Business & Finance BlackRock attempting to monopolize housing

[Battlegrinder]

the article actually says they bought 90% of the 7500 homes in one zip code

No, it doesn't:

In one Atlanta zip code, they bought almost 90 percent of the 7,500 homes sold between January 2011 and June 2012; today, institutional investors own at least one in five single-family rentals in some parts of the metro area,

Buying 90s of the homes that were sold in a suburb is a very different thing than owning 90s of the homes in a suburb, the ownership rate you're taking about is not compatible with the situation progressing to the point they now own only about 20% in just some areas.

 

[Captain X]

@Battlegrinder and @Abhorsen be like:

 

[LordsFire]

No, they're really not. They're saying that the reporting doesn't actually give enough information to say anything definitive, which appears to be true.

A stack of their personnel becoming Biden Admin officials? That's certainly concerning.

Real estate companies buying real estate? Not really concerning.

Concentrating in a couple specific areas? A bit odd, but if their research says it's a good area, makes sense they'd focus on it.

90% of the homes sold in one year? ....Okay, maybe there's something there. Still, 'one in five single-family rentals in some parts of the metro area' is not exactly monopolistic control.

Maybe there's something there. Maybe there isn't. Saying 'Absolutely definitely there's something going on here' is silliness when you have so little information.

If you want to make a better argument, can you tell us what the absolute percentage of the market in terms of properties and property valuation Blackrock has in the Atlanta area? Nationwide? What's the highest concentrated control they have of a single area? What specific area is that? What is that area like?

Acting like you know FOR SURE when Abhorsen and Battlegrinder are raising some reasonable questions, is just making people arguing the other side look hysterical.

 

[Battlegrinder]

What lordsfire said. There is a potential issue here, and the case of the altantic article, a clear issue of wall street firms not being very good landlords, however the articles presented don't firmly establish that blackrock's actions are having a definitive, negative impact on the housing market. It's possible, but there needs to be more investigation to confirm that is the case and more clean communication of what information has been uncovered already.

 

[Bear Ribs]

Acting like you know FOR SURE when Abhorsen and Battlegrinder are raising some reasonable questions, is just making people arguing the other side look hysterical.

Their questions really aren't that reasonable. We've got Abhorsen pretending that zoning laws have nothing to do with lobbying for zoning laws and Battlegrinder simply having no idea what "The Market" is from the context surrounding that sentence in an article that's entirely about the rental market in Atlanta Georgia.

The big issue is that both of them are using "Gamer Logic" where things act like HP and thus as long as they don't have a supermajority of properties, things are fine, thus repeated issues of them comparing a single company to the whole US and concluding that the percentage is small. In reality, a small percentage can shake the entire country, f'rex the Subprime Mortgage Crisis that caused the Great Recession? About 20% of mortgages were subprime... and 10% of those were over 60 days overdue* in 2006, triggering a financial meltdown that hit the entire country and then spread to the world. So basically, 2% of mortgages, not homes, just mortgages in the US, were enough to cause a planetwide recession. That's why those of us that actually work in this industry are rather worried, a cabal taking even a small percentage and doing something stupid to make an extra dollar can be devastating, and these are companies with a history of doing extremely stupid things to make an extra dollar who are showing signs of doing many stupid things to make an extra dollar right now.

*Sentences for people who can't click links:

The percentage of lower-quality subprime mortgages originated during a given year rose from the historical 8% or lower range to approximately 20% from 2004 to 2006

And...

By the end of 2006, approximately 10 percent of subprime mortgages in the United States were more than 60 days delinquent or in foreclosure

 

[Battlegrinder]

Battlegrinder simply having no idea what "The Market" is from the context surrounding that sentence in an article that's entirely about the rental market in Atlanta Georgia.

The article was about houses, not specifically rental homes, it in fact noted that this trend stated out with investment firms buying foreclosed homes and turning them into rental properties. It could easily refer to either rental property or the overall housing market.

