People who run said companies should be scalped.
In Germany they are called “Heuschrecken” which translates to “Locusts” because thats how they operate.
Only in german: https://de.wikipedia.org/wiki/Heuschreckendebatte
This is what librewolf translated the first section to:
A locust debate in Germany in April and May 2005 over a statement by the then SPD chairman Franz Müntefering is referred to as a locust debate. This compared the economic action of some “anonymous investors” with locust plagues.
The term “locust” has since been regarded in German political parlance as a derogatory animal metaphor for private equity companies and other forms of equity participation, such as in the public-private partnership model, with allegedly short-term or excessive return expectations, such as hedge funds or so-called vulture funds.
The term and debate have been criticized variously, including as in parts anti-Semitic and anti-American.
The last part is super funny to me, because it just speaks to the way that the defenders of these investment tactics think.
I went and looked at the referenced “vulture fund” phrase and was not disappointed. https://en.wikipedia.org/wiki/Vulture_fund
We’ll fix those greedy bastards! Just like we did with Ticketmaster! What? We didn’t?
They should be known as criminals, as it should be illegal for companies to own residential property. It should also be illegal for any individual (or partners) to own more than 2 properties.
The housing crisis will never end unless limits are imposed on the ownership of the finite resource. Every single “solution” I’ve seen from “liberal” governments to date is only proven to incentivise profiteering and inflate the cost of housing.
I agree! Its shouldn’t be legal to have houses as investments.
Such an extremist take is difficult to implement in practice. A healthy rental market gives significant power to the potential renters. Key word: healthy.
Low income housing can get taken over by the state but that’s not the only section of the market. White collar workers have also seen an increase in their mobility, for example.
Edit: Wow, some people read this and must have thought I was in support of house scalpers. But I have been a renter most of my adult life, and see the benefits. I appreciated being protected by the law, I hated when I wasn’t. I saw the effects of both on the market and I am confident a healthy housing market not governed by scalpers is totally possible. Just often not the reality.
Also, a lot of people explicitly do not want to own their home as that requires a lot of work to maintain it that is hugely expensive if you can’t do it yourself. I do however agree that “house scalpers” should receive a guillotine haircut for free.
I have a career that required me to move internationally every 2-3 years. I definitely did not want to buy and sell houses at such pace, without even having a credit record in the new country. Scalpers should be treated like cockroaches though.
In spain we call those companies “fondos buitre” (vulture founds)
Homephiles
“Organised crime”
You’re being nice
Guillotine baiters
flippers, but companies
no, it would be people that are flipping homes, using low interest loans either from exploiting thier children(adult) to do it, and flipping it for more. it can be a person besides a company. i once followed a yottber that did this in vegas, what a cringe individuals they become, people in the sub was saying they are contributing to the housing crisis in the us.
Company ownership of housing seemed to work fine in Germany, and is significantly better than non-professional landlords who will see to your faulty boiler or tap in 2-7 business months.
High housing costs are mainly due to one thing: lack of housing. That is caused by not building enough houses, or not filling the ones you do have (e.g. because they are Airbnbs and are vacant most of the time). For companies to cause problems they have to buy so many homes they can abuse their market share by forcing rents up, which you would see as an increasing vacancy rate. As far as I know this has not been happening.
For companies to cause problems they have to buy so many homes they can abuse their market share by forcing rents up
Not necessarily. Your logic only applies to non-necessities. For a necessity, all you need is to own enough of the industry, that you’re the only option for some people. If there only exists enough housing to just barely house everyone who needs a home, then you could own only 1%, and set the price to whatever you want, because someone will have to live there. Everywhere else is occupied.
which you would see as an increasing vacancy rate
No, you wouldn’t. There is no rent that is so high people will decide to live on the street. They’ll keep paying, until they actually can’t.
Again, this logic only applies to non-necessities. If you hike the price of food, people don’t stop eating. They stop bying luxury goods.
And no, if there isn’t an overabundance of food (as you yourself admit, housing is insufficient) they can’t just switch to the competition, because the competition does not have the capacity to serve everyone.
Yeah if you literally only 100%, or close to it, of housing in a city, that’s true. But no company does in anywhere I’m aware of. There are cases of massive consolidation but the largest competitor acquires like 17% of housing. There are also always some vacant houses even if that number is very low.
Housing is a necessity but there is still some elasticity. People can move in with parents, move to a cheaper region unaffected by the attempted market abuse, share with more people, live in their car or literally be out on the streets. All of those options (none of them good ones) mean that some people will not pay the higher rents if there’s an attempted squeeze - some houses would stand vacant. (Or: stand vacant for longer).
