[HN Gopher] US will ban Wall Street investors from buying single...
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US will ban Wall Street investors from buying single-family homes
Author : kpw94
Score : 435 points
Date : 2026-01-07 19:13 UTC (3 hours ago)
(HTM) web link (www.reuters.com)
(TXT) w3m dump (www.reuters.com)
| ceejayoz wrote:
| Actual title: "US will ban Wall Street investors from buying
| single-family homes, _Trump says_ "
|
| Trump, notoriously, says all sorts of things.
|
| I'm sure this'll come right after he finishes his healthcare
| plans in "two weeks".
| frogperson wrote:
| Im sure this will be rolled back 2 days after mid-terms.
| xp84 wrote:
| I see the Democrats are right back in their 'wildly
| overconfident' phase again.
| lif wrote:
| What about the many, many thousands of homes that have already
| been bought up?
| Simulacra wrote:
| I'm not sure if they could be forced to sell those, the
| government could, but then that would fall under just
| compensation seizure. I'm not a lawyer, but it would seem under
| basic legal theory that you couldn't take those homes.
| causal wrote:
| The Comrade Trump memes would go crazy
| Octoth0rpe wrote:
| Not that I expect this particular strategy from this
| administration, but there's 'forced' as in "you WILL sell
| this property", and there's 'forced' as in "any corporate
| owned housing unit will see its property tax rate increase by
| 25% per year until it is sold to a person". I don't think
| your description could apply to the latter.
| seydor wrote:
| If they cannot be resold to other speculators their price can
| go waaay down
| Aurornis wrote:
| The vast majority of home purchases aren't from speculators
| or institutional investors.
|
| Institutional investors only own about 0.5% of homes. If
| they're forced to stop buying, nothing will really change in
| a noticeable way. At best, small landlords and investors will
| scoop attractive properties up for slightly less.
| Octoth0rpe wrote:
| > Institutional investors only own about 0.5% of homes
|
| Where they buy those homes matters though. In areas with
| lots of jobs/growth (often the areas experiencing the most
| housing price pain), that number is likely much higher.
| antonymoose wrote:
| Is that 0.5% a uniform distribution across the United
| States or is it concentrated in a handful of hot markets? I
| suspect the latter and have to imagine some distortion must
| be occurring in those regions.
| ntonozzi wrote:
| Maybe the best part of this legislation will be that people
| will realize it's not institutional investors that are
| driving up home prices. No, that's far too optimistic.
| tbrownaw wrote:
| When this doesn't make anything better, the conclusion
| won't be that it was a bad idea but that it somehow
| didn't go far enough.
| xadhominemx wrote:
| Nonsense. Do you think these landlords intentionally overpaid
| for the properties? They are sophisticated entities who like
| to pay at or below fair value.
| roywiggins wrote:
| It happens
|
| https://www.npr.org/2021/11/03/1051941654/zillow-will-
| stop-b...
| olyjohn wrote:
| It's pretty simple, you overpay for something if you
| suspect it will be worth even more in the future.
| usefulcat wrote:
| The only way that prices could go waaay down is if the supply
| of new homes increases or demand decreases (or some
| combination of both).
|
| Which of those do you think is likely as a result of the
| proposed action, and why?
| aagha wrote:
| Great point. Those homes need to be back on the market for
| housing prices to come down.
| hypeatei wrote:
| These homes going back on the market wouldn't make a dent in
| housing prices. As much as we'd like to think that
| corporations are to blame, that's not reality. Plenty of
| middle class families own homes and vote for local
| politicians to keep their investment safe (and for it to
| increase in value) by making it hard to build.
| jeffbee wrote:
| Your housing affordability plan is that everyone who rents
| from a corporation gets evicted?
| bdcravens wrote:
| IF it results in dramatic reduction of home prices, this sounds
| great at first, but in actuality, it throws the market into
| disarray, since many sellers and also buyers, and it may trap
| home owners who need to sell into bankruptcy.
| potato3732842 wrote:
| God forbid someone not sell out of their home. /s Home
| ownership isn't exactly a crappy life milestone to be stuck
| at. Yeah it would suck for a select few people who need to
| get out of one and into another RFN due to life reasons and
| surely some municipalities would leverage that to really
| screw people but I think the upside is orders of magnitude
| higher than the downside.
|
| Come to think of it, I bet making homes less liquid would
| knock the divorce rate down more than anyone wants to believe
| it would, lol
| standardUser wrote:
| Tax vacant properties. To high heaven.
| wewewedxfgdf wrote:
| Wow. Usually everything is about the money.
| kakacik wrote:
| Now its about elections, which are about power. And
| subsequently money
| delecti wrote:
| I get that title length is limited, but the "Trump Says" in the
| title is a pretty significant detail. He "says" things all the
| time.
| Simulacra wrote:
| That's true, but to play devils advocate for a second, just
| because he says something doesn't make it wrong or bad. Banning
| Wall Street from buying single-family homes is a great thing
| that I completely support, and I don't really care which
| president makes it happen.
| donkey_brains wrote:
| The point is that leaving off "Trump says" makes it sound
| like something that will actually happen.
| shadowgovt wrote:
| It also doesn't mean he can actually do it. There's no
| obvious mechanism by which this can be enforced without a law
| from Congress, and it's not entirely clear such a law would
| be Constitutional (they'd have to base it in the right of the
| federal government to regulate interstate commerce if they're
| going to base it in anything, which presupposes an interstate
| market for shelter, and there's a reasonable argument to be
| made that maybe that's not a thing; housing is a local
| concern, and home prices in Topeka don't impact me, a buyer
| in Boston, if I want to live in Boston).
| delecti wrote:
| The policy would be great! You aren't playing devil's
| advocate for what I said. I wasn't talking about the merits
| of the policy at all. Him saying it just doesn't have any
| connection to whether the policy will ever exist. The
| headline without that detail is wrongly implying certainly
| that isn't warranted.
| EA-3167 wrote:
| What baffles me is why people still take it all seriously,
| we've had well over a decade to examine his patterns of
| behavior and the takeaway is that fully 99.999% of his
| utterances are worthless. In the rare case that his promises
| are turned into some shambling semblance of reality there's
| always plenty of warning; in the case of VZ and Maduro you had
| significant troop movements for months for example.
|
| Unfortunately by treating his every utterance as requiring
| attention he gets what he wants, the media gets clicks,
| bloggers get clicks, and people get to use it as part of an
| eternal argument over "what comes next".
|
| People here at least should be more adept at recognizing and
| responding to patterns.
| codyb wrote:
| Seems reasonable to me, a very anti Trump individual. Now
| deliver.
|
| And which of his buddies does this benefit?
|
| I'm trying to think if there will be ramifications to this...
|
| - Obviously forced divestment of all Wall St owned single family
| homes could impact housing prices which is both the point, but of
| course... also hurts many families borrowing power and net worth
|
| - I guess that crash could potentially have people paying lots of
| money for homes that aren't worth that much anymore, which sounds
| pretty negative
|
| - Of course... wow, would it be nice to be able to afford
| something in the city I love (which I doubt will be impacted by
| this)
|
| Of course, no clear plan here. Just Trump saying something, why
| wasn't the "Trump says" part kept in the headline here?
| nerdjon wrote:
| I am also trying to think of what else could actually be
| fueling this, since it sounds very... not republican. Quite
| literally the opposite.
|
| Like you said that also assumes it actually happens and isn't
| another incoherent ramble that is conveniently forgotten about
| or claimed he never said.
|
| I mean if its legit I will cheer it on... but I remain
| skeptical.
| xp84 wrote:
| It's mostly a made-up issue to begin with - so this would be
| a popular policy, easy to pass because there won't be much
| opposition, and it'll be easy to point to and say "We fixed
| that problem."
| usefulcat wrote:
| The R party has changed so radically that it's hardly
| recognizable any more. As a result, "not republican" is no
| longer a very meaningful description.
|
| I think the most likely explanation is pretty simple.
| Whenever people are unhappy with their economic situation, at
| the ballot box they take it out on whoever is currently in
| power, logic be damned. Politicians know this.
| anonymars wrote:
| > also hurts many families borrowing power and net worth
|
| This is part of the crux, isn't it? It's a backbone of
| families' wealth and positioned as an investment. So there
| seems to be no winning: either choke off the young trying to
| buy or crack the nest egg of the old
|
| See also: Bitcoin and the like (wild value fluctuations are the
| hallmark of a good currency)
|
| Related article of interest:
| https://archinect.com/news/article/150496266/is-this-swiss-h...
| Sohcahtoa82 wrote:
| > either choke off the young trying to buy or crack the nest
| egg of the old
|
| The simple fact is, housing can either be affordable xor an
| investment[0].
|
| Affordable means the prices are flat relative to inflation,
| which makes it a terrible investment. If it's a good
| investment, that means the price is going up faster than
| inflation, which quickly makes it unaffordable.
|
| [0] I want to be clear that I'm referring to housing as an
| investment to mean buying a house _purely_ for profit
| purposes, ie, to flip or to rent out. Buying a house to live
| in, rather than renting the house you live in, can be
| considered an "investment", but I mean to explicitly exclude
| that usage of "investment" in this comment.
| tbrownaw wrote:
| Sure it can be an investment even with no capital gains,
| there's still income from charging rent.
| Sohcahtoa82 wrote:
| Which still contributes to unaffordability.
|
| A house bought for the purpose of renting out is a house
| that could have gone to someone who wanted to buy it. It
| creates upward pressure on housing prices.
|
| I mean, I get it. There _are_ some people that truly _do_
| want to rent a house because they know the living
| situation is temporary.
|
| But we have a generation that was able to buy houses
| during an economic boom where you could buy a house with
| an entry-level job, and once that house was paid off,
| they started buying up houses with their extra money to
| rent out, and it was so lucrative that prices have
| skyrocketed and now people in their 20s can't buy houses
| without a decently lucrative job.
|
| Obviously, there are many factors at work here, but
| buying or building houses with the intent to rent them
| out is certainly a contributor.
|
| I just think about the fact that I bought my house in
| 2015 for about $340K, and it's now worth about $600K, an
| 80% climb in just 10 years, and I think that's _absurd_ ,
| not to mention a _bad_ thing for society overall.
| tootie wrote:
| Well, there's no explanation for how this will affect any
| currently owned properties. So maybe it won't do much of
| anything. And something important to understand about private
| equity owning homes, is that they tend to descend on specific
| geos where the supply allows buying in scale. If they are
| forced to divest, it very well could crash a few cities or
| towns. And given that the aforementioned supply was heavily
| bent towards distressed areas, the crash could be brutal.
|
| It will likely have close to zero impact on high-demand areas.
| Goronmon wrote:
| _It was not immediately clear what legal authority Trump would
| draw upon to impose such a ban on the private market purchases of
| houses. Trump did not detail the policy, the form it would take
| or the legal changes he was seeking from Congress.
|
| The White House did not immediately respond to a request for
| comment. The U.S. president was due to sign unspecified executive
| orders later on Wednesday._
|
| Anyways, I thought that issues with Americans being able to
| afford things like housing was all a hoax made up by Democrats?
|
| Why craft policies to address a made up issue?
| exe34 wrote:
| because he doesn't run mid-terms - states do. He's desperate.
| daft_pink wrote:
| I'm from the government and I'm hear to help!
| roschdal wrote:
| There is hope for humanity.
| ggoo wrote:
| Believe it when you see it folks. No sooner.
| kingstnap wrote:
| > "People live in homes, not corporations," Trump said.
|
| Very surprisingly progressive opinions from Trump.
|
| I do completely agree though, the consumer surplus of housing
| should be captured by people. Not investors looking to profit.
|
| It's extremely toxic to society when investors get to eat the
| utility of housing.
| GaryBluto wrote:
| > Very surprisingly progressive opinions from Trump.
|
| Trump does not possess many "locked-in" opinions. He can be
| persuaded to support anything if you are charismatic enough.
| el_benhameen wrote:
| Oh come on. There are plenty of uncharismatic rich people who
| have still managed to persuade him.
| toast0 wrote:
| My friend Ben is pretty charismatic... especially when I
| give you several copies of his portrait.
| smallmancontrov wrote:
| Individual owners drive far more NIMBY policy than
| corporations. The rent of land exclusivity should accrue to the
| public rather than to private individuals or corporations.
| hypeatei wrote:
| This is not surprising at all. I'm not sure why people keep
| making this mistake thinking that good 'ol Republicans are
| flipping their script all of a sudden. MAGA is a populist
| movement and has a lot in common with the far left types.
| JoshTriplett wrote:
| One additional important detail: if this gets implemented at all,
| hopefully it does not affect the common practice of having a
| self-owned LLC owning your home. This is common for the purposes
| of keeping your personal name out of public records; it is _far_
| too easy to link someone 's name and address, and people at risk
| of doxing can do this to protect themselves.
| mc32 wrote:
| There has to be some nuance. Companies are known to either rent
| of sometimes own housing for personnel who travel to other
| offices. Universities typically own housing as well. So maybe
| it's something like it can't be one of the main businesses of
| the corp to buy up residential housing as an investment tool.
| JoshTriplett wrote:
| I mean, the _ideal_ amount of nuance is to not ban this in
| the first place "; right now we're talking about damage
| control for particularly critical subsets of uses.
|
| > Universities typically own housing as well.