That's why those of us that actually work in this industry are rather worried, a cabal taking even a small percentage and doing something stupid to make an extra dollar can be devastating, and these are companies with a history of doing extremely stupid things to make an extra dollar who are showing signs of doing many stupid things to make an extra dollar right now.

That's not the issue the linked articles or discussion is raising, though? The main concern appears to be that this is driving a housing shortage and locking would be homeowners out of the market, not that it's setting up the Dominos for another 2008.

 

[Abhorsen]

And you think they don't have that? I'd argue that it would actually be easier for them to do so at a local level.

Then cite those ones, not ones in the fed which aren't relevant to this discussion.

As for getting people in local government, it's a different type of challenge as they'd need penetration in a bunch of different governments, and there's a lot less unelected positions in local government that are easier for lobbyists to fill.

First let's look at the definition of Lobbyist:

• n. A member of the lobby; a person who solicits members of a legislature for the purpose of influencing legislation.
• n. One who frequents the lobby or the precincts of a legislature or other deliberative assembly, with the view of influencing the votes of members.

So yeah, the people you mentioned are lobbyists. I don't have a lot of patience for wordgames like you're pulling here.

What I was pointing out is that these aren't corporate lobbyists. These are groups of motivated citizens (stupid motives, IMO, but still). In contrast, lobbyist is practically a pejorative term that makes one think of the corporate lobbyists on K street. What I was pointing out was that these 'lobbyists' and BlackRock's corporate lobbyists are very different, and I've not heard of corporate lobbyists being against expanding housing.

So yeah, the people you mentioned are lobbyists. I don't have a lot of patience for wordgames like you're pulling here.

Of course, we can also look and see if Blackrock is lobbying for building codes.

BlackRock Inc Lobbyists

BlackRock Inc spent $1,940,000 lobbying in 2021. See the lobbyists it hired.

www.opensecrets.org

So Blackrock is throwing scads of cash at Rich Feuer Anderson...

Real Estate & Land Use Lobbying Profile

Lobbying profile for Real Estate & Land Use

www.opensecrets.org

Which in turn is a lobby that handles real estate and land use lobbying...

Real Estate & Land Use Specific Issues

Lobbying profile for Real Estate & Land Use

www.opensecrets.org

And the first entry under their issues includes permitting, also listed is lobbying for the home rental industry, and they also have multiple lobbies operating in individual counties to influence local officials. Hmm...

Only a) This is a permit from the BLM, which are the feds, and absolutely nothing to do with what we're talking about, b) Seems to be concerned more with opening up the place to exploit resources rather than preserving them (admittedly not much to go by), and c) The lobbying you are talking (very first one on the page) was done by The Porter Group (read what you link before saying I'm not reading stuff).

In fact, BlackRock only paid for two lobbies in regards to housing, both at the federal level:

BlackRock Inc Issues Lobbied

BlackRock Inc spent $2,230,000 lobbying in 2012. See the issues it lobbied.

www.opensecrets.org

So no, they aren't screwing around trying to keep people out of houses.

My my, you just happen to pick the single most high-priced metro on the entire continent and ignore things like the OP links including buying up entire ZIP codes in other, more affordable towns. And a cabal of several companies can do a lot more than a single one.
are already illegal.

The figure for Atlanta was $570B. Even if all $60B of investment went into Atlanta, that would give them only about slightly over 10% of market capital. That's not something that worries me overly much, and is not near any market control, much less monopoly.

No. From my posted link:

The new law keeps the general recovery periods of 39 years for nonresidential real property and 27.5 years for residential rental property.

Are you even reading anything people post here?

I was on my phone and will admit to missing that. But yeah, complaining about any tax break on the purchase is something I disagree with. They shouldn't have expenditures count as income until they make a profit.

Their questions really aren't that reasonable. We've got Abhorsen pretending that zoning laws have nothing to do with lobbying for zoning laws and Battlegrinder simply having no idea what "The Market" is from the context surrounding that sentence in an article that's entirely about the rental market in Atlanta Georgia.

... Only you still haven't shown BlackRock lobbying for zoning laws, nor any corporate lobbying for housing zoning laws. Now I'm sure there is some firm, but you've yet to show it, much less show that it's significant or linked to BlackRock.

