didn’t name them.)

Megacorps such as BlackRock, then, are not removing a large share of the market from individual ownership. Rental-home companies own less than half of one percent of all housing, even in states such as Texas, where they were actively buying up foreclosed properties after the Great Recession. Their recent buying has been small compared with the overall market."

I mean BlackRock and Blackstone creating securities backed by real estate in general, not only single family homes.

What if this new type of asset signals to the broader real estate market that regulators favor large investors?

Even more likely, what if this new type of asset succeeds at the expense of first time home buyers?

How do you think homeowners would feel about a policy that doesn't maximize the value of their homes. That's just another way to phrase "maximizing the cost of real estate"?

The gobbledygook you posted, “ properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing”, is just that, gobbledygook.

Just because a buyer as Inc. behind its name doesn’t give it magical powers to set market prices.

If you think it does, then please explain it to us like we are really slow.

https://www.milliman.com/en/insight/mortgage-market-and-hous...

https://www.sifma.org/issues/market-structure/housing-financ...

The intermediate players "electricity retailers" then participate in a day ahead and real time market to fulfill their obligations to their customers.

You'll find most markets actually work this way. When I go to the supermarket to buy sugar, the price isn't jumping around real time with the underlying price of sugar. Same for coffee etc. But it changes with a lag, and consumers respond and the effects flow through even if not in real time.

If cocoa prices spike, you buy less chocolate. If housing prices spike in your job market, your options are: pay more, endure a brutal commute, or uproot your life. The demand is far more inelastic.

I can easily live a full and meaningful life without owning gold, drinking cocoa or eating mustard. Those aren't essential and have decent substitutes.

Electricity is essential, just like housing and it's very highly regulated.

If you're going to use "housing" as an umbrella for its substitutes, let me do the same. Instead of wheat, beef, pork, cocoa, sugar, etc, let's call that "food". So now food is as essential as housing. Why doesn't the housing complaint against speculators work for food speculators?

We could start with I have traded wheat futures and could hedge with future contracts on all those commodities. You can't trade single family home derivatives in the same way because it is not the same.

This is unthinking market religion stupidity and the result is going to be a massive over correction towards socialism. You don't help free markets with this bullshit. You are helping to destroy them in the long run.

And you're claiming that the reaction to opposing state control and socialism is socialism? Not compelling.

Like this one:

> In fact, institutional homebuyers (those who bought 100+ homes in a 12-month period) didn’t even reach 2.5% market share at the peak level in this data line, which goes back to the start of the century.

I don’t know how to evaluate this. I doubt this analysis rolls up subsidiaries. So what does it really mean for an entity to own 100+ units? Is that actually something we care about?

Imo only thing people need to give a shit about is whether a house is being bought to be lived in.

"US will ban Wall Street investors" != "Trump says he will ban Wall Street investments..."

This a Truth Social post from the President. It doesn't mean it has happened, will happen or will happen in the form that either Trump says it will or is being implied here.

This is a very difficult issue to properly address for lots of legal/logistical reasons. For example - many legitimate homeowners have their homes registered as LLCs and most home legislation is governed by states.

What it will come down to is the exact wording of what Trump means by "large institutional investors" (his exact words on Truth).

I'm pretty naive to the issue, but awhile back I took a look at property records for my neighborhood. In fact, equity firms, including BlackRock, were buying up a bunch of houses in my neighborhood.

A tiny datapoint, I know.

Edit: It might've been Blackstone. It's been about a year since I looked it up.

Edit 2: Looking up records now, it looks like most of these equity firm purchases are back to actual people owners! Interesting. What does this mean? Firm bought property and resold at a profit?

I never went far enough to get all the details back when I was considering a move, but my impression is a lot of these "buy your home and close fast" corporate purchasers were offering just enough to make the speed and ability to not have to make a lot of major improvements worth the lost money from selling on the market. Then they do just enough work to clean up any "show stopper" problems and re-sell at market prices.

So (very simplified) if you have a home that might sell for 200k on the market if you put 10k of work into it, but you need to move in a few months, and you need to pay off 100k on the loan, the company offers you something like 180k. You walk away with 80k (instead of 90k) in your pocket and avoid the various real estate agent fees and the need to do any of the fix up work or deal with trying to sell and move at the same time. The company puts the $10k of work into it and sells for the 200k, pocketing the $10k you gave up.

The last call I took, last year, they were ready to buy my house in cash at market value without looking at the property.

The majority of the houses in my neighborhood are rentals, and there are thousands of houses in my neighborhood under the same HOA.

Building has not kept pace with growth in households.

> Black rock isn't buying up all the housing, your neighbors are.

So in '08 we saw the veil drop on the mortgage folks. For a brief moment the sort of advantage they were taking of individual homeowners (I'm including landlords here) was plain for all to see, because the systems they had built to extract that value had been pushed too far and started to break.

The really clever/evil/nasty thing that happened next was that they all said "we're sowwy" and pretended to close up shop on the Mortgage Backed Securities markets, while sowing the seeds for a resurgence in mortgage lending by having Fannie run REO-to-Rental programs that sold foreclosed homes in bulk to investors. It would have been too obvious in the numbers if large institutional investors had bought those directly, so they let mom and pop go into business as landlords, effectively buying obfuscation of the stream of finances for the cost of whatever margins they had to take a hit on to allow for low interest rates to pump housing prices up to a place where, like in 07, they could go back to fucking around with mortages.

