Supply and demand applies here. These equity firms rent those homes out. So as they amass more and more housing, rent should be going down as there are more rental units on the market.
Unless the problem isn’t the equity firms. If the problem is just that there just isn’t enough housing, then it doesnt matter if you’re looking to buy or rent, somebody is going to outbid you regardless. Which is what is happening.
I’m always confused why people go to such lengths to find anybody to blame rather than the people who actually govern building housing: municipalities.
And you think private equity is just going to let someone create more supply and dilute their investment?
Private equity getting in is the death knell. They know the market is fucked and and like an alligator grabbing an old gazelle, they know this market will never escape their jaws because it is too weak. Private equity in housing will make the already bad problem even harder to fix.
It is incredibly harmful for muncipalities to create a too big surplus of housing. Large swaths of empty houses mean crime, povertyand desolation.
The core problem here is the disproportionate power that gets even worse with the wealth concentration.
For the landlords it is ultimately about money. For the tenant it is about his very livelihood and secure private protected place.
A landlord of a single house is interested in forming a long term cooperative relationship with his tenant, which mitigates some of the power imbalance. But a company thats sole interest is maximizing profit will abuse this power imbalance, especially in poorly regulated markets.
The answer is not to create more 90s Detroits, but to regulate the market and keep the worst actors out.
And yet rents don’t go down.
Supply and demand applies here. These equity firms rent those homes out. So as they amass more and more housing, rent should be going down as there are more rental units on the market.
Unless the problem isn’t the equity firms. If the problem is just that there just isn’t enough housing, then it doesnt matter if you’re looking to buy or rent, somebody is going to outbid you regardless. Which is what is happening.
I’m always confused why people go to such lengths to find anybody to blame rather than the people who actually govern building housing: municipalities.
And you think private equity is just going to let someone create more supply and dilute their investment?
Private equity getting in is the death knell. They know the market is fucked and and like an alligator grabbing an old gazelle, they know this market will never escape their jaws because it is too weak. Private equity in housing will make the already bad problem even harder to fix.
It is incredibly harmful for muncipalities to create a too big surplus of housing. Large swaths of empty houses mean crime, povertyand desolation.
The core problem here is the disproportionate power that gets even worse with the wealth concentration.
For the landlords it is ultimately about money. For the tenant it is about his very livelihood and secure private protected place.
A landlord of a single house is interested in forming a long term cooperative relationship with his tenant, which mitigates some of the power imbalance. But a company thats sole interest is maximizing profit will abuse this power imbalance, especially in poorly regulated markets.
The answer is not to create more 90s Detroits, but to regulate the market and keep the worst actors out.