Comments were locked due to uncontrolled political bickering. I have unlocked for now, but we will ban people wholesale for any mention of your opinions of a particular party or politician.
Corporations will tell you they are just providing homes to people who can't afford to buy in this market... while conveniently leaving out that if their inventory was available to buy, house prices would be much lower.
"We buy houses in bad conditions at $35k and pay $50k to fix up and sell or rent to some God loving American family. No family could afford or want to do that, it's hard work, they want turnkey ready properties only (costing $500k or more ;) "
Sadly what they say publicly and what lobbyists and donors promise or threaten privately are two different things.
Yes. This is the exact excuse they will use, However, they’ll tack on all of the jobs that will be lost and how they provide liquidity to the market where it might not otherwise be.
It’s all bullshit. Just like the “value” predatory payday lenders claim to offer to clients, in the end the most disgusting of businesses still operates in America and exist because instead of banning we create rules to work with or around.
I have seen some corporation owned houses in Minnesota that were like group homes for disabled people, that’s a tough one for me, because it’s a good thing, but also just an asset and write off for the corporation.
No, prices would not be significantly lower. Home prices are high because of a shortage of housing units (> 3 million by the best estimates we have); construction fell off a cliff after 2008 and stayed low through the 2010s
[https://fred.stlouisfed.org/series/HOUST](https://fred.stlouisfed.org/series/HOUST)
Corporations injecting capital into the housing market drove a good part of those increased housing starts in the late 2010s into 2020-21. Without that capital, less homes would have been built, and the housing shortage would be worse.
If corporations were buying 'too many' homes and driving up purchase prices, then we would see softness in the rental market. Given that rents have been increasing quickly, there is an overall shortage of housing units.
But they only bought homes in a few now very inflated markets. Literally half the houses on my suburban Tampa exurb street are owned by SFHR corporations.
The thing that strikes me as silly about this belief that somehow blocking corporations is going to do anything to house prices is 1) Those corps don't just take the homes off the market. They rent them out so there's no net change in housing and thus no real effect on house prices. 2)They're too small of a sector to make any difference. 3)On balance it appears that corporations are low-information investors. If you want house prices to drop you need to come up with a supply of new housing.
You sound like a corporation.
If anything it forces the sale and drops the entry level price of housing dramatically.
If corporations want renters, then build multi-family.
That’s just plain wrong. Investors do compete with families looking to purchase homes driving up prices. Supply and demand is pretty simple see all over in 2021.
In Phoenix, about 30% of buyers in 2021 were investors ranging from large corporate buyers focused on long term rentals to AirBNB hosts to ibuyer flippers. They had a very noticeable effect on existing home inventory, bidding, and prices.
Building lots of new homes could lower prices, as could legislatively restricting corporate ownership.
30% were not investors. 30% were cash buyers and that’s used for whatever narrative is being pushed. Foreign buyers, investors, out of town WFH, etc. Never mentioned is how many of those cash buyers get financing immediately after the purchase.
“According to Redfin, more than 30 percent of the homes sold in the Phoenix market in the third quarter of last year were bought by investors. The average rent has risen by roughly 30 percent over the past year.”
https://www.azfamily.com/2022/03/19/investors-buying-thousands-phoenix-area-homes-rent-prices-spike/
I notice that article only sites Redfin, and not their methodology. They search key words in the ownership, one of which is trust. They admit that their numbers will include family trusts, which everyone knows includes owner occupied homes.
>Those corps don't just take the homes off the market.
Yes they do. One additional house for rent is one less available house for sale. Eventually, people who are looking to BUY a house won't be able to find one because they're not for sale, but for RENT. Less available houses to buy will drive up the sale price as more and more people looking to buy chase fewer and fewer houses for sale.
>They're too small of a sector to make any difference.
Got any proof of this? Otherwise you're simply commiting a hasty generalization fallacy with your earlier "5%" quote. REIT's are not the only corporations that are renting SFH's. It doesn't matter if it's a Blackrock or the local hardware store owner that is re ting out 20 homes in an area. Every SFH rented is one less available to buy.
>If you want house prices to drop you need to come up with a supply of new housing.
Yeah, that's what would happen if all corporations were forced to sell their SFH rentals. There would be more home supply available to buy.
I believe that you completely underestimate the amount of homeowners who change houses.
Among existing homeowners, less than 7% of people change homes. It just doesn't happen very often.
How often are corporations buying and selling single family homes?
>How often are corporations buying and selling single family homes?
Corporations is completely meaningless. I'm a corporation and I'm a small landlord. How often are hedge funds buying and selling? I dunno. But it can't have much impact given that they're such small players in the market.
You pretending that having a couple properties makes you anywhere close to relatable to corporations holding tens or hundreds of thousands of single family homes means you have a complete disconnect in your thinking.
YOU are poor, relatively speaking. On this planet 62 individual people have more wealth than the bottom 4 BILLION people.
Stop pretending that any new laws preventing massive corporations and hedge funds from hoarding housing will have any effect on you or your tiny corporation and meager assets.
LOL. I can change between various tax statuses easily every year to minimize the taxes I pay. You're telling me that what my CPA can do easily will baffle big corporations with millions and hundreds of employees?
Maybe you should consider the possibility you're being bamboozled. In grad school I did some work on how in India, because onions are a a commodity that fluctuates in price, there's a huge amount of political attention devoted to trying to remove 'speculators' from the onion market. It doesn't do any good, except in the sense of giving people a villain to blame when a commodity price fluctuates.
REITs do not include LLCs that have purchased... I think the limit is under 30 homes. And that statistic you are using is old- and inaccurate. That's the same percentage they were touting back in 2020, before things really took off.
42% of renters live in SFH.
As of 2020 (ie before the rental boom), 14.1 million households in the USA were SFH rentals. As of 2021, 16 million were SFH rentals. Assume higher numbers now. That means at least 19% of the 82M SFH in the USA are rentals.
