Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals. For the sanity in the housing market, members of society need to be driven to participate in other business activities for income/revenue, not rentals.
This is basically a maximum wage for landlords, bound to start a secret society.
IMO it's a crooked notion that landlords are rent seeking and nothing else - they do create supply and maintain housing.
Issue is when they want to politically and artificially raise the value of their property by preventing more housing from being built, so, if you're going to ban something, ban artificial regulations on construction!
North Carolina has done some good by loosening up code around tiny homes, but, a lot of municipalities want to enforce big homes only because they like the property tax of high value houses, 4 bedroom and all. Small town I'm in basically won't allow expansion of housing because the people that live here don't want the village to get any bigger, but if it's democratic like that I'm mostly OK with it, it's when there's demand for housing and someone with a perverse incentive to block it that we should want to solve for.
No, the real problem is that the vast majority of their income does not come from their role in creating supply or maintaining housing.
Proof: Propose a 100% land value tax, which definitionally only removes that part of income that is generated by the community around their property, and see if they go for it.
The actual value of a landlord is insulating the tenant from financial risk, charging a predictable rent and absorbing the costs of repairs and maintenance. That's a lot of value for some people, but it also comes with problematic incentives and obvious bad outcomes when combined with other aspects of housing markets.
In a perfect world, but rent is often less significantly predictable than mortgage payments. Of course the cost of repairs and maintenance isn’t absorbed, it is paid in full by the renter in the cost of rent.
> IMO it's a crooked notion that landlords are rent seeking and nothing else - they do create supply and maintain housing.
They don’t create supply in any way, the only ones who do that are builders. But sure they maintain houses. Although just the bare minimum, they will never fix it nicely - just enough to rent it out.
But not in the causal chain. The building happened because someone was willing to pay for a fungible asset. An asset is only fungible if there are buyers.
> The building happened because someone was willing to pay for a fungible asset.
Building often happens because a developer believes someone will buy the homes they build. A lot of the time, they are right; some of the time they are wrong. Some developers will get buyers lined up first, to minimize the risks of being wrong; many do not. In the latter case, there's no inherent connection between the building and subsequent buyers.
> But sure they maintain houses. Although just the bare minimum, they will never fix it nicely - just enough to rent it out.
Depends a lot on the landlord. Many will fix it up nicely because they can charge a higher rent. Much of my work is repairing rental properties and I've seen all types of landlords. I try not to work for the cheap ones if I can help it because I don't want my name associated with the crap they want me to do.
How does one propose to supply the market for temporary housing without landlords? Students, travelers, new residents to an area, people early in their careers switching jobs frequently, all of these people have a need for temporary housing. If the only people who own buildings live in them, where do these people find their housing?
I spent over a decade living in various rentals after I moved to a new state. I didn't have the money to buy when I first moved, and even if I had, I didn't know the area well enough to know whether I would want to buy where I first lived. And having the ability to just pick up and move meant I had a lot of flexibility for chasing job opportunities. Don't get me wrong, there's plenty to love about the home I own now, but it absolutely ties me down and anchors me in ways that renting never did. I for one am glad to have had people willing to rent property to me.
All fair and valid points. I agree. In today’s age with a career in the tech field and a newly first time home owner, I do feel the aspect of being tied down. But I never really got to avail of moving to chase job opportunities since the Bay Area is where they’re the densest. That being said during Covid times I had to move to the PNW due to layoffs (got a great offer, but I didn’t have to accept it and could afford to keep looking). So I really do understand the benefits of renting.
Like I said in another reply, I don’t consider landlords to be inherently bad. But there are a lot who will try to take advantage of you if you let them. You have to be lucky to get a good one - I only had a couple out of the dozen or so and I wish them the best.
The actual value of landlording is offloading financial risk. The tenant pays a stable rent including a premium in exchange for maintenance, repairs, and not having to sell a home in order to move to a new one.
I just can't bring myself to agree with the hard-line socialists who think landlording is fundamentally a bad thing. There are a lot of problems with it, but it does have a legitimate place in the world.
I don’t think it’s fundamentally a bad thing. It has its place. But it’s an industry that’s easily exploited - I rented over a dozen places and like 80% would try to do things that the tenant handbook would not allow. I sued one of them, and settled out of court for another. And surprise surprise a lot of them don’t want to rent in areas that are pro-tenant rights.
Right, it's entirely possible that landlording in practice has so many opportunities for abuse that it's irredeemable despite its potential for benefit in certain cases. I don't know if I agree with that, but at least it's more intelligent than "Marx says landlords bad therefore landlords bad."
The concept of "landlords do nothing while collecting passive income, therefore not creating any value but instead are just exploiting that they own the land" would be correctly described as "rent-seeking behavior".
This equally applies to any investment income wouldn't it? Dividend, loan interest would all be classed as "unearned income" by a certain economic theory I won't name that keeps causing people suffering a century later. Don't do that.
Investment is generally considered profit-seeking behavior (i.e. not rent-seeking). Building an apartment and renting it out is clearly profit-seeking behavior, but if you were continuing to rent it out doing the bare minimum to keep it from falling over 40 years later, that would be pretty clearly rent-seeking.
From this, we can conclude that there must be some point after an investment is made where continuing to benefit from it transitions to rent-seeking behavior.
Predatory loans were maligned as "usury" long before "rent-seeking" or Scary Marxists came along. For good reason. They're bad for society and the economy writ large.
Classing all loans as usury help Europe back for a long time.
I guess you could class some rent as predatory as well, allowing others to use your property for a fee is not necessarily predatory (unless you're of "property is theft" kind).
Criticising landlords is fine, but words (and phrases) have actual meanings, and the term "rent seeking" has literally no place in a discussion about landlords.
I am well aware of what the phrase means, and I re-read the Wikipedia article to be sure. Maybe you read the use of the word in a different way than I did, but I helpfully included my precise interpretation of it in my comment to clarify the meaning.
> the term "rent seeking" has literally no place in a discussion about landlords
Having "literally no place" is certainly a strong choice of words, particularity as it was introduced in this thread as being a inaccurate label to apply to landlords.
Personally, I first learned about the term applying it to Feudalism, in which the (land)lords' only contribution was their ownership of the land. That example alone seems to pretty handily disprove your claim of "literally no place", in fact it's specifically cited in the Wikipedia article as the Georgist interpretation of economic rent.
Your own wiki link disagrees with you, most of the article uses landlordism as the base-level example. You've just discovered how "rent seeking" is used as a more broad term to describe many phenomena, but they're still describing them essentially in the metaphor of landlordism.