|
| I'd expect that argument to carry negative weight with the
| folks trying to do this, given the hate they have for
| universities in general, and the love of privatization.
| OGEnthusiast wrote:
| > critical subsets of uses
|
| I don't consider rich people trying to hide their identity
| to be "critical" at all. Maybe having their address public
| will be a way to force them to act with consideration of
| the community instead of just themselves for once while
| they hide in some anonymous mansion.
| JoshTriplett wrote:
| > rich people
|
| What part of "people at risk of doxing" made you jump to
| "rich people" rather than, for instance, "people in
| groups commonly attacked"?
|
| > force them to act with consideration of the community
|
| By doing what, precisely? "Have you tried not being
| (commonly attacked group here)?"
| sdenton4 wrote:
| Only rich people can afford houses in the US, ergo.
| yrxuthst wrote:
| Rich people aren't the only ones that want to hide their
| address. Stalking/DV victims can use this too, or even
| just a regular person that prefers privacy.
| impendia wrote:
| I agree in principle, but companies (and individual very rich
| people) are amazingly inventive when it comes to finding
| loopholes in the "nuance".
| cmxch wrote:
| So basically you want to give a loophole for Wall Street to
| cosplay as regular people.
|
| No thanks.
| JoshTriplett wrote:
| https://news.ycombinator.com/item?id=46532033
|
| https://news.ycombinator.com/item?id=46532004
|
| It costs relatively little to create an LLC. This is not an
| uncommon pattern for people in groups commonly targeted by
| hate-motivated doxing and similar attacks. This is not a
| "rich-person trick", and if you can afford a house, the cost
| of an LLC is a _very tiny_ expense by comparison.
| guelo wrote:
| hate-motivated doxing? That doesn't sound like a real thing
| except for maybe famous people, so we're basically back to
| rich people.
| potato3732842 wrote:
| This technique is used by a very solid fraction of people
| who's job is to do things that are somewhat bad for
| either a lot of people or very bad for a few people.
|
| So your local cops, everyone on every local commission
| except the secretary, journalists, payday loan and tow
| company owners, etc.
| JoshTriplett wrote:
| You are factually incorrect, and attempting to invalidate
| real people's horrifying experiences. "Existing on the
| internet" != "famous", and "famous" != "rich".
| beembeem wrote:
| LLC annual registration is up to $800/yr in CA, including
| foreign LLC's. I don't think $800/yr for privacy is a "very
| tiny". Not to mention you would need to pay an owner of
| record, probably a professional, to have their name on the
| LLC.
|
| EDIT: A quick web search shows that an estimated annual
| cost of $50-$400 for a registered agent in CA. So the cost
| is closer to $1k/yr.
| JoshTriplett wrote:
| Living in California is expensive in general. Average LLC
| costs in the US are under $100.
|
| > Not to mention you would need to pay an owner of
| record, probably a professional, to have their name on
| the LLC.
|
| Whether that is public record depends on the legal
| requirements in your state. And in any case, costs for
| registered agent services are typically comparable to the
| costs of an LLC.
| BeetleB wrote:
| I have an LLC registered in Nevada. I neither live there,
| nor do business there.
|
| Most states allow for this - I don't know about
| California, though.
| beembeem wrote:
| This is an often conjectured example. California allows
| for that, but it falls under a foreign LLC registration
| to get it recognized by the state. It turns out that the
| annual foreign registration fee matches the in-state one.
| So this ends up costing more if you want it to be
| enforceable.
| BeetleB wrote:
| > California allows for that, but it falls under a
| foreign LLC registration to get it recognized by the
| state.
|
| That's what I mean: California may be different.
|
| In my state, I don't need to register anything for the
| Nevada LLC.
| bluedino wrote:
| Maybe they can just own one?
| IncreasePosts wrote:
| Why should you be allowed to create a corporation that has no
| actual purpose other than a shield for your own private
| concerns?
| JoshTriplett wrote:
| Ideally, it should not be possible for random hateful people
| to easily get name/address records from local governments,
| but that's unfortunately not the world we live in yet.
| galleywest200 wrote:
| They could just buy it from data brokers.
| darknavi wrote:
| Indeed. I was in Sweden and learned that you can look up
| someone's address and pay on a government website. I
| think there are some "are you human" checks, but it's
| basically all in the clear.
|
| It creeped me out a bit and then I was angry when I
| realized it's the same way in the US, but maybe worse. In
| the US this is possible too, you just have to pay private
| data brokers and a bunch of middle men make a cheap buck.
| Employers sell your pay data, websites sell your address.
| Everyone makes a buck at your expense.
| IncreasePosts wrote:
| If you know the region they live in, many counties in the
| US now let you search property records by name from a
| simple web form.
| ksherlock wrote:
| Houses are also put into revocable living trust to avoid
| probate when kicking the bucket.
| klipklop wrote:
| Personally I feel people and especially corporations/REITs do
| not have the right to hide what real estate they own. Sure put
| it in a trust, but the public has the right to know who
| controls it.
| cyberax wrote:
| It might help in the long term, as it can force cities to stop
| densifying. And as we all know by now, densification is the
| leading cause of unaffordability. The US has more houses than
| households, but people are forced by economic forces to move into
| denser and denser areas.
|
| But short-term it'll hurt availability. One of the most common
| ways to enshittify cities is buying an SFH, demolishing it, and
| plopping a 3-4 apartment complex in its place.
| iamnothere wrote:
| This sounds backwards? Density means more units available,
| which should lower costs. Supply and demand. Rentals in a dense
| complex are cheaper than standalone rentals or duplexes,
| townhomes are cheaper than SFH, etc.
|
| I don't think cities should force density, but there's no
| reason to go the other way either as long as growth is managed
| properly in terms of traffic, transit, and infrastructure.
| cyberax wrote:
| > This sounds backwards?
|
| Nope. The ONLY way to get cheaper housing is by reducing the
| city population.
|
| > Supply and demand.
|
| Sigh. No. You assume that the demand is fixed. It's not. By
| building new housing, you _increase_ the demand. And always
| faster than you can satisfy it.
|
| I just love this example:
|
| Forbes 2016 - "Tokyo's Affordable Housing Strategy: Build,
| Build, Build", "The Great Urban Myth: 'Cities Can't Build
| Their Way To Affordable Housing'"
|
| Reuters 2023 - "Surging Tokyo property prices squeeze out
| young professionals",
|
| Japandaily 2025: "Housing Crisis: Families Struggle to Buy
| Homes in Tokyo" ( https://japandaily.jp/housing-crisis-
| families-struggle-to-bu... )
|
| > Rentals in a dense complex are cheaper than standalone
| rentals or duplexes, townhomes are cheaper than SFH, etc.
|
| Try to find a city where dense housing made it cheaper.
| iamnothere wrote:
| Well technically that's true, in the same sense that the
| only way to roll back inflation is demand destruction (and
| an extended recession or depression).
|
| The problem with this is that you can't forcibly reduce
| population. Halting growth in one area just displaces it.
| This can be a good trade if the area into which growth is
| displaced is underdeveloped with few other potential uses.
| But it can also create Atlanta or Houston style sprawl, or
| destroy natural areas that would be better to preserve.
|
| Japan is an unusual example because most job opportunities
| are in a handful of areas. You can get impossibly cheap
| properties in the countryside but there are few jobs or
| young people. Properties in the city keep getting more
| expensive because of demand _and_ because building codes
| are constantly evolving to keep up with new developments in
| earthquake protection. There are older urban properties
| available for cheap outside of trendy areas, but the cost
| of renovation is often too high to be worth it. There's
| also a cultural stigma around older properties.
| cyberax wrote:
| > The problem with this is that you can't forcibly reduce
| population.
|
| We don't need to. The population growth in the Western
| world is mostly over, the US will likely peak at barely
| +10% to the current population numbers. Europe is likely
| already at or near the peak number.
|
| And Tokyo managed to get a bubble within a country with a
| _falling_ population. Not just stagnant like in Europe,
| but actually numerically decreasing.
|
| > Halting growth in one area just displaces it.
|
| That's EXACTLY what we need. The US already has 1.1
| houses per household, except that they are not where the
| demand is.
|
| So the fix is to shift the demand, not try to satisfy it.
| Ironically, this is exactly the same method that
| urbanists propose to fight congestion: instead of just
| adding more lanes to busy roads, you shift people to
| other modes of transportation.
|
| How can this be done? Exactly like we did it with
| pollution: tax negative externalities, incentivize clean
| technology. For cities: tax dense office space (cap-and-
| trade can also work), incentivize work-from-home,
| incentivize offices in less dense cities, etc.
|
| This doesn't even have to be a huge policy shift.
| iamnothere wrote:
| Interesting theory, although I don't know if US based
| remote work will continue to be as common as it is now.
| The policies you suggest also seem difficult politically
| since most environmentalists seem to want more density,
| not less.
|
| If the combination of AI, declining returns on service
| and knowledge-based work, and national security
| priorities create a resurgence in manufacturing then
| factory towns may make a comeback.
| ImPostingOnHN wrote:
| _> Try to find a city where dense housing made it cheaper._
|
| Are there cities where replacing denser housing with
| single-family homes made housing cheaper?
| chasd00 wrote:
| i can see what they mean. Another way to think about it is
| like how adding a lane to a highway doesn't decrease traffic
| it increases it. There's no shortage of demand in densely
| populated areas otherwise they wouldn't be densely populated.
| Adding more units will be met with more demand like adding a
| lane to a highway is met with more cars on that highway. Fix
| it by making the area less dense and prices will drop like
| how the way to fix a busy highway is to decrease the cars on
| it and traffic will lighten up.
| iamnothere wrote:
| True, but typically this also means fewer jobs, local
| economic contraction, and eventually neighborhoods full of
| decaying empty properties as in Detroit. They did achieve
| lower density, as many abandoned homes were forcibly
| demolished. Housing is cheaper now too.
|
| It seems much more realistic to freeze growth than reverse
| it. Even then, growth in surrounding areas or other factors
| can quickly make the area more desirable and expensive as
| in SF.
| HappyPanacea wrote:
| > And as we all know by now, densification is the leading cause
| of unaffordability.
|
| This is the first time I see this bold claim, what evidence do
| you have to prove it?
| cyberax wrote:
| It's a simple observation. No large city in the US or Europe
| reduced the housing prices by increasing density. I gave an
| example of Tokyo in the other comment in this thread as an
| absolutely illustrative case.
|
| The only price decreases happened only during the 2008 crisis
| and during the pandemic lockdowns, due to local population
| decreasing.
| renewiltord wrote:
| Interesting that Blackstone stock is the same as a week ago.
| Either this can't be done, or it can be done and they're exempt,
| or it will be reversed.
| ameliaquining wrote:
| Or it won't materially impact Blackstone's business because
| single-family homes are a tiny sideline for them and not where
| they make most of their money.
| legitster wrote:
| Investor owned housing is a bit of a sensationalist scapegoat.
| Publicly traded companies account for a tiny, tiny fraction of
| available single family homes in the US. And so long as the tax
| code doesn't change, it strongly favors private/individual
| homeowners, and corporations only account for the margins where
| housing appreciates so fast or rental incomes are
| disproportionate to asset values.
|
| This is an easy thing for Trump to promise (after all, little
| family-owned real-estate developer operations like his would
| _never_ be affected). But who owns the homes is not going to
| change the problem that Americans have underdeveloped housing
| supply by over a million homes.
| agentifysh wrote:
| regarding public reits focusing on blackrock misses the
| Vancouver Model dynamic which is absolutely happening in major
| us markets.
|
| the issue isn't just yield-seeking corps, it's opaque shell
| companies (llc) using real estate as a store of value aka money
| laundering vehicle. vancouver showed how this decouples prices
| from local wages completely. the us has this exact
| vulnerability--anonymous delaware/wyoming llcs buying in cash,
| specifically in supply-constrained cities like ny or miami.
|
| this only works because of zoning. if nimbys didn't
| artificially cap supply, housing would be a depreciating
| consumer good (like in Japan) rather than a deflation-proof
| asset class. zoning is what turns a house into a safe deposit
| box for offshore capital.
|
| if the corporate transparency act that Trump vetoed is
| successful then I expect to see the real estate become US's top
| source of GDP like it is for Canada.
| cyberax wrote:
| > this only works because of zoning
|
| The dynamics in the countries that don't have zoning is
| exactly the same. Price bubble and misery for everyone in
| dense cities.
|
| There will be no affordable housing in cities, whatever you
| do, short of nuking everything from the orbit.
| tootie wrote:
| Yeah, this move is maybe a net positive, but will have a tiny
| impact on actual home prices. It is absolute red meat for the
| internet conspiracy machine though. Especially on the left.
|
| I also have no idea what statutory authority he has to enforce
| this. Surely it requires Congress or at least the FTC chair.
| And if there's enough vested opposition it's going to be
| challenged in court pretty quickly.
| Aurornis wrote:
| Even if this goes through without a mountain of loopholes and
| exceptions, I doubt it will have a significant impact. "Wall
| Street Investors" implies they're targeting large institutional
| ownership, which is only around 0.5% of housing ownership as
| cited in the article. That number is also flat-ish or maybe
| decreasing depending on the chart you look at, from what I
| recall.
