How private equity is changing housing

Not at all what the GP said.

They aren't saying landlords are the problem, they are saying Institutional Investors and Foreign Corporations being landlords are the problem.

There is absolutely nothing wrong with institutional investors buying tract homes and renting them out. Nothing! It brings the benefits of living in such homes to people who otherwise would be excluded from them by the financial credit system.

The article linked in the OP, and many posters in this thread, present arguments to the contrary. The main one seems to be that although institutional investors are happy to let people “benefit” from renting their homes, they are precluding many from ever owning those homes themselves.

I understand the arguments, and I understand that they are morally vacuous arguments. It is simply an advancement of the interests of the bourgeoisie. They are annoyed that renters are effectively able to influence the market, even if by the second degree through large-scale renting. They believe that having scraped together a quarter million dollars for the down payment makes them a special class of people. It is a stupid position to defend.

> It is a stupid position to defend.

Doubly so when they themselves lobby for policies that keep housing prices high, which is the primary thing preventing more people from owning rather than renting.

Wait, you're not answering his question. "Institutional investors" rent out houses at a scale individual owners can't, and have more resources to maintain those properties and respond to renter complaints. Why isn't a carefully-regulated market of institutional single-family-home lenders a good thing?

>Why isn't a carefully-regulated market of institutional single-family-home lenders a good thing?

Is there a good example of this?

Every corporation I've rented from have all fought me tooth and nail when I needed maintenance and did basically everything possible to ignore any and all complaints (because it costs them money, obviously). I have had to have a lawyer send a letter on my behalf more than once.

But that's just my experience, which has jaded me. Perhaps you can show me a non-hypothetical example of the other side and open my eyes up a bit? Any countries, laws, specific corporations which demonstrate a carefully-regulated market of institutional single-family-home lenders I should look at?

It has not been my experience that individual owner landlords have been better than institutional owners!

Anyways, I was just calling out that your logic didn't appear to hold. The right response to the comment that roots this subthread is "institutional landlords are not generally a thing". Again: the median number of properties a California corporate landlord lets out is 1.

>your logic

I didn't write any other comment here :)

But, anyways:

>It has not been my experience that individual owner landlords have been better than institutional owners!

My experience has been different than yours, in that case!

Well really I was just trying to explain the GP's post, not adopt their views, but I think I can play devil's advocate here for the sake of discussion.

The problem with institutional investors is that in making it big business you drive up home prices which in turn drives up the rental prices. Since they can have a wide portfolio of homes, they are less likely to lower rent prices when demand drops, because they can afford to take the short term hit if it they think the market is going to pick back up again. AND they can play games like grabbing all available homes in an area in order to artificially inflate prices.

Must be. In particular: the only landlord I ever got a security deposit back from automatically was a corporate landlord.

More broadly: if your concern is that the landlord isn't going to fix the furnace or whatever, you can address that without distorting the market just by creating causes of action, penalties, and fix-and-deduct ordinances to shift incentives.

Banning corporate landlords reduces the supply of housing (larger institutional investors are the primary builders of dense multifamily), and privileges individual owner/landlords who do not have a better track record or better incentives or better resources.

Right. I'm not advocating for a banning of corporate landlords. I just wanted to look at the regulations/ordinances/etc. of a "carefully-regulated market of institutional single-family-home lenders" to take some inspiration from, and perhaps advocate for some of the sensible rules in my area. I know you participate in your local politics, and have a different viewpoint than mine, so I thought I'd ask.

Fair enough! Hard for me to answer, because my priors are that non-corporate landlords are generally worse than institutional landlords, if only because the structural incentives favor scale.

I see that you did your best, but it should be obvious that the people who want to buy homes also have a massive financial machine on their side, and that it also drives up prices. If the insured 30-year mortgage did not exist, homes would be a lot cheaper.

Not sure the median makes sense for this argument. Say 51% of corporate landlords let out 1 property, and 49% let out 100 - most people will live in a property owned by the 49%. The absolute number of landlords in the 51% would be mostly meaningless.