> "Rent seeking" has nothing to do with landlords and tenants
They're orthogonal. In a competitive market, landlords earn no economic rent. In a market with supply restrictions, however, landlords will earn a return "in excess of the costs needed to bring that factor into production" [1].
This is almost never true. Leases come with a million stipulations, and they get to decide what you can and cannot do. It’s exclusive in the sense that the landlord can’t force other tenants on the place you’re renting.
> if it's democratic like that I'm mostly OK with it
One thing to keep in mind. It might be that it's "democratic" in that all the homeowners are allowed to vote for or against the zoning policy (or for or against the local leaders who set zoning policy) but ONLY the local homeowners are allowed to vote. Those who rent (or who can't even afford to rent) live in a different district and aren't allowed to participate in the election.
If that's the case, then voting doesn't represent "the will of the people", just the will of those people permitted to participate.
I live in Massachusetts. Maybe I’d like to move to Palo Alto or Malibu. I hear they’re lovely.
To what extent, and by what mechanism, should the government of those two areas weight my preferences on housing policies in those areas? (I think it is properly exactly zero, even I say really, really want to.)
> Rent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth. (https://en.wikipedia.org/wiki/Rent-seeking)
Given that renting out property you own doesn't meet this definition it can categorically not be called rent seeking. I'm always shocked that people apply this definition exclusively to property rentals, and not VHS rentals, without seeing the hypocrisy.
I fail to understand how your quote doesn't describe land lords? It is:
1. An act of growing one's own wealth (no other purpose to land lording)
2. It is accomplished by taking advantage of economic conditions (perhaps not "manipulating")
3. Does not create any new wealth.
And a little further down is this:
> Rent-seeking implies the extraction of uncompensated value from others without making any contribution to productivity.
Which to me certainly sounds like someone who's only contribution is ownership.
Aren’t you exploiting the economic condition that housing supply is extremely low, and a lot of them vote to keep supply low and prevent new builds? I’m not trying to be facetious but I find it hard to believe that landlords don’t exploit economic conditions.
"Normie" and "happens to own one or two extra homes" seem a bit contradictory to me... And doesn't everyone who invests in something that makes them money exploit economic conditions?
Maybe I’m just unlucky but about a third of the places I rented had landlords who owned at least 5 homes. My realtor owns a dozen. I think owning a couple of extra homes is ok… but at some point I feel like it’s a bit excessive. People struggle to own one, let alone a dozen.
If you have 97 flights landing at airport with 1-3 pax each and 3 full jumbo jets and you survey passengers leaving the airport, the average person surveyed will report that their flight was packed.
What? Of course they are. They just produce entertainment instead of housing-days.
I think we're at the bottom of the discussion here. You've got your opinions but each time you've been pressed you don't really have a justification that stands up.
I can’t imagine what you mean by “each time you’ve been pressed.” Are you perhaps confusing me with other people you’re arguing with?
But no, VHS tapes are not factors of production. That’s a term with a widely understood definition, and linguistic tricks like “a VHS tape causes an image to be produced on a television” or “viewing an VHS tape produces a sense of enjoyment” are not valid arguments.
You're trying to side-step the point by not understanding it.
A VHS tape is capital in the same way that a machine or house is capital. They are capitalized goods that produce something of value on the other side. You still haven't been able to demonstrate that renting one is morally questionable while the other is fine except by special pleading.
"Rent" has a few specific meanings in economics, but charging a tenant rent isn't necessarily economic rent. The economic rent is more like the difference between your actual monthly rent and some hypothetical idealized market-clearing monthly rent.
The municipality cares about the taxes, sure but it goes far beyond that. Literally everyone in every department is more convenienced by attracting the well off and being hostile to those who aren't. Those rich people in those big houses with their big assets are much "easier to own" for the town than a bunch of rowdy generally noncompliant trailer trash who crank out a bunch of kids who need services, have poor elderly who need services, don't goose step in line without a bunch of enforcement, can't pay the taxes to pay for the "do we really need this" equipment and facilities government always wants, the working parents can't pick up the slack if the schools slip and scores will show it, etc, etc, etc.
Growing municipalities kind of have to choose if they want to become bedroom communities or industrial/business communities and if they choose the former optimizing for rich people is the easy lazy not sticking their neck out choice and what does government employment optimize for if not retaining people disposed toward that sort of decision making.
I'm not sure if this is what you mean by secret society, but I could well imagine that these kind of limits would be hard to enforce. Like a person creates shell corporations to own their properties on their behalf, or buys them in the name of their kids, or employs randos to "own" pieces of their portfolio.
They already do these things to take advantage of "primary residence" or "first-time home buyer" incentives; see the big hullabaloo over Letitia James doing it by accident.
Check out the origin of freemasons, a originally a secret society of stone masons whose labor was in such high demand after the black plague rolled through Europe and England that London set a maximum wage. I forget exactly what the meetings were for but it was something like a union / underground political resistance / price-fixing agreement club that worked in all the Pythagorean and Egyptian ritual later on .
Noone says it's nothing else. But rent seeking is a big component of it, you just focus on other minor parts.
In general, locking down some limited but critical commodity (e.g. land) is bad for any economic system. It doesn't really matter whether it's "Wall Street" or "your neighbor". A healthy economy is geared towards creating an added value.
I disagree, but I am interested in pulling this thread somewhat. What would be alternative? The role will likely exist in some form regardless, but I suppose there are obviously ways to make it less common just by removing of its incentives. That said, I might be tipping my hand a little.
Germany practices basically rent control, so that 60%+ of population rent and consider it stable. That's another way.
Maybe there are more, I didn't think hard. The basic idea is to prevent formation of an "aristocracy" that holds some limited but necessary (not luxury) resource. Pretty much every revolution happened because of that.
I guess not most, all of mine were fine, mostly individuals with one or two investment properties who were friendly neighbors I happened to pay rent to.
Point is, in choosing to be a landlord and buying property, an ideal world would respond to this demand pressure by building housing, didn't mean to suggest the landlords themselves put on their hard hats and frame a new building. Just that they're also part of the marketplace.
I've had slumlord landlords, landlords who maintained and kept up the property and focused on retaining tenants over increasing rents, and corporate landlords with prices set by a computer. Landlords are a spectrum.
IMO, government owned basic dormitories with high density should exist. Think of something one or two steps above emergency shelters. Call them pods if you like.
Rent and utilities could be positioned at a level that permitted people to survive and have a foundation from which to lift themselves back up and perhaps eventually to a private housing situation with some luxury.