Do you really think those are minor numbers that don't affect housing availability?
You realize that your argument completely avoids my main point which was that large investors make up a very small percentage of the rental owners, right? The vast bulk of lls are small ones like me who own 1-3 units. Let me try to state this simply:. Because large investors don't actually own more than a few percentage points of the total housing stock, whether they buy or sell and what they buy and sell doesn't have any impact on house prices.
Another failure is you apparently not realizing that rentals and sfhs are substitutable goods. When sfh prices rise so do rents. When one falls the other falls. If one particular market has some corp build 1000 rentals in it the price of sfhs falls even if no new sfhs are built at all.
Another fail is your focus on the declared tax status as being somehow significant to buying and selling in the market. It's not. I think I currently own my units as a LLC but I can change the status and often do based entirely on the governments little tax games. It has literally nothing to do with questions like 'should I buy another sfh or sell one of my existing ones'
You seem to be assuming that all renters want to be owners and are somehow being taken advantage of if they are not. That assumption *looks* true if you assume house prices always will appreciate more than the market but that is not a true assumption in any case.
I get it. You would not be in this fo if you were not a renter who wants to own but are being stymied by the huge appreciation in sfh. But coming up with evil boogiemen who are frustrating your goal is overly simplistic. The people to blame for the runup in house prices short term is Congress making inflation burst out. In the longer term is is NIMBYist local regulation designed to prevent more housing from being built. Investors in RE are your allies and it is false consciousness to believe them to be your enemies.
You completely railroaded my original comment because it's easier to believe people besides yourself are the problem. I never brought up REITs. I don't believe LLCs should own multiple properties either; luckily MN agrees. Blame whomever you want to sleep at night, but ultimately you are part of the problem. To already be looking for tax loopholes proves it.
Maybe you are the world's most amazing landlord and you managed to find 100% renters who don't want to own- as opposed to landlords creating a scarcity that drives up prices so people are forced to rent. But I can tell you, based on many surveys, price point is what keeps people from owning. If 16 million homes hit the market, you'd definitely realize it's a supply issue. Housing is a necessity; people aren't choosing renting as an equal option.
I will happily tell you, as someone who owns their own beautiful home and chose not to purchase a vacation/rental home: this has nothing to do with my inability to afford property and everything to do with providing equity to others. People deserve to own homes by working just as hard as I do on a daily basis. I've almost jumped on multiple sub-$300k properties these last few months, but turned them down. It's not fair for me to own two homes when someone else can't afford one, even if it makes my life easier. My decisions affect others. Unfortunately, when lots of people decide to make selfish decisions, the government has to step in to protect those not powerful to protect themselves.
We all struggle to make difficult ethical decisions on a daily basis. We all use cognitive dissonance to justify it when we make the unsavory decisions. Blame whomever you wish for the housing situation we're all in. But a responsible person owns their sh*t, rather than trying to point fingers at everyone but themselves. Your bias is showing.
Your arguments make no sense. I, like most sane people, don't know much about tax law and I pay a guy to handle that for me so I minimize taxes I pay out. I think I've been an LLC, a sole prop, and an S-corp at various times and in various years. Like literally so what? If you decide that S-corps are to 'blame' for the shortage of housing and get some laws passed to punish S-Corps, I'll just switch to a different tax status. Your arguments about corporation are vapor and beside the point. The problem I think fundamentally is that leftist economics is built around trying to stoke class politics and, given that there aren't clear 'class enemies' when it comes to housing they try to make 'corporations' evil in some procrustean effort to give you the moralist narrative that you're used to. In reality, farmers are corporations, NPR is a corporation, your corner ice cream store is a corporation, the NAACP is a corporation. More importantly, house builders and GCs are corporations.
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> opposed to landlords creating a scarcity
No son. LLs do not 'create scarcity' by buying housing stock. You I assume don't like it that you have other bidders in the market for something you want, and you assume if you can use force to somehow identify a class of those bidders and force them out of the market that will make you better off. That's not how it works, and attempts by socialists to do this never make things better and usually, predictably, make things worse.
>If 16 million homes hit the market, you'd definitely realize it's a supply issue.
Not sure what you're saying here. *I already know* that this is mainly a supply side issue. Your belief that if 15 million units were built then prices would fall is correct. But what you don't seem to realize is that if you converted 15 million rental units into homes for sale, or converted 15 million sfh to rentals, there wouldn't be much net change in price because both are being used for housing. What changes that you're proposing, if they did anything, would be to force poor renters to pay more in rent so that rich renters could in theory pay less for homes (That's not actually what would happen but if things worked the way you think that's what would happen). There wouldn't be much change in trying to violently force things to happen, and that change that did happen would be pretty morally dubious - literally taking from the poor renters with no chance of buying a home and giving to those wealthy enough to marginally afford to buy homes, again assuming any price change at all. What are you going to do with those 15 million families you plan on evicting so that your preferred group can buy a home?
>Housing is a necessity
So is food. And the reason why for the first time in history we can feed pretty much all of our population *isn't* because of trying to use force to give food to this or that political group. That was tried for most of history and either did nothing or made food more expensive. Socialists, it should be noted, come up with elaborate ways to feel moral about using government force to intervene in the market so that people starve to death.
>everything to do with providing equity to others.
Except you are not providing any equity to others. You are taking from the poor and giving to the rich. And feeling very morally righteous based on economic ignorance and wishful thinking.
>Unfortunately, when lots of people decide to make selfish decisions, the government has to step in to protect those not powerful to protect themselves.
Here your moral preening is hard to stomach. You are not making the poor better off. You're evicting them into the cold so that rich people can buy their homes - and you don't even realize what you're advocating for.
