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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
Yes. And therefore it’s not just the price issue. Even at the same price, the corporate buyer’s offer is often more attractive to the seller – cash (no waiting for appraisal and mortgage approval, no uncertainty about whether the sale will fall apart because of mortgage disapproval); fast closing (again, no waiting for appraisal and mortgage approval); often willing to forgo pre-purchase inspections and negotiating repairs (corporate buyer buying dozens or hundreds can absorb the occasional “lemon” house).
And if they are increasing the number of houses available to rent,the same law of supply and demand means they will be bringing down the cost of renting a house.
When prices are going up, those who are immune to cost can hang on for a long time.
And then when prices are falling, those who are sensitive to price must unload.
Because houses are not stocks, this distinctions skews towards purpose more than simple cash reserves might indicate.
A person can live in a house. They can not live in a stock. The math is simple from there.
Except when they end up competing against themselves. Then they can engage in good old fashioned price-fixing.
Not if they’re doing it in a monopolistic fashion.
That too.
How would they do that? Does this one company have an exclusive government-issued license to buy and rent out homes? Does it make sense to expect the worst possible outcome from every commercial enterprise?
When big money tries to take over a market, there is definitely a strong possibility that they will succeed these days. It doesn’t take the government. And I don’t see that big business is friendly to the consumer, it is divorced from moral constraints. I really do think there’s a great reset being attempted now. Do you think the Great Reset is science fiction and not real?
I think it is simply investors trying to make a profit, same as always. If there is a big market for rented single-family homes, other companies will also buy homes and rent them out and it will become a competitive market.
People keep saying this, but isn’t it possible there’s a “big market” for rental homes because people can’t afford to buy? Because corporations are trying to make a profit by buying up property, inflating the price of homes, and “profiting” off the sales? Another real estate bubble, but skipping the middle man of individual homeowners?
And isn’t it possible the whole scheme fits rather well with leftist ideology about property ownership — or lack thereof?
Yeah, that’s possible. But I think that by far the main reasons houses have become so expensive is that the irresponsible fiscal policy of the COVID-era government have made our dollars worth less, as well as the shortage of building supplies. I don’t deny that in some markets, the purchase of homes by corporations has had an effect, but I don’t think it is the primary driver.
It just all sounds a little Elizabeth Warrenish to me. There are no honest supply and demand reasons for the price of gas to be high, it’s those evil oil companies. Supply and demand as well as labor costs have nothing to do with the increased grocery prices, it’s those damned grocery conglomerates just gouging people.
As I outlined in a previous comment, there are are many people who actually prefer to rent rather than buy. It varies year to year but on average 25-30% of new cars are leased rather than bought outright. I doubt all those people who are leasing cars had their arms twisted by scheming leftists. For whatever reasons – right or wrong – some people prefer to rent things that most people want to buy.
Have you actually heard thoughtful people, especially Ricochet people, say this?
No, not those examples. I am making a comparison, Flicker, between the arguments Warren has made about grocery and oil companies and what people are saying here about real estate investors. In each case, people don’t want to believe that it is natural market forces as well as government diluting our spending power by printing money and giving it away that are driving prices up.
This is presumptuous. Certainly people here know enough to know that the feds printing money is causing economic damage on multiple fronts. Embrace the power of “and.” Devaluing the currency and corporate diddling in the housing market is inflating housing prices.
Houses =/= cars. The people I’ve known who lease vehicles own at least one house and often multiples. They lease because it allows them to trade up for a newer model every couple years and they can afford to have a monthly car payment indefinitely.
I also call it presumptuous to say that people prefer to rent homes over home ownership. This sounds like the globalists telling us to eat bugs and like it. So I’ll see your Warren and raise you a Great Reset.
I wouldn’t mind a true Reset since a Reset means “going back to previous settings.” But what they’re really talking about is a “Great Leap ‘Forward'” (according to them, anyway) and we saw how well that worked out in Asia… (Which is probably why they’re calling it a “Reset” instead.)
So, I suppose I should just ignore your Warren-related remarks.