Renting should be viewed is a negative in society. Imagine if car dealerships moved to a rental model instead of ownership..oh wait, they sort of already are, they just call it "financing", they make no money from cash buys because of that economic perversion.
Rent income is not wages, that's the critical part you're mistaken. Income and wages are not the same thing. Rent income is as much wages as Elon Musk selling stocks is to him, or a bank making income on interest payments. Renting is a business, it's income is business revenue, not wages.
There is this terrible view that landlords are "just like you and me, hard working regular people" - not that it's false, but so are the people that own mom & pops shops, or a local subway franchise, they're all business owners making business profits, not wages.
Business practices that harm the public should be regulated and curtailed. With taxis for example, the medallion system was used to limit the number of Taxis in operation. Similarly, not only should an individual be limited to (directly or via an ownership/shareholder interest in a company -- even with them or their family) a reasonable number of properties, but the number of rental properties in an area should itself be limited. Property owners can either sell houses, or sell condos and make income via condo (regulated) condo fees.
Food, shelter, health-care/medicine should be heavily regulated, if private parties take part as intermediaries between individuals and their food, shelter, health-care, they should expect lots of red-tape and limits. Ideally, the government itself would be driving these markets directly by building and selling properties, hospitals, pharmacies, grocery stores, etc.. that's not socialism or communism. That's just common-sense capitalism, everyone, especially the richest make more money this way. not only that their money will spend better this way.
The kind of capitalism we have now is a short-sighted parasitical money-grab. The kind where if fully realized, you'll build your own mansions and sky scrapers but you'd be complaining about the slums and crime nearby, how you can't get good help, skilled labor, and spend a ton of money on bribes instead of paying a fraction of that in taxes.
In theory, reaganism and trickle-down economics could have worked. A rising tide does indeed lift all boats. But in reality, it's more of the "scorpion and the frog" story. In this case, landlords can own a reasonable number of decent homes and make decent income, and then diversify the money in other markets. But currently, it's a race to become the biggest slumlord or until the markets collapse again.
> they make no money from cash buys because of that economic perversion.
This is completely false. This might be surprising to learn, but for normal car dealerships (not buy-here, pay-here or used car dealerships) a huge amount of their compensation rides on receiving holdback payments from manufacturers, as well as per-unit bonuses that often have cliffs.
Cash buyers paying invoice price are welcomed (if they aren't too big of a headache) because they push a dealership over or at least closer to the next sales-volume bonus cliff.
Holdback alone is worth more than any realistic origination fee.
What I heard is that they make no profit. I'm sure they'll make revenue, but if they simply sold all cars at the cash price, they will be losing money, especially dealerships. But if you're certain they do make profit, not just revenue, then you sound like you know more about the industry than myself, so I'll concede that point.
The dealership customarily earns 2-3%+ in quarterly holdback payments from the manufacturer. They sell you a $100k car at invoice, later that quarter they're getting a $3000 payment - this is pure profit, the deal was long-since done and they didn't take a loss at time of sale.
Dealerships are also earning miscellaneous per-car bonuses which are also profit, which go up based on overall volume: if they sell 50 cars, they get $200/car, if they sell 100 units this might jump to $500/car - just a random example.
If a car is in high-demand or really uncommon (in reality, not sales-speak, and a customer has no other options), they can afford to not sell a car at invoice - but this is an exceptional circumstance.
It's the nature of a capitalist society. Perverse incentives are everywhere and our primary measurement of success is wealth. We richly reward grifters and cheaters and folks with integrity often fall behind. The decades of perverse incentives have created a perverse society that no amount of "golden rule" theory taught in kindergarten can stand up against.
I commented elsewhere in more detail, but it is in my opinion caused by a lack of national pride. If I was a billionaire, how would I feel about other Americans living the way they do? Would i be apathetic or would I feel ashamed as an American? Even paying taxes used to be considered a patriotic act a few decades ago.
If nothing else, landlords should be held to much stricter standards for maintenance and the overall state of their properties.
What’d make sense for me is if a rental has a documented history of being poorly maintained, past some threshold the property can be auctioned off, with the proceeds going towards funding public housing. This should help filter slumlords and bare-minimum-effort speculators.
> Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals.
Here in Norway the solution, as with so many other things, is taxing. Your home is evaluated at some "market rate", but if it's your primary residence the effective tax value is just 25% up to $1 million (70% on value above $1 million). For reference, a typical 3-room apartment in Oslo, the capital, is around $400-500k.
However, if it's not your primary residence, then you pay tax on 100% of the "market rate". The tax rate is 1%, so not insignificant.
Until a few years ago, tax on non-primary residences was much lower, and hence we had a lot more people buying to rent if they inherited money or similar. Some even had a dozen or more properties. These have now exited, so policy is working as intended.
One thing of course politicians for some reason didn't think of is that if most of the landlords suddenly sell, rental market will shrink. So now it's super-expensive to rent, and those who rent usually do so because they can't buy for one reason or another (no stable income to support a loan for example).
So you created a policy that takes money from the lower/working classes and those on welfare (restricting rental supply for those who rent) and transfers it as a tax subsidy to the middle class (who own) and are offering this up as "good" policy?
You've also encouraged your middle class to massively over-leverage themselves to a single house/apartment by creating a huge tax subsidy for them (from 30-75%), which will no doubt continue placing upward pressure on house prices and also create risks if interest rates increase. Why would you not take the biggest loan the bank will offer, given interest rates are quite low in Europe and you will not be taxed on most of the value of that property you can acquire with leverage?
Crazy thought, did your politicians ever think about the idea of NOT subsidizing the demand side at all? If the issue is the price of housing, subsidizing demand for it in any way is going to make that problem worse!
And as if it was ordered, a news story[1] on exactly that this morning. Last year alone the average price for a rental unit went up 6.3%, and simultaneously a record number of apartments were sold. So very unlikely to come down.
Landlord, or property management, is a job, same as any other job you might have. The problem is not owning multiple properties, but not paying enough taxes on land. Otherwise, landlords benefit from the free lunch that comes with economic growth and real estate price appreciation, which is true for every homeowners in this country.
IF you want affordability? Tax land.
Doesn't matter who owns them. Your grandma or wall street.
A landlord owns the property. Property managers operate the property. Sometimes these are the same people (in mom and pop scenarios), but typically and at scale they certainly are not.
Property management is a job. Landlording is not. It is simply owning an asset.
