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What happens when private equity buys homes in your neighborhood

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61 points pseudolus | 3 comments | 09 Sep 25 17:32 UTC | HN request time: 0.215s | source
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jameslk ◴[09 Sep 25 18:34 UTC] No.45186475[source]▶
> 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...

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1. nineplay ◴[09 Sep 25 19:08 UTC] No.45187123[source]▶
How do you end housing as an investment?
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2. jameslk ◴[09 Sep 25 19:18 UTC] No.45187308[source]▶
I don't have an answer to that (I'm sure others do) but I do feel this is a problem that can only make itself worse

The more prices go up, the larger % of net worth for an individual a home consumes. If your entire net worth is wound up in your home because your home costs so much, your incentives are much higher to keep the price of your home from falling than if it was just a fraction of your net worth. Worse yet if you're in debt and you have to sell

The longer this problem goes on, it seems the harder it will be to rectify

3. bluGill ◴[09 Sep 25 19:39 UTC] No.45187628[source]▶
People who are not investing need to vote usefully. Renters typically do not vote in large numbers and so this group that isn't getting anything from the investment isn't getting their needs represented. When renters do vote it is often for things that increase rental costs indirectly.

Even those who do own a house are often helped by things that lower value in some way. Many have a kid they want to move out and be successful in life and this means they gain more from lower values then raising values (which is paper money anyway since they would have to sell to see it - most are not). Many want to put an addition on the house and the same laws that prevent building also prevent their addition.