Nonetheless, do you or don’t you believe that there’s such a thing as a Great Reset? Because if there is this fits it pretty completely. You say this is just organically happenstance investing of disparate businesses? If they were paying market rates, and going for the best purchase price, I suppose I’d see nothing out of the ordinary or unwholesome here. But they’re not.
To say that big money investors are suddenly buying up as many small houses through shell companies (as has been argued) as they can at higher than asking is a pretty unusual thing as far as I can see. It’s not so much like Warren as the Hunt brothers buying up silver (iirc). And requires more time and money to operate, as opposed to, say, renting out intact farms, which on the other hand don’t (I don’t think) require annual refurbishing such as painting and on-going maintenance, such as calling the plumber at odd hours.
Unless they’re slum lords, which I’ve seen a lot of, and people do rent (so they fill a niche), but are a blot on the community. Which is of course just doing business, too.
Or a “Brand New Machine”.
Yes, I believe there are socialists who have a plan called The Great Reset which is pretty much a new name for the same stuff socialists have been dreaming of for decades. I also believe the KKK has a dream of eliminating all non-white people, that Louis Farrakhan has a dream of eliminating all non-black people, and that radical jihadists have a dream of eliminating everyone whom they cannot convert to their strain of Islam. But I do not think that every time something bad happens to a non-white, non-black, or non-Muslim person it is proof that those warped dreams are reaping fruit.
What about when something bad happens to a bunch of them, all at once?
So you think it’s real but fairly normal, but fringe in its application and inconsequential? Historically normal? It’s like religious fanaticism and racism.
Flicker, if after all these comments I still have not been able to explain my position in an understandable way, I give up. I am apparently very poor at communication.
It’s not that you’re a poor communicator, it’s that you happen to be wrong on this issue. ;-)
Homeownership is a very big deal as part of the “American dream” and is fundamental to human flourishing and family and community formation. The impermanence culture we’ve “progressed” into is destructive to the core of what it means to be human. That’s why I call this corporate raiding of properties a moral issue. There is nothing benign about it.
But, in the culture war, it looks like people who believe as I do are going to lose again, because on one side, we have the “free market” fundamentalists, and on the other the new authoritarians and their lackeys who don’t believe we should own anything — they’re even coming for our children (Disney).
https://www.tabletmag.com/sections/news/articles/new-authoritarians
h/t @richardeaston for finding the article
No, I don’t think you communicate poorly. I think it’s either that you don’t want to communicate (bringing in the KKK) or else we have not actually identified the fundamental presuppositions that go into making an informative conversation.
I see the Big Business interests using money power to dominate and alter a market and to force out of the market buyers of inexpensive homes (though government deliberately inflating dollars, and through Business interests buying up homes at far more than what would heretofore be considered normal prices — leading to a recent 4% drop in home sales I might add)…
and you seem to dismiss my comments as the same as fringe KKK-type or Black muslim-type demagoguery, or I suppose fringe happenings — and I think that you are saying that these are occurring in an honest and free market where prices are set by supply and demand, and actual aggregate purchase prices.
What you describe may be legal but I view it as a lot more than Big Business simply trying to diversify themselves in new markets. And when I bring this up, you more or less dismiss it by not answering or by answering outlandishly.
According to Luke Groman, it’s been like this for years. Every level of government cannot collect enough taxes unless the Fed is creating constant CPI or asset inflation. I have a question into him, about when he thinks this started. This is a really stupid way to run a country.
I have always wondered about this. Doesn’t the theory have to be that the amount of taxes you collect for property taxes buoys the value of your property? You collect just enough to have enough public goods like police fire and roads to make the property valuable. That is the only logical way you can justify this one wealth tax.
The last I heard was, the drivers are monetizing their depreciation, for the most part.
Government Is How We Steal From Each Other™
In my opinion, the government has made a huge hash of this. What you should do and how you should think about it totally depends on what they do to push the economy around.
This is one of the dangers to the economy. If they constantly inflate housing, then they have to keep doing it otherwise people can’t trade houses to get themselves into better jobs in areas that need them. The labor market has less friction this way. It works until it doesn’t work anymore.
Yeah, like 6% negative real interest rates. It’s only going to get worse, too.