This is not a defence of free market economics in housing; I think local authorities should heavily invest in social housing. I just don’t think that we have any evidence of the high cost of housing being due to excessive company involvement in housing. We are seeing housing crises across the western world in all sorts of cities and all sorts of distributions of ownership.
You are bending over backwards to dismiss my points.
Yeah if you literally only 100%, or close to it, of housing in a city, that’s true. But no company does in anywhere I’m aware of.
I’m not even sure what you’re saying here. Did you misunderstand my point that they don’t need to own 100%?
There are cases of massive consolidation but the largest competitor acquires like 17% of housing
That is MASSIVE consolidation! If a huge 10% of homes are unneeded, that means they can set the price for 7% as high as they want!
People can move in with parents
Boomers are selling their homes to these companies, because the payout is ludicrous. They pay so much more than what the home is worth, because the return of renting it back to someone needing a home is literally limitless.
move to a cheaper region unaffected by the attempted market abuse
You know why it’s unaffected? Fewer jobs. The pensioners selling their homes can move out there, sure… But the people who need homes in the area they just sold their old home for millions in? Not so much.
share with more people
Right. Because these companies aren’t chopping big apartments into smaller units so they sell each room individually. Are you suggesting people start sharing studio apartment closets?
some people will not pay the higher rents
Some is not enough. The whole reason this works is that these companies can squeeze people on necessities, because someone always has to buy from them. To fight this, everyone has to have access to a better option, so that these companies have zero customers. Because as long as they can squeeze someone, they can squeeze harder than any luxury industry could ever dream of.
I just don’t think that we have any evidence of the high cost of housing being due to excessive company involvement in housing.
This has literally been studied. It’s not about what you “think”. You are ignoring current economic facts.
We are seeing housing crises across the western world in all sorts of cities and all sorts of distributions of ownership.
No shit. When someone finds a way to make profit, the method gets copied. No to mention that stuff like airBnBs skirt regulation and often literally operate against local law or building rules. My very first point was that companies don’t need to own much to start hiking local prices. Heck, you could be just one wealthy individual who owns two extra houses, and by setting your rents high, contribute to the problem.
There is a thru-line here, but because it’s so pervasive, you’re saying it can’t possibly be it.
Your point by point objections don’t really change the picture - these are all things that people do. In a market that is not completely elastic, if you increase prices, some people will stop paying and we will see that in the data. Every time I’ve checked this for the USA (where this argument is usually made) there is no recent increase in vacancy rates.
So how about I offer you an alternative scenario: investment companies are seeing that housing is shooting up in value already, due to low rates of building, hence making it a more attractive investment relative to other things. So they buy them up and charge high rents - but at the same time all the individual owners of rental property also see that they can charge high rents, and do so. All we’ve done is swapped who is screwing renters, not by how much.
If this has “literally been studied” then I’d be very happy to see the studies - like I said I’ve tried to find data on this, and never found anything to suggest that replacing individual owners with corporate owners increases prices. Maybe my search-engine-fu is lacking (but also… every other time I’ve discussed this online no-one has come up with anything either. What I’m trying to say is that I don’t hold this position for lack of trying to challenge it.) But in contrast, I’ve seen plenty of studies comparing population growth to house building and coming up with a huge deficit.
there is no recent increase in vacancy rates
You’re looking at the wrong stats. When people are forced to spend more on necessities, they don’t cut necessities. They can’t. They’re necessities.
They cut luxuries.
One such relevant stat, would be piracy spiking. Not to mention the spike in homelessness if we are talking about the US.
You yourself point out that housing is not keeping up with need. Things can absolutely be getting worse (and they are), while at the same time not showing up in vacancy rates. The well-off can be moving into new homes faster than the poor are moving back in with parents. Or going homeless.
Another stat is the average age at which people buy their first home increasing.
Another is the ratio of renters increasing in relation to owners.
investment companies are seeing that housing is shooting up in value already, due to low rates of building, hence making it a more attractive investment relative to other things. So they buy them up and charge high rents - but at the same time all the individual owners of rental property also see that they can charge high rents, and do so. All we’ve done is swapped who is screwing renters, not by how much.
This is a distinction without a difference. You’re saying the chicken came first, while I’m trying to explain chickens come from eggs, and the entire relationship between the two.
