observationistJan 7

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.

Show threadtptacekJan 7

You're telling a just-so story, and you can tell because there isn't a simple schematic 1-2-3 story you can make from this about how these people exert control over home prices. Words mean things; wielding scarcity requires you to control enough inventory to manipulate scarcity, and REITs and corporate buyers empirically don't.

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

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

Show threadbrightballJan 8

About 2 miles from my house, a housing development recently went up.

No homes for sale. Rent only.

Stuff like that is becoming a big problem.

Show threadtptacek
Why? Why should I care what the balance of rental and owner-occupied is? Owned is not strictly better than rented!
Jan 8 at 1:38amWeb
Show threadbrightballJan 8

At scale, it limits the supply of available homes to buy which increases the prices.

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

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

Show threadtptacekJan 8
None of this is happening "at scale", but either way, you're talking about the price of deeds on houses, and affordable housing isn't about home ownership; in fact, the urge people have to drive this issue towards "starter homes" is a big part of the problem, because the highest-opportunity areas have strictly limited carrying capacity for single-family homes in the first place, and what we desperately need to do is upzone and diversify the housing stock.
Show threadlupusyndrby9Jan 8
Isn’t manipulation of zoning an example of why it’s important and how even with a small share they can have an outsized influence on the market? Also I seriously doubt the return to work directives are driven by anything more then the projected drop in property values.
Show threadtptacekJan 8
No. I actually don't give a shit whether corporations can buy single-family houses, by which I mean, I don't care if that's banned. My problem is that high-opportunity high-value residential areas are deeply resistant to upzoning and are actively using this "corporate investor" narrative as a reason why they should wait. Corporate investors are not why the inner ring suburbs with the good schools in major metros are expensive; zoning is. This is literally a distraction from affordability work.
Show threadpaulryanrogersJan 8
There can be more than one problem at once. Two different solutions can be tried at the same time.
Show threadtptacekJan 8
This doesn't acknowledge anything I just wrote.
Show threadpaulryanrogersJan 8
You said blaming corp buyers is a distraction from NIMBYISM. I'd argue corp buyers are a problem as well as NIMBYISM. Both should get blamed and be addressed.
Show threadtptacekJan 8
In fact, it's the opposite: corp buyers are associated with declining rents. I don't care what happens with them either way, they're a second-order factor, but most of what people are saying about this phenomenon is just wrong.