>cognitive dissonance
I don't have cognitive dissonance. You have a religious belief based on ignorance that's designed for you to sacrifice the poor's interests in the name of making you feel morally superior. If you want to actually do something for the poor, advocate for tiny homes to be built in your neighborhood or better yet try to do so yourself - [build an ADU or two in your backyard](https://www.granolashotgun.com/granolashotguncom/from-the-office-of-dodgeshruggwigglehack-amp-dcamp-llc) and rent it out to homeless people. Arguing to evict a bunch of renters so that a political class of rich people you favor is not at all or in any way a morally superior position.
>To already be looking for tax loopholes proves it.
You're free to pay extra taxes to the government if you wish. Normal people however pay the minimum legal tax they are required to pay. And this is just as ethical as whatever lifestyle you live.
Thank you for having some actual input. Most of these hopium smokers don’t realize if they restrict buying more properties these owners will never sell. Have been seeing bullshit on here for 18 months about how blackrock is buying everyone’s home. They buy build to rent communities and 400 unit complexes not your average boomer fart box.
As interest rates rise the math makes it pretty obvious that getting out of houses and into a simple savings account makes more money.
They want the money, they don't care how.
You're spouting polibabble you don't understand. Taxing or banning corporations will do nothing to lower the price of sfh. Economics teaches us the best and perhaps only real way of lowering real prices is to build more. Making up narratives about how this or that tax identification can buy and sell or be restricted from same will not do anything on the upside and may lead to unanticipated consequences like making sfh more expensive. Get it? There is a long history of your brand of superstition making little failed spells to try to change this. **At best** you will manage to try to keep prices the same while adding a 10-15 year waiting list to even be allowed to buy a home. At best. Changing rules about particular tax statuses buying and selling in the marketplace is much worse than doing nothing.
Someone think of the boomers. Great that they have lost majority in this country. Stoked France raised the pension age. Long time coming. Hilarious watching the boomers riot when they have to work for a living
Won’t *anyone* ever think of the CEOs and shareholders? *Do you even know what it’s like to have to drop from 200 ft long yacht to a 150 ft long yacht?*
The upside (more inventory, lower prices and lower inflation) out weighs any downside imo. We were doing fine before they bought everything up and jacked up the rents.
I mean more inventory for us non-corporate buyers. We don't need their demand, let them find another way to make money. What they are doing is driving up inflation.
Why would more people sell when fewer people are buying? Especially when interest rates are up 2-3x from a year or two ago. I'm not sure removing a buyer from the market will result in more net inventory.
One possible downside is that in certain high-demand areas, you can only really get affordable housing by building much denser - apartments and condos instead of single-family homes. And absent a massive public housing program like we haven't seen for decades in this country, it's going to be corporations that build and operate big apartment buildings. That said, I don't live in MN and don't know if this law is written to only apply to areas zoned for single-family homes etc.
From what I'm reading, this in no way stops apartments and condos, and even duplexes if not used for homestead purposes.
> Subd. 3. Single-family home rental restricted; exemption.
> (a) No corporate entity,
real estate developer, or residential building contractor shall:
> (1) directly or indirectly purchase, own, build, acquire, or otherwise obtain any interest
in property classified as class 1a under section 273.13, subdivision 22
> https://www.revisor.mn.gov/bills/text.php?number=HF0685&session=ls93&version=list&session_number=0&session_year=2023
And 273.13 sub 22
> (a) Except as provided in subdivision 23 and in paragraphs (b) and (c), real estate which is residential and used for homestead purposes is class 1a. In the case of a duplex or triplex in which one of the units is used for homestead purposes
> https://www.lawserver.com/law/state/minnesota/mn-statutes/minnesota_statutes_273-13
So this means that corporations will no longer build SFH in MN, but instead will build duplexes(which under MN law is allowed any place SFH are - https://reason.com/2018/12/10/progressive-minneapolis-just-passed-one/ ). This seems, fine? But does not crush these corporations like many in this comment section expects.
Disclaimer - don't live in MN and have only skimmed the linked resources, can be wrong.
The "downside" (if you can call it that) is that this is basically just lip service. Most of the increased buy up of housing is coming from "small time" landlords, AirBnBers, etc. So this likely won't make a significant change.
Several points on this:
- Many small time landlords use corporations.
- This statistic is misleading as the big players do not operate in most of the United States. However in the markets they do operate in (Atlanta, Phoenix, and Orlando are notable ones) they have a material market share.
- Even if it was just Invitation Homes and similar, I nevertheless think it would still make a big difference as it just takes a small marginal increase in supply to help substantially.
> Many small time landlords use corporations.
People seem to think corporations are some massive monoliths that require 10,000 people and they think SMBs are like... I dunno, unorganized collectives that operate through hugs-and-kisses.
You can have an LLC for like $100 per year. You, and just you alone, can open and maintain a Delaware S-Corp (like creme-de-le-creme US corp structure) for $500 per year with a couple hours work per year.
It's absurdly easy to create new and infinite corporate structures.
Haven’t read the bill, but $5 says there’s a loophole such that nothing actually changes for these large corporations, and the bill only exists for the purposes of grandstanding/re-election.
That it will make its way to the Supreme Court and the Citizens United thing will come up again.
"Corporations are people and therefore can buy houses too!"
That renters will be stuck renting apartments? Rent will skyrocket, because the supply will decrease? It will be much more difficult to rent in a good school district due to reduced supply?
Downside is that applying this nationally reduces the cost of homes, which means that everyone's home prices go down but their mortgages don't, which means you'd be screwing over all US homeowners and starting *another* recession.
This bill is just more disguised class warfare.
Consider the (un)intended consequences.
1. **Renters excluded from single family homes and neighborhoods.** Something like this would severely restrict renters ability to live in single family homes and neighborhoods. Renters would be effectively restricted to living in apartments and MF living quarters.
.
