[weard_beard]

