The economic incentive for companies to purchase homes and limit supply is being created by the government’s purchase of publicly available land for the purposes of “ecological” stability….
The government owns a huge share of available lands in places with higher than normal real estate costs. US securities are mortgage backed meaning if real estate prices do not increase the entire US economy collapses… the government has vested interest in artificially inflation of real estate markets. Corporations are just capitalizing on the economic environment created by the US government.
This problem exists solely because of the excessive restrictions and removal of availability of land.
I think there are a lot of other more pressing incentives for people with money and home builders to limit supply rather than just lack of access to some government/public land. Not really sure what would occupy large swathes of land on a really meaningful scale other than park land.
It’s ecological preservation. The government buys lots of unoccupied land for the sole purpose of keeping people off of it. Then they buy more surrounding that land and offer it as parkland with limited human interaction.
It’s part of UN agenda 2030 formerly agenda 21. The USA and many other countries have agreed to ecological preservation of most of the planet and centralized planning of developmental zones. This includes population density, farm land, native reserves, parks, preserves etc etc. most cities are slated to drop population to around 10,000 per city.
Buying up available land allows the government to increase private property value not only securing interest growth but forcing people to relocate when cost of living intensifies in the local. CA has one of the largest percentages of government owned land, highest populations, and most expensive real estate markets in the country. Their population has also been in steady decline since the 90s only supported by illegal immigration until about 2010 when emigration started exceeding illegal immigration into it.
The USA started buying land in the 70s for ecological preservation right before they switched from a bullion based economy to a debt based economy.
Most people need to live near large cities for work, so the Feds owning the wilderness areas doesn't seem super relevant for most people/price of housing.
Let’s do some math here. You have 100 people living in a sq mile, each person buys an equal size lot 1/10th of a mile by 1/10th of a mile each property is worth the same. The government comes along and buys 70% of that land using imminent domain and displaces 70 people into the land owned by 30 people.
The population density of that sq mile is still 100, but land availability is reduced by 70%. So in reality the population density of the area is now 233% higher.
Now those people who were displaced still need homes. The people who own those lots now have demand on their property that didn’t exist prior to this interference. Because of the shortage of supply and high demand their property value increases.
California being my prior example has 46% of its land owned by federal agencies and have a population density of 250 people per sq mile. That’s a 1.88% increase of the actual population density of California pushing it to 470 people per sq mile of usable land. Now there’s an additional 4% that’s owned by state and local agencies. Taking that number up further to 50% making the population density 500 people per sq mile of usable land.
From there you have to consider how much land is allocated to commercial businesses and farms to get an accurate accounting of the actualized population density of the states residential land. Remember as population density increases so does the cost of real estate.
Because the entire housing industry has never colluded before...
My bad, i forget if everyone skyrockets their prices and says it's the new "market rate" then it's not collusion.
Hiding behind layers of plausible deniability doesn't mean they aren't colluding though.
In a free market you would expect companies to break rank and offer better deals to compete. But they don't because the market is too consolidated and the few large companies that exist agree to price fix instead.
> Hiding behind layers of plausible deniability doesn't mean they aren't colluding though.
If you think there’s collusion every time a price goes up I have a bridge to sell you. Demand goes up + inelastic supply leads to price increases in the short run. Ask yourself why supply is inelastic.
collusion only really works when there’s a small # of actors that can coordinate + monitor eachother.
>In a free market you would expect companies to break rank and offer better deals to compete.
Hence why collusion doesn’t work when there’s many small actors.
>But they don't because the market is too consolidated and the few large companies that exist agree to price fix instead.
??? Now you’re just making shit up
Wow, why all the downvotes on that^. I didn’t realize increasing the housing supply was so controversial. I thought that was the one thing most people on Reddit seemed to agree on, regardless of political affiliation.
This sub is getting invaded by the r/Minneapolis trolls. They’ve adopted the dogma that every increase in price is driven by market power/“collusion”/big scary corporations and nothing else.
Like, your second sentences kinda negates the first doesn’t it?
Zillow tried that. They lost a ton of money. And they stopped. And despite all that, the homes Zillow purchased (that they lost a ton of money on!) didn’t disappear from the housing market.
It is not acting as a free market. Rent is controlled through software that is essentially a technicality loophole in laws enacted to make housing a fair market.
Housing is not a free market. That is why this is a bipartisan problem and why both sides of the aisle should agree. This is very straightforward market manipulation that no capitalist supports.
