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Re: The Corporate Ownership of Homes
Gary Berman just oozes the sense of entitlement and arrogance that typifies globalist oligarchs. His company, Tricon Residential, owns 30,000 single-family homes in the United States and is buying more at the rate of 800 per month. His $5.5 billion corporation (and companies like his) has the resources to snap up the kind of home young families would like to buy. He says it’s OK because “Millennials don’t really want to own homes.”
I tend to disagree, as the father to three “Millennials” and the uncle to several more. Millennials would very much like to own their own homes, despite being propagandized their entire lives to disdain property, to have a preference for “experiences over possessions,” to own nothing and be happy. There are very good reasons for wanting to own property; and very good reason that the oligarchs don’t want you to.
Authoritarian Government supports the trend of large corporations owning rental properties. Corporations can do things that Government Constitutionally cannot (at least not until the left gets another one or two on the Supreme Court). Government cannot censor speech, but Big Tech is happy to on the Government’s behalf. If the Government cannot mandate you to take a vaccine, your employer can threaten to fire you if you don’t. If you protest against the Government, the courts may not allow them to freeze and confiscate your bank account, but a Government-regulated bank is only too happy to oblige.
So, imagine if a few companies owned the majority of homes in the United States. Perhaps, at the urging of regulators or elected officials, they might decide not to rent to gun owners, or people who protest at school board meetings, or people who think the maximum number of sexes is two. Democrats would love this state of affairs. Republicans — to whom corporations are blameless, holy creatures — would only respond “If you don’t like it, start your own multibillion-dollar hedge fund.”
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Published in General
Remember those scooter companies that were all the rage a few years back? Rent a scooter, then leave it wherever you want? Are any of those still in business?
In our town most of the voter fraud involves the large apartment complexes and nursing homes.
When I was living in Phoenix, I found a few of those in the dumpsters.
Ask Mayor Pete. He spent many thousands of tax payer dollars supporting a “partnership” with LimeBikes.
yes. They fill a niche. The future will be autonomous Uber-type service. Many people will not own a car and cities won’t have parking. I am a car guy, but I realize most people just want to get from A to B while playing on their phone.
It seems to me that what Berman is doing is OK because we live in a free country. If he wants to invest in residential rental property, he can. That’s how free enterprise works.
I see no evidence that he has any kind of market power. 30,000 homes has to be a trivially small percentage of all homes in the country.
The oligarch rhetoric really smacks of socialism, I think. Whether it’s the national or international type, I can’t tell. I dislike both.
Whatever laws, regulations or taxes are pushed, one must look at private beneficiaries and losers. There are always winners and losers with laws, regulations and taxes, even Democrat ones that have negative net impacts.
Probably because you’re not a family trying to buy a house only to have it scooped up by a giant corporation with unlimited money.
If you have a better word than “oligarch” for extremely wealthy people whose wealth gives them access to political power and influence, feel free to share it.
It might be a trivially small percentage of all homes in the country, but what percentage is it of homes that might be for sale at any given time?
You’ve convinced me! If it makes no sense to you, it couldn’t possibly work. By all means, forget the whole thing. Schwab and his pals are idiots. None of their schemes has a chance. BlackRock, et. al are busy acquiring millions houses across the land because they’re fools. Don’t worry, there won’t be kill switches in cars to turn them off if you step out of line, maybe by engaging in wrongthink. Rest easy, “the goals of this section of the law are to reduce drunk driving fatalities and crashes.”
Go back to sleep. Sweet dreams.
So much of what you appear to be concerned – perhaps alarmed, or even panicked – about, seems to be based on static assumptions. And assumptions that what has worked on small scale, such as Uber (although if Uber is still losing money, it can’t really be said to have “worked”), can just be multiplied by a factor of thousands or millions, without coming apart at the seams. I think we’ve seen plenty of examples through history of why that is perhaps never the case.
Are Laurence Fink et al buying up all the houses and preventing any more from being built? In movie terms, that sounds like Mr Potter. Meanwhile, the Bailey Brothers got many people into their own newly-built homes, and Potter didn’t make a cent on them.
I would also be interested in your theory of how I’m somehow forced to sell my home which I own, and then rent it from the people I sell it to, forever, for less than I’m paying now which is the only way it might seem remotely attractive? Not even counting that I only have about 50 payments to go and then no more payments.
People who choose to live in places like the People’s Republic of California may face additional challenges in these areas, but I tend to think of them as volunteers. And I think my first post in the Conservative Migration group, included a warning that people in PRC and places like it, might be stuck if they wait too long.