|
| Outside of a few metro areas where institutional ownership is
| very high, I don't think this would change anything. As long as
| houses remain an attractive investment, non-institutional smaller
| investors will happily buy the properties for a few thousand
| dollars less than the institutions would.
|
| Anyone familiar with basic economics is pulling their hair out
| reading this, because there's one extremely obvious way to lower
| the price of building new housing: Reducing or eliminating
| tariffs on construction equipment and materials and ensuring a
| robust supply of low-cost labor.
| reactordev wrote:
| The material costs are high too because of regulations that
| require specific lumber for framing etc.
|
| It's more complex than just reducing tariffs and inviting cheap
| labor. It's systemic red tape put in by the large builders to
| prevent anyone but them to be able to build. When they do
| build, it's never to code. The code they themselves help write.
| Ryan Homes for example...
| Aurornis wrote:
| > The material costs are high too because of regulations that
| require specific lumber for framing etc.
|
| Having done some extensive remodeling and building work in
| recent years and going to great lengths to follow building
| codes, this just isn't it. The type of lumber you can use for
| most framing jobs isn't that special. Having walked through a
| number of new construction properties and seeing what passes
| code, I don't think relaxing lumber standards would be a good
| idea, nor buy us anything.
|
| When lumber, cabinetry, and other building products have
| tariffs in the range of 10-50%, you can't tell me that
| tariffs are not the primary problem driving costs up right
| now. There just isn't a secret stash of lesser grade lumber
| lying around that would also be perfectly good for building
| homes.
| potato3732842 wrote:
| Single and few number family residential and owner stuff
| gets all sorts of exemptions in just about every town's
| zoning code because if not the townsfolk would revolt.
|
| This is why everyone on the internet screeches "well I put
| up a deck and it wasn't so hard". Try and do a new build of
| literally any structure and get back to me. Or worse, a
| construction type that is not the regional default for
| whatever it is you're doing.
|
| Reality for new construction is way, way, way worse than
| homeowners think.
|
| Unless you know a guy, in which case it's all open doors
| and green lights because that's how local politics always
| is.
| potato3732842 wrote:
| This. They don't want the local septic man and the local
| roofer partnering up to GC a development of a dozen houses or
| even worse, an individual doing the bulk of the work of
| building anything, so they get it all saddled with
| requirements that amortize away nicely when vertically
| integrated but absolutely crush anyone else.
| reactordev wrote:
| It's a Ponzi scheme disguised as a monopoly. They'll block
| everyone and just sit on the lots with a sign that says
| coming soon rather than let local contractors do the jobs.
| londons_explore wrote:
| Making it hard for cities to deny all permission to build new
| housing through impossible zoning laws should also be on the
| cards.
| threecheese wrote:
| Making this decision as a politician in this country is death
| to your career though; how could we incentivize our leaders
| to bite the hand that elects them?
| londons_explore wrote:
| If your local mayor decides to allow a tower block to be
| built next to your house, you might be pissed.
|
| But if the president says 'we're gonna take away mayors
| powers to restrict housebuilding', you won't be pissed
| yet.... And when a builder comes along to build later it'll
| be too late.
| unyttigfjelltol wrote:
| Yeah, all the politicians talking housing-- the actual net
| governmental effect on housing is to massively constrain
| supply (quantity) in service of rather arbitrary qualitative
| standards. I'm all for "the building shouldn't spontaneously
| collapse" standards, but ... two acre lots? Restrictions on
| casting shadows? Accessory dwelling units? Nah. If the
| government wants to make a difference it should ban Euclidian
| zoning as it currently is practiced, full stop.
| londons_explore wrote:
| "We expect all states to expand housing supply by 2% per
| year. States which fail to meet this standard will pay
| $1000 per unbuilt house per year, as a subtraction from
| other federal funding. States may trade house building with
| other states to achieve this.".
| kccqzy wrote:
| These qualitative standards are subjective. Everyone has
| something that they deem essential and others not so much.
| A lot of zoning regulations is the amalgamation of
| preferences by different people, because they try to
| satisfy the aesthetic preferences of too many people.
|
| For example in New York City go take a walk on the street
| next to hundred-year-old skyscrapers in downtown. It's
| miserable to me. Now go walk alongside midcentury
| skyscrapers in midtown. It's much better. The difference is
| entirely because of shadows cast by the skyscrapers. The
| visceral reaction from shadows is so strong to me that I am
| wholeheartedly supporting restrictions on casting shadows.
|
| Now on two-acre lots. That's not something I care about.
| Even 0.1 acres of land is too much maintenance for me. But
| it will be non-negotiable for someone else.
| Hammershaft wrote:
| Millions of people want to live in NYC and would
| productively contribute to the city if it were more
| affordable.
|
| The government should not criminalize development that
| would make housing more affordable over your preference
| on shadows!
|
| It's a negative externality, yes, but it's a trivial one
| next to the upside of cheaper housing for more people!
| danielfoster wrote:
| Encouraging the creation of new housing is the way to go. One
| thought-- what percentage of new home purchases are made by
| large investors and is it growing? This seems like the most
| important metric to look at rather than existing ownership.
| toomuchtodo wrote:
| There are examples of entire subdivisions being built to
| order for private investors to rent out. It's called "built
| to rent."
|
| https://www.nar.realtor/magazine/real-estate-
| news/commercial...
|
| Corporate ownership mapped:
|
| https://www.lincolninst.edu/publications/other/who-owns-
| amer...
|
| https://storage.pardot.com/153411/17634993251KmjZ4d2/whoa_ma.
| ..
| mc32 wrote:
| Not sure. But I've been hearing of this being an issue from
| both progressives, leftists as well as conservatives and
| rightists. Maybe they're all misinformed by their bubbles, but
| there seems to be some smoke...
| Aurornis wrote:
| It's a populist issue because it sounds vaguely correct and
| being angry at Wall Street is ever popular. That's also why
| this idea is being floated before the mid terms.
|
| That doesn't make it correct.
| epistasis wrote:
| It's because of emotionally charged response. Leftists
| largely don't want corporations owning houses, because it's
| "impure" and capitalist. Rightists largely don't want renters
| to live in homes that used to be exclusionary on the basis of
| being able to buy a home. Though there's crossover on the
| reasons, of course.
| kelipso wrote:
| Honestly, the argument on the other side seems like
| emotionally charged arguments due to TDS and not wanting to
| give Trump any credit.
|
| It seems obvious to most people that institutional
| investors should not be allowed near single family homes
| and you would need quite a strong argument to persuade
| otherwise.
| epistasis wrote:
| Which side is TDS and why? I've heard both of these
| opinions expressed quite freely over the past few years,
| without any association with Trump. However, most
| instances of TDS seem to not "derangement" but "normal
| human emotion to me."
|
| > It seems obvious to most people that institutional
| investors should not be allowed near single family homes
|
| What is obvious about this? They have always invested in
| single family homes. Can you provide a priniciple or
| rationale? If it's something other than renters or
| "corporations bad but I won't explain further" then I'd
| love to hear it!
| kelipso wrote:
| Homes are for people to live in, not asset classes for
| investors to play with.
|
| There, you have the apparently obscure principle that no
| one has ever heard of. I'd love to hear whatever
| economist inspired argument against it lol.
| epistasis wrote:
| I have no argument really in favor of corporate
| ownership, but I don't find the arguments against
| convincing in terms of helping normal people.
|
| Rental housing is an important part of housing, and
| giving access to the schools in suburbs through rental
| opportunities seems good to me. The people I know who
| have rented a SFH in my area have had better experiences
| with corporate landlords than home-owning landlords
| because the home-owning landlords frequently evict their
| tenants so that a relative can move in, which is super
| disruptive. California allows homeowners to evict people
| with very little warning that way, without cause.
| Corporations can't do that and also follow the law
| better.
|
| As far as investing: Every home owner treats it as their
| primary asset. Which is the _only_ reason that
| corporations are getting in on the game: people living in
| their own homes have changed regulatory structures so
| much that it 's rigged in favor of owners.
|
| Single family homes owed by corporations are rented out
| to people to live in them, giving access to neighborhoods
| that were not accessible before.
|
| If you think that's "economist inspired" well it's no
| more inspired than your statements!
| andrewmutz wrote:
| Left-populists and right-populists like to frame issues as
| being a conflict between the elites and the common man.
| Banning big banks from owning homes is a perfect example of
| this.
|
| It's fine to ban big banks from buying homes and wont do
| damage to the nation, but don't expect it to solve the
| problem.
|
| High housing prices are due to zoning-based supply
| restrictions. These are entrenched due to politically active
| NIMBY voters.
|
| Actually fixing the housing crisis means addressing zoning,
| but that doesn't fit the elite vs common man narrative so
| gets ignored by the populists.
| tbrownaw wrote:
| > _It 's fine to ban big banks from buying homes and wont
| do damage to the nation_
|
| It makes things slightly worse for people who want a non-
| apartment house but think they might move soon.
| 1980phipsi wrote:
| > Anyone familiar with basic economics is pulling their hair
| out reading this, because there's one extremely obvious way to
| lower the price of building new housing: Reducing or
| eliminating tariffs on construction equipment and materials and
| ensuring a robust supply of low-cost labor.
|
| And just in general reducing the restrictions on building in
| places with high rent to income ratios.
| stocksinsmocks wrote:
| The tariffs are a bit of a new phenomenon so I think that may
| be motivated reasoning. Construction productivity has also been
| stagnant for about 60 years. I think the most important factor
| is that housing prices, in the United States at least, are
| governed by how much a bank will lend. Very small but
| affordable houses will never be built because a bank will not
| finance a $10,000 loan over 30 years. In the same vein, it's
| technically feasible for automobiles to be built for just a few
| thousand dollars, but, again, they will not finance $2500 over
| five years. So cars and houses are just built to the price
| point which will satisfy the lenders. You may not hate
| financialization nearly as much as it deserves.
| psunavy03 wrote:
| Source that cars are buildable for a few thousand dollars to
| the existing laws?
|
| Even the Slate truck is $25,000 because safety features are
| required.
| Aurornis wrote:
| > The tariffs are a bit of a new phenomenon so I think that
| may be motivated reasoning. Construction productivity has
| also been stagnant for about 60 years.
|
| If construction was stagnant for 60 years, adding 10-50%
| tariffs on lumber and building materials would only make it
| worse. Not motivated reasoning, just basic economics.
|
| The new tariffs went into effect January 1st, by the way. If
| you thought things were bad now, they're about to get worse.
|
| This announcement is just another distraction. They want you
| mad at Wall St, not tariffs.
|
| > In the same vein, it's technically feasible for automobiles
| to be built for just a few thousand dollars,
|
| No it's not.
|
| If this was true you'd see it in some other countries. It's
| not happening anywhere in the world. Unless you redefine
| automobile to mean a tiny cart with a 5HP motor and some
| seats.
| newtonsmethod wrote:
| The claim they went into effect January 1 simply does not
| seem true.
|
| The finished products tariff was delayed:
| https://edition.cnn.com/2026/01/01/business/trump-
| furniture-... For unfinished lumber, I don't think there
| was any tariff going into effect January 1.
|
| Sure, these tariffs may further increase the house of
| prices (e.g. be relevant to 15% of the cost of the house,
| with tariffs ranging from 20% to 50% and sources of
| materials adjusting to these tariffs), but the say 4%
| future effect of these tariffs is likely less than the
| effect of zoning laws, other development restrictions, and
| rent freezing.
| sgerenser wrote:
| Not sure about $10,000 houses (that would be pretty spartan,
| even Tiny Homes usually cost more than that), but the $2500
| car thing being due to lenders is completely off base. The
| reason there are no $2500 cars is that it's impossible to
| make one and meet current US safety regulations. Once you
| meet all of those, then you're already well beyond $2500, but
| it's still a pretty crappy car. Might as well add a few extra
| creature comforts that most consumers demand (power locks,
| power windows, bluetooth/stereo, disc brakes, more than 100HP
| engine, etc.) and you're never going to be below ~$15K with
| current parts and labor pricing.
| overfeed wrote:
| > governed by how much a bank will lend [...] Very small but
| affordable houses will never be built because a bank will not
| finance a $10,000 loan over 30 years.
|
| Banks typically won't hold onto to your loan for 30 years.
| Mortgages in the US have been thoroughly fiscalized: your
| typical bank/mortgage lender bundles up a bunch of loans and
| sells them to another servicing party as soon as the ink
| dries on the closing documents. The specialized servicer
| package them, and offer them as securities to investors who
| in turn will get a monthly return based on aggregate mortgage
| installments.
|
| All this to say: lending banks would be happy to finance
| thousands upon thousands of 5-digit mortgages, and sell those
| to securitization specialists.
|
| New houses aren't built in existing neighborhoods because
| dense housing is unpopular, as is a distaste of having
| "poorer" people as neighbors. Static zoning, terrible
| transport networks and no funding for new public
| infrastructure tag-team to discourage new developments on
| undeveloped farmland.
| ksherlock wrote:
| $2,500 cars? $10,000 houses? I found the time traveler from
| 1960!
| lotsoweiners wrote:
| Even if it is only 0.5% I would prefer that large institutional
| investment firms not be allowed into the housing market.
| vasilipupkin wrote:
| actually, they are actively beneficial owners. They can do
| things more efficiently than small time owners.