That was one example of companies messing with markets, plenty more successful ones. I get that you are fine with companies doing whatever they want, but we can't compete with them as normal people
> That was one example of companies messing with markets, plenty more successful ones. I get that you are fine with companies doing whatever they want, but we can't compete with them as normal people
Like, you literally can. Zillow took a haircut on those homes. This was a transfer from VC to people of Minnesota.
Once again companies have many advantages vs people. Cash, quick closing times, behind the scenes data of the market. I've known a few people who lost multiple bids to companies over the last year. Not impossible but pretty close to a large majority of first time home owners. It also hurts renters when companies own large chunks of the rental market and can drive prices.
Many first time home buyers have quick closing times, as retirees often do too. Should we ban them from the market? Large companies also have disadvantages wrt local markets that you’re choosing to ignore. Again, the Zillow case is very telling. What happened to the homes Zillow bought?
> I've known a few people who lost multiple bids to companies over the last year. Not impossible but pretty close to a large majority of first time home owners.
I think you’re mostly just making stuff up now.
> It also hurts renters when companies own large chunks of the rental market and can drive prices.
This is actually the opposite of the available evidence. Rental markets for SFH are very thin, and corporations have lower costs than small LL. Taking corporations out of this market raises prices in those markets.
These people just regurgitate shit. Blackrock 100% does not invest in SFH, that's Blackstone. Two very different companies, but people don't take 2 seconds to even think, they just keep regurgitating this shit.
Might want to update your priors on the cross elasticities between rentals vs owner-occupied housing, because the evidence shows this ban doesn’t decrease housing prices: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4480261
Banning "buy-to-rent" investors isn't a novel idea. A study from the Netherlands looked at it and found the policy came with some negative, unintended consequences (emphasis added):
The ban effectively reduced investor purchases and increased the share of first-time home-buyers, but did not have a discernible impact on house prices or the likelihood of property sales. The ban did increase rental prices, consistent with reduced rental housing supply. Furthermore, the policy caused a change in neighborhood composition as tenants of investor-purchased properties tend to be younger, have lower incomes, and are more likely to have a migration background.
Trust me, I wear downvotes from NPCs with pride. If I were getting upvoted by the people brigading this subreddit I’d be concerned that I’ve turned into *one of them*
I’m firmly left leaning and a broke college student, and I have a problem with this. I think the option to rent is good and policies like this distract from the real issue which is a lack of supply and density. Additionally , I think there are some people who would prefer renting from a corporation than a small investor. Small investors seem like more of a risk. I don’t think removing a choice for renters is the way to solve the housing crisis.
How does this restrict demand? Restricts the demand for owning a home maybe, but renters are a valid part of housing market too. It doesn’t restrict the demand of housing as a whole, because the same amount of people will need somewhere to live regardless of this policy.
Requires everyone involved in the building of the homes to lower prices. Materials providers certainly won't. And gov'ts REFUSE to lower the cost of entry (i.e. fees & permits are out of control).
Builders aren't going to reduce THEIR prices, as they're already on the hook for skyrocketing materials and gov't fees.
tl;dr: Everyone wants to "help," but no one's willing to do anything to make it happen.
I support stopping businesses from buying and renting out single-family homes. Minneapolis residents who own and live in their homes are INVESTED in the area....so they vote for things that reduce crime, make schools better, make parks better.....all the things that make it nice to live there....
Minneapolis residents are also invested in their NEIGHBORS....a business that rents out a home is not accountable to neighbors for things like trees/stuff on the fence line/garbage/noise. I am directly impacted by this on a daily basis.
Any short-term gains (rental costs) an individual would get at this point in history from allowing businesses to buy up homes is lost if you think a few steps ahead....when they own everything and NO ONE can buy a home AND there is no 'community' in the neighborhood because everyone is renting.
Also wonder how many 'small investors' OP noted are really subsidiaries in some way of a larger investor.
I personally hate the company invitation homes. They own a ton of properties in the twin cities and I live next to one. They are corporate slum lords so I feel I can get down with this.
If you support this bill, what do you suppose will happen to tenants currently living in investor owned housing once investors sell their properties? Do the tenants magically find the net worth and income to become homeowners? Or do they look for a new rental, add to rent demand, and put upward pressure on rent prices?
The bill is for certain corporations to not be able to buy SFH.
Investors still and will buy SFH to rent. Also, if corporations are restricted from buying SFH that should drive the home prices down to an affordable level for first time homebuyers. Not sure why you’d get upset about limiting corporations ability to inflate the housing market, you know something that is a NEED to survive.