Increased consolidation increases the co-ordination of price hiking, hence increasing “how much” screwing is going on. But that doesn’t mean a tiny bit of screwing can’t get it started.
I’m saying it has gotten so bad because the problem feeds itself. By allowing more investment, the screwing gets harder.
All we’ve done is swapped who is screwing renters, not by how much.
This is a truly insane take. You’re saying if all rented properties were owned by single landlords who owned no other properties, rents today would still be just as high?
When people are forced to spend more on necessities, they don’t cut necessities. They can’t. They’re necessities.
Well then, we’re back to some people cutting their costs by doing all the things I said above. You dismissed them all as if reasons why they’re not practical are reasons why they’re impossible.
You’re saying if all rented properties were owned by single landlords who owned no other properties, rents today would still be just as high?
All those landlords have the exact same incentives to charge as much as they can get away with, to subdivide properties and to exploit their renters as corporate landlords do. Consolidation can allow prices to increase - but it doesn’t always, and typically not by a lot, until consolidation reaches very high levels. 3-7% is what I’ve read for company mergers (note that the case studies include large market shares and companies dealing in necessities).
So I propose that corporate landlords have manipulated the market by no more than 10%. So about 6 months of house price increases at current rates, or two years at less crazy rates. Everything else is caused by low supply and such.
Well then, we’re back to some people cutting their costs by doing all the things I said above. You dismissed them all as if reasons why they’re not practical are reasons why they’re impossible.
No. I dismissed them as insufficient to show up in the stats. In order to significantly impact the situation, the alternative needs to be valid for any individual. Not just some.
All those landlords have the exact same incentives to charge as much as they can get away with, to subdivide properties and to exploit their renters as corporate landlords do.
Duh. But are you really going to claim single property owners competing with every other single property owner, wouldn’t have different results than duopolistic companies carving up cities and throwing their weight around in legislation?
Have you considered that larger companies are also able to act to maintain the low supply?
Real-estate and construction overlap a great deal, and that influence also grows with consolidation.
And thanks for linking to a study that confirms what I’m trying to say? 3-7% of the largest bill most people have is not nothing.
Does that percentage account for wage stagnation? Which is also exacerbated by mergers.
Everything else is caused by low supply and such.
A few comments ago you were clamining low supply is the only problem.
Yeah no. Last i checked there are 4 times as many empty apartments than homeless people in Germany. The housing market here is completely fucked and corporate housing ownership needs to be disincentivized or outright banned for this to be solved. Whenever people try to buy housing they will be outbid by companies that already have plenty of capital. This leads to an everlasting spiral where the rich people will always have more buying power and normal people are perpetually stuck paying absurd rents to those same rich people making them even richer.
But the vacancy rate is not shooting up; it’s steady/decreasing: https://cdn.statcdn.com/Infographic/images/normal/31454.jpeg
I can’t find any good data on corporate versus individual ownership.
Whenever people try to buy housing they will be outbid by companies that already have plenty of capital. This leads to an everlasting spiral where the rich people will always have more buying power and normal people are perpetually stuck paying absurd rents to those same rich people making them even richer.
How is this different when every house for rent is owned by an individual? They have the exact same incentive to charge high rents.
How is this different when every house for rent is owned by an individual?
Obviously there should be limits to individual land ownership too…
I mean, if every house for rent is owned by someone who only owns a small number of houses. They still want to charge as much rent as they can get away with. Always have.
Which brings us back to the issue of all the empty and unused housing which is used to artificially increase rent levels. There is actually more supply than demand, but the supply is being limited by the gatekeepers (corporate and individual landlords). With proper legislation this would improve quite a bit.
As far as I understand, in the USA large corporate ownership of housing is a recent phenomenon, whilst vacancy rates have been trending downwards. Example chart
What is “all the empty and unused housing”? Why are vacancy rates going down if this is pushing the price up?
I agree: if large companies bought up enough housing stock that they were able to let it lie empty to push prices up (and then actually did it) it could cause a big increase in prices/rents, and that would be a big problem. But we just do not see it in the data.
In contrast, we do see that, in the USA, home building has not kept pace with increases in population. This chart plots the ratio of population growth to housing growth. It was about 1.5 in the 70s, meaning that for every 3 people who were born or arrived in the US, 2 houses were started. Nowadays that ratio is around 2.5.
There is a MASSIVE OBVIOUS explanation for huge increases in rent/house prices.
I disagree
Oh damn, I didn’t realise
That’s okay, glad we cleared that up