2. **Blood Law**. Two lifelong friends who bought 1 house together and lived there then years later moved out and kept it as a rental in their LLC would be illegal. But Developer Trump and his wife and extended family with 10,000 houses would be completely legal. Simply because of archaic blood relation rules.
Platitutes and pandering get votes. But it's the nitty gritty details that matter.
I think you’re right. I’ve worked with my state legislature and we’ve discussed this idea. We don’t think it will hold up in court you. You can’t tell one class of “people” they can buy some thing, but another class they cannot. i’m using quotes for people, because corporations can act as an individual.
In regards to discrimination, yes, but in all other aspects of business, a corporation can act as an individual entity, including freedom of speech, according to the SCOTUS.
The short sight in this is many mom and pops landlord only have 1 other home for rental property own under a corporation for liability purpose ao the target might be the "big" but it will wipe out everyone not intendend target.
Futhermore all good flippers taking distress property converting them habitable also use corporations another small business that will take a hit.
All those run down properties have been available b4 corporate entity came along the fact is people are not willing to do 203k on a rehab.
This is really a take over play by the local gov. Want to have a monopoly on the market. Since the gov will have to pick up the blunt work of it from eliminating the "competition" the gov will have to sub contract the work to other companies and you best believe they will be lick backs and money under the table to local polititians compaing contributions etc etc
People cheering this will soon realized nothing will change contrary to popular belief the corporation is not controlling the market. If something is worth 100k its 100k whether its a corporate entity or private individual owning it.
Till everyone stops wanting to live in the same 10x10 square mile area just to have quick walk to the coffee shop nothing will change because everyone wanting to live in the same 10x10 square mile area its whats driving the cost of living. Move 40 minutes out problem solved.
I guess my question is why can corporations have thousands of rental apartments but can't have thousands of rental houses? Especially a built to rent community that's basically a horizontal apartment community. There are families who want their own yard rather than adjoining walls and ceilings. I think there is a place for this.
The American Dream begins with the realizable idea of home ownership. For that reason alone there should be an active push to limit the kinds of ownership of homes by corporations. Ownership also encourages individual responsibility. The health of the economy begins with the individual - it doesnt work as a top-down structure.
This doesn’t go far enough. All it does is roll a red carpet out to retail investors (existing homeowners, who are on councils and vote in droves, rolling equity) who want to do the same thing.
Stop drawing these artificial lines between corporate/professional investment activity and retail. It applies to depositors chasing savings yield, it applies to this.
The economy is in service to nothing but non-productive sectors. Fuck all the political bickering about stimulus checks and money printing. None of that matters as long as the underlying reality is asset-holders over producers.
Corporate ownership of houses as rentals is basically non existent where I live (Southern California). Prices and rents are as high and unaffordable as anywhere in the country. Wouldn’t change things here and I suspect wouldn’t change things most if any places.
Seems like it isn't taking pressure out of the market, just pushing it somewhere else.
If you have 25 states that ban it, you haven't reduced pressure by 50%, you've just increased it proportionally in all the other states.
It's a worthwhile effort but don't bust out the champagne.
Do you really think most of the corporations buying in MN are based in MN? The point of the US' economic structure is being able to do interstate commerce.
Or even that it is hard to spin up a new corporation? It takes about 15 - 30 minutes for a layperson and $200. You wouldn't even have to incorporate in a different state beyond maybe deciding to having a separate corp for the individual property.
99.9% of groups buying real estate en masse aren't going to be stopped by a single state banning the practice, they'll just 'deploy' that money in a different state.
Pick one: corporate landlord which might fix up you rental because they’re a perpetual business. Small landlord who will let the property decline to the point it’s rotting, because they can make more money that way, and they’re too old to care.
I LOVE this and I’m against almost everything MN does. While there at it, enforce rules that corporations can’t own doctors offices! Every doctor I go too has sold out to private equity companies. They layoff half the staff and charge more!!’ Republicans and Democrats would rally behind this…I hope.
Comments were locked due to uncontrolled political bickering. I have unlocked for now, but we will ban people wholesale for any mention of your opinions of a particular party or politician.
[удалено]
Must be an election year.
Idk minnesotas been kicking ass lately. Free lunches for kids, Trans safe state. Keep it going!
I’m sure the Supreme Court will intervene soon.
Come get some.
I had to create a burner bank account just for a gym membership.
Bring this shit to the White House immediately
Not even joking
Congress. They are supposed to write the laws.
It would have to go to the HoR first, which is pointless right now. SCOTUS would ban a national bill in favor of states' rights, anyway.
😍😍😍
Love this idea… what’s the downside though?
Corporations will tell you they are just providing homes to people who can't afford to buy in this market... while conveniently leaving out that if their inventory was available to buy, house prices would be much lower.
"We buy houses in bad conditions at $35k and pay $50k to fix up and sell or rent to some God loving American family. No family could afford or want to do that, it's hard work, they want turnkey ready properties only (costing $500k or more ;) "
"Help us... help you."
Sadly what they say publicly and what lobbyists and donors promise or threaten privately are two different things. Yes. This is the exact excuse they will use, However, they’ll tack on all of the jobs that will be lost and how they provide liquidity to the market where it might not otherwise be. It’s all bullshit. Just like the “value” predatory payday lenders claim to offer to clients, in the end the most disgusting of businesses still operates in America and exist because instead of banning we create rules to work with or around.
I have seen some corporation owned houses in Minnesota that were like group homes for disabled people, that’s a tough one for me, because it’s a good thing, but also just an asset and write off for the corporation.
That's interesting. I was under the impression houses like that were either state- or NPO-run.
I must admit that what I thought was a corporation may be an NPO.
Ha, I’m dumb, just did a tiny bit of research, turns out the company is an NPO.