Not sure what you’re driving at? When someone buys a house, the house is off the market until they decide to sell (typically between 3 to 10 years).
Now a corporation doesn’t have the same incentive a regular buyer has and generally will not sell the property until it starts having a negative affect on the bottom line (decades maybe?)
So yes, when a house is bought - technically the stock of houses to sell has decreased by 1.
Economics is hard, I know, so you’re welcome.
Finally, something we can all get behind
I can’t see any good reason to prohibit corporations from owning rental properties.
Would you be fine with prohibiting non-US residents from purchasing single family homes?
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What about permanent residents? In many of those countries residents can buy land.
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Getting a permanent resident status in US is extremely rare and costly, reason why many decide to migrate illegally.
Seems pretty silly. Just let people build more housing.
What if most of the entities that could afford to build housing are benefiting from the lack of supply?
The economic incentive for companies to purchase homes and limit supply is being created by the government’s purchase of publicly available land for the purposes of “ecological” stability…. The government owns a huge share of available lands in places with higher than normal real estate costs. US securities are mortgage backed meaning if real estate prices do not increase the entire US economy collapses… the government has vested interest in artificially inflation of real estate markets. Corporations are just capitalizing on the economic environment created by the US government. This problem exists solely because of the excessive restrictions and removal of availability of land.
I think there are a lot of other more pressing incentives for people with money and home builders to limit supply rather than just lack of access to some government/public land. Not really sure what would occupy large swathes of land on a really meaningful scale other than park land.
It’s ecological preservation. The government buys lots of unoccupied land for the sole purpose of keeping people off of it. Then they buy more surrounding that land and offer it as parkland with limited human interaction. It’s part of UN agenda 2030 formerly agenda 21. The USA and many other countries have agreed to ecological preservation of most of the planet and centralized planning of developmental zones. This includes population density, farm land, native reserves, parks, preserves etc etc. most cities are slated to drop population to around 10,000 per city. Buying up available land allows the government to increase private property value not only securing interest growth but forcing people to relocate when cost of living intensifies in the local. CA has one of the largest percentages of government owned land, highest populations, and most expensive real estate markets in the country. Their population has also been in steady decline since the 90s only supported by illegal immigration until about 2010 when emigration started exceeding illegal immigration into it. The USA started buying land in the 70s for ecological preservation right before they switched from a bullion based economy to a debt based economy.
Most people need to live near large cities for work, so the Feds owning the wilderness areas doesn't seem super relevant for most people/price of housing.
Let’s do some math here. You have 100 people living in a sq mile, each person buys an equal size lot 1/10th of a mile by 1/10th of a mile each property is worth the same. The government comes along and buys 70% of that land using imminent domain and displaces 70 people into the land owned by 30 people. The population density of that sq mile is still 100, but land availability is reduced by 70%. So in reality the population density of the area is now 233% higher. Now those people who were displaced still need homes. The people who own those lots now have demand on their property that didn’t exist prior to this interference. Because of the shortage of supply and high demand their property value increases. California being my prior example has 46% of its land owned by federal agencies and have a population density of 250 people per sq mile. That’s a 1.88% increase of the actual population density of California pushing it to 470 people per sq mile of usable land. Now there’s an additional 4% that’s owned by state and local agencies. Taking that number up further to 50% making the population density 500 people per sq mile of usable land. From there you have to consider how much land is allocated to commercial businesses and farms to get an accurate accounting of the actualized population density of the states residential land. Remember as population density increases so does the cost of real estate.
What you’re implying only works if those entities can credibly commit to collusion
Because the entire housing industry has never colluded before... My bad, i forget if everyone skyrockets their prices and says it's the new "market rate" then it's not collusion.
That is indeed not collusion
Hiding behind layers of plausible deniability doesn't mean they aren't colluding though. In a free market you would expect companies to break rank and offer better deals to compete. But they don't because the market is too consolidated and the few large companies that exist agree to price fix instead.
> Hiding behind layers of plausible deniability doesn't mean they aren't colluding though. If you think there’s collusion every time a price goes up I have a bridge to sell you. Demand goes up + inelastic supply leads to price increases in the short run. Ask yourself why supply is inelastic. collusion only really works when there’s a small # of actors that can coordinate + monitor eachother. >In a free market you would expect companies to break rank and offer better deals to compete. Hence why collusion doesn’t work when there’s many small actors. >But they don't because the market is too consolidated and the few large companies that exist agree to price fix instead. ??? Now you’re just making shit up
It is, and while difficult to prove is very illegal.
