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New Legislation Proposes to Take Wall Street Out of the Housing Market
(www.nytimes.com)
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this post was submitted on 07 Dec 2023
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I mean, would it be better if we had a thousand mid-sized car dealership style house flippers rather than one singular monolith doing the same thing?
Blackstone agents are operating at a national scale in a market that's been flush with speculators and flippers going straight back to the colonial era. The high price of real estate is the consequence of housing as a commodity. There's no more free land to develop on the cheap and no more suburbs for young people to push out into searching for cheap new constructions. Take everyone at Blackstone out of the market tomorrow and you'll have a hundred smaller banks lining up to repeat their formula by the end of the month.
So long as cash is cheap, housing is in demand, and REITs are a thing, you're going to have businesses looking to profit off the difference between sale rates and rental rates as well as the gap between the prime rate and the going mortgage rate.
Did you just scoff at the idea of competition improving a market?
One big monopoly looks no different to the consumer than a cartel of mid-sized dealerships. You're not fixing the underlying speculative demand issue, just changing the number of participants in the speculative racket.
Yes it would be better. Monopolies are bad. Near monopolies are bad. The more market power a company gains the more they can charge for no reason at all except "fuck you pay me".
Cartels are equally bad. Unless you change the economic incentives in home building and real estate speculation, you are - at best - changing the discrete number of people who get to participate in the profiteering. I don't particularly care if one national guy or fifty state guys get to ratchet up my housing prices. Big Number Goes Up all the same.
Absolutely. Especially since we just caught them colluding to raise the market price.
The solution is to make hoarding rental properties an unattractive investment. Put an escalating tax on owning multiple residences. If the 5th property is at 40% tax every year it's no longer a money maker in a competitive market. Put the money towards tax rebates for single mortgage interest. Now you have buyers back in the market and landlords looking to sell.
Home 1 : 100%
Home2 : 133%
Home 3: 175%
Home 4: 250%
Home 5: 325%
Excellent suggestion. I don't mind people having a second home or a couple of rentals, but more than that is just greed.
Or just use it to construct new multi-family units that are sold at cost of construction.
There WOULD be more suburbs to develop if we were allowed to work remotely. I would gladly move to the developing suburb of bumfuck-nowheresville if I could go there and keep my job, but I have to stay within a reasonable commuting distance of the nearest metropolis.
Monopolies are bad.
So are cartels.
So why are you advocating for one?
For the same reasons you are, i guess.
So preying on the victims of the growing wealth innequality and income gap. That will surely accelerate the decline of civilization.
Well said, people think that making certain companies go poof will suddenly resolve issues for a long time, without thinking about resource availability, the circumstances which led to the sutuation and the customers who enable them.
Which is the exact reason the government is supposed to step in when there's this kind of excess in the sector. Especially regarding a need like housing.