Landlords have to allocate capital to fixing and improving the house, as well as taking care of insurance and taxes. Also, assuming that they're not living in the house and the value of the home goes up, they're taxes will rise whenever an appraiser reassesses their home value.
All improvements are excluded from a land value tax, which actually means improvements are even more incentivized.
Yes that is correct if you occupy land while your community makes it more and more valuable, you should not get wealthier and wealthier for no reason. All of that should be taxed away.
So when you build a sewage farm on your back 40 you should get wealthier (while your neighbors thank you because their land tax went down), but if someone snaps a photo of your area that goes viral on {THE PLATFORM DU JOUR} thus making your county more popular and driving up a bidding war for postage stamp sized lots of land (leading to the land being valued at a higher rate than it was a year before) you suddenly have a massive tax bill because "we noticed you are living in a popular county" and the benefits of living in a popular place should be taxed away? Or do we need some kind of a standard for "more valuable" that deals only with tangible things? And if so, which tangibles?
> All improvements are excluded from a land value tax, which actually means improvements are even more incentivized.
I'm not sure what this applies to with regards to my original comment. Improvements, insurance, and taxes are capital expenditures which need to be managed. This was to counter that landlording "is simply owning an asset."
> Yes that is correct if you occupy land while your community makes it more and more valuable, you should not get wealthier and wealthier for no reason. All of that should be taxed away.
Why assume that the landlord isn't getting the brunt of the cost for making the community more valuable? I don't think there's a strong case for saying a property manager is a job while denying landlording being one. Assuming landlording is completely passive is as far-fetched as thinking that property management is completely passive (both may require irregularly tasks to be performed or require no involvement in the ideal case).
While we don't want to tax a landowber's capital investment and improvements, most of the land value is due to the agglomeration effect of the surrounding land. So land value is mostly not an individual owner's own work, but the sum total of the community's efforts and entrepenural spirits.
>but the sum total of the community's efforts and entrepenural spirits.
More like "was too rural or too poor in the 70s/80s/90s to indulge in the then trendy policy like zoning the crap out of themselves and passing a bunch of ordinances more akin to country club rules thereby making incremental growth and development actually possible in the 2010s and 2020s"
Because most development today seems to correlate with whether or not that particular policy bullet got dodged than culture or spirit or anything like that.
> Landlords have to allocate capital to fixing and improving the house, as well as taking care of insurance and taxes.
These costs aren’t that high though, compared to rent. 3 months of rent covers a year of property taxes where I live. Major repairs are about a couple months rent. There is still another half year of rent that’s pure profit. Then they raise your rent every year, demonize rent increase caps, and then vote for reduced housing builds. I find it very difficult to accept them. If I had the money and the capital I absolutely would own a dozen homes and rent it all out, you would make insane money. Not to mention the mortgage costs being so low during ZIRP days. At the rate of AI coming for SWE jobs, landlords seem untouchable.
> 3 months of rent covers a year of property taxes where I live. Major repairs are about a couple months rent. There is still another half year of rent that’s pure profit.
Fair. Mortgage during the ZIRP days and prior was really low though. A 3K mortgage then is like a 6-7K mortgage now. And home insurance is also relatively low, I pay like 1.5K for the whole year. Point is, it’s a great way to make money and that is why people become landlords.
> Point is, it’s a great way to make money and that is why people become landlords.
If it is, why not do it and become rich too?
It's not really a particularly good way to make money. I've run the numbers on hundreds of properties over the last two decades and I've yet to find a scenario where I could buy something and rent it out with enough profit to be worth the hassle. You'll be much better off investing in some index fund instead.
If I had the capital I absolutely would have. It’s a bit worse now but any property you bought pre-covid (at least in big cities) can be rented out for more than what mortgage costs. I remember looking at houses in the Bay Area and the monthly mortgage would be 3K while you can rent it out for 4-5K. Anyone who owned property in the 90s and early aughts are absolutely rolling in it. You can invest the profits in an index fund on top of it.
I bought a house in the Bay Area in the 90s and the mortgage was well over $3K (remember interest was over 7%) and an equal house back then was renting for $1300 (my rent at the time for a 3br house in south San Jose).
Try to run the numbers for any property you like. Remember to include taxes and insurance and maintenance. Just to break even is not easy and then you'll have to work for free on the maintenance. Or pay a rental management company, which is another 8-10% taken from the rent.
Your house now can be rented for 4-5K a month if not more, you have no mortgage. Your property taxes are capped at purchase price due to Prop 13. All said and done can’t you net like 35-40K or so per year on a single home?
I agree that buying a home and immediately putting it up for rent would put you underwater these days but during ZIRP times rent and mortgage weren’t too far from each other.
> Your property taxes are capped at purchase price due to Prop 13.
BTW this is a common myth but not true. Property taxes are set by purchase price in year zero when you buy it. Every year after that, they go up 2% compounding.
That's not the full story because the city/county can also add any extra fees they like, and raise them, prop13 does not apply. My taxes go up by well over 2% every year.
> All said and done can’t you net like 35-40K or so per year on a single home?
If you can find yourself a free house somehow, that feels about right. But how do you get yourself a free house? If you have to buy it, now you have a mortgage, and the math no longer works.
The only people I know who profitably rent out homes are those who inherited a home with no debt. In that case, yes it works.
> during ZIRP times rent and mortgage weren’t too far from each other
Low interest helps, for sure, but the numbers still didn't work out.
The rates only briefly dipped below 3% during the pandemic. Let's say you got the timing right and got a 3% mortgage for 1.2M. The payment is still a bit over $5K/mo. That's just the mortgage, add insurance + taxes + maintenance. On a home you can rent out for maybe 4K-4.5K/mo. Losing money every month.
I've been running these numbers every few months for the last two decades hoping to follow the common advice to buy rental property and become rich. But it has always been cash flow negative no matter what the rents and interest rates have been.
Only advice I have is go inherit a free house, that can be profitable.
Pretty insightful details actually, I’ll rethink some of my positions. But I can’t imagine these bigger landlords taking that much of a hit, especially with multiple properties. Like let’s say I bought a home before meeting my significant other who also has a home - then I only need one place and I can rent out the other. Once both are paid off you have significant leverage. I don’t think you necessarily need a “free” house
The landlord of most of the United States is the American people since American public pension plans are some of the largest holders in these funds that purchase single family homes.
People act as if this is due to 'private greed'. It's not. American public pension plans are underfunded and need more returns. Thus they turn to the private markets, who offer them that which they are seeking to purchase. The market is heavily distorted by these public players whose policy and aims are not constrained by the market but by public policy.