| Fritatta wrote:
| More efficiently extract cash from renters
| cmxch wrote:
| Only if you consider their more efficient ability of
| pumping the renter for cash and dumping the renter with an
| arbitrary rent increase.
| 01100011 wrote:
| This is pretty far down in the list of consequences we should
| be thinking about but building more housing in desirable,
| coastal areas of the US will only serve to exacerbate the
| political and cultural divide between the two Americas.
|
| I know we all hate on the electoral college, but it exists and
| it isn't going away anytime soon.
|
| I'm not saying the answer is to force folks to move to "flyover
| country", but that's what you'd do if you wanted to avoid
| another presidential victory by a trump-like character.
| buellerbueller wrote:
| It's also what you'd do if you wanted to buy an inexpensive
| house and have a low cost of living.
| tbrownaw wrote:
| > _because there 's one extremely obvious way to lower the
| price of building new housing: Reducing or eliminating tariffs
| on construction equipment and materials and ensuring a robust
| supply of low-cost labor._
|
| Oh I thought the one extremely obvious way was to fix local
| policy roadblocks. After all, it's not like a lacking supply of
| housing is a _new_ issue they suddenly appeared out of nowhere
| within the last dozen months.
| Aurornis wrote:
| > After all, it's not like a lacking supply of housing is a
| new issue they suddenly appeared out of nowhere within the
| last dozen months.
|
| The main lumber and building materials tariffs went into
| effect January 1st 2026.
|
| If you thought the current situation was bad, it's only going
| to get worse.
|
| This announcement is a distraction to get people blaming Wall
| Street. It's a "look over there!" announcement literally days
| after they raised tariffs to make a bad situation worse.
| newtonsmethod wrote:
| I think you're getting your facts wrong:
| https://edition.cnn.com/2026/01/01/business/trump-
| furniture-...
|
| "President Donald Trump has delayed new tariff increases on
| upholstered furniture, kitchen cabinets, and vanities for a
| year, pushing their implementation to 2027, according to a
| White House statement."
| newtonsmethod wrote:
| I agree with the first half of what you posted, but immediately
| jumping to blaming tariffs in your last paragraph seems weak
| (and a slight attempt at a gotcha).
|
| Concrete, gypsum and steel are primarily domestically produced.
| Similar goes for wood (although a substantial amount is
| imported, e.g. from Canada - the tariffs range from 25% to
| 50%). Labour & Materials may make up say 60% of the cost of a
| house, but only 50% of this is likely materials, with likely a
| minority of the materials tariffed.
|
| What is likely to actually reduce rent and house prices is
| making development permission and laws more lax, as well as
| preventing rent control.
| TZubiri wrote:
| Anyone familiar with basic economics is pulling their hair out
| reading this, because there's one extremely obvious way to
| lower the price of building new housing: Reducing or
| eliminating tariffs on construction equipment and materials and
| ensuring a robust supply of low-cost labor.
|
| That's quite an extreme political take.
|
| A more humble basic economic theory question would be:
|
| If you ban large institutional investors from buying homes, and
| then you ban small institutional investors from buying homes.
| And only owners directly can buy homes, no renting. Would that
| be good? Sure homes would be cheap, but very shortly after that
| the supply of new housing would drop dramatically, as there's
| no one to finance building homes, maybe the ultra rich will
| just invest in their own mansions or yachts?
|
| Just very basic economics is the discussion here, not tariffs
| and china politics, but just a variant of the highschool/red-
| scare question of, "will anti-wealth laws have a positive
| effect on the economy"? in the past it was determined that no,
| and that you were a communist for suggesting it, but maybe
| there's a nuanced take like making a difference between some
| type of "institutional" investors and other types of investors?
| kelipso wrote:
| Why would you need institutions to finance building new
| homes? You think the cost of building a home is more than the
| cost of buying a home? (Obviously not.) Normal people have
| been building their own homes using their own money for
| thousands of years.
| SirFatty wrote:
| Everything you stated is speculation.
| johnnyanmac wrote:
| Those "few metro areas" are on the scale of 10s of millions of
| houses. Remember that the top 10 largest cities have a third of
| the US population in it.
|
| >because there's one extremely obvious way to lower the price
| of building new housing:
|
| Cheaper housing doesn't mean that institutions won't still try
| to buy it up.
| program_whiz wrote:
| It seems like in some areas (the good ones) its much higher
| (12%): https://econofact.org/factbrief/do-private-equity-firms-
| own-...
|
| It also seems like it might be important to determine what
| share of _new_ development is being created for investment. The
| share of existing homes being owned isn't as important.
|
| There's also the 2nd order effect. The price of property might
| go down if there weren't investors with tons of money to spend
| on a property.
| epistasis wrote:
| All housing is investment due to the way it's owned,
| regardless of who owns it. For most people, it's by far their
| biggest investment, resulting in extreme political activity.
|
| We must confront that fact, or negate it, for example by
| taxing away the investment opportunity.
|
| Investors buy housing to rent it out to others, that's the
| investment. People who own their own home implicitly pay
| themselves rent, by choosing to live in what they own versus
| renting instead.
|
| Getting non-resident owners out of housing only means that
| renters have been banned from an area.
| program_whiz wrote:
| Isn't that circular reasoning? Charging rent means its an
| investment, but also just living in a home is "paying
| yourself". Is there any way to live on a property that
| isn't an investment (I suppose just staying there while the
| government owns it?).
| epistasis wrote:
| No, as long as the housing is bought and sold and priced
| by the market it's always investment. Homeowners talk
| freely about how it's an investment, choose their own
| home for its investment properties.
|
| It's not circular it just is, under our ownership scheme.
| Adding a 100% land value tax does remove the investment
| characteristic, though, as it removes the speculative
| aspect of land, and in fact drives the price of land to
| $0.
| cael450 wrote:
| Zoning laws are the number one obstacle to building housing.
| They need to be regulated into oblivion. Then we need to
| incentivize building dense housing.
| Alex2037 wrote:
| they don't even have affordable housing in the country all
| those tarriffed materials and equipment come from.
| OGEnthusiast wrote:
| Not a Trump supporter but this seems like a great move.
| pstuart wrote:
| Agreed. It's important to evaluate policies regardless of the
| party promoting them.
| roadside_picnic wrote:
| The key word here is "Wall Street". And this statement is playing
| off a popular misconception around corporate investors buying up
| American houses.
|
| There has been a bit of a panic around "Investors buying up all
| the property!!!" With people often citing Black Rock and
| Blackstone as the main culprits. But most of the "investors"
| buying up property are _individuals_ purchasing investment
| properties.
|
| Here's an article on the topic from 2023[0], a bit old but my
| understanding is large institutional investment in residential
| real estate was already starting to cool down.
|
| Black rock isn't buying up all the housing, your neighbors are.
|
| I suspect this statement, and even if it becomes an actual ban,
| is largely to gain wider popular support around a largely
| imaginary concern people have.
|
| 0. https://www.housingwire.com/articles/no-wall-street-
| investor...
| xp84 wrote:
| That sounds right. And, I have to admit, it's pretty good
| politics to ban a mostly imaginary thing that is a popular
| talking point. Since it's barely going to affect anyone, it'll
| be easy to pass.
|
| 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.
| sgc wrote:
| He's in real estate. Of course he has an angle. Hopefully
| they can get something worthwhile into the eventual bill
| anyways.
|
| 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.
| gsibble wrote:
| Yeah, that's why Blackstone's stock fell 9% on this news. It
| doesn't affect them at all.
| pohl wrote:
| > But most of the "investors" buying up property are
| individuals...
|
| 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.
| silisili wrote:
| In raw numbers of ownership, sure.
|
| 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.
| stvltvs wrote:
| Exactly, absolute ownership numbers matter less for housing
| prices than the proportion of corporate buyers in the market.
| BeetleB wrote:
| Here's a report where you can see which areas have a high
| percentage of big investors (not just people who own 2-3
| homes):
|
| https://go.lincolninst.edu/whoa-mapping-corp-ownership-
| repor...
| rcpt wrote:
| Looking at the map one might conclude that big investors
| buying up single family homes is a recipe for affordable
| housing.
| BeetleB wrote:
| LOL - Simpson's Paradox at play here?
| KumaBear wrote:
| It might not solve the problem but we also have other countries
| buying up homes for pension accounts. Take AU for example doing
| this. Should be illegal regardless of the size.
| alephnerd wrote:
| Pension funds like Ontario Teacher's are institutional
| investors who would be barred as well according to this
| proposal.
| mikkupikku wrote:
| As they should be.
| bluGill wrote:
| If they then rent these houses out and keep them
| maintained I don't care that they own them. Of course
| they should not be allowed to have a monopoly on houses
| in any area (including indirect monopoly by agreeing to
| minimum prices with others). Landlord is an important job
| that someone needs to do for the people who owning their
| own house is the wrong decision.
| hn_acc1 wrote:
| Even if they are the leader in percentage point rent
| raises, and do it 5x as often as every other landlord?
| And blackball a renter they don't like, not from 1
| specific house, but from 10K all at once?
| alephnerd wrote:
| > If they then rent these houses out and keep them
| maintained I don't care that they own them...
|
| 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.
| CPLX wrote:
| This is absolutely, violently, incorrect.
|
| Private equity has absolutely been buying up (and _building_ )
| 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.
| rick_dalton wrote:
| Do you have any source? Googling it tells me otherwise.
| CPLX wrote:
| Here's a few examples:
|
| 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.
| orangecat wrote:
| _Private equity has absolutely been buying up (and building)
| U.S. residential stock, and this is addressing a real
| problem._
|
| Building more housing is the opposite of a problem.
| mattmaroon wrote:
| While that's true, even if "Wall Street" is only holding a few
| percent of homes, those being released to the markets (and
| future ones not being purchased) might help.
|
| 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.
| limagnolia wrote:
| Not really, because the problem isn't investors buying homes,
| its a lack of supply of new homes. Big investors don't buy
| homes to keep them empty, they buy them to rent them out. An
| exception to this might be short term rentals but that is
| going to be significant in only a few markets and the problem
| there is still fundamentally a supply problem.
| lbarrow wrote:
| Why do you think they aren't on the market right now? These
| companies buy them so that they can rent them. They are on
| the rental market!
| tjwebbnorfolk wrote:
| From the moment I saw this in the WSJ this morning, I was
| wondering what people were going to come up with in order to be
| against this obviously-good idea, just because Trump said it.
|
| Now I know.
| thejazzman wrote:
| I don't read this as being against it at all. They're simply
| pointing out it doesn't have that big of an impact because of
| a bigger problem that remains.
| tjwebbnorfolk wrote:
| Institutional investors collectively nearly a million
| residential properties in the US, and continue to buy more.
| When turnover of inventory is only a couple percent a year,
| owning nearly 1% of the housing stock and not turning it
| over is a lot. Small landlord property turnover is much
| higher than institutions.
|
| 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.
| Analemma_ wrote:
| I'm not against the idea per se, but "institutional investors
| are buying up homes" is an effect, not a cause. Boomers
| demanded that "house values are never allowed to go down,
| only up" and put all manner of construction-preventing policy
| in place to make sure this happened, so _of course_
| institutional investors showed up. If there 's an asset class
| which is only allowed to go up, why wouldn't they?
|
| 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.
| tjwebbnorfolk wrote:
| I don't know if you've noticed, but politicians aren't in
| the business of root-cause analysis or actual solutions.
| They are in the business of making things either slightly
| better or significantly worse for certain people.
|
| 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.
| rick_dalton wrote:
| How are you so sure this will be a definite improvement?
| Many well-meaning policies have had a measurable negative
| effect.
| Analemma_ wrote:
| I have to admit, I'm very used to politicians tossing out
| non-fixes as a distraction when there's some problem, but
| your comment is the first case I've ever seen of a voter
| openly acknowledging that it's a non-fix, but being happy
| about it anyway. And not just that, but actually
| attacking the people pointing out that it's a non-fix,
| and casting sinister aspersions on their motives.
|
| 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.
| jay_kyburz wrote:
| Yes, It should be expanded that no company can own residential
| property, and more importantly, each person can only own one
| property.
|
| People should go find something else to invest their savings
| in.
| roywiggins wrote:
| Would that not make rental properties entirely illegal? That
| seems... complicated
| em-bee wrote:
| the owner could rent out their own house and rent someone
| elses.
|
| 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.
| compsciphd wrote:
| that only works with a complete loop of landlord/renters
| and hence doesn't help anyone rent who can't own
| themselves....
| JoshTriplett wrote:
| There _are_ people who unironically seem to want to do
| that.
| tbrownaw wrote:
| I think the idea is that _nobody_ would prefer to rent if
| given a choice, and that _everybody_ could afford to own if
| not for the presence of landlords in the market.
| BobaFloutist wrote:
| Which is obviously incorrect.
| BeetleB wrote:
| > I think the idea is that nobody would prefer to rent if
| given a choice
|
| I'd wager about 25-50% of the population prefers renting.
| Lots of people don't want to be tied down.
| cloverich wrote:
| Possibly but that is not the main argument. The main
| argument is about the lesser of two evils. Do we want to
| prioritize the open market of SFH ownership, or do we
| want to prioritize (maximize) the number of people who
| can own a SFH. Banning multiple SFH ownership would
| target the latter, with the tradeoff of a restrictive
| ownership path for wealthy individuals.
