What happens when private equity buys homes in your neighborhood

> But the bigger problem for housing affordability, he adds, is that "we just haven't built enough [homes] to keep up with the population growth and household formation."

The circular incentive here is left unsaid. If a house is an investment, you and every other homeowner has an incentive to keep supply low and demand high. This ultimately drives votes, lobbying, and policies that prevent houses being built. Otherwise you end up with falling rents and stagnating property prices, like in Austin.

https://www.apartmentlist.com/research/cooling-rent-growth-d...

Housing is only 'an investment' of the kind people expect to get fast returns on because of the shortage of housing. Everyone who benefits from that is effectively extracting wealth from the people who are stuck outside of the housing market because of those shortages.

When the line goes up, everyone hopes it keeps going up, and tries to figure out a way to profit from that.

One way to stop that, is ensuring the line doesn’t go up. That has some pretty nasty side effects in other ways though.

When the line stops or starts to go down, then bad things happen. People can’t sell and move without losing a ton of money. People go bankrupt, etc, etc.

> When the line stops or starts to go down, then bad things happen

Only because many millions bought risky investments since they were told it was basically risk free. Normally things getting cheaper is a good thing, but we tricked people into thinking that housing being expensive is good for them.