If you tax land the only thing you will end up with is higher rents. You are punishing the wrong people.
Want to punish the right people? Cut taxes so that people can save cash faster, afford houses earlier and stop renting from their landlords.
Build more actually-affordable housing, too. Not these blocks of luxury apartments with swimming pools that nobody uses. (See HDB, Singapore -- that’s what the US needs more of)
Land is taxed but improvements are not. That tax is not passed down because landlords are already charging the highest price they can.
The tax simply redirect the unearned income to the public coffer which are either spent on public investment that further increase land value or redistributed as citizen's dividend.
Meanwhile landlords are free to construct as many buildings as they can without being penalized by higher taxes.
Empty lot, parking lots, and self storage facilities would be penalized because they wouldn't generate enough income to cover taxes on land, leading to more efficient utilization of land, as improvements are no longer penalized.
> Empty lot, parking lots, and self storage facilities would be penalized because they wouldn't generate enough income to cover taxes on land, leading to more efficient utilization of land
Right, so the city would be nothing but luxury (to maximize income to pay those taxes) high rise apartments packed tight every block.
No parks, no playgrounds, no soccer fields, no sports courts, no bike trails, no dog parks... none of the things that make living in an area pleasant. Also, no low income housing. Because none of those maximize "efficiency" (measured only in dollars) of every square inch of land.
Life is not pleasant if maximizing value extraction is the one and only #1 criteria. This is what land value tax misses.
Incorrect. Parks and other amenities raise land value. They would be an investment by the city to raise land value in a given area. People do not want to live in soulless concrete jungle. They want to live in a society full of amenities such as theater, parks, train station, basketball courts, etc.
Also, "luxury" housing cause what economists called "filtering", in which new construction are occupied by the upper strata of income, which means they pay for the cost. As housing age, this naturally becomes more affordable to the lower strata. This of course, depend on sufficient housing stock. Otherwise the inverse will happen.
Also, you only need to cover the cost of paying the land value tax to keep it, not to generate the maximum amount of revenue for that plot of land.
We are not talking about value extraction here, but making sure that landowners work for their keep, while the unearned income/economic rent that would otherwise goes to them is returned to society, because the value of the land is largely determined by the agglomeration effect, the sum total of the community's effort and entrepreneurial spirit. Otherwise, your private effort as individuals would flow to landowners reaping the benefit of increased land value, hence appreciation in real estate price.
I am responding to the comment I quoted, namely: "parking lots, and self storage facilities would be penalized because they wouldn't generate enough income to cover taxes on land".
So if a LVT has the explicit goal of eliminating things like parking lots and self storage units because those don't generate enough income to pay for the taxes, then what hope do things like playgrounds and parks have to continue existing.. they generate far less income than a self storage facility.
Parks and playgrounds increase the land value of the surrounding community. That results in higher LVT.
That creates a virtuous cycle for the local government who is administering those taxpayer paid amenities, same as other form of infrastructure and amenities.
That feels like wishfull thinking. What I see around me in practice is government doing all they can to sell off public lots (like parks) to developers to tear down the park and build another luxury condo. More tax revenue, more money in the government pocket, some bribes under the table, another loss of quality of life in the neighborhood.
> Under the tax scheme described, the reverse is true.
Explain how.. In a dense urban area, with LVT, that lot that held a park will bring even larger tax revenue when the city sells it off to a developer. Having the tax be based on maximum potential usage will only increase the temptation to sell it off and remove yet another park from the people.
I think this assumes politicians who care about subjectives like quality of life, and who are able to think in long-term sustainable city finances instead of just maximizing what they can grab in current fiscal year. We don't have any such politicians in power in the US.
> Landlord, or property management, is a job, same as any other job you might have.
Let's ignore property management for now and focus on landlords (i.e. people who own homes and collect rent from the people who live in the homes). That is very much not the same as any other job. Most jobs do not consistent entirely of literally rent-seeking.
>Most jobs do not consistent entirely of literally rent-seeking.
First off you're using "rent seeking" wrong, it's a specific economic term that means something else.
But using your definition....
There's entire industries built around renting capital investments. Sometimes purely, like rental equipment. Sometimes the investmentents are so expensive they come with the labor to operate them (the way many buildings have a building manager and a desk person). Many industrial transactions are structured basically the same way as commercial rent.
> First off you're using "rent seeking" wrong, it's a specific economic term that means something else.
It is a specific term, but it means: taking control of a limited resource (e.g. housing), most typically by ownership, that you do not have any direct use for, and then seeking revenue by then renting it to other people who actually want to use it (e.g. live in it).
Which, not suprisingly, is precisely what landlords are doing.
And also not surprisingly, those "entire industries" would be rent-seeking if the resources they rent out were limited. However, that does not apply to rental equipment, for example (though there are a few specific exceptions in the case of extremely expensive, very complex and/or very large equipment).
>Which, not suprisingly, is precisely what landlords are doing.
The bulk of the political will for this garbage doesn't come from landlords. Landlords want more, more, more. There literally aren't enough landlords in this country for that.
It comes from existing homeowners who are not landlords and don't want a bunch of high(er than them) turnover housing near them let alone cheaper housing because of the "neighborhood character" or whatever. Basically got mine fuck you.
And this is enabled with the remainder of the political will being provided by a select number of unconscionably ignorant non property owners who have insane takes about how the government should manage all this, be deeply involved in this, immensely scrutinize any sort of property development, etc, etc, all of which is to the benefit of megacorp landlords and developers and the detriment of the small time guys who own a number of properties you can count on one hand with a sum total of units you can count on two or thereabouts who make up the overwhelming majority of landlords on a unit basis and if even a small percent of them added a little bit of capacity would be a huge amount.
> However, that does not apply to rental equipment, for example (though there are a few specific exceptions in the case of extremely expensive, very complex and/or very large equipment).
They don't rent seek the literal equipment. They rent seek your ability to use it without a bunch of thugs showing up with a "stop or else" proposition. You can literally buy a car crusher on Alibaba but you can't open a junkyard in my state without a permit that they have a well known hospital-esque "we only allow X to exist overall" system for, assuming your town doesn't outlaw the business outright.
Once again, this is all to the benefit of big business for whom a few million bucks of donations to the right stuff and work directed at the right firms as needed to get a variance (i.e. pay the law away) for their billion dollar dildo manufacturing plant or whatever whereas the guy who wants to, IDK, take his HVAC bending business to the next level, open a second site and get into process equipment is shit outta luck because without greasing palms he can't afford to the government will hem and haw about every goddamn detail and prevent anything from happening. And the existing industrial plant that got in before the rules is laughing its way to the bank the whole time, well, right up until it gets regulated all the way to China but that's a different problem.
