Looking at companies like Blackstone, who buy up houses at auction, lightly flip them and put them back on the market as high-priced rentals. THEY’RE the big reason for the lack of affordable housing.
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.
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”.
Monopolies are bad.
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.
Monopolies are bad.
So are cartels.
So why are you advocating for one?
For the same reasons you are, i guess.
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.
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.
Put the money towards tax rebates for single mortgage interest.
Or just use it to construct new multi-family units that are sold at cost of construction.