| jay_kyburz wrote:
| I figure many couples would live in one home, rent a
| second.
|
| The children could have one each too, perhaps only once
| they reach 18.
|
| I think there would be plenty of rental stock still.
| cperciva wrote:
| _each person can only own one property._
|
| 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.
| jay_kyburz wrote:
| I think my suggestion would unlock a lot of supply, without
| expanding our cities or adding to urban sprawl.
|
| 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.
| chucksta wrote:
| Depends where you are
|
| 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.
| mandevil wrote:
| But is that Big Money Private Equity or "took a class from
| that Rich Dad, Poor Dad guy who said we should create a
| company and invest in real estate" corporation?
| Loughla wrote:
| Is there a difference?
| lazyasciiart wrote:
| Only one of them will be affected by the proposed law.
| OGEnthusiast wrote:
| Both are bad.
| chucksta wrote:
| The title of the article - "3 companies own nearly 38,000
| metro Atlanta homes" Home many rich dads do you know with
| 12,500 homes?
| epistasis wrote:
| Having personal experience here, I'll take the company
| owning 10,000 homes over the rich dad any day. That rich
| dad is desperate, incompetent, and breaks tenant law all
| the time, ie chaotic evil. The corporation is lawful evil
| instead which can at least be planned for.
| nospice wrote:
| "Corporations" is meaningless in this context. If you want to
| own a rental home in the US, you should set up an LLC, both
| for liability reasons and because it makes it easier to deal
| with taxes and expenses.
|
| 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.
| Workaccount2 wrote:
| Just to reinforce this, the last place I lived in was owned
| by a corporation...of one man, who lived a town away in a
| modest house and worked as a paper pusher by day.
| BeetleB wrote:
| Indeed. This was discussed about a month ago. My prior
| comment:
|
| https://news.ycombinator.com/item?id=46208561
| dpoloncsak wrote:
| I've been told that, for privacy reasons, you should even
| buy your own home under an LLC as well
| kccqzy wrote:
| Depends on how unique your legal name is. Buying your own
| home as an individual creates a public record with your
| address and your name. This gets ingested by lots of
| people search websites like
| https://www.fastpeoplesearch.com/ (which I have used and
| liked). But if your legal name is really common, it would
| be harder for anyone else to deduce which one is actually
| you.
| saghm wrote:
| For what it's worth, I just searched that site you linked
| with my name and the zip code I lived in for the first 18
| years of my life, and it seems to have a pretty muddled
| view of who I am. It has my correct age, full legal name,
| and current address, as well as two of my past apartments
| and my address for those 18 years where I lived in the
| zip code I searched, but it also lists my parents current
| home that they bought over a decade after I had
| permanently left that state in a city I've never lived
| in. The landline number it lists is the number my parents
| had at the house I grew up in, but they don't even use it
| now, and it wouldn't have been an effective way of
| reaching me since I used to live at that house, and the
| mobile number it lists is one I've never seen in my life.
| For family members, it lists one of my brothers and
| parents, but not my other brother or either of my two
| living maternal grandparents, although it has a strangely
| long list of names I've never heard of, some of whom have
| my mother's maiden name but aren't my grandparents or any
| of my relatives with that name who I'm aware of, as well
| as a bunch of people whose names I don't recognize with
| last names I'm not aware of being in my family tree.
|
| 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.
| eli wrote:
| Significantly complicates getting a mortgage though
| chucksta wrote:
| The title of the article - "3 companies own nearly 38,000
| metro Atlanta homes"
| epistasis wrote:
| There are well over a million homes in the metro Atlanta
| area. If the top three owners have less than 4% of a
| market, need if they act in a completely coordinated
| manner they have approximately zero market power.
| piker wrote:
| Yes if the market is for rice, but illiquid assets are an
| entirely different market which can be crazy warped by a
| few important participants.
| epistasis wrote:
| How so, could you explain that a bit? I could see them
| causing a price dip or spike in purchase prices if they
| bought or sold all at the same time, but that would
| affect their own prices that they pay or receive, right?
| What is the market manipulation with 4% of housing stock?
| piker wrote:
| Houses are unique and have irreducible transaction costs
| which makes the market for them very inefficient and slow
| relative to a commodity. For one example, if you are in
| the market for a 3-bedroom house with a garage, the
| market is already segmented much more narrowly than can
| be the case in an efficient market like that for a
| commodity. If you have to move into one as soon as
| possible for a new job, and you know closing will take a
| minimum of 3 months, the market for your prospective
| houses is going to be extremely small without even
| factoring in other distinctive characteristics like
| driving distance and schools. 4% of the aggregate market
| may represent 25-30% of your "market" nonetheless.
| epistasis wrote:
| Thanks for that! I guess I don't see how there could be
| market manipulation without also damaging the
| manipulator, especially in a market that is as
| transparent as housing, with nearly every sale being at a
| public price.
|
| 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.
| rmah wrote:
| Metro Atlanta has a population of 6 mil, say 2/3 live in
| detached homes with 2 persons per home. So that's 38,000
| out of 2 mil homes, so about 2%
| enraged_camel wrote:
| LLC may be a type of corporation but when people complain
| about corporations buying up homes they really mean
| C-corps, not LLCs owned by Uncle Bob who likes to flip
| houses.
| indymike wrote:
| > e never seen big corporations own single-family rentals
| en masse.
|
| 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.
| tshaddox wrote:
| That's not really meaningless though. You just explained in
| more detail some attributes of corporations, many of which
| are precisely the things many people are criticizing when
| they criticize the fact that corporations own lots of
| housing. Of course we all know that there are still humans
| behind the corporations.
| greenavocado wrote:
| Many people register houses they purchase in LLCs for privacy
| protection purposes
| gowld wrote:
| "Clark" is an arbitrary commenter.
|
| 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.
| cmxch wrote:
| Cover those individual investors too.
| dstainer wrote:
| Agreed, I think the simple answer is the tax rate is one
| thing for a primary residence and another for non-primary
| residences regardless of who owns it. For example in CA, Prop
| 13 stays in place for your primary residence, but properties
| are re-assessed every year like in Texas if it's not your
| primary residence. In addition, take away some (or all) of
| the tax deductions for SFH that aren't primary residences.
| sgc wrote:
| Rent would go through the roof and it would become even
| harder to get out of the rental trap. It's better to just
| have a very low hard cap on the number of properties anyone
| can own.
| sapphicsnail wrote:
| People being less likely to buy multiple houses is going
| to make it harder for people to buy a primary residence?
| oceanplexian wrote:
| > But most of the "investors" buying up property are
| individuals purchasing investment properties.
|
| 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.
| seanmcdirmid wrote:
| Once you try to clamp down on investment properties, you have
| couples getting divorces so they can own two homes (this
| happened in China), and all your kids are going to have their
| own home as well.
|
| 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.
| ryandrake wrote:
| This comment always comes up when regulation is proposed:
| "But people will just game it!" The solution is not to
| throw our hands up and say "Well, we just can't regulate
| this!" The solution is to prevent the gaming, too. Laws
| should iterate as often as people find clever ways to work
| around their spirit.
| LPisGood wrote:
| Realistically if the biggest problem is couple's
| divorcing to get a second home, then the problem has been
| pretty well attacked
| ryandrake wrote:
| Exactly. Nobody wants to hear this, because we're all
| Temporarily Embarrassed Landlords, but if a corporation
| buying 100 houses to sit on and extract rent is bad (or
| good), then 100 individuals each buying 1 house to sit on and
| extract rent must be equally bad (or good).
| FarmerPotato wrote:
| The complaint, real or imagined, is that young individuals
| aren't building up capital. Home ownership was the bedrock
| of middle class assets.
| LPisGood wrote:
| I disagree with this logic. To take it to an extreme, if
| one person earning a million dollars per minute has moral
| value X, then a million people earning one dollar per
| minute has moral value X. I disagree on principle.
| hn_acc1 wrote:
| Guaranteed those 100 individuals won't all raise their rent
| 10% (or whatever) on the same day, every n months.
| Noaidi wrote:
| If "Black rock isn't buying up all the housing" then how do you
| explain why Blackrock lost $17 billion in capital today?
|
| https://xcancel.com/KobeissiLetter/status/200899449445747946...
|
| It matters, you just dont want to know it matters.
| WackyFighter wrote:
| A hit in the stock price doesn't prove or disprove their
| claims. What would disprove their claims is the number of
| properties Blackrock is buying and if it is affecting pricing
| at the margin.
| OGWhales wrote:
| I don't think a stock market reaction is a good way to
| measure their impact on the housing market. It's not that
| they aren't involved in the market, it's that their impact is
| questionable given the relative size of their participation.
| rcpt wrote:
| Now explain Tesla stock.
| foobarian wrote:
| And part of the problem may be people like my cousin, who
| bought a house without selling the old one, choosing to rent it
| instead.
| woah wrote:
| Why isn't it your cousin's tenant who is the problem?
| bs7280 wrote:
| I propose two changes to (try) and broadly solve this: -
| Additional property tax if you do not live in your home
| fulltime. This includes vacation homes. - First time, US
| Citizen, non-corporate homebuyers can get a loan at the federal
| interest rate.
|
| 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.
| sharpy wrote:
| That sounds nice, but I think that increased tax will just be
| passed down as higher rent.
| jspaetzel wrote:
| Higher rent means more people will opt to buy. That's not
| necessarily a bad thing in perspective. Assuming the other
| side effect is a decrease in costs due to a lower profit
| margin.
| RegEx wrote:
| I believe your comment is operating under the assumption
| that people are merely choosing to rent over buying
| because it's the more economically wise choice. That's
| not how things work in reality. Many people want to buy
| but cannot put up the initial costs.
| lawlessone wrote:
| > Many people want to buy but cannot put up the initial
| costs.
|
| This, monthly rent actually costs more here in Ireland
| than what you would pay monthly for mortgage.
| jazzyjackson wrote:
| Many things cost less when you pay for 40 years up front
| bs7280 wrote:
| That is a good point, and this tax would need to be well
| thought out. I specifically would increase the tax rate the
| more properties an entity owns (Not a lawyer so IDK how to
| treat one guy owning 10 companies as 1 entity the right
| way). That way smaller local landlord's can still exist
| (and keep rental prices competitive), but massive orgs will
| be forced to sell properties. The idea is to create a
| disincentive for hoarding properties in supply constraint
| markets.
| skissane wrote:
| > I specifically would increase the tax rate the more
| properties an entity owns (Not a lawyer so IDK how to
| treat one guy owning 10 companies as 1 entity the right
| way).
|
| 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.
| kiba wrote:
| The problem is not owning multiple properties, but
| untaxed land ownership. There's a prexisting solution for
| what you want to solve. It's called the Land Value Tax,
| which imposes a tax on land, but not on buildings and
| other improvement.
|
| 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.
| almosthere wrote:
| Long term these non-occupants will sell as other properties
| are being purchased by x-renters.
| iknowstuff wrote:
| Opportunity cost means makes purchasing with a mortgage wiser
| than buying cash. $1000/month more for a few years is nothing
| compared to the property value increase of a $1M property
| bs7280 wrote:
| Where I live, condo's do not increase in value much due to
| HOA fees and taxes.
|
| 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.
| WalterBright wrote:
| See my other reply about what it costs to own a house.
| WalterBright wrote:
| The stock market goes up more than the housing market. When
| considering the return on investment for a house, remember
| the property taxes, insurance costs, maintenance costs,
| repair costs, 6% real estate commissions, and so on.
| andromeduck wrote:
| It'd be simpler to just have a high LVT and treat it as a
| credit instead of deductible.
| wordpad wrote:
| Property taxes are directly and immediately translate into
| higher rent.
|
| Making rent more expensive doesn't make ownership cheaper,
| just makes it more attractive relative to renting.
| MikeNotThePope wrote:
| Yes & no. Higher costs can obviously be passed onto
| consumers, but higher taxes make things a less attractive
| investment, too. The higher your costs regardless of
| whether a unit is occupied or not, the less interesting it
| is an an investment.
| Hammershaft wrote:
| Property taxes do not directly translate into rent, the %
| of the tax that is on the land value of the property can't
| be passed on, because the supply of land is inelastic.
|
| https://www.astralcodexten.com/p/does-georgism-work-
| part-2-c...
| thayne wrote:
| It depends on the state, but that is largely kind of already
| the case. At least in my state you get a significant
| deduction to your property taxes if it is your primary
| residence.
| WalterBright wrote:
| > Rich investors and companies effectively get to buy homes
| at a discount vs average joes.
|
| 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.
| iknowSFR wrote:
| Couple things to add. First, rates are much lower when
| you're leveraging 10,000 homes at 3:1. That allows you to
| purchase 20,000 additional homes, which isn't something the
| normal individual can do. Second, most of this borrowing
| was done during the 0% interest days and when rates went up
| after Covid, a lot of the operations grinded to a halt.
| Third, there's no regulatory environment for rent rates and
| rate increases.
| WalterBright wrote:
| > First, rates are much lower when you're leveraging
| 10,000 homes at 3:1
|
| 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.
| FireBeyond wrote:
| > What interest rate do you think rich people are
| getting?
|
| 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.
| ricardobeat wrote:
| Aren't you forgetting something, like hmm, rent and
| appreciation?