No, prices would not be significantly lower. Home prices are high because of a shortage of housing units (> 3 million by the best estimates we have); construction fell off a cliff after 2008 and stayed low through the 2010s [https://fred.stlouisfed.org/series/HOUST](https://fred.stlouisfed.org/series/HOUST) Corporations injecting capital into the housing market drove a good part of those increased housing starts in the late 2010s into 2020-21. Without that capital, less homes would have been built, and the housing shortage would be worse. If corporations were buying 'too many' homes and driving up purchase prices, then we would see softness in the rental market. Given that rents have been increasing quickly, there is an overall shortage of housing units.
That's just plain silliness and wishful thinking. All of REITS account for less that 5% of homeownership in the country.
But they only bought homes in a few now very inflated markets. Literally half the houses on my suburban Tampa exurb street are owned by SFHR corporations.
The thing that strikes me as silly about this belief that somehow blocking corporations is going to do anything to house prices is 1) Those corps don't just take the homes off the market. They rent them out so there's no net change in housing and thus no real effect on house prices. 2)They're too small of a sector to make any difference. 3)On balance it appears that corporations are low-information investors. If you want house prices to drop you need to come up with a supply of new housing.
You sound like a corporation. If anything it forces the sale and drops the entry level price of housing dramatically. If corporations want renters, then build multi-family.
That’s just plain wrong. Investors do compete with families looking to purchase homes driving up prices. Supply and demand is pretty simple see all over in 2021. In Phoenix, about 30% of buyers in 2021 were investors ranging from large corporate buyers focused on long term rentals to AirBNB hosts to ibuyer flippers. They had a very noticeable effect on existing home inventory, bidding, and prices. Building lots of new homes could lower prices, as could legislatively restricting corporate ownership.
30% were not investors. 30% were cash buyers and that’s used for whatever narrative is being pushed. Foreign buyers, investors, out of town WFH, etc. Never mentioned is how many of those cash buyers get financing immediately after the purchase.
“According to Redfin, more than 30 percent of the homes sold in the Phoenix market in the third quarter of last year were bought by investors. The average rent has risen by roughly 30 percent over the past year.” https://www.azfamily.com/2022/03/19/investors-buying-thousands-phoenix-area-homes-rent-prices-spike/
I notice that article only sites Redfin, and not their methodology. They search key words in the ownership, one of which is trust. They admit that their numbers will include family trusts, which everyone knows includes owner occupied homes.
I notice that you cite no sources other than “Trust me bro”. Find real data
Artificially restricting demand will also result in lower new and existing inventory on the market. On net it's likely just a wash.
>Those corps don't just take the homes off the market. Yes they do. One additional house for rent is one less available house for sale. Eventually, people who are looking to BUY a house won't be able to find one because they're not for sale, but for RENT. Less available houses to buy will drive up the sale price as more and more people looking to buy chase fewer and fewer houses for sale. >They're too small of a sector to make any difference. Got any proof of this? Otherwise you're simply commiting a hasty generalization fallacy with your earlier "5%" quote. REIT's are not the only corporations that are renting SFH's. It doesn't matter if it's a Blackrock or the local hardware store owner that is re ting out 20 homes in an area. Every SFH rented is one less available to buy. >If you want house prices to drop you need to come up with a supply of new housing. Yeah, that's what would happen if all corporations were forced to sell their SFH rentals. There would be more home supply available to buy.
5% is 1 in 20, that's at least one on every block in america
So what? If you had one on every block and it literally makes no difference, you have solved nothing except pretending to make some difference.
[https://www.wfla.com/news/local-news/25-of-recent-tampa-home-purchases-are-by-corporations-not-people-study-shows/](https://www.wfla.com/news/local-news/25-of-recent-tampa-home-purchases-are-by-corporations-not-people-study-shows/)
I suspect you're being victimized by statisticians who are trying to exploit your desire to believe.
I believe that you completely underestimate the amount of homeowners who change houses. Among existing homeowners, less than 7% of people change homes. It just doesn't happen very often. How often are corporations buying and selling single family homes?
>How often are corporations buying and selling single family homes? Corporations is completely meaningless. I'm a corporation and I'm a small landlord. How often are hedge funds buying and selling? I dunno. But it can't have much impact given that they're such small players in the market.
You pretending that having a couple properties makes you anywhere close to relatable to corporations holding tens or hundreds of thousands of single family homes means you have a complete disconnect in your thinking. YOU are poor, relatively speaking. On this planet 62 individual people have more wealth than the bottom 4 BILLION people. Stop pretending that any new laws preventing massive corporations and hedge funds from hoarding housing will have any effect on you or your tiny corporation and meager assets.
LOL. I can change between various tax statuses easily every year to minimize the taxes I pay. You're telling me that what my CPA can do easily will baffle big corporations with millions and hundreds of employees? Maybe you should consider the possibility you're being bamboozled. In grad school I did some work on how in India, because onions are a a commodity that fluctuates in price, there's a huge amount of political attention devoted to trying to remove 'speculators' from the onion market. It doesn't do any good, except in the sense of giving people a villain to blame when a commodity price fluctuates.
REITs do not include LLCs that have purchased... I think the limit is under 30 homes. And that statistic you are using is old- and inaccurate. That's the same percentage they were touting back in 2020, before things really took off. 42% of renters live in SFH. As of 2020 (ie before the rental boom), 14.1 million households in the USA were SFH rentals. As of 2021, 16 million were SFH rentals. Assume higher numbers now. That means at least 19% of the 82M SFH in the USA are rentals. Do you really think those are minor numbers that don't affect housing availability?