Lots of ‘em. Lyft recently introduced them in my area. Uber has them too (branded as Lime). Bird scooters have been around for years; now they also rent bikes. I’ve seen lots of visitors ‘round here on Uber’s bikes. Speaking of bikes, the last few times I was in Boston (most recently last Christmas) there were Blue Bikes for rent all over the place. Last time I was in Paris (2010) here were renta-bikes all over the city; they still seem to be a thing there.
You guys need to get out more. COVID’s over, man. It’s safe to leave the house!
Perhaps more to the point, are any of those places actually making money, by renting bikes/scooters/etc? If they’re tossing out investor money like there’s no tomorrow, well… eventually, tomorrow comes.
Okay, boomer. It’s not all about you, though. You prolly didn’t actually follow any of the links for if you had you’d know that the concern is for people entering the housing market.
It’s no wonder that lots Millennials and Zoomers hate Boomers. Just remember this: those ‘kids’ will be the ones taking care of you in the hospital or nursing home. Better hope they don’t know much about your opinions on these matters.
The LimeBike program in South Bend had an estimated $500k direct and indirect subsidies from the city. Its vehicles were exempt from city ordinances such as parking, use of the sidewalks, etc.
From my vantage point it was far harder to get into a house in the late 1970s than it is today.
Seems like the problem is about the same as if home builders were only building expensive homes that first-time buyers can’t afford. (And in terms of my market, just about ALL new homes already fit that bill!) But if these people are qualifying for mortgages, they should be able to buy a house built for them, even if it’s not as big as what they would have liked. Or they can do what I did: start with a mobile home, then a townhome, and then a regular house.
I had my first programming job then, and I remember the days of “normalcy” with Carter – and many people thought Biden would bring back “normal” and it seems like he did, I wonder how many of the people complaining about not being able to buy a house voted for Biden – and people I worked with feeling very fortunate that they were able to get a tiny overpriced house at 10% interest or more.
In the late 70s our rent for a 645 square foot house was 45% of our 2 incomes. The cracker box [AKA “newlywed dream cottage”] had electric heat and only token insulation. Our electric bill would sometimes spike to over $100. There was no way we could afford a down payment or qualify for a loan.
Too many of the folks drlorentz describes as “Millennials and Zoomers” want to start out at the same quality of life they had when they left home for college.
The recipe for financial success is cooked in a crockpot, not a microwave.
That’s perhaps most of it. I would also add that renting can be easy – too easy, really – to get comfortable with, if you don’t have higher goals.
I don’t think people should buy a home as a monetary investment, though, with expectations that it will increase in value – or at least price, considering inflation etc – forever. That only happens because of regulation, zoning, inflation…
Part 1 of 2
I’m going to try to put together a summary comment based on both business news analysis I have read, and my personal experience with neighbors and recently selling the house of my parents-in-law, plus my personal opinion.
It appears to me that the younger people (at least a noticeable percentage of the high income intellectual or “laptop” class to which media pays attention) are somewhat less likely to want to own real estate than their predecessors. They (or at least enough of them to attract suppliers) seem to see themselves as more “global citizen” and desire to be rather nomadic. Many want to be able to pick up and go somewhere else whenever the mood strikes them. Churches, community volunteer organizations, and other groups that are used to relatively stable participation are also seeing reduced long-term commitments from younger people, which is creating other new issues for community involvement. The demand for rental housing is such that according to reporting in the Wall Street Journal, even entire housing developments of single family houses are being built for rental use, a previously unthinkable concept. A developer is about to begin construction on one such development behind my house. So, I think the greater demand for rental as opposed to ownership of housing is real.
The house buying corporations do not finance their purchases with individual mortgages the way you or I do. Stock purchasers have supplied the corporations with capital, and the corporations then borrow large sums from banks the way other corporations do, based on the promise of the business model. This then allows the corporation to approach a house seller with basically a wad of cash in the hand of the corporation. It is very attractive as a seller to take that wad of cash, with closing in just a few days, instead of selling to an individual for whom the seller has to wait a couple of weeks to be sure the buyer can get a mortgage, with the accompanying risk that the buyer may not be able to close after all if the buyer cannot get a mortgage.
Part 2 of 2
Nationwide, and particularly in the “sunbelt,” America has not built enough “starter homes” for decades. Zoning laws (which are enacted by politicians who answer to existing property owners), building codes, and housing standards have long favored larger houses with more “luxury” features on larger lots. Most existing residents consider “starter” houses (relatively small houses on small lots, with basic architecture and minimal other features) to be less desirable neighbors. After decades of not building enough “starter” houses, we have a shortage of supply relative to demand. Prices and competition among buyers are going to increase.