| WalterBright wrote:
| I'm talking about both parties buying a house, not
| renting it. The appreciation would be the same for both
| scenarios.
| derangedHorse wrote:
| An intelligent investor wouldn't buy it outright, they'd
| get a mortgage with a lower than average interest rate. The
| appreciation of the home will cover the interest rate over
| the long run and the interest rate is a small price to pay
| for keeping most of that $100,000 liquid for other
| investments.
| ricardobeat wrote:
| Except they do, as the original comment already said. The
| rich "person" has cash and access to much cheaper credit,
| is buying multiple properties, not paying the bills and
| earning rent, the other will have a mortgage.
| indymike wrote:
| > Additional property tax if you do not live in your home
| fulltime.
|
| 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.
| estearum wrote:
| > The effect: Rent goes up to cover the tax and margin is
| added, so the rent goes up more than the tax.
|
| 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
| lbarrow wrote:
| 1) Is already how things work. Every single municipality I've
| ever seen in the US offers an owner-occupancy tax abatement.
|
| 2) Would just inflate home prices.
| derangedHorse wrote:
| > 2) Would just inflate home prices.
|
| That depends on demand. If no one wants to buy homes at the
| prices offered, prices will drop.
| milesskorpen wrote:
| But you'd have an asset you own at the end of that period,
| and your mortgage payments wouldn't go up over time whereas
| rent likely would.
| fn-mote wrote:
| > 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 mo
|
| ... 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.
| mycodebreaks wrote:
| Controversial, but for affordability reasons, there even should
| be a cap on how many homes an individual can own for rentals.
| For the sanity in the housing market, members of society need
| to be driven to participate in other business activities for
| income/revenue, not rentals.
| lbarrow wrote:
| Why would this help affordability? If you restrict who can
| operate rentals, that will inevitably shrink the supply of
| rentals, which will raise rents.
| baq wrote:
| but it'll lower mortgages, which will lower rents.
| AstroBen wrote:
| Would it not also lower house prices, causing would-be
| renters to buy instead, reducing demand for rentals?
| jazzyjackson wrote:
| This kinda reminds me of student loans, why not get as
| many people as possible into 6 figure debt?
|
| 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.
| AstroBen wrote:
| I don't think this is a purely financial decision - my
| position on that is it's not a good investment if you're
| buying a single home. Taking on 5x leverage on a hugely
| concentrated asset is insane to me if it's a large % of
| your net worth
|
| 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..
| caditinpiscinam wrote:
| That "less commitment" argument assumes that renters are
| content to be paying higher-than-mortgage costs for a
| property they'll never own. If they are, then it's true
| that the rental system is benefiting them. If they'd
| rather own their homes and be paying a mortgage, then the
| rental system is a hindrance.
|
| 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.
| dghlsakjg wrote:
| Renting and purchasing are not perfect substitutes. There
| are many situations where a rental is a far better
| solution.
| lawlessone wrote:
| >that will inevitably shrink the supply of rentals
|
| 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/...
| KptMarchewa wrote:
| This will release homes on the market, which will lower the
| prices, causing the rents to drop.
| jazzyjackson wrote:
| This is basically a maximum wage for landlords, bound to
| start a secret society.
|
| 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.
| mikepurvis wrote:
| I'm not sure if this is what you mean by secret society,
| but I could well imagine that these kind of limits would be
| hard to enforce. Like a person creates shell corporations
| to own their properties on their behalf, or buys them in
| the name of their kids, or employs randos to "own" pieces
| of their portfolio.
| estearum wrote:
| No, the real problem is that the vast majority of their
| income does not come from their role in creating supply or
| maintaining housing.
|
| 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.
| pepperball wrote:
| > North Carolina has done some good by loosening up code
| around tiny homes
|
| How great, you can live in a pod and eat bugs.
| tshaddox wrote:
| > This is basically a maximum wage for landlords
|
| Well sure, but it's good to incentivize looking for sources
| of wages other than (literally) rent-seeking.
| Plasmoid wrote:
| Renting out property isn't rent seeking.
| j-krieger wrote:
| > they do create supply and maintain housing.
|
| Clearly you have never interacted with most land lords
| cosmic_cheese wrote:
| If nothing else, landlords should be held to much stricter
| standards for maintenance and the overall state of their
| properties.
|
| 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.
| kiba wrote:
| Landlord, or property management, is a job, same as any other
| job you might have. The problem is not owning multiple
| properties, but not paying enough taxes on land. Otherwise,
| landlords benefit from the free lunch that comes with
| economic growth and real estate price appreciation, which is
| true for every homeowners in this country.
|
| IF you want affordability? Tax land.
|
| Doesn't matter who owns them. Your grandma or wall street.
| estearum wrote:
| > Landlord, or property management,
|
| 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.
| derangedHorse wrote:
| Landlords have to allocate capital to fixing and
| improving the house, as well as taking care of insurance
| and taxes. Also, assuming that they're not living in the
| house and the value of the home goes up, they're taxes
| will rise whenever an appraiser reassesses their home
| value.
| estearum wrote:
| All improvements are excluded from a land value tax,
| which actually means improvements are even _more_
| incentivized.
|
| 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.
| tshaddox wrote:
| > Landlord, or property management, is a job, same as any
| other job you might have.
|
| 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.
| AznHisoka wrote:
| Should this apply to multi-family homes or just single
| family?
| imgabe wrote:
| For affordability reasons, just build more housing. It
| doesn't matter how many houses anyone owns if you just build.
| more. housing.
| orangecat wrote:
| This is obviously correct. Somehow people just can't accept
| the pigeonhole principle that if X people are trying to buy
| Y houses and X>>Y, a lot of them are going to be
| disappointed regardless of what laws you pass.
| cloverich wrote:
| This would certainly drive down prices - how much is an open
| question. But I think its a fair compromise, UNTIL we
| actually do have enough homes for everyone. Until then
| something has to give - right now its people who can't own a
| single home that are yielding, but IMO it would be much more
| fair to ask people who already own a home to yield (not buy
| more than one). Ultimately that's the tradeoff to discuss.
| idiotsecant wrote:
| This is treating a problem symptom, not a root cause.
|
| 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.
| orangecat wrote:
| _Landlords owning property is not a problem._
|
| 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.
| woah wrote:
| That's a surefire way to make sure that all rental properties
| are controlled by people who are able to de facto own a lot
| of properties with family members (or "family" members) on
| the paperwork, and who are able to enforce their ownership
| with extrajudicial means.
| robotsquidward wrote:
| Perfect for a big splashy press release. Populist policy with
| no practical benefit to the average American.
| iknowSFR wrote:
| I worked with these firms for several years when the business
| concept was in its earlier stages. The money coming in to buy
| these homes quickly went from family offices (2013-2019) to
| state pension funds (2019-present) to sovereign funds
| (2020-present).
|
| 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.
| observationist wrote:
| It's not that simple - the problem is that those institutions
| are market makers. They are a tiny portion of the market, but a
| huge driving force in setting and manipulating prices, 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.
|
| 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.
| WalterBright wrote:
| > They are a tiny portion of the market, but a huge driving
| force in setting and manipulating prices, 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.
|
| 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.
| observationist wrote:
| It's not just raising prices - it's holding prices steady
| at some point without the concurrent pressure to sell, for
| example, or manipulating other markets in order to raise or
| lower prices in an area, or using other mechanics to
| manipulate pricing, across the entire market, depending on
| the intended actions. If they intend to purchase
| properties, it benefits them to depress pricing in the
| area, if they intend to rent, they can afford to impose
| artificial scarcity until they force renters to meet their
| rates, and so on.
|
| 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.
| estearum wrote:
| This is extremely silly.
|
| 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.
| fc417fc802 wrote:
| > which is mostly because it's really expensive to build
| houses,
|
| 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.
| packetlost wrote:
| In areas with low CoL the cost of building houses and the
| cost of selling a house has a massive impact on the
| number and type of homes that get built. If it's not
| profitable for a builder to build a home they simply
| won't, whether it's because of bureaucratic red tap or
| economic conditions. There's very strong incentives for
| builders to take the path of least resistance and highest
| margin.
| estearum wrote:
| Not true.
|
| 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
| datsci_est_2015 wrote:
| Define "tiny portion of the market", especially "market".
|
| 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.
| ToucanLoucan wrote:
| To add to this: the "total stock" is also completely
| different to any other asset in terms of market forces,
| because it varies widely depending on the buyer in
| question. People don't shop for "a house" and address the
| entire available market of houses in the country. They
| shop for a house in a particular area/city, of a certain
| value, with certain amenities, in proximity to other
| things, etc. etc. etc.
|
| 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.
| observationist wrote:
| The market meaning all real estate, residential and
| commercial, and tiny, as in under 3%, with regards to
| what is owned by the institutional investors. That's
| probably higher with regards to properties that are or
| have been on the market in the last ten years or so. From
| what I can tell, the other ~97% is owned by individuals
| and smaller funds and mom&pop companies, with fewer than
| 20 properties involved.
|
| 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.
| tshaddox wrote:
| I don't think that's quite what the comment is claiming.
| They're not saying that some small portion of homeowners
| are working together to raise prices. I think they're more
| talking about the concept of "marginal buyers." It's the
| marginal buyer that sets prices, not the average buyer. And
| particularly when supply is heavily restricted, the
| marginal buyers can be a very tiny portion of all buyers,
| and can look very different from the _average_ buyer.
| xvedejas wrote:
| Marginal buyers have a big impact by adding a lot of
| liquidity, but I'm not sure they manipulate prices that
| much, given that if they ever tried to move prices far
| from the margin they would cease to be marginal buyers.
| tshaddox wrote:
| But again, I don't think we're talking about a concerted
| effort to manipulate prices. We're talking about the
| effect that particular marginal buyers just so happen to
| cause.
| kortex wrote:
| Going by the graph in the article, that's still ~13% of
| homes owned by investors with >5 properties. And that's
| total of what is currently held, it speaks nothing of
| liquidity. That number likely includes investors who have
| had that property for a long time, the current property
| buy-up likely means far greater than 13% of the market
| right now is going to those sorts of aggregators.
|
| 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).
| no_wizard wrote:
| You may be interested in learning about the Land Value
| Tax[0] which will in effect, taxes become more burdensome
| for leaving land unproductive (e.g., empty housing or
| land). It also shifts the calculus on 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, which is better for median
| home owners as well.
|
| [0]: https://en.wikipedia.org/wiki/Land_value_tax
| appreciatorBus wrote:
| The vast majority of land in the country has been owned by
| capitalistic profit motivated players since 1776 - individual
| home owner occupiers.
|
| 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.
| EugeneG wrote:
| "properties get leveraged, instrumentalized, and securitized,
| with derivative products, speculation, and all sorts of
| incentives"
|
| Spoken like someone has no clue what they are talking about
| and just throwing out jargon
| ASinclair wrote:
| > you allow for policy that doesn't maximize the cost of real
| estate over the interests of the majority of the population.
|
| 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"?
| pandaman wrote:
| I somehow doubt these institutions are market makers in the
| housing market, if they had been ones then they'd be offering
| to sell and buy houses _all the time_ , this is a market
| maker's function.
| johncolanduoni wrote:
| If you have a model where you can do price manipulation of
| something while owning 1% of it, I understand why you
| wouldn't share it. Where are you on the Forbes Billionaire
| List, out of curiosity?
| mi_lk wrote:
| Not buying this. Have you seen studies that support this line
| of arguments?
| jncfhnb wrote:
| I feel like this article is littered with suspicious statements
|
| 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.
| mbesto wrote:
| Also, the headline on HN is downright wrong.
|
| "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.
| GolfPopper wrote:
| After a decade of national politics, and many decades of his
| "business", too many people still take "Trump says" as
| anything more than a piece of a con.
| 827a wrote:
| Its true that its a small number, but when you look at the
| statistics as a function of "percentage of homes purchased in
| 2024" instead of "total percentage ownership of homes", it is a
| bit more substantial: My understanding is the number is closer
| to 2% for Institutional investors, and as high as 4% for major
| markets like Phoenix and Dallas.
|
| What it will come down to is the exact wording of what Trump
| means by "large institutional investors" (his exact words on
| Truth).
| runjake wrote:
| _> Black rock isn 't buying up all the housing, your neighbors
| are._
|
| 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.
| cyanydeez wrote:
| Random private equity newspaper isn't the most convincing
| source.
| firesteelrain wrote:
| I can only provide anecdotal information. In my HOA community
| we had to make a rule that you need to live in your home for
| two years before you can rent it. This effectively stopped the
| companies like Innovation Homes from buying up properties in
| our neighborhood. Post housing crisis-2015 it was getting
| pretty bad with the investors purchasing the single family
| homes. I don't know if places like Innovation Homes qualifies
| as "Wall Street" or not.
| austin-cheney wrote:
| Where I live, in the fastest growing big city in the US, it is
| absolutely commercial investment firms buying up all the homes.
| I used to get calls several times a week from these guys want
| to buy my house in cash. I stopped taking their calls and now
| it has slowed to only a few calls per month.
|
| 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.
| paulddraper wrote:
| Moreover, the fundamental problem is lack of supply.
|
| Building has not kept pace with growth in households.
| throwmeaway820 wrote:
| Pure populism.