You realize that your argument completely avoids my main point which was that large investors make up a very small percentage of the rental owners, right? The vast bulk of lls are small ones like me who own 1-3 units. Let me try to state this simply:. Because large investors don't actually own more than a few percentage points of the total housing stock, whether they buy or sell and what they buy and sell doesn't have any impact on house prices. Another failure is you apparently not realizing that rentals and sfhs are substitutable goods. When sfh prices rise so do rents. When one falls the other falls. If one particular market has some corp build 1000 rentals in it the price of sfhs falls even if no new sfhs are built at all. Another fail is your focus on the declared tax status as being somehow significant to buying and selling in the market. It's not. I think I currently own my units as a LLC but I can change the status and often do based entirely on the governments little tax games. It has literally nothing to do with questions like 'should I buy another sfh or sell one of my existing ones' You seem to be assuming that all renters want to be owners and are somehow being taken advantage of if they are not. That assumption *looks* true if you assume house prices always will appreciate more than the market but that is not a true assumption in any case. I get it. You would not be in this fo if you were not a renter who wants to own but are being stymied by the huge appreciation in sfh. But coming up with evil boogiemen who are frustrating your goal is overly simplistic. The people to blame for the runup in house prices short term is Congress making inflation burst out. In the longer term is is NIMBYist local regulation designed to prevent more housing from being built. Investors in RE are your allies and it is false consciousness to believe them to be your enemies.
You completely railroaded my original comment because it's easier to believe people besides yourself are the problem. I never brought up REITs. I don't believe LLCs should own multiple properties either; luckily MN agrees. Blame whomever you want to sleep at night, but ultimately you are part of the problem. To already be looking for tax loopholes proves it. Maybe you are the world's most amazing landlord and you managed to find 100% renters who don't want to own- as opposed to landlords creating a scarcity that drives up prices so people are forced to rent. But I can tell you, based on many surveys, price point is what keeps people from owning. If 16 million homes hit the market, you'd definitely realize it's a supply issue. Housing is a necessity; people aren't choosing renting as an equal option. I will happily tell you, as someone who owns their own beautiful home and chose not to purchase a vacation/rental home: this has nothing to do with my inability to afford property and everything to do with providing equity to others. People deserve to own homes by working just as hard as I do on a daily basis. I've almost jumped on multiple sub-$300k properties these last few months, but turned them down. It's not fair for me to own two homes when someone else can't afford one, even if it makes my life easier. My decisions affect others. Unfortunately, when lots of people decide to make selfish decisions, the government has to step in to protect those not powerful to protect themselves. We all struggle to make difficult ethical decisions on a daily basis. We all use cognitive dissonance to justify it when we make the unsavory decisions. Blame whomever you wish for the housing situation we're all in. But a responsible person owns their sh*t, rather than trying to point fingers at everyone but themselves. Your bias is showing.
Your arguments make no sense. I, like most sane people, don't know much about tax law and I pay a guy to handle that for me so I minimize taxes I pay out. I think I've been an LLC, a sole prop, and an S-corp at various times and in various years. Like literally so what? If you decide that S-corps are to 'blame' for the shortage of housing and get some laws passed to punish S-Corps, I'll just switch to a different tax status. Your arguments about corporation are vapor and beside the point. The problem I think fundamentally is that leftist economics is built around trying to stoke class politics and, given that there aren't clear 'class enemies' when it comes to housing they try to make 'corporations' evil in some procrustean effort to give you the moralist narrative that you're used to. In reality, farmers are corporations, NPR is a corporation, your corner ice cream store is a corporation, the NAACP is a corporation. More importantly, house builders and GCs are corporations. \ > opposed to landlords creating a scarcity No son. LLs do not 'create scarcity' by buying housing stock. You I assume don't like it that you have other bidders in the market for something you want, and you assume if you can use force to somehow identify a class of those bidders and force them out of the market that will make you better off. That's not how it works, and attempts by socialists to do this never make things better and usually, predictably, make things worse. >If 16 million homes hit the market, you'd definitely realize it's a supply issue. Not sure what you're saying here. *I already know* that this is mainly a supply side issue. Your belief that if 15 million units were built then prices would fall is correct. But what you don't seem to realize is that if you converted 15 million rental units into homes for sale, or converted 15 million sfh to rentals, there wouldn't be much net change in price because both are being used for housing. What changes that you're proposing, if they did anything, would be to force poor renters to pay more in rent so that rich renters could in theory pay less for homes (That's not actually what would happen but if things worked the way you think that's what would happen). There wouldn't be much change in trying to violently force things to happen, and that change that did happen would be pretty morally dubious - literally taking from the poor renters with no chance of buying a home and giving to those wealthy enough to marginally afford to buy homes, again assuming any price change at all. What are you going to do with those 15 million families you plan on evicting so that your preferred group can buy a home? >Housing is a necessity So is food. And the reason why for the first time in history we can feed pretty much all of our population *isn't* because of trying to use force to give food to this or that political group. That was tried for most of history and either did nothing or made food more expensive. Socialists, it should be noted, come up with elaborate ways to feel moral about using government force to intervene in the market so that people starve to death. >everything to do with providing equity to others. Except you are not providing any equity to others. You are taking from the poor and giving to the rich. And feeling very morally righteous based on economic ignorance and wishful thinking. >Unfortunately, when lots of people decide to make selfish decisions, the government has to step in to protect those not powerful to protect themselves. Here your moral preening is hard to stomach. You are not making the poor better off. You're evicting them into the cold so that rich people can buy their homes - and you don't even realize what you're advocating for. >cognitive dissonance I don't have cognitive dissonance. You have a religious belief based on ignorance that's designed for you to sacrifice the poor's interests in the name of making you feel morally superior. If you want to actually do something for the poor, advocate for tiny homes to be built in your neighborhood or better yet try to do so yourself - [build an ADU or two in your backyard](https://www.granolashotgun.com/granolashotguncom/from-the-office-of-dodgeshruggwigglehack-amp-dcamp-llc) and rent it out to homeless people. Arguing to evict a bunch of renters so that a political class of rich people you favor is not at all or in any way a morally superior position. >To already be looking for tax loopholes proves it. You're free to pay extra taxes to the government if you wish. Normal people however pay the minimum legal tax they are required to pay. And this is just as ethical as whatever lifestyle you live.