Your view of the world we live in is extremely different from mine. I don't think it is remotely correct, but hey, that's just, like, my opinion. I hope you find some peace in the midst of your experience.
People assume that renting out property is rent-seeking literally only because they both have the word rent in them.
I would note that people don't use the word rent-seeker (or parasite) when it comes to banks renting out money. I assume this is partly because banks use the word `loan` and partly because referring to bankers as parasites would be a little too close to dog-whistle antisemitism.
> People assume that renting out property is rent-seeking literally only because they both have the word rent in them.
It's not a coincidence that they have the same word in them. It's literally just the same word with the same definition and etymology in both cases. Rent is a payment demanded by property owners from people who want to make productive use of that property.
But rent-seeking isn't renting. They're different terms that don't have anything to do with each anymore.
> Rent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth. (https://en.wikipedia.org/wiki/Rent-seeking)
> people who own homes and collect rent from the people who live in the homes). That is very much not the same as any other job.
Why are you thinking of it as a job? Is putting money into the stock market a job? Owning property to rent out isn't a job, and that's perfectly fine. People make money off non-jobs all the time.
No. If you want affordability, make the government efficient and tax people LESS.
The government steals half of my money, half of my landlord's money, and I have to pay my landlord’s income and property tax in addition to my own income tax.
This is why I still cannot afford a home even though I work in a senior role in AI. After paying all those damn taxes and everyone else’s taxes there is almost nothing left.
I’d imagine it’s less taxes and more you want to buy a nice house in the Bay Area where a lot of people are high earners and would be driving up prices on the low supply.
Yes and for some weird reason, the bay and all the nice places to live are all single-family and expensive as hell. Just build some soviet or Chinese style apartment blocks and give people housing like Singapore does its not that hard. This is not a democrat or republican issue, it is a have versus have-not issue.
The logical conclusion is that the residents of these desirable areas like the bay / San Diego / Seattle / DC actually want housing prices to stay high.
Building giant apartments would change the vibe of the Bay though, and my guess is some of people who want to live there also want to live in it as it is now and not what it would be with high rise apartments etc. There’s probably a way to do it well, but it’s a pretty heavy lift versus doing nothing, which is the current status quo.
Also doesn’t help there’s a lot of red tape as the other commenter mentioned.
I mean.. some people would prefer to live next to a forest or grassland, but nope, houses were built there, because people needed somewhere to live. Now that's not enough, and larger buildings are needed, and that includes socialist buildings.
I live in a former socialist country (well, part of a country, the country does not exist anymore), and when we needed more housing, we designated the land in the city to be for housing, ie. large socialist buildings. Then 1990s came, no more socialism, capitalism now, and no more large building projects, no new neighborhoods. So now, we have cows and cornfields in what would be prime realestate because the government won't change the zoning, all three neighbors there complain and apartments that used to be 120k eur maybe 20 years ago are now close to 500k eur.
If you want to live next to cows, move to a village, thousands want apartment buildings there, to live in a city.
Repealing all the bullcrap from the last 50yr that makes that artificially expensive to the point of being a non starter if not outright illegal is the hard part.
This is obviously correct. Somehow people just can't accept the pigeonhole principle that if X people are trying to buy Y houses and X>>Y, a lot of them are going to be disappointed regardless of what laws you pass.
It's obviously incorrect. If X people are trying to buy Y houses, and 1 of them can always buy Y/2 houses, then you'll need to build a hell of a lot more than Y houses if Y is only equal to X. Right now in most places, Y < X, and a certain percentage of people can still buy many more than 1, so it seems like that's a real problem shouldn't continue during times of scarcity.
When N_for_sale > N_individuals_and_couples_buying, it is still possible for N_dissatisfied to be > 0 for the reason you give. But N_dissatisfied must be > 0 whenever N_for_sale < N_individuals_and_couples_buying, even if everyone is limited to having at most one.
Agreed, but I wasn't disagreeing with their whole sentiment, just their assertion that the GP was obviously correct, namely that it doesn't matter how many homes people can buy.
Less supply couldn't possibly be helpful for those disappointed, but also there's less supply than there would be if access to it as a commodity was limited, supposing that all other artificial restrictions and funding models could rely on less concentrated investments, which I think they could
> It doesn't matter how many houses anyone owns if you just build. more. housing.
That's what people with disproportionate access to capital would want people to believe. It absolutely matters if there's a ceiling and a floor on the production rate of every aspect of the supply chain of housing. If it doesn't matter how many houses someone owns, then it wouldn't matter if builders don't outpace the ability for particularly wealthy people to borrow and own as much as they possibly can. It's a particular type of commodity that should be appropriately controlled in a way that reduces the whole "tragedy of the commons" type effect.
There's always a finite supply, and there's always some contingent of people who will try and get as much as they possibly can, leveraging as much generational wealth as they need to, if they need to.
There should absolutely be a limit on the number of homes, within a particular region, someone should be able to buy, as long as a sufficient threshold is met for what can reasonably be called a scarcity problem. If an individual average home of any type would require the mean family income to quadruple in order to service the mortage, or the downpayment would require 5x their annual salary pre-tax, that seems like a very liberal threshold.
> there even should be a cap on how many homes an individual can own for rentals
India still has this in some states [1]. You wind up with everyone in the family owning a house. After that, other people own it and pass on most of the rent.
This would certainly drive down prices - how much is an open question. But I think its a fair compromise, UNTIL we actually do have enough homes for everyone. Until then something has to give - right now its people who can't own a single home that are yielding, but IMO it would be much more fair to ask people who already own a home to yield (not buy more than one). Ultimately that's the tradeoff to discuss.
This kinda reminds me of student loans, why not get as many people as possible into 6 figure debt?
Yes mortgage is often cheaper than rental, but the whole tradeoff is the commitment, just like all kinds of services, if you pay 40 years up front you can get a good deal, but do you really want to take out a loan to do that?
Limiting landlords ability to buy property is reducing demand for construction, you want to increase demand for housing, not decrease it.
As I said in a sibling thread, it does suck that property owners are incentivized to raise their property values, preventing supply from reacting to demand.
That "less commitment" argument assumes that renters are content to be paying higher-than-mortgage costs for a property they'll never own. If they are, then it's true that the rental system is benefiting them. If they'd rather own their homes and be paying a mortgage, then the rental system is a hindrance.