|
| If you believe that banning investors from buying SFHs will
| decrease the price of SFHs, why not also ban investors from
| buying apartments/condos?
| georgeburdell wrote:
| This will help out home prices in a lot of lower priced markets,
| but do little in higher priced markets. In the Bay Area, many
| houses are bought up by non-occupying internationals. I've been
| in a couple of such houses. It's bizarre walking into a $5M+
| hilltop mansion that's completely bare inside except for a token
| "student" living out of one room.
| mattmaroon wrote:
| Banning people from other countries buying home is both more
| sensible and more practical than this, which is why very many
| countries do it.
| 63 wrote:
| "From" other countries is overly broad and I assume not what
| you intended. I am actually interested though in the idea of
| legislating how frequently home owners have to actually be
| within range of the home, for example. A friend has had a
| hell of a time with a landlord in Malaysia who's never seen
| the property.
| linuxftw wrote:
| Many countries prohibit non-citizens from owning any real
| estate or businesses at all, even if they have a long-term
| resident status. Thailand is one example. Ownership is
| limited to 49%, a local partner must own at least 51%.
| rsanek wrote:
| does that work out in their favor in the end? seems like
| that would really deter investment in the country. I'm
| not familiar with any large thai corporations.
| charcircuit wrote:
| Someone from another country taking ownership of land in
| your country is practically an invasion.
| mattmaroon wrote:
| They do it by citizenship, and you might be surprised how
| many investment properties are vacant homes, but I'm not
| necessarily advocating for this in any case. The real cure
| would just be right to build laws.
|
| The problem is, you can't do that at the federal level, and
| the people who vote at the local level are the homeowners
| who benefit from housing restrictions.
|
| The federal government has a very difficult task. They want
| to make home prices basically stay flat for a long time,
| and they have limited tools with which to do it since they
| can't do the one thing every economist agrees would solve
| the problem.
| xnx wrote:
| Kind of great to have someone paying property taxes and using
| minimal city resources.
| ceejayoz wrote:
| Except land is one of a city's most important resources, and
| they often aren't paying much property tax (https://en.wikipe
| dia.org/wiki/1978_California_Proposition_13).
| Olympicene wrote:
| Feel like that would be cancelled out by the opportunity cost
| of high network individuals not spending in the area.
| logicalmind wrote:
| It's the same in Southern California. When I sold my first
| starter home it was bought by internationals to rent. There
| were already multiple homes on the block owned by foreign
| interests.
|
| And at the new home I moved into, the house next door is owned
| by foreign interests and rented out to the highest bidder. It
| makes it extremely difficult to get anything done that involves
| shared areas (like common fence or overhanging trees) because
| the owner is essentially unavailable and doesn't speak english.
| Not to mention that every year or so we have to deal with
| renters who are minimally vetted. We've had a group of 5
| college kids turn the place into a frat house once. There is
| also a property management company involved, but they can't get
| in contact with the owner either.
|
| In my experience, this seems to be a bigger issue than wall
| street investors.
| klipklop wrote:
| > many houses are bought up by non-occupying internationals.
|
| Maybe they are next?
| mountainb wrote:
| There is a conservative case for this in that the 30 year fixed
| mortgage, combined with all of the foreclosure protections both
| old and new, amount to a government benefits program.
| Historically, this type of mortgage was developed to promote
| family homeownership. The mortgage systems have continually blown
| up in "crises" in part because it's a product of policy more than
| it is a market product. This is partly why investors both
| corporate and small flipper types actually do cause serious
| distortions: the US housing market is a welfare program first and
| a market for bundled land and houses second.
|
| No one wants to abolish this welfare program (you would have an
| easier time abolishing Social Security), but also the government
| wants to keep the trappings of a market price system. It is
| easier to have serial crises and to blame some guys for the
| predictable explosions every time, adjust the laws to create
| enormous numbers of lawyer billable hours nationwide, and then
| set the stage for the next crisis and the next round of patsies
| to be blamed. Fortunately, this time we have AI to write all the
| think pieces about what it really means.
| hypeatei wrote:
| I mostly agree with your comment except the part where flipper
| types and corps cause distortion because they have 30-year
| mortgages at their disposal. A fixed rate, 30-year is
| distortionary on its own; it's a uniquely American "product"
| and banks in other countries would look at you crazy for
| requesting such a thing.
| Electricniko wrote:
| I wonder if this would include the real estate investment startup
| that Jared Kushner co-founded.
| asimpleusecase wrote:
| Seems like a good start. Then ban this as an asset class for
| scale investors so they have to release existing inventory.
| kleton wrote:
| They will continue trading the ones they have as LLC holding
| companies.
| antonymoose wrote:
| This guy wholesales ;)
|
| I recently worked on an MVP for a Zillow-for-wholesale startup.
| As a curveball, our state passed a law restricting where and
| how these contract-to-buy sellers operate. So their workaround,
| after consulting lots of lawyers, was to provide a standardized
| LLC / Contract flow such that you're no longer marketing a
| house for sale. You're marketing a stake in an LLC, only that
| LLC has a sole purpose (a contract to option out a specific
| house).
| cmxch wrote:
| Then expand the definition and scope to make it more painful to
| circumvent. Describe the structure such that it's hard to not
| be able an individual non-investing homeowner.
|
| Of course that's unpopular to those who want to freely commit
| to bad practices.
| jodah wrote:
| This is excellent news if it can actually be enforced.
| tbrownaw wrote:
| So if you aren't staying long enough to want to deal with a
| mortgage, you'll be stuck with an apartment only?
| jeffbee wrote:
| Yep, that's the hidden agenda behind this meme. The petty
| bourgeois home shoppers are big mad that REITs are allowed to
| bid against them, but also big mad that slightly less wealthy
| people are allowed to live in their subdivisions.
| barbazoo wrote:
| If you don't want to own, you rent, is that what you're saying?
| primer42 wrote:
| "Trump says" is not the same as "US will"
|
| Trump says a ton of things that he never ends up doing.
| michaelteter wrote:
| Will not happen with the current administration.
|
| Like so many other big promises, it will appease a lot of people,
| but there will be no real follow through.
|
| Any regulation that prevents unrestrained capitalism is
| immediately decried as socialism and therefore evil.
|
| These kinds of promises are made which temporarily create market
| volatility, and once it later (usually quite soon) becomes clear
| that the big thing will not actually happen, the markets snap
| back. At this point, it's incredibly likely that these situations
| are manufactured to both look good AND create large short term
| investment gains for people in the know - without actually
| changing anything.
| 01HNNWZ0MV43FF wrote:
| Now ban everyone from buying them :P Tax the land
| YY4893438276 wrote:
| Trump will get the boss call from Jamie Diamond or any of his
| other donors and quietly drop this, or sneak in a loophole big
| enough to walk an elephant through.
| chasd00 wrote:
| idk how this would work effectively. There's lots of affordable
| homes they're just located where no one wants to live. You'd have
| to focus on HCOL locations and make them not so high cost which
| seems something that should be done at the local level.
|
| You can increase supply but investors would just snatch them up.
| Maybe the feds could put a cap on the value of a single-family
| home that an institution can own and then make ownership very
| tedious. For example, no institution can own a home valued at
| more than $500k and for each home owned a quarterly filing must
| be made in person at the county the home is located. I'm sure
| these organizations would rather own very high value homes than
| lots of low value ones out in BFE.
| only-one1701 wrote:
| Just tax non primary residences at a much higher rate. Housing
| crisis solved.
| anal_reactor wrote:
| Capitalists hate him! Use this one weird trick to...
| HeyLaughingBoy wrote:
| They already are.
| kccqzy wrote:
| Not enough. Things like 1031 exchanges should be removed
| from the tax code.
| smileysteve wrote:
| Only on a local level.
|
| And businesses can already expense that tax, so it's 20%
| off, while individuals have been subject to the SALT cap
| VirusNewbie wrote:
| As someone who generally hates taxes I support this. Taxes at
| best should be used to discourage externalities and rent
| seeking.
|
| However, California even tried to repeal prop13 for non
| primary residence and it failed! So i'm not sure how popular
| this idea is.
| m4ck_ wrote:
| >There's lots of affordable homes they're just located where no
| one wants to live
|
| It's probably more accurate to say "they're just located where
| no one can get a job." You can give up you SWE job or whatever
| and move to a small town/rural area, but you're not going to
| convince anyone to give you a mortgage off your income from the
| subway at the local truck stop, or whatever labor gig you can
| get at the local industrial concern. Although if you're in
| medicine there is probably hope.
|
| If only technology had progressed to an extent that we don't
| psychically need to be concentrated in 15-20 HCOL major metro
| areas to do most (if not all) office jobs.
| derangedHorse wrote:
| > You can give up you SWE job or whatever and move to a small
| town/rural area, but you're not going to convince anyone to
| give you a mortgage off your income from the subway at the
| local truck stop, or whatever labor gig you can get at the
| local industrial concern
|
| There's certainly SWE jobs in LCOL places but even if there
| weren't, one's savings from a HCOL area should go pretty far
| in a LCOL one. Also, thinking that you can't get a mortgage
| off working at Subway in a small town is just out of touch.
| You'd probably have to work a lot longer than a cushy SWE
| job, but it's still possible.
| raw_anon_1111 wrote:
| If I were renting a house, I would much rather deal with a
| business than an individual landlord.
|
| On another note, it's amazing that in only a year, we accept a
| dictatorship where we are okay with the President setting policy
| that should require a law to be passed.
| commandlinefan wrote:
| If I were a business whose interest in owning houses was banned
| by legislation, I'd sell my "services" to the individual
| landlords who now owned the rental property. Blackrock manages
| the financial part (taking rent, scheduled repairs) and the
| silent partner gets a cut.
| raw_anon_1111 wrote:
| That's already a thing. Property Management companies charge
| landlords around 50% of the first month rent for a new tenant
| and 10% of the rent to manage the property for the landlord.
|
| They also charge a lease renewal fee.
| cmxch wrote:
| Then expand the scope to include all interested parties in
| the chain, whether owners or service providers.
| raw_anon_1111 wrote:
| So now you're going to make it illegal for individual
| landlords to use external property management companies?
| m4ck_ wrote:
| I've dealt with both; anecdotal but I had a much better
| experience with the individual landlord than corporate. Ex: AC
| went out in both cases; Individual land lord showed up with a
| replacement window unit the next day after I reported it. Corpo
| landleech ignored my ticket and calls for 3 days while I slept
| in a house that was nearly 90F inside past midnight.
|
| Corpo landleeches nickle and dime you (base rent + rent payment
| fee + pest control fee + trash fee + valet trash fee + fee for
| the service that bills water/sewage + mail room fee + others
| I'm no doubt forgetting) (but they only advertise the base
| rent), and they like to push straight up scams ( such as
| forcing mandatory renters insurance at 3x the market rate,
| expensive "benefits" packages with everything from HVAC filter
| delivery to credit monitoring, all heavily marked up.). The
| individual land lord? just a flat rent every month, no
| surprises.
|
| I'm sure there are plenty of horror stories about individual
| landlords though; the same greed drives both to cut corners and
| maximize profits.
| raw_anon_1111 wrote:
| The two times I've stayed in an apartment complex, they had
| staff onsite and repairmen and someone on call. The
| individual landlord doing this on the side is likely
| undercapitalized and operating on thin margins and not
| budgeting for repairs
| mattmaroon wrote:
| There will be no way to enforce this such that "Wall Street"
| can't easily get around it, so it is clearly for show and not an
| actual attempt to solve a problem.
| jajuuka wrote:
| This is another non-solution from Trump. Similar to the "no taxes
| on tips" nonsense that applies to almost no one since the cap is
| so high. It's a populist move that doesn't address the problem
| but appears to be a good thing for working class people at first
| sight.
| siliconc0w wrote:
| Yet again the Trump admin identifies an issue but misses the
| nuance. We want investors to encourage more homebuilding, the
| problem is more regional concentration - in regions where PE owns
| a big enough % of the homes that they can monopolize and control
| the rents. Or NIMBY policies (where the federal government could
| dock funding to states that don't build to match population
| growth).
| guywithahat wrote:
| Why do they not link Trumps posts? I would really rather be able
| to see what he said, and this was something he posted online to
| truth social
|
| Edit: I think this was the post
| https://truthsocial.com/@realDonaldTrump/posts/1158550595275...
|
| I guess they didn't link it because it changes the meaning of the
| article, his post reads more like he's going to discuss it and
| wants to do something about it.
| rgmerk wrote:
| It will make very little difference in the end.
|
| Australia's land tax system makes it effectively impossible for
| large corporations to own large chunks of residential property,
| but our real estate is amongst the world's most expensive and
| landlords are still awful - it's just that the landlords are
| hundreds of thousands of dentists and, yes, software engineers
| rather than corporate entities.
|
| If you want housing to be cheaper and renters to be better
| treated, increase supply. Everything else is window-dressing.
| lewdev wrote:
| > It will make very little difference in the end.
|
| I feel like there will be a difference between a handful of
| large corporations owning a majority of properties vs thousands
| of dentists and software engineers. Are you saying that all of
| these property owners are also soulless profit-optimizers?
|
| I remember watching some video of tenants being priced out of
| their rental apartments so when they tried to contact the
| property owner, they found layers upon layers of managers and
| companies. It just seems better when there are more thousands
| of owners than just a handful of corporations.
