... That doesn't actually reduce the home market though. These weren't houses before, now they are. Increasing the availability of renting is a good thing, as it reduces home prices as it is a substitute product. Also, some people prefer to rent (hi). It's honestly much more convenient for me, as I don't have need of a house nor want one right now.
No, they are not substitute products. I'm beginning to see some of your issues here if you think they are.
Houses are the most rivalrous of goods. Because they take up large amounts of land that cannot be increased, and can't be moved, they can't be substituted the way, say, socks that can be shipped to the customer are. Once each parcel on a given block has a house on it, that's it, no new houses can be built on that block and you have to move to the next block, which is almost certainly further away from points of interest or otherwise less desirable, else it would have been built first. New construction is generally going to be in less and less desirable locations because the most desirable ones are built first. For this reason, rental houses, especially if they take up large parts of specific areas, cannot substitute for owner-occupied houses and new construction cannot substitute for existing construction. Generally speaking, because every house is a
unique combination of design and location, they tend not to work like normal commodities.
No, I'm saying it's not in the interest of almost any company to restrict housing, unless they are a well established small landlord (I'm sure there's some outliers, but I don't know of them). Big landlords want to expand, and build more, because they have excess capital, so while they could try to squeeze renters by stopping building, that would leave their excess capital doing nothing. Instead I'd bet they'd rather build more and get more cashflow and investment opportunity (hence them buying land without houses as well).
This is in stark contrast to restaurant zoning (and alcohol permits, etc) lobbying. Most restaurant lobbying is done by interest groups of local small businesses (and sometimes franchisees) who very much don't want competition. Also, restaurants in particular are vulnerable to competition as they have low profit margins, and if not for zoning and other stuff, it wouldn't be that hard to enter the market, but at the same time, most restaurants don't end up expanding by opening chains (most just die).
In contrast, landlording is a more difficult market to enter because one needs a lot of space and capital. You don't rent a store to serve customers like a restaurant does, you buy a building for families to live in. They way BlackRock's doing it is even more capital intensive, as they are doing it 1 building/family. So keeping competition out isn't their biggest priority. Also, unlike most restaurants, it's not as hard for BlackRock to expand by building (except for zoning). For BlackRock, zoning doesn't stop the competitors, it stops them.
Now if you have evidence on BlackRock trying to screw with zoning or permits to limit housing (not expand it, I could easily see them lobbying for that, and in that case more power to them), then I'll be annoyed.
Let's turn that around and see your proof that Blackrock is building houses first since your entire house of cards is built on that. While you're at it, how about you provide some proof of your claims that developers are buying land to build on.
The issue here is that we know, for an
absolute fact, that they're paying well over the current market price for the houses they're buying. Your claim is that the companies are merely hedging against inflation, but massively overpaying at the same time which means they lose either way. You also claim their overpaying will also increase building and generate competition against themselves that will lower prices and mean they overpaid by
even more massive amounts. A five-year-old could see massive losses coming from this strategy. You fundamentally are insisting that the companies are tossing money on the fire in an illogical strategy that is guaranteed to lose money no matter what, and will not think to use some sort of maneuver like zoning regulations that would let them keep their shirts.
That's a rather extraordinary claim. We also know that zoning regulation is the poster-boy for corruption even by government industry standards and Atlanta has a history of corruption and taking bribes in their zoning boards.
My last post looked at the constant, pernicious corruption and conflict of interest in local land use planning decisions in the United States. Despite shocking stories and a handful of high-profile…
globalanticorruptionblog.com
Federal prosecutors say they have obtained an indictment in an ongoing investigation into corruption at City Hall in Atlanta
abcnews.go.com
This time around, the case involves unethical pressure on members of the local board of zoning appeals. The case comes to us from Indianapolis, where a former law enforcement officer was elected to a position with the city council.
tewlawfirm.com
The report on corruption in DeKalb County was explosive. With allegations of illegal spending, mismanagement and bribery, Gov.
www.ajc.com
Majors Management sought rezoning of a 33-acre tract for higher density residential development. Majors Management proposed to develop the property into 91 lots. Gwinnett County denied the rezoni…
georgiazoningblog.wordpress.com
The article doesn't establish what the baseline for rental property ownership was, so I can't say if it's bad, or just different in terms of who owns those properties. It doesn't sound infeasible for a collection of a few major firms to own a majority of rental property in a given city normally.
Well if that's your objection, go ahead and establish a baseline. You haven't presented any evidence whatsoever for any of your ideas so far, and "I can't figure anything out, not even things the first sentence of a linked article says outright" isn't an argument.
That was an offhand mention in one article, it was not the core point of any of them.
I quoted two different articles, actually.
And really, offhand mention? It's literally brought up in
The. First. Sentence. of the
Bloomberg article, and the line from it I quoted was in the first paragraph. It's also literally brought up in
The. First. Sentence. of the
Atlantic article, which discusses comparisons multiple times. The
Wall Street Journal article spends three paragraphs on how the current situation looks much like the sub-prime mortgage crisis in its early stages.
This discussion would be shorter and less unpleasant if you actually read the articles.