My intuition is that the majority of renters would rather be owners paying mortgages. This is less true of certain demographics (young people, students) and more true of others (older people, families).
I also wouldn't characterize being a renter as low-commitment. Say you're renting a place for 1.2k a month. When you sign a year lease, you're committing to pay 1.2k x 12 in rent, plus (at least) a month of security deposit, for a total of 15.6k. That may not be a down payment, but it's still a huge commitment, especially given how hard it is to assess potential problems with a living space before you've actually lived there.
> but it's still a huge commitment, especially given how hard it is to assess potential problems with a living space before you've actually lived there.
Now imagine trying to asses the potential problems with a living space before committing the next 30 years of those payments, plus locking yourself into that single living space and taking on the single and sole responsibility for repairing or addressing all of those problems yourself.
Look, I really like owning my own home, but when I signed a rental agreement, for the duration of the agreement that was the most money I would ever spend on my housing. And I never once worried about replacing a roof, or replacing an HVAC unit, or replacing a water main. I've owned my own home now for over a decade and my monthly housing expenditure is nearly 2x what it was when I started between tax increases, insurance increases and loans to pay for the various major repairs, and that's with a fixed rate primary mortgage. And that's my cost increases AFTER the insurance payouts. The townhome I first rented when I moved to the area currently rents for about $100 LESS than I pay each month. Granted when I bought the place, it was renting for about $200 more per month than I was paying but that basically means renting vs buying was a wash as far as costs go. Yes, to a degree I got unlucky, but that's also the point, I couldn't know if I was going to be unlucky or not before agreeing to the mortgage. As a renter I could get reviews and recommendations or warnings from prior tenants and at least have a chance of knowing what I was getting into.
I don't think this is a purely financial decision - my position on that is it's not a good investment if you're buying a single home. Taking on 5x leverage on a hugely concentrated asset is insane to me if it's a large % of your net worth
The bigger thing, though, is so many people are currently priced out from owning something for themselves. Your home is such a fundamental part of your life and for a lot of people renting fucking sucks. They can't live their lives the way they want to. To have that be the case because others are buying it up to profit? Ehh..
Lowering prices would also disincentivize anyone to sell their house, sort of like the recent, relatively high interest rates. Those undesirable rates have not applied significant downward pressure on prices because they’re simultaneously exerting downward pressure on the volume of houses available for sale. No one wants to sell their low rate house for a higher one.
>that will inevitably shrink the supply of rentals
As someone that's renting because buying is impossible i think this would be fantastic. They should do it with Airbnb too.
Not American or in the US, this is problem everywhere now. People thinking they're entrepreneurs for gouging.
People will come up with all kinds of reasoning, its the property tax, it's migrants, its minimum wage, it's millennials, it's inflation ,when ultimately it's just that landlords will charge whatever they think they can get away.
and sometimes they'll try to charge in other ways...
> there even should be a cap on how many homes an individual can own for rentals
Many people wish to rent, not buy. If we make it so each landlord can own fewer homes, but renting demand stays similar we just incentivise more people becoming landlords
The purpose of people putting money into stocks or real estate is to allow for a simple, fairly 'hands-off' way to make money (real estate is not totally hands off, but is pretty close to a set-it-and-forget-it business).
Real estate works for this because you can really put in as much as you want into it.
Other business activities do not work because the entrance cost for non-rent-seeking business is extremely high and the risk is way too high compared to real estate. This is due to American regulation and labor laws.
This is a 'first-world problem', but now that I have capital, the question is 'what to do with it'?. Yeah, you could throw it in the stock market, but that's also rent-seeking in a sense because you're not really able to invest in primary rounds (I mean you can, but it's hard to find deals), so basically you're just providing liquidity to people, which is rent-seeking of a different kind.
So then the question becomes what else to do with it? I've given a ton away, but that's useless for the most part since it barely creates any economic value.
In my ideal world, I'd start a factory and hire a manager, but the capital cost of that is high, not because of the material or the rental cost, but because of the labor cost. So then, what's the option? I could easily outsource it all to China or India, but that's completely useless for the United States.
Then the question becomes, why start your own, when you could invest in others. Great! I would love to do that. It would be even better if I could simply invest in a local enterprise... Except, that's not easy either. Regulation over investments means that even investing in this is fraught with difficulty unless you want to establish some sort of 'fund'.
So basically, there's nothing to do with the money, which is sad, since I end up giving most of the money I make away anyway, and would prefer to have more of it to give away.
Until America figures out what it wants to be, it's going to be real estate for me... consistent incomes, fairly uncorrelated with equities (which I have a lot of too), etc. There's really not many other options here. There's barely any 'productive' activities taking place in the United States.
That's a surefire way to make sure that all rental properties are controlled by people who are able to de facto own a lot of properties with family members (or "family" members) on the paperwork, and who are able to enforce their ownership with extrajudicial means.
Ironically, supply would probably increase for no other reason than those are the kind of people who just add cash only units without giving a crap about expensive permission and permits.
> Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals
Price controls and limits like this rarely work out in history.
Around here, many landlords renovate or build new high density construction. Put a cap on how many properties they can own and they'll switch from building/renting as many units as possible to maximizing the rent on the limited number of properties they can own.
Restricting the market in one dimension rarely has the desire effect.
That would not be useful. A far better solution would be to drive up rates to make/force landlords unload properties they could only afford at lower rates and also deport the roughly 30 million foreign nationals that are currently in the USA driving up costs of everything. It’s basic supply and demand, but ironically the immigrant supporters are allied with the billionaires and generally wealthy who profit from piling in ever more people into the same supply of housing and amenities and resources.
> also deport the roughly 30 million foreign nationals that are currently in the USA driving up costs of everything.
Nothing like middle school economics to help a debate along ... have you checked on the level of economic activity that is due to those 30M foreign nationals, and considered if there might be any downsides to them no longer being here (and presumably not being replaced by other foreign nationals) ?
Speaking of middle school mindsets; so by your logic, you should take in how many strangers into your home against your will? …and if your infantile logic has any value, why don’t we just cram every single human on earth into the USA, at your expense of course, right?
What immature peasant-logic people as yourself don’t understand is that no, there is negative net benefit to the common person, while the common American is deprived of that benefit which goes primarily to the richest, and of course the freeloading foreign nationals.
Nothing about America has gotten on any controlled measure better without the increase in foreign nationals that have been imposed on the citizens of America against their will.
Is it really as simple as that you have no dignity and are just a self-interested person that enjoys living off the theft of Americans?