| rgmerk wrote:
| You would feel that, but you would be wrong.
|
| Small businesses are often just as ruthless as large ones,
| just less competent. In any case, most rental properties are
| managed through agencies, who are soulless profit-optimisers.
| DoesntMatter22 wrote:
| So what's your solution exactly? No businesses at all?
| seanmcdirmid wrote:
| > I feel like there will be a difference between a handful of
| large corporations owning a majority of properties vs
| thousands of dentists and software engineers. Are you saying
| that all of these property owners are also soulless profit-
| optimizers?
|
| Do we want to trade crazy high prices in the American real
| estate market for absolutely crazier high prices in the
| Australian real estate market?
|
| That is a bit simplistic though, there could be other things
| going on in Australia, and all the other rich countries (e.g.
| Switzerland, England, China) where American prices look like
| a good value. I'm sure at the end of the day supply is the
| main factor, and not having a hot economy also helps, so I'm
| sure the USA will get there fairly quickly.
| ghaff wrote:
| And, everywhere, it's about people wanting to live in some
| specific cities. Even a bit outside of those specific
| locations isn't necessarily particularly expensive.
| (Leaving aside ski resorts, especially nice college towns,
| and the like).
| bell-cot wrote:
| > increase supply.
|
| THIS. If Supply & Demand just feels too complex, then spend a
| day watching kids play musical chairs.
| cloverich wrote:
| It will make a _small_ difference, and then also banning
| individuals from owning multiple homes would be a bigger
| difference (and then building enough supply, the biggest). We
| can do all three.
| Someone1234 wrote:
| The problem with "increase supply" is that existing property
| owners rarely want that.
|
| In almost all cities land has run out, so the only way to
| actually increase supply is to increase density. That means
| fewer single-family-homes, and more townhomes, multi-family,
| condos, and apartments.
|
| The "American Dream" is a single-family-home, surrounded by
| other single-family homes, but even with urban sprawl we simply
| run into the limits of a commute and prices skyrocket.
|
| Ironically we actually solved this problem: Indefinite
| Telecommuting. But then decided to take our solution that
| reduces property prices, reduces air pollution, and improves
| quality of life and then just threw it away because commercial
| property owners were losing money.
| 4d4m wrote:
| How does this affect Arrived?
| tptacek wrote:
| None of this has anything to do with "affordability", which is
| not about shifting rentals to owner-occupied properties, but
| rather reducing the monthly cost of residing in areas with
| opportunity. The notion of home ownership as an absolute good is
| a _driver_ of unaffordability.
| tootie wrote:
| Yup. Building wealth through home ownership directly implies
| homes becoming unaffordable for new buyers.
| tptacek wrote:
| Right. There are good financial reasons to own a home even if
| you don't think it's going to be a great investment, just as
| there are very good reasons _not to own a home_ even if you
| have the means. It 's the absolute, which is the premise of
| this policy proposal, that's the problem.
| kasey_junk wrote:
| And home ownership rates are well within the normal range
| for the US post war regime! So this is a policy proposal
| that will likely decrease affordability to fix a problem
| that doesn't exist.
| instagib wrote:
| So, REITs? There is so much money there I expect some immediate
| pushback or a built in loophole.
|
| Can't buy a single home but an entire community is okay.
| dboreham wrote:
| Either a) this is window dressing and nothing material will
| change or b) there's a housing crash coming.
| websiteapi wrote:
| They should go all out and nationalize zoning. Let it be
| challenged all the way to Supreme Court. Trumps developer buddies
| get paid, the grift continues and the housing crisis is
| eliminated.
|
| Do it. Do it now.
| mellosouls wrote:
| I wonder if we will one day look back and wonder at the morality
| of a society that considered _homes_ suitable targets for
| investors of any stripe.
| tbrownaw wrote:
| Not unless we decide that personal mobility is evil, and start
| just _assigning_ people to plots of land when they reach
| adulthood.
| mellosouls wrote:
| Eh? I'm not talking about investing in your own home, but
| buying them simply as profit vehicles with no intention of
| living in them.
| tencentshill wrote:
| They're also buying risk. It's just during the last 10
| years buying a home has happened to be a fantastic
| investment, an easy way for an individual with the ability
| to get a 200k loan to turn that into 400k+ with 0 effort,
| especially during COVID. The market could crash and
| purchasing would become a risk for everyone but the
| wealthiest once again.
| alecco wrote:
| More like the housing bubble peaked and with this fund managers
| have a way to save face while fleecing investors.
| Workaccount2 wrote:
| Well that's going to do nothing.
|
| But at least people eating the chaff of property owners will
| celebrate it, I guess.
| SpaceManNabs wrote:
| Does wall street investors include private equity? i thought i
| was pretty sure that is most of the problem, but maybe i am
| wrong.
| deadbabe wrote:
| What about REITs!? They are a crucial source of portfolio
| diversification!
| w10-1 wrote:
| As others have noted:
|
| - Whether this is needed or helps depends not on percentage of
| owners or buyer/sellers, but on the effect in the market of such
| players. REIT's have an outsize effect because they are repeat
| players, and thus lucrative clients for brokers, who qualify
| themselves by skewing local markets accordingly.
|
| - Policy-wise, it's hard to distinguish by size: second homes,
| mom-and-pop with a few rentals, REIT, private equity. (This is
| how corporations get free-speech rights.)
|
| - Politically, it's a shame that a real problem is addressed via
| scapegoating
|
| - Practically, it will have little effect since REIT's and home
| builders are sitting on a lot of inventory that they can't sell,
| so they've stopped accumulating (and they're resorting to
| secondary offerings to pay off the original investors). Indeed,
| to the extent this stimulates buying, they're all for it.
|
| - Ethically, the US has been a magnet for money laundering, much
| of it via real estate, which has pushed up asset prices and de-
| conditioned professionals. Scapegoating only delays reform.
| jspaetzel wrote:
| They should just increase the taxes on rental income to make it
| less profitable. It's too easy to be a bum landlord.
| Ifkaluva wrote:
| The landlords would raise the rent to pass the tax along? If
| all landlords have this tax, all landlords will be raising
| rents.
| christkv wrote:
| Corporations can build their own buildings and rent them out,
| keep them out of the second hand market.
| rssoconnor wrote:
| I don't actually know anything, but I've been wondering lately:
| is higher house prices simply a consequence of Baumol's cost
| disease? If so, then there is kinda nothing we can do about it,
| right?. Higher house prices is simply a consequence of improved
| productivity elsewhere, and thus it is necessary to spend a
| larger fraction of one's income on housing.
| tootie wrote:
| Headline is very misleading. Reuters prefaces this with "Trump
| says" which is weaselly enough.
|
| Quote from the article: "In a post on Truth Social, Trump said he
| was immediately taking steps to implement the ban which he would
| also call on Congress to codify in law."
|
| The president can't do this. His EO will likely be some kind of
| statement of intent or request to the FTC to see what can be
| done. Really, this is an exhortation for Congress to do
| something. A bill has yet to be written.
| Glyptodon wrote:
| Just build more housing, the whole "let's make rules to avoid the
| easy and obvious solution" trend annoys me.
| standardUser wrote:
| Utilizing vacant properties is easier and cheaper than building
| new ones, by a massive margin. We should do both, but ignoring
| perfectly good homes in desirable locations being used by
| nobody is silly.
| thekyle wrote:
| If the goal is to reduce the number of vacant homes, then why
| not create a tax on those specifically. Corporate owned homes
| and vacant homes are not the same thing at all.
| tehlike wrote:
| Sounds like federal outreach over what is probably within states'
| jurisdiction.
| 7e wrote:
| People want the value of their house to go up after they buy it,
| but stay low before they buy it. This is all nonsense. If people
| in an area keep breeding, housing costs will go up. It's that
| simple. Increasing housing prices are actually one of the only
| checks that keep humans from overbreeding and ruining large
| swaths of desirable places to live.
| almosthere wrote:
| How about stopping all non-occupants from buying properties.
| tacticalturtle wrote:
| I don't want to purchase property, so where do I live?
| anthomtb wrote:
| Sounds like a terrible idea. Have you heard otherwise?
| riazrizvi wrote:
| This will absolutely help. It's easy for these institutional
| players to downplay their involvement with select stats, to play
| PR defense, but platforms like Zillow work with institutional
| funds to sell them an information advantage that means they are
| at the end of the market that does the most upward impact on
| pricing.
|
| People don't have a natural feel for how little you need to alter
| flow to cause liquidity in a system to collapse.
| pcurve wrote:
| I also think this will help. There's no one size fits all
| solution. I hope it goes through.
| empath75 wrote:
| Zero chance this moves housing costs an iota. Most of those
| wall street owned houses are rentals. If they are forced to
| sell them, that is a net zero change to housing supply, because
| they are taking a rental unit off the market.
| oldjim798 wrote:
| Anything bad for Wall Street is generally good for the rest of
| us.
| pinkmuffinere wrote:
| Wow this is exciting. I tend liberal, but I think this sounds
| like a bad policy lol. My understanding of the existing research
| is that rent control tends to decreases the motivation to
| increase supply, and I think this should do the same
| derangedHorse wrote:
| Yeah if investors are no longer buying from home developers
| then it'll definitely limit the demand, the price homes sell
| for, and the motivation to build new homes. I believe that
| metropolitan areas are the problem and my unpopular opinion is
| that people have to get used to the idea of moving to sparser
| areas for affordable housing.
| eunos wrote:
| "Houses are for living, not for speculation" spreads to the
| Imperial Core
| wanderingmind wrote:
| Corporations are people under the current SCOTUS interpretation.
| Which means they have the same rights under the US Constitution,
| so this should be struck down in no time in the courts. Another
| nothing burger likely to end up just manipulating the equity
| market and the derivative markets in the short term for large
| investors to capitalize.
| klipklop wrote:
| I feel the numbers that show investment groups that own X number
| of homes is highly misleading. More than likely these investment
| groups form multiple companies when they buy up the homes. Likely
| state or regional. From there the larger parent company is
| invested. So I wonder if there are hundreds or thousands of
| "small" investment groups that are essentially a shell for a
| larger private equity group.
|
| So my big worry is that the Trump admin will say they are going
| to only eliminate the most obvious cases and the problem will
| remain. The LLCs and shell corps, etc.
|
| EDIT: Also it does not address the massive amount of housing
| stock that is foreign owned by people that don't even live in the
| country.
| gen220 wrote:
| Churchill was right!
|
| We'll try everything except for a land value tax, so that we can
| eventually prove once and for all that LVT is the right thing to
| do! :)
|
| But actually, it's good to see movement on the underlying problem
| (affordability of home ownership). This is The Domestic American
| Problem of our times, and it deserves to be closer to the center
| of the Overton window of our politics and policy-making.
|
| Even if we think this step is kind of meaningless, it draws more
| attention to the problem, which is a good thing.
| kart23 wrote:
| Can someone please explain to me a practical way to apply the
| LVT? Vancouver used to have an LVT, it was too low and there
| was a housing speculation bubble in the early 1900s, since
| property was appreciating much faster than the tax rate. And if
| the LVT is too high, then you will have very little new
| development. This isn't even mentioning how you determine the
| value of the land.
|
| Denmark has an LVT and copenhagen affordability is... not good.
| ASinclair wrote:
| Hopefully this happens so people can stop blaming institutional
| investors for high home prices once this fails to work. Then
| maybe we can work on actually building homes.
| exabrial wrote:
| One of rare instances I'll say it: make owning a second home a
| major tax liability and 0 takes breaks for building or ownership.
|
| Not that because "we have a right to housing" or other
| catchphrases, but because getting rid of the government sponsored
| local monopolies is impossible.
| micromacrofoot wrote:
| how is this going to help when they already own it and new
| housing is built at a snail's pace? investors pulling up the
| ladder behind them
|
| not that I expect it to even happen at all
| gowld wrote:
| Submitted editorialized title in a misleading way.
|
| Correct title is: "Trump says he will ban Wall Street investments
| in single-family homes"
| emodendroket wrote:
| Crowd pleasing policy that will not make any difference to the
| problem.
| ck2 wrote:
| the carve outs will be insane and defeat the whole point
|
| absolutely, easily predictable
|
| what should be a one page bill will have riders of insanity
|
| they'll probably do it like they do with corporations having more
| than 15 employees, so every little business just has 15 people
| contracting out to the next business with 15 people etc., there
| will be a corporation for every 15 houses etc.
| smileysteve wrote:
| So close to realizing the issues with the 2018 tax bill.
|
| - 20% maximum corporate tax
|
| - Personal Salt cap
|
| Made it less expensive for an llc to buy a home than for most
| individuals.
|
| To make individual ownership on par with corporate, individuals
| need to be in a lower tax bracket, be able to deduct taxes ,
| interest, and insurance. And the $10k cap really hurt the ability
| for local property taxes to make it better for the individual.
| The new $40k cap may put it slightly towards the individual in
| some jurisdictions.
|
| But raising corporate rates or reducing corporate deductible
| expense re real estate is the most efficient policy to encourage
| individual ownership.
| snowwrestler wrote:
| The actual headline is "Trump says he will ban Wall Street
| investments in single-family homes," which is a more accurate
| description of what happened: one social media post by the
| president, asking Congress to do something. Nothing has actually
| changed yet.
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