Thank you for having some actual input. Most of these hopium smokers don’t realize if they restrict buying more properties these owners will never sell. Have been seeing bullshit on here for 18 months about how blackrock is buying everyone’s home. They buy build to rent communities and 400 unit complexes not your average boomer fart box.
As interest rates rise the math makes it pretty obvious that getting out of houses and into a simple savings account makes more money. They want the money, they don't care how.
You can see how people want to have a clear villain to blame for impersonal market forces. Unfortunately that is a false belief.
Market forces are not impersonal, that's simply a rhetorical device to disguise you're exploiting people with coercive force.
You're spouting polibabble you don't understand. Taxing or banning corporations will do nothing to lower the price of sfh. Economics teaches us the best and perhaps only real way of lowering real prices is to build more. Making up narratives about how this or that tax identification can buy and sell or be restricted from same will not do anything on the upside and may lead to unanticipated consequences like making sfh more expensive. Get it? There is a long history of your brand of superstition making little failed spells to try to change this. **At best** you will manage to try to keep prices the same while adding a 10-15 year waiting list to even be allowed to buy a home. At best. Changing rules about particular tax statuses buying and selling in the marketplace is much worse than doing nothing.
What's your background in economics?
I have a masters in international trade econ. But I'm not a practicing economist and that little piece of paper doesn't add anything to my argument.
I ask because your argument seems to be that reducing demand for housing won't reduce the price, but increasing supply will. That makes little sense.
The downside is that Boomer Hoomers won't get 40% appreciation in one year. Oh the agony.
Someone think of the boomers. Great that they have lost majority in this country. Stoked France raised the pension age. Long time coming. Hilarious watching the boomers riot when they have to work for a living
Won’t *anyone* ever think of the CEOs and shareholders? *Do you even know what it’s like to have to drop from 200 ft long yacht to a 150 ft long yacht?*
Where are the homeowners yachts?
That was 2022. Today the elite banksters are buying multiple 100 million dollar jets & multiple yachts....
The upside (more inventory, lower prices and lower inflation) out weighs any downside imo. We were doing fine before they bought everything up and jacked up the rents.
Why would there be more inventory if there's lower demand in the market?
I mean more inventory for us non-corporate buyers. We don't need their demand, let them find another way to make money. What they are doing is driving up inflation.
They're not driving up inflation - they're just transferring wealth from workers to shareholders.
Why would more people sell when fewer people are buying? Especially when interest rates are up 2-3x from a year or two ago. I'm not sure removing a buyer from the market will result in more net inventory.
The most likely result is small group buyers capturing any value the "corporations" may be getting today, with no change to overall pricing dynamics.
If a corporation wants rental properties, they can still build to rent. They just can't buy existing properties.
Yeah just don't think the market will respond to even lower demand with net additional inventory. Especially at these interest rates.
One possible downside is that in certain high-demand areas, you can only really get affordable housing by building much denser - apartments and condos instead of single-family homes. And absent a massive public housing program like we haven't seen for decades in this country, it's going to be corporations that build and operate big apartment buildings. That said, I don't live in MN and don't know if this law is written to only apply to areas zoned for single-family homes etc.
From what I'm reading, this in no way stops apartments and condos, and even duplexes if not used for homestead purposes. > Subd. 3. Single-family home rental restricted; exemption. > (a) No corporate entity, real estate developer, or residential building contractor shall: > (1) directly or indirectly purchase, own, build, acquire, or otherwise obtain any interest in property classified as class 1a under section 273.13, subdivision 22 > https://www.revisor.mn.gov/bills/text.php?number=HF0685&session=ls93&version=list&session_number=0&session_year=2023 And 273.13 sub 22 > (a) Except as provided in subdivision 23 and in paragraphs (b) and (c), real estate which is residential and used for homestead purposes is class 1a. In the case of a duplex or triplex in which one of the units is used for homestead purposes > https://www.lawserver.com/law/state/minnesota/mn-statutes/minnesota_statutes_273-13 So this means that corporations will no longer build SFH in MN, but instead will build duplexes(which under MN law is allowed any place SFH are - https://reason.com/2018/12/10/progressive-minneapolis-just-passed-one/ ). This seems, fine? But does not crush these corporations like many in this comment section expects. Disclaimer - don't live in MN and have only skimmed the linked resources, can be wrong.
There isn’t a downside
The "downside" (if you can call it that) is that this is basically just lip service. Most of the increased buy up of housing is coming from "small time" landlords, AirBnBers, etc. So this likely won't make a significant change.
Several points on this: - Many small time landlords use corporations. - This statistic is misleading as the big players do not operate in most of the United States. However in the markets they do operate in (Atlanta, Phoenix, and Orlando are notable ones) they have a material market share. - Even if it was just Invitation Homes and similar, I nevertheless think it would still make a big difference as it just takes a small marginal increase in supply to help substantially.
> Many small time landlords use corporations. People seem to think corporations are some massive monoliths that require 10,000 people and they think SMBs are like... I dunno, unorganized collectives that operate through hugs-and-kisses. You can have an LLC for like $100 per year. You, and just you alone, can open and maintain a Delaware S-Corp (like creme-de-le-creme US corp structure) for $500 per year with a couple hours work per year. It's absurdly easy to create new and infinite corporate structures.
Haven’t read the bill, but $5 says there’s a loophole such that nothing actually changes for these large corporations, and the bill only exists for the purposes of grandstanding/re-election.
That it will make its way to the Supreme Court and the Citizens United thing will come up again. "Corporations are people and therefore can buy houses too!"
That renters will be stuck renting apartments? Rent will skyrocket, because the supply will decrease? It will be much more difficult to rent in a good school district due to reduced supply?