And again, your infantile mind cannot seem to grasp that removing a squatter from your home is in fact justified, regardless of how much negative economic impact it would have by depriving that squatter of your assets and living in your home.
Why do you types not understand these basic things? Is it really as basic as that you’re vile? Depraved? Narcissistically callous towards the people you harm? Is it really just because you enjoy making others pay the cost of your decisions while you benefit?
How about we just make you pay for all, every single cost of the foreign nationals that are squatting in America at the profit of the ruling class? Of course not, you would prefer others pay the cost with the misery you cause them.
> so by your logic, you should take in how many strangers into your home against your will?
You do realise you don't own all of America, right?
Nobody actually forced you to take 30 million immigrants into your home, because your home stops at your property boundaries.
I've seen this nonsensical argument in my home country, the UK, too. If you want to claim *all of [the USA]* as your country because you're a citizen of that country, then *any other [USA] citizen welcoming migrants into [the USA] is already taking all these "strangers" into their own home*.
(Works just as well if you substitute any other nation for [the USA], everywhere has people who think about their nation the way you think about yours).
> …and if your infantile logic has any value, why don’t we just cram every single human on earth into the USA, at your expense of course, right?
You should talk to more non-Americans. People like me, for example. I don't want to live in the USA. So I don't.
I mean, we'd physically fit quite easily, you've got most of a continent there, every time people like me suggest things you can do to make your nation better the collective response keeps being "oh but the population density is so low we couldn't possibly make public transport or cheap broadband work". We keep suggesting stuff like this because a lot of us just don't look up to the politics or the infrastructure you've got, certainly not any more, although the reasons are various and our interests are a dis-aligned from each others' as much as from yours.
> freeloading foreign nationals
The foreign nationals in the USA come in three broad groups:
1. People like Elon Musk, who took billions of taxpayers' dollars for self enrichment but are somehow really popular (today only with the establishment, but used to be more broadly) despite this.
2. People who do a huge amount of work in the construction and food industry, without whom the USA would collapse in about 6 months, who get all the hate because they're poor and undocumented (AKA "illegal") immigrants.
I'd like to draw your attention to the word "construction" in there specifically, as it's the other half of "supply and demand".
3. People in the middle with the boring work visas doing middle of the road work. By having in-demand skills, they command above-average salaries, but by commanding an above-average salary they drive up rent and house prices, with that money going to landlords etc.
Of these, only group 1 is "freeloading".
> squatter from your home is in fact justified
A squatter is a person who settles in or occupies a property without legal permission or claim to the property. Squatters live on land or in buildings where they have no title, lease, or right.
Ironically, this is how the USA got Texas from Mexico.
You claim 30 million. I don't know where that number comes from, as it doesn't seem to correspond to either documented or undocumented groups. Too big for estimates of undocumented (~10-12 million estimated) too small for documented immigrants (~40 million).
But it's false in any case, that number does not consist of squatters.
I’ll at least give you some credit for effort, where the other CIA mush-mind just sent a link to peek CIA-brainwashing central link, but you’re clearly arguing in bad faith because you’re so mentally deranged from the life long conditioning.
But you are a well trained NPC, repeating all the installed “knowledge” you have faithfully, with no ability to even realize the inherent contradictions in your statements and beliefs, largely because what you have been conditioned with like a good mindless NPC is only what the ruling class wants you to know for a fact and then infect others with in places like Reddit. You’re a good zombie infecting and devouring those brains, lacking any ability to recognize you serve those who hate you and you say you hate.
But not matter how angry reality makes you, it does not change whether you hear it from me or not at all.
You are an inherent contradictions, just like the ruling class wants you.
So I realized who you are. Of course it’s you, living so far away from any and all effects or impacts of those people you have no problem thrusting on others. You’re really a bad person just alone for that mentality, a pure narcissist, prescribing for others that which you want nothing to do with just so you can live a delusional fantasy of being a good person.
Again, if you’re so convinced of how wonderful foreign nationals themselves on Americans against their will, how about you just put up a sign welcoming them all to squat in your house and live on your property and freeload off you; instead of prescribing that misery on others. You’re really a sick and evil person, you know that. How about you do unto yourself first, what you do unto others.
This is treating a problem symptom, not a root cause.
Landlords owning property is not a problem. Some people prefer to rent - they may be students, or they may not anticipate being somewhere for long, they might not want the risk of owning a home, lots of valid reasons. Having housing available for these people is good and landlords are a necessary and valid part of this market.
The problem is when people who want to own houses can't afford them, even when they contribute meaningfully to society. The root cause of this is not landlords existing. It is wealth inequality. A vanishingly tiny number of people own almost all the wealth in the system, to a point that the additional wealth gives them no real benefit, but serves only to remove that wealth from the vast majority of otherwise middle class people.
If you want to fix this problem return the top tax tiers to what they were 50, 75, 100 years ago and the problem will be severely reduced. It's not sufficient to solve it, but its low hanging fruit.
> A vanishingly tiny number of people own almost all the wealth in the system
I'm not sure this is true. Based on a couple articles I found, this is what the current situation looks like in USA:
a) Billionaires, (of whom there are about 1,000) own about 5% of the wealth
b) Millionaires, (of whom there are about 25 million, or 7% of the population, excluding billionaires) own about 74% of the wealth
This tracks with my impression of the rental market. Most rent money isn't going to the billionaires or big corporations, it's going to the 10 million or so mom-and-pop rental property owners.
I'm not an expert on this stuff by any means, but my intuition is that it's a cycle, wherein the rental system is one of the largest drivers of wealth inequality in the country.
It is wealth inequality. A vanishingly tiny number of people own almost all the wealth in the system
To the extent that this is true, it's not why housing is unaffordable. Even if Larry Ellison buys a dozen mansions and keeps them empty most of the time, that's not going to noticeably affect the market for normal people. Houses are expensive because they're scarce; you're far more likely to be outbid by the guy who makes $10k more than you than by an evil billionaire.
You're inspecting entirely the wrong end of this spectrum. The problem isn't that the average person is being outbid by a trillionare on their two bedroom. It's that an corpuscular capital class has so much money that all assets are being wildly inflated, housing included, while simultaneously depriving more than half of the population of anything close to the capital to buy even the cheapest house. There is no 'being outbid' for the average American who makes a hair over 45k. It's a laughable impossibility to even be in the game. The system is broken and the average user of this site is way too comfortable to recognize it but it's a daily reality for almost everyone else, particularly the young generation.