In less word salady terms, the plan looked like so:

- "oh fuck we pushed it too far and here come the torches and pitchforks"

- Stop making money on mortgages, but we're investment banks as well as mortgage lenders, so we can make up for the loss of mortgage money by buying a more significant fraction of the housing market at near-zero interest rates

- Wait for low interest rates to pump housing prices over time

- Okay cool, people have forgotten about the whole 08 thing and we've peeled back all the subsequent regulation so we can go back to making our money bundling risky ass mortgage securities again <--- we are here>

The essence of the problem as I see it is that finance has gotten so byzantine and complicated that the only people who understand it in real time are the people who are actively trying to manipulate it to maximize their profits, and by the time it becomes clear what dirty tricks they're pulling they've moved on to the next grift so it looks like they're innocent.

The people responsible for the cost crunch middle class people feel isn’t billionaires. Bezos isn’t using his money to buy up houses or daycare spots in your neighborhood or Disney Word tickets. It’s upper quantile white collar workers. They are competing with the middle class for the same goods and services, but make much more money relatively than they did in past decades.

With house prices being driven up by reckless lending through a debased currency, you enter a feedback loop where every inflating currencies drive prices higher, which only fuels a further frenzy of lending (including through FOMO) to driver prices higher once again.

You seem to want it both ways. It was a misconception, but it apparently did happen, and apparently "cooled down?" I don't think all these things can be true.

It's highly possible they were heavily investing and were planning on continuing but people noticing and the social pushback it created caused them to change their minds about the strategy.

> Black rock isn't buying up all the housing, your neighbors are.

People may or may not be. They may or may not be my neighbors. You seem to be pushing a set of ideals rather than a set of facts.

To a degree, but there's a whole tranche of investment vehicles that accredited investors use to invest in single-family homes that is not securitized at all, and not on Wall Street. The whole fix-and-flip industry feeds into this now, loaning out money to turn houses into rentals that some LLC holds.

If Black Rock is guilty of anything here above all else, it's taking advantage of a situation deliberately created for someone else. If government policy wasn't already going balls to the wall trying to constantly pump up property values, there'd be no investment returns to be had.

Give me the levers of federal, state, and local government and I promise you I can completely tank property values in 48 hours or less.

Atlanta specifically when I was flipping houses in 2012-2015 had a lot of corporate investors buying up low income properties, fixing them up, then renting them out.

You are correct however that smaller private investors are more common. I live in a small city. Small property management companies from NYC and NJ are pretty commonly buying up 2-4 family houses. I suspect that some of these "small" players aren't small at all, but hiding in a maze of LLCs.

I know a couple of dudes from way back that have leveraged their way to a real estate empire with >2000 homes in the region.

This is a common trope.

"It's not big conglomerates that buy and hodl the homes where families are supposed to live, its mom and pop investors so please be nice."

Having a home is not something to speculate with or leave it to the supposed "market forces".

Housing projects and regulation is what this country needs, yesterday.

"The Arrived team is cracked, and I love the audacity of their vision: a stock market for real estate," said Ali Partovi, CEO of Neo, in a release. "I'm betting on them to democratize and digitize access to America's $50 trillion in residential real estate." [0]

Should housing be a “$50 trillion” market for fractional ownership, bundled with its own secondary/speculative market to turn around and flip like penny stocks?

Lovely knowing I can have “access” to that platform and own a 0.004% share in a house someone somewhere out there lives in (rents). While I’ll probably never own a house again.

[0] https://www.cnbc.com/amp/2025/11/13/arrived-launches-trading...

> "Large institutional investors, defined as those owning over 100 homes (which includes private equity firms), own 3 percent of the single-family rental stock nationwide according to Brookings. This share is higher in some local markets — in the 20 Metropolitan Statistical Areas where these investors are most present, they own 12.4 percent"

I personally believe that its problematic that large institutional investors own 12.4% of single family properties in the 20 main metro areas of the US.

I'm not sure I understand the difference between "Wall Street" buying up all the property and real estate investment firms like RREAF doing the same, or come to that the guy down the street buying a few properties to rent out.

A small company or single investor can buy up a large percentage of local available property and be just as bad a landlord.

Obviously, the other factor in home prices is zoning and people who own wanting to keep supply down so their house is guaranteed to appreciate. Affordable housing (just like homelessness) in the US is only a problem because we lack the political will to solve it.

I'm sick of the arguments that rely on the meaning of "most/many/some/not all". The arguments are irrefutable because you can always weasel your way through the meaning of the quantifier, or the false implication that only the "biggest" of something needs redress before the next in line.

A person owning a second home is fine, that's one of the paths towards financial independence: small business ownership. Someone starting out in a tiny money making operation is a good thing, and they do not need to compete with a trillion dollar empire!

This feels very similar to the Canadian narrative that foreign (read: Chinese) investors are buying all the houses in Vancouver & Toronto. Does it happen? absolutely, but it's also a nice way to blame a segment that has no voice or recourse. It also allows us to turn a blind eye to the impact of a generation of essentially zero % interest rates and a country that holds twice as much of their wealth in houses as the US. Other popular targets: out-of-province home owners, vacation property owners, multi-generational properties.

The reason institutional investors are blamed is that they usually have significant holdings elsewhere, and demonstrably will just wait out a market, taking loses they write off against their other businesses in the meantime, rather than actually participating in it. That ability to wait out the market on a finite resource rather than participating is usually otherwise only seen during antitrust market activities. The fact that many cities are considering adding significant vacancy taxes on properties, citing specifically this behavior as a driving factor, is pretty damning.

Additionally, it's not necessary for these institutional investors that are ignoring the market pressures to own a majority, or even that large of a share. Any portion they own and ignore the market for is effectively just removed from the market entirely and reduces the remaining pool of what's available. And the second-order effect is an overall damping of market responsiveness since they are simply refusing to respond to the demand half of supply and demand. I don't have the models to run the math myself, but it should theoretically be possible to calculate how much their involvement without participation impacts the prices as a relation to market share, and I'll bet it's a nonlinear result with a steep curve at even low volumes.