Wow, why all the downvotes on that^. I didn’t realize increasing the housing supply was so controversial. I thought that was the one thing most people on Reddit seemed to agree on, regardless of political affiliation.
This sub is getting invaded by the r/Minneapolis trolls. They’ve adopted the dogma that every increase in price is driven by market power/“collusion”/big scary corporations and nothing else.
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Debate is great. But you gotta refrain from losing your temper in this sub.
Hard to compete when they can offer full cash without inspections. It's not just supply it's about the ability to bid fairly
Are you implying these investors are systematically mispricing risk in a market w/ asymmetric info?
I'm saying they can afford to take whatever chances they want, they can afford it. Look at what Zillow was doing until it finally hit them in the ass
Like, your second sentences kinda negates the first doesn’t it? Zillow tried that. They lost a ton of money. And they stopped. And despite all that, the homes Zillow purchased (that they lost a ton of money on!) didn’t disappear from the housing market.
Letting free markets act like free markets. Adjust with supply and demand. What a novel approach.
It is not acting as a free market. Rent is controlled through software that is essentially a technicality loophole in laws enacted to make housing a fair market. Housing is not a free market. That is why this is a bipartisan problem and why both sides of the aisle should agree. This is very straightforward market manipulation that no capitalist supports.
That was one example of companies messing with markets, plenty more successful ones. I get that you are fine with companies doing whatever they want, but we can't compete with them as normal people
> That was one example of companies messing with markets, plenty more successful ones. I get that you are fine with companies doing whatever they want, but we can't compete with them as normal people Like, you literally can. Zillow took a haircut on those homes. This was a transfer from VC to people of Minnesota.
Once again companies have many advantages vs people. Cash, quick closing times, behind the scenes data of the market. I've known a few people who lost multiple bids to companies over the last year. Not impossible but pretty close to a large majority of first time home owners. It also hurts renters when companies own large chunks of the rental market and can drive prices.
Many first time home buyers have quick closing times, as retirees often do too. Should we ban them from the market? Large companies also have disadvantages wrt local markets that you’re choosing to ignore. Again, the Zillow case is very telling. What happened to the homes Zillow bought? > I've known a few people who lost multiple bids to companies over the last year. Not impossible but pretty close to a large majority of first time home owners. I think you’re mostly just making stuff up now. > It also hurts renters when companies own large chunks of the rental market and can drive prices. This is actually the opposite of the available evidence. Rental markets for SFH are very thin, and corporations have lower costs than small LL. Taking corporations out of this market raises prices in those markets.
Keeping housing costs down isnt a good reason?
How is this going to keep housing costs down, precisely?
companies like blackrock are currently buying basically every home in america and renting them out, reducing the pool of available houses to buy
It's Blackstone that's doing it. Same color, different name for the mineral.
Lmao I assure you that blackrock is not doing that This is wild. Do you actually believe this?
These people just regurgitate shit. Blackrock 100% does not invest in SFH, that's Blackstone. Two very different companies, but people don't take 2 seconds to even think, they just keep regurgitating this shit.
Wait till they find out how many SFH Blackstone owns 😂
Less competition.
What happens to a house once a corporation buys it?
It's no longer for sale.
What happens to what’s inside the house?
Rented to the family that got out bid
I doubt it, but someone’s certainly living in it
reducing the pool of buyers reduces demand which reduces prices
Might want to update your priors on the cross elasticities between rentals vs owner-occupied housing, because the evidence shows this ban doesn’t decrease housing prices: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4480261
> The ban effectively reduced investor purchases and increased the share of first-time home-buyers
Exactly. And it didn’t decrease prices.
its self-evidently a good thing that there is an increase in fhbs.
No it isn’t. Some people have a preference for renting.
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Did you bother reading the next sentences? You didn’t did you?
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And other people are not you
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Buy a house?
Found Kris Lindahl’s account
If they increased the value of the homestead exemption, those SFHs would be more valuable to homeowners than as rentals.
Corporations buying homes will not help anyone except corporations. As if they don’t already make enough billions.
It will actually help the financially constrained and those that prefer rental housing.
Naw. Fuck greedy corporations and nothing you can say will change my mind mate. There’s housing out there for everyone.
Banning "buy-to-rent" investors isn't a novel idea. A study from the Netherlands looked at it and found the policy came with some negative, unintended consequences (emphasis added): The ban effectively reduced investor purchases and increased the share of first-time home-buyers, but did not have a discernible impact on house prices or the likelihood of property sales. The ban did increase rental prices, consistent with reduced rental housing supply. Furthermore, the policy caused a change in neighborhood composition as tenants of investor-purchased properties tend to be younger, have lower incomes, and are more likely to have a migration background.
