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What happens when private equity buys homes in your neighborhood

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61 points pseudolus | 1 comments | 09 Sep 25 17:32 UTC | HN request time: 0.413s | 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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youniverse ◴[09 Sep 25 19:03 UTC] No.45187041[source]▶
I would imagine most of the housing being newly built is also on the higher end. This new supply doesn't exactly help affordability!
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1. bluGill ◴[09 Sep 25 19:33 UTC] No.45187547[source]▶
That depends. Builders build what there is profitable demand for. If there is a lot of demand that means the high priced high end homes are in demand and builders won't build anything else. (unless forced) However there is only finite demand for such things so and as you build eventually someone says "can you make it cheaper" and some builder - having no other customers is forced to build something lower end just to get any work.

Now builders won't accept a loss (in general), so that does limit how low end they can go. However the other half of this is that most people moving to something high end just freed up something lower end for someone who can't afford luxury. (most people cannot afford a second home and even those who could afford it want to spend their money on something else. There are also a small number of junk houses that are so worthless they end up destroyed, but this isn't common)