[sgpl]

While this behaviour by corporations (eg: Zillow buying and flipping, or Blackstone buying and renting out houses [0]) is inflating housing prices across the country, I don't see them stopping anytime soon even in the face of temporary losses (in the case of Zillow here). As a corporation they can withstand this, triage the situation internally and get smarter about flipping in the future.

Personally I feel that this only makes housing more unaffordable in the long run for most people and only policy level intervention by the government is going to stem such actions in the future.

Obviously real estate/housing is seen as a good investment because it's one of the few asset classes available to average/retail investors where they can access leverage in a massive way to build up a portfolio of housing assets over time so if any legislation about this is even considered, it'll probably face a lot of opposition even from people it won't possibly affect (because that's what happens these days + FUD).

I guess I don't really see any meaningful changes in the near future that'll make housing affordable for the masses (at least in some of the most desirable real estate markets, can't talk about rural markets as I don't know enough). For more context, I live in Toronto and unless I settle for owning a condo or housing in the suburbs, owning a house in the city is pretty much a no go for me and most of my peers.

[0] https://www.wsj.com/articles/blackstone-bets-6-billion-on-bu...

[ajsnigrutin]

I'm generally against taxes on stuff that is not vastly limited (buildable area in a good location is very limited compared to other stuff), but progressive tax here would solve a lot of problems (eg, 0% on your first property and primary residence, 1% yearly on your second one, 2% on third, ...). This would basically make owning more than two or three properties very expensive, and owning hundreds or thousands of properties impossible.

[xputer]

The Netherlands just implemented an 8% property transfer tax for investors in the housing market. This seems to have discouraged a lot of investors from buying up homes in the past year compared to previous years. Still there are massive shortages on the housing market though.

[jdross]

How do you suggest multi-family housing or single family suburban infill housing gets built affordably?

[ajsnigrutin]

You can never go below cost... that's a nonissue. But we have shitty houses, worth $100k in labour and materials going for millions+, due to sheer unavailability of housing.

Housing is something people need to live, not an investment option.

Also, USA has a problem with building large apartment buildings, where even overcrowded places like san francisco still build single family houses, instead of 5, 10+ story apartment buildings everywhere.

[jdross]

These are zoning and policy issues, not tax or incentive issues.

[JKCalhoun]

Progressive tax applies only to single-family homes.

[ajsnigrutin]

It doesn't have to. You can still build an apartment highrise, and sell the apartments and make profit... and the owners, if it's their only realestate, still get taxed at minimum rate.

[rsj_hn]

It doesn't work like that. Please see an accountant to advise you on this, because if this is really what you think -- e.g. that the profits of developers or even owner-developers are not taxed -- then you are in for a world of hurt if you get audited. Only the unit you are living in is allotted special cap gains privileges. Not other units, even if those units are built on property that used to be a SFH. Tax treatment for developing residential real estate is a complex beast.

[ajsnigrutin]

I'm not an american.

here you can build a multi apartment building, sell each apartment as a separate unit to different people, and the common property (hallways, grass around the building, etc.) is divided between the apartment owners (and they pay whatever amount for taking care of that). After all the apartments are sold, the investment firm owes nothing there anymore. Of course they pay VAT, their profits are taxed, etc, when selling the apartments, but after that, they have nothing to do with that property anymore.

What I was talking about was basic property tax, which should be higher for each property (house, apartment,...) you own. This would make owning many properties very expensive, and force people to sell.

[rahimnathwani]

"Personally I feel that this only makes housing more unaffordable in the long run for most people"

In the long run, housing prices are determined by supply and demand. Supply (housing stock) is increased when prices are high (as developers can make money). And supply stays flat when prices are low (but developers don't destroy the existing homes).

If this short term trading by Zillow etc. is causing market prices to be high at the moment, you'd expect that to increase long term supply. So future prices would be lower than they would be without Zillow.

[unreal37]

I've seen Zillow in interviews claim that they are actually physically improving the homes before selling. And they sell for basically what they bought for it intentionally, so they're not actually inflating prices.

They're improving homes, helping sellers get out of homes faster, and not raising the prices.

This isn't like those home flippers on TV who buy a house for $70K, put $20K into it, and sell it for $200K. The story you're commenting on says they sell 90%+ for less than they paid.

This isn't a simple "Zillow buying homes must be bad". More analysis required.

[space_fountain]

I think the danger is when they assume that making money will only require some simple tweaks, happy to sell at a loss in the meantime and then at some point in the future realize that actually the whole things was a capital fueled house of cards. I think one could argue that something like this has happened with Uber and Lyft (though perhaps covid + inflation has more to do with those price increases)