So while I do not like the corporate ownership of single family houses, I can see why the phenomenon exists, and do not blame such companies for most of what they do.
By the way, when we sold my wife’s parents’ house (small house needing a lot of update work, but on a large lot in an area of high demand) we ended up selling to a decidedly not “laptop class” family of husband who owned a handyman business and wife managed a local restaurant, with two small children. We rejected the “all cash” corporate bidders because even their money looked dubious once we started digging into how they were putting it together.
But once you accept their money and the house is paid for, even if the corporation’s house-of-cards financing later collapses, they can’t take back the money you received.
Some places we have lived the in-laws house would be a candidate for a tear down.
True. In that case we weren’t sure the financial status of the corporation was secure enough that they could even really deliver the money to us.
Would it have killed you to wait a few days to find out?
That said, it’s certainly nice that you sold to a family instead. Hopefully that family didn’t turn around and sell it at a profit, to the same corporation you turned down.
I raise a few points to consider. I do not believe that corporations buying single-family homes is the primary driver of the increased prices. If you haven’t noticed, nearly everything is substantially more expensive than it was a couple years ago. We could debate the reasons for general inflation, but that is a whole other subject. For houses, a big part of it the skyrocketing prices is the supply chain problem caused by various businesses temporarily shut down by COVID-19, and the problem of a lot of workers being unwilling to go back to work. If you build windows, garage doors, cabinets, shingles, or any of a thousand other things that go into a house and you cannot get enough employees, you may only be able to produce 80-90% as much as you did when you were fully staffed. This drives up the cost to build a house and makes it impossible for a contractor to accurately estimate how long it will take. So a lot of people who want to build a brand new house are dropping that plan and shopping for existing homes, which is obviously going to drive those prices up. Just as a decrease in new car availability has driven up demand and therefore prices for used cars.
A lot of people seem to think there is something sinister about buying homes and renting them out. There is an old saying in business that most people misunderstand. “The customer is always right.” Most people think this maxim means that a business is obligated to indulge in every unreasonable demand made by their customers, but that is not what it means. It means that regardless of what you – the business owner – may think people ought to buy, people are going to buy what they want. If you want to make a profit, you need to sell what buyers want to buy. These companies buying homes and renting them out believe that there is a market for them. They cannot make people rent who do not want to. Maybe they are overestimating the demand, maybe not. If there actually are a lot of people who wish to rent a house, why is it immoral to rent them one?
There are likely plenty of people who want more space or more privacy than they can get in an apartment, but either cannot or do not even want to buy their own home. Examples would be people with poor credit. People who aren’t sure they want to stay forever in a new town. People who work for an interstate company and may get reassigned to a different city in just a couple years. I have heard radio DJ’s opine that a DJ should never buy a house, because you never know when you may be fired and your next job opportunity will almost certainly be in another city. And there are probably people who would rather rent than buy for reasons I might think are dumb, but again, the customer is always right. I’ve known people who have leased automobiles when in my opinion they would have been better off buying, but it’s their choice.
I don’t think you have to be a globalist or authoritarian to support companies’ right to buy homes for whatever reason they want to.
Good points there, and more long-term I think there need to be some new cities built, rather than just keep adding to existing cities. This used to happen organically, a town springing up at a crossroads, etc. But with modern infrastructure expectations and demands (due to zoning laws etc) more deliberate action is likely needed.
Not necessarily immoral, but when places that rent out houses are buying them up, that also increases the prices for those who want to buy. And if they can’t afford to buy, then they have to rent. So in a way, those big corporations buying up houses, are also somewhat “forcing” some people to rent, who would rather not.
Yeah, I agree there are tons of factors behind the large increase in house prices. The supply problem, the low inventory (low from pre-COVID) that likely can’t meet demand for another 3-4 years, among other things. That’s why I said it’s annoying dealing with investors with cash offers instead of them being wrong or immoral. I’m sure the frustration level is going to be very specific to each buyer. I know I was quite peeved several weeks ago when an investor swooped in with a cash offer that was 25K above our offer that was leading at the time. I can imagine if this happened to you multiple times, you would grow to hate guys like Berman. I think because things are currently so tough, having lots of investors throwing their cash offers into the mix just pisses off regular buyers.
There’s the thing. The investors aren’t just buying one house. They will be there round after round, and will always have more money than the average buyer. It’s not like losing out to a guy from across town that outbid you on one particular house.