A Housing Opinion

[Jolly]

Anything this guy says makes sense?

https://alt-market.us/inflation-will-price-many-americans-out-of-housing-and-into-homelessness/

[Larry]

Every bit of it makes sense.

[LuFins Dad]

Well, when he starts off by claiming that the Biden administration began the eviction moratorium when it actually began under the Trump administration, I begin to think the guy may not be an impartial observer which casts doubt on many of his other points. Since I can't trust anything else he claims in the article because he has already either lied or is incompetent, I then have to decide whether I am going to invest any more time in his article knowing that I am also going to have to go back and fact check his other claims. Since I don't have the time or inclination to do so, I closed the article and moved on.

[Axtremus]

@LuFins-Dad good that you fact-check the stuff you read on the Internet. The article subsequently goes into Weimar comparison; bet you didn’t see that coming.

[Mik]

I agree with 89th for the most part. But there is definitely a trend toward conglomerates buying up homes and apartment buildings. This will not bode well for younger buyers.

[LuFins Dad]

@Mik said in A Housing Opinion:

I agree with 89th for the most part. But there is definitely a trend toward conglomerates buying up homes and apartment buildings. This will not bode well for younger buyers.

No doubt. The Blackrock acquisitions have been very troubling and I have long held that there's a silent war on ownership over the last 20 years, not just in housing but in basically everything. Even in software. We no longer buy Microsoft Office, we get a subscription. A lot of people are no longer buying or even leasing cars, they are going into these car-share programs.

[Axtremus]

OK, stepping back 10,000 steps and flying up 30,000 feet to look at the big picture.

Blackrock (and other like conglomerates) buying up assets — it’s just organizations whose reason d’être is making money using money finding an asset class that they think will let them do it more efficiently. When the risk/reward profile of “single family houses” becomes more favorable than that for other asset classes (e.g., “apartment complexes,” “commercial real estate,” stocks, bonds), they go into “single family houses.”

You want to discourage that, you take away the incentive (so “single family houses” has less attractive risk/reward profile for the conglomerates because, say, you add regulations/requirements/responsibilities/costs for corporate ownership “single family houses”) or you straight up limit the amount of “single family houses” that can be owned by one controlling entity.

It’s easy to say “conglomerates buying up all the single family houses is bad for X, Y, and Z,” but what are we willing to do to counter it? Are there public policies countering it that you are willing to support, or just sit back and hope that individuals, HOAs, and local townships will each fend for itself (amongst their other responsibilities) and somehow be successful against conglomerates whose main purpose is to invest money to make more money? Or maybe you hope that the conglomerates will someday just grow a social conscience on their own and give up the opportunity to efficiently make money from “single family houses”?

Pulling back even more, do we want to keep rewarding “making money with money” or rent seeking more than, say, “making money from labor” or “making money from new production”? Because right now we live under a tax regime with a long term capital gains tax rate that is substantially lower than, say, the tax rate on income from labor beyond the first $40k per year. Changing that will change the incentive for “making money using money” vs. “making money from labor” in an even more fundamental way.