 

[Bacle]

Built-to-Rent Suburbs Are Poised to Spread Across the U.S.

Economic forces and generational preferences are leading to a new kind of housing: subdivisions designed for renters and managed like apartment buildings. What does it mean for suburbia?

www.wsj.com

Seems relevant to this thread.

Blackrock and other's buying up houses to convert to single family rentals while paying overmarket for them is going to drive up housing prices. Some people here claim it will just lead to more housing developments being built.

What they fail to grasp is that the new housing being built is also increasing meant to be rentals from the start, or is bought up as it is built and made into rentals.

This will make home ownership even harder, because there will be fewer houses available at inflated prices, and large finance corps will effectively own massive amounts of the housing market.

Some corps may even outright start buying houses for 'employee housing' to make the wage-serfs even more beholden to them.

The American Dream, and any hope of building a base for generational assets, is going to effectively vanish for most people in the US, if nothing is done to stop this multivector attack on the middle class.

 

[LordsFire]

The American Dream, and any hope of building a base for generational assets, is going to effectively vanish for most people in the US, if nothing is done to stop this multivector attack on the middle class.

You state this as an absolute.

What you have sketched out, is a possible outcome of an (apparent) emerging trend. Sure, it is possible, but it is by no means certain.

What would make it certain? Even if nobody actively resisted the plan, what about the chances of something just going wrong. Or more likely, lots of somethings, because in real life 'the best laid plans of mice and men...'

Has it occurred to you that maybe this is just someone trying out a business model they think will be profitable? (And possibly using corruption to support it)

There does not need to be some grand conspiracy behind it.

I'm not saying that there is any certainty that you're wrong. I am saying that you're coming up with a theory, then immediately treating it as 100% proven, when you haven't even presented enough proof to show that it's more likely than unlikely.

If you want people to treat you like a conspiracy theorist, this is an excellent way to create that impression of yourself.

 

[Bear Ribs]

The article was about houses, not specifically rental homes, it in fact noted that this trend stated out with investment firms buying foreclosed homes and turning them into rental properties. It could easily refer to either rental property or the overall housing market.

And you think this is an actual issue... why? If they own 60% of the rental market that's bad. If they own 60% of the entire housing market that's really, really bad. But whether or not you're not able to figure out which one in an article that has "rental market" in its first sentence, neither option is exactly good, is it?

That's not the issue the linked articles or discussion is raising, though? The main concern appears to be that this is driving a housing shortage and locking would be homeowners out of the market, not that it's setting up the Dominos for another 2008.

This discussion would be shorter and less unpleasant if you actually read the articles.

The bubble has room to grow before it bursts, according to John Burns Real Estate Consulting. But it is inflating fast. The firm expects home prices to climb 12% this year—on top of last year’s 11% rise—and increase at least 6% in 2022, a period of appreciation reminiscent of 2004 and 2005.

After the housing bubble popped, millions of Americans lost their homes as property values plunged. Many saw this as a tragedy. Some big investors saw it as an opportunity. ... Blackstone went on to invent a new version of the money machine that fed the homeownership bubble.

The articles linked are in fact actively talking about how this is setting up the dominos for another 2008.

What I was pointing out is that these aren't corporate lobbyists. These are groups of motivated citizens (stupid motives, IMO, but still). In contrast, lobbyist is practically a pejorative term that makes one think of the corporate lobbyists on K street. What I was pointing out was that these 'lobbyists' and BlackRock's corporate lobbyists are very different, and I've not heard of corporate lobbyists being against expanding housing.

Okay, I won't quibble about grammar.

Only a) This is a permit from the BLM, which are the feds, and absolutely nothing to do with what we're talking about, b) Seems to be concerned more with opening up the place to exploit resources rather than preserving them (admittedly not much to go by), and c) The lobbying you are talking (very first one on the page) was done by The Porter Group (read what you link before saying I'm not reading stuff).