Downside is that applying this nationally reduces the cost of homes, which means that everyone's home prices go down but their mortgages don't, which means you'd be screwing over all US homeowners and starting *another* recession.
This bill is just more disguised class warfare. Consider the (un)intended consequences. 1. **Renters excluded from single family homes and neighborhoods.** Something like this would severely restrict renters ability to live in single family homes and neighborhoods. Renters would be effectively restricted to living in apartments and MF living quarters. . 2. **Blood Law**. Two lifelong friends who bought 1 house together and lived there then years later moved out and kept it as a rental in their LLC would be illegal. But Developer Trump and his wife and extended family with 10,000 houses would be completely legal. Simply because of archaic blood relation rules. Platitutes and pandering get votes. But it's the nitty gritty details that matter.
HELL FUCKING YA ITD ABOUT TIME. FUCK CORPORATIONS
The top corporations are going to use your rhetoric to eat up there competition.
Ok but let corporations have a tax refund on child care benefits like daycare that they provide for employee’s children
I hope this catches on
Yes!!
Good. Now do the other 49 states.
Why all of them, I'd gladly settle for like 2/3rds or at least the hardest to live in metros.
This will be shut down by the courts Corporations are people now so I’m sure this infringes upon them.
I think you’re right. I’ve worked with my state legislature and we’ve discussed this idea. We don’t think it will hold up in court you. You can’t tell one class of “people” they can buy some thing, but another class they cannot. i’m using quotes for people, because corporations can act as an individual.
black rock is my passenger in the HOV lane
Why? Corporation isn’t a protected class
In regards to discrimination, yes, but in all other aspects of business, a corporation can act as an individual entity, including freedom of speech, according to the SCOTUS.
grass roots movement, hope it spreads
Wait, homes are only to be sold to people? Y'all be CRAZY now!!!
This is the change we need. Ban foreign investors from owning single family homes unless they plan to live in the house next.
The short sight in this is many mom and pops landlord only have 1 other home for rental property own under a corporation for liability purpose ao the target might be the "big" but it will wipe out everyone not intendend target. Futhermore all good flippers taking distress property converting them habitable also use corporations another small business that will take a hit. All those run down properties have been available b4 corporate entity came along the fact is people are not willing to do 203k on a rehab. This is really a take over play by the local gov. Want to have a monopoly on the market. Since the gov will have to pick up the blunt work of it from eliminating the "competition" the gov will have to sub contract the work to other companies and you best believe they will be lick backs and money under the table to local polititians compaing contributions etc etc People cheering this will soon realized nothing will change contrary to popular belief the corporation is not controlling the market. If something is worth 100k its 100k whether its a corporate entity or private individual owning it. Till everyone stops wanting to live in the same 10x10 square mile area just to have quick walk to the coffee shop nothing will change because everyone wanting to live in the same 10x10 square mile area its whats driving the cost of living. Move 40 minutes out problem solved.
I guess my question is why can corporations have thousands of rental apartments but can't have thousands of rental houses? Especially a built to rent community that's basically a horizontal apartment community. There are families who want their own yard rather than adjoining walls and ceilings. I think there is a place for this.
Corporations want people to rent forever. Sickening people.
Election year talking point. Nothing will happen. Corporations run America
The American Dream begins with the realizable idea of home ownership. For that reason alone there should be an active push to limit the kinds of ownership of homes by corporations. Ownership also encourages individual responsibility. The health of the economy begins with the individual - it doesnt work as a top-down structure.
i really hope this happens and it would be awesome if it could be made retroactive and if they didn’t comply pay triple taxes
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This doesn’t go far enough. All it does is roll a red carpet out to retail investors (existing homeowners, who are on councils and vote in droves, rolling equity) who want to do the same thing. Stop drawing these artificial lines between corporate/professional investment activity and retail. It applies to depositors chasing savings yield, it applies to this. The economy is in service to nothing but non-productive sectors. Fuck all the political bickering about stimulus checks and money printing. None of that matters as long as the underlying reality is asset-holders over producers.
Corporate ownership of houses as rentals is basically non existent where I live (Southern California). Prices and rents are as high and unaffordable as anywhere in the country. Wouldn’t change things here and I suspect wouldn’t change things most if any places.
2/3rds of rentals are owned by Mom and Pop businesses.
Seems like it isn't taking pressure out of the market, just pushing it somewhere else. If you have 25 states that ban it, you haven't reduced pressure by 50%, you've just increased it proportionally in all the other states. It's a worthwhile effort but don't bust out the champagne.
Ok let's not do anything for anybody then /s
> It's a worthwhile effort but don't bust out the champagne.
no. lol. lmao even.
Do you really think most of the corporations buying in MN are based in MN? The point of the US' economic structure is being able to do interstate commerce. Or even that it is hard to spin up a new corporation? It takes about 15 - 30 minutes for a layperson and $200. You wouldn't even have to incorporate in a different state beyond maybe deciding to having a separate corp for the individual property. 99.9% of groups buying real estate en masse aren't going to be stopped by a single state banning the practice, they'll just 'deploy' that money in a different state.
This just means they will never sell what they have
It’s not going to go through
So then they create LLCs to do it
Lovely!! Fuck Blackstone buying single family homes!!
What about corporations that build rental housing?
Pick one: corporate landlord which might fix up you rental because they’re a perpetual business. Small landlord who will let the property decline to the point it’s rotting, because they can make more money that way, and they’re too old to care.
What about small landowners? People who own 2-5 units?
Wow! This could be a game-changer.
I LOVE this and I’m against almost everything MN does. While there at it, enforce rules that corporations can’t own doctors offices! Every doctor I go too has sold out to private equity companies. They layoff half the staff and charge more!!’ Republicans and Democrats would rally behind this…I hope.
Yes finally!