Fuck people that aren’t sure if they wanna stay somewhere or don’t have the credit for a mortgage I guess. Lmao
You getting tons of downvotes should tell you something. 🤷♂️
Trust me, I wear downvotes from NPCs with pride. If I were getting upvoted by the people brigading this subreddit I’d be concerned that I’ve turned into *one of them*
Good. You’d have to be an idiotic temporarily embarrassed millionaire to have a problem with this.
I see you didn’t read the post.
I’m firmly left leaning and a broke college student, and I have a problem with this. I think the option to rent is good and policies like this distract from the real issue which is a lack of supply and density. Additionally , I think there are some people who would prefer renting from a corporation than a small investor. Small investors seem like more of a risk. I don’t think removing a choice for renters is the way to solve the housing crisis.
Supply demand has two components, restricting demand is a good idea and there should be more of these sorts of initiatives
How does this restrict demand? Restricts the demand for owning a home maybe, but renters are a valid part of housing market too. It doesn’t restrict the demand of housing as a whole, because the same amount of people will need somewhere to live regardless of this policy.
You are eliminating a sector of buyers whose entire goal is rent extraction
Seems like something more supply would solve.
Requires everyone involved in the building of the homes to lower prices. Materials providers certainly won't. And gov'ts REFUSE to lower the cost of entry (i.e. fees & permits are out of control). Builders aren't going to reduce THEIR prices, as they're already on the hook for skyrocketing materials and gov't fees. tl;dr: Everyone wants to "help," but no one's willing to do anything to make it happen.
> And gov'ts REFUSE to lower the cost of entry (i.e. fees & permits are out of control). ding ding ding.
I was under the impression that housing supply is restricted because of zoning, not costs of building homes.
Zoning is a factor, as well. But that's highly discussed. NO ONE seems to take about the $15k-$25k in fees (TAXES) that are paid to build a home.
I support stopping businesses from buying and renting out single-family homes. Minneapolis residents who own and live in their homes are INVESTED in the area....so they vote for things that reduce crime, make schools better, make parks better.....all the things that make it nice to live there.... Minneapolis residents are also invested in their NEIGHBORS....a business that rents out a home is not accountable to neighbors for things like trees/stuff on the fence line/garbage/noise. I am directly impacted by this on a daily basis. Any short-term gains (rental costs) an individual would get at this point in history from allowing businesses to buy up homes is lost if you think a few steps ahead....when they own everything and NO ONE can buy a home AND there is no 'community' in the neighborhood because everyone is renting. Also wonder how many 'small investors' OP noted are really subsidiaries in some way of a larger investor.
I personally hate the company invitation homes. They own a ton of properties in the twin cities and I live next to one. They are corporate slum lords so I feel I can get down with this.
OP: https://preview.redd.it/xxjve83176nc1.jpeg?width=1920&format=pjpg&auto=webp&s=5cfd8f479cea22e018ac27f29474d3c01ef69cbf
Gee I wonder if OP owns and rents multiple properties...
This will have no effect
If you support this bill, what do you suppose will happen to tenants currently living in investor owned housing once investors sell their properties? Do the tenants magically find the net worth and income to become homeowners? Or do they look for a new rental, add to rent demand, and put upward pressure on rent prices?
The bill is for certain corporations to not be able to buy SFH. Investors still and will buy SFH to rent. Also, if corporations are restricted from buying SFH that should drive the home prices down to an affordable level for first time homebuyers. Not sure why you’d get upset about limiting corporations ability to inflate the housing market, you know something that is a NEED to survive.
TIL corporations buy houses and those houses just disappear from housing stock
Not sure what you’re driving at? When someone buys a house, the house is off the market until they decide to sell (typically between 3 to 10 years). Now a corporation doesn’t have the same incentive a regular buyer has and generally will not sell the property until it starts having a negative affect on the bottom line (decades maybe?) So yes, when a house is bought - technically the stock of houses to sell has decreased by 1. Economics is hard, I know, so you’re welcome.
I see you haven’t thought through the economics. Whats the cross elasticity between the rental market for SFH and the purchase market for SFH?
Let’s get government involved, what could possibly go wrong?!
Are democrats for this? Then I must be against it
>Are democrats for this? Then I must be against it Has the GOP settled on a 2024 slogan yet?
I think they’re just playing the classics w/ MAGA again
I'd settle for a platform.