In fact, BlackRock only paid for two lobbies in regards to housing, both at the federal level:

BlackRock Inc Issues Lobbied

BlackRock Inc spent $2,230,000 lobbying in 2012. See the issues it lobbied.

www.opensecrets.org

So no, they aren't screwing around trying to keep people out of houses.

The figure for Atlanta was $570B. Even if all $60B of investment went into Atlanta, that would give them only about slightly over 10% of market capital. That's not something that worries me overly much, and is not near any market control, much less monopoly.

I was on my phone and will admit to missing that. But yeah, complaining about any tax break on the purchase is something I disagree with. They shouldn't have expenditures count as income until they make a profit.

... Only you still haven't shown BlackRock lobbying for zoning laws, nor any corporate lobbying for housing zoning laws. Now I'm sure there is some firm, but you've yet to show it, much less show that it's significant or linked to BlackRock.

Well at least I can give you credit for reading the links. Your standard will be effectively impossible to meet because local zoning lobbies aren't well-tracked the way national ones are. F'rex Atlanta lobbied to the tune of 480K in 2019 but only 120K of it was reported, where'd the rest go? Nobody knows. In 2020 there's 440K of lobbying and a big fat zero as far as what's available for us to see. Ditto 2018, they never reported any of it so there's simply no data. It's rather unreasonable to demand I prove things that are kept off the records, and the idea that a massively wealthy and influential company that spends large amounts of cash on lobbying just won't think to spend any on protecting their fledgling real estate empire is ridiculously illogical.

So if I understand your position correctly, you've openly acknowledged that corporations use lobbying to manipulate zoning for restaurants, but you believe they will forget how or simply decide not to use this effective tool when it comes to protecting their housing interests? And even though they are paying lobbyists who lobby specifically for zoning, you feel it's reasonable to assume their money won't go there and they will not do so?

You state this as an absolute.

What you have sketched out, is a possible outcome of an (apparent) emerging trend. Sure, it is possible, but it is by no means certain.

What would make it certain? Even if nobody actively resisted the plan, what about the chances of something just going wrong. Or more likely, lots of somethings, because in real life 'the best laid plans of mice and men...'

Has it occurred to you that maybe this is just someone trying out a business model they think will be profitable? (And possibly using corruption to support it)

There does not need to be some grand conspiracy behind it.

I'm not saying that there is any certainty that you're wrong. I am saying that you're coming up with a theory, then immediately treating it as 100% proven, when you haven't even presented enough proof to show that it's more likely than unlikely.

If you want people to treat you like a conspiracy theorist, this is an excellent way to create that impression of yourself.

The only people who've said it's some kind of conspiracy and you and Abhorsen trying to strawman everybody else. The rest of us are just noting exactly what you say, that companies are trying out a new business model, that it's highly destructive to homeownership, and that when something goes wrong, we're going to be the ones paying for it because these companies are also big on themselves getting government bailouts.

 

[Abhorsen]

So if I understand your position correctly, you've openly acknowledged that corporations use lobbying to manipulate zoning for restaurants, but you believe they will forget how or simply decide not to use this effective tool when it comes to protecting their housing interests? And even though they are paying lobbyists who lobby specifically for zoning, you feel it's reasonable to assume their money won't go there and they will not do so?

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.

The thing about this is that Occam's razor cuts against this being some sinister plan to sentence people to serfdom versus just being a hedge against inflation (which is huge, and BlackRock constantly complains about).

 

[Bacle]

You state this as an absolute.

What you have sketched out, is a possible outcome of an (apparent) emerging trend. Sure, it is possible, but it is by no means certain.

What would make it certain? Even if nobody actively resisted the plan, what about the chances of something just going wrong. Or more likely, lots of somethings, because in real life 'the best laid plans of mice and men...'

Has it occurred to you that maybe this is just someone trying out a business model they think will be profitable? (And possibly using corruption to support it)

There does not need to be some grand conspiracy behind it.

I'm not saying that there is any certainty that you're wrong. I am saying that you're coming up with a theory, then immediately treating it as 100% proven, when you haven't even presented enough proof to show that it's more likely than unlikely.

If you want people to treat you like a conspiracy theorist, this is an excellent way to create that impression of yourself.

Except I have produced evidence, and others are noticing the same patterns I am in the articles others posted.

Also, given how many conspiracy theories have been shown to be rather close to the truth over this past year, calling me a conspiracy theorist isn't actually an insult anymore. It just means I am able and willing to see things for what they are, and make connection others don't want made in public.

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.

The thing about this is that Occam's razor cuts against this being some sinister plan to sentence people to serfdom versus just being a hedge against inflation (which is huge, and BlackRock constantly complains about).

I'll buy this is just inflation prep on Blackrock and others part when large housing tracts aren't also being built as rentals from the get go, thus continuously shrinking the actual, available home market.

People don't want to believe that there are large scale, strategic actions being taken by financial and investment groups, in concert with other multimillionaire groups who effectively control the world, to gut the middle class's ability to buy and own thier own home.

"You'll own nothing, and be happy about it."

If you all think the investment and finance sectors aren't involved in trying to pave the way for The Great Reset, and taking strategic actions to help enable it, you are fooling yourselves.

 

[Abhorsen]

I'll buy this is just inflation prep on Blackrock and others part when large housing tracts aren't also being built as rentals from the get go, thus continuously shrinking the actual, available home market.

... 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.

People don't want to believe that there are large scale, strategic actions being taken by financial and investment groups, in concert with other multimillionaire groups who effectively control the world, to gut the middle class's ability to buy and own thier own home.

"You'll own nothing, and be happy about it."

If you all think the investment and finance sectors aren't involved in trying to pave the way for The Great Reset, and taking strategic actions to help enable it, you are fooling yourselves.

Also, the idea that one can predict what people need economically is generally the height of folly. Central planning of the economy fails every time. The last time people were on the "Homeownership is success kick" government incentives for mortgages et al helped lead to the 2008 crash.

 

[Bacle]

... 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.

And some people want the actual ability to own a home, not settle for a 'substitute product'.

I get it, you don't really care because you don't want to buy a home, but recognize many, many people do want to own a home.

Also, the idea that one can predict what people need economically is generally the height of folly. Central planning of the economy fails every time. The last time people were on the "Homeownership is success kick" government incentives for mortgages et al helped lead to the 2008 crash.

Yes, and the same people who got bailed out then are doing their damnest to reduce the the ability of the average person to even find a home they might be able to get a mortgage on to buy it.

Blackrock got bailed out with taxpayer money, and now they are using that same money to go after one of the best routes to create generational assets for a family.

EDIT: Worse, the Blackrock people are buying homes by overpaying on them, not paying market rates; this drives up the cost of housing overall, regardless of if new homes are being built (and many of those are going straight to rental as well).

And if Blackrock has issues and needs to be bailed out, it's the taxpayer that will have to pay the price, again.

 

[Abhorsen]

And some people want the actual ability to own a home, not settle for a 'substitute product'.

I get it, you don't really care because you don't want to buy a home, but recognize many, many people do want to own a home.

I get that, but people building houses doesn't harm this.

EDIT: Worse, the Blackrock people are buying homes by overpaying on them, not paying market rates; this drives up the cost of housing overall, regardless of if new homes are being built (and many of those are going straight to rental as well).

And if Blackrock has issues and needs to be bailed out, it's the taxpayer that will have to pay the price, again.

It actually doesn't matter what price they bought the houses at, as once they leave the homebuying market, there will be a return to normalcy, with some friction because people still expect them to be buying. But the real reason it doesn't matter is that they aren't long term major players in any real estate market. Again, if they put all there money into Atlanta, they'd own slightly over 10% of housing. That would be something (not a lot, but also not a nothing), but I doubt they spent it all in one place, meaning that while they do have an effect on the housing market now, it isn't a huge one, and given they plan to hold, it won't be a large one long term either.

Now them getting bailed out? That's bad, but that's bad because bailouts are bad, not because they are spending bailout money in a particularly bad way.

 

[Battlegrinder]

And you think this is an actual issue... why? If they own 60% of the rental market that's bad. If they own 60% of the entire housing market that's really, really bad. But whether or not you're not able to figure out which one in an article that has "rental market" in its first sentence, neither option is exactly good, is it?

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.

This discussion would be shorter and less unpleasant if you actually read the articles.

That was an offhand mention in one article, it was not the core point of any of them.

 

[Bear Ribs]

... 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.

Planning and Zoning Board Corruption: Finding the Missing Whistleblowers

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

Ex-city official charged in ongoing Atlanta corruption probe

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abcnews.go.com

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tewlawfirm.com

Criminal inquiries into DeKalb County corruption continue

The report on corruption in DeKalb County was explosive. With allegations of illegal spending, mismanagement and bribery, Gov.

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Gwinnett County Settles Zoning Lawsuit, Purchases Land For $2.3 Million

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georgiazoningblog.wordpress.com

Gwinnett County Commissioner Pleads Guilty to Accepting Bribes

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.

 

[Abhorsen]

No, they are not substitute products. I'm beginning to see some of your issues here if you think they are.

They very much are substitutes. Both serve as permanent housing, and the price for one affects the other. Rivalry has little to do with substitution, actually, as almost all physical goods are rivalrous, like apples. But apples and pears are still substitutes.

Second, you then argue that some houses aren't as good as others, therefore they aren't substitutes. But the thing is products don't have to be perfectly equal to be substitutes (that's why they are substitutes). For example, I'm likely to stop renting sooner than I expected because houses are cheaper where I live now. That's substitution. My boss is considering selling his house and renting because he thinks this is a bubble: also substitution. 2 of my coworkers stopped renting and began homeowning: more substitution.

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.

No, see, I'm not the one making big claims here. You are the one claiming that BlackRock is part of some big conspiracy, so you must demonstrate that BlackRock is trying to stop others from building. Your current evidence is that they do lobbying. That's nowhere near enough. You need to show that not only do they lobby, but they lobby local places to stop additional housing being built. I'm just pointing out that you haven't shown that and

Other things wrong here:

but massively overpaying at the same time which means they lose either way

No. The massive overpayment is because time matters to them. They want to buy now, so are eating loss instead of letting the money be lost through inflation. They likely suspect that if they buy slowly, prices will rise fast enough that this will cost them in the long run, along with lost income from renting and lost money from inflation.

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.

Zoning boards are the poster child for corruption as that's frequently the only way to get approval. Usually the board sets the impossible bar to pass, then lets people around it for a fee. No company wants the bar, but some adapt to it. Corruption of zoning boards isn't a problem that originates with companies, it starts from government saying no all the time.

For example, the Gwinnett County one was... after they were denied by the zoning board from building more housing.

 

[Terthna]

Neither communists nor libertarians (of the anarcho-capitalist "the free market will solve everything" variety) seem to understand how economics actually work. Though to be fair, It's not like I understand it entirely either; I'm just not suffering under the delusion that I do.

 

[Abhorsen]

Neither communists nor libertarians (of the anarcho-capitalist "the free market will solve everything" variety) seem to understand how economics actually work. Though to be fair, It's not like I understand it entirely either; I'm just not suffering under the delusion that I do.

Anarcho capitalists understand economics, their mistake is psychology. The problem with AnCaps is warlords, who are economically speaking stupid (except for the mongols), but as a practical purpose not, as now they have power and you don't. Underestimating petty human desire for power over another is where they fail.

But this isn't that problem, as the bigger a company, they more they seem to equate money and power (which is a good thing, as the other power is the barrel of a gun). So I've seen nothing to worry about here, other than bailouts and rising home prices (that were rising anyway).

Also, equating communism and Ancaps when it comes to economics is fundementally wrong. Communist 'economics' is a bunch of philosophy without evidence at best, mostly psuedoscience ignored by everyone else, and outright lies at worst. It's not considered reality by most economists. Meanwhile both the Chicago and Austrian schools of economics are highly respected, and are the foundations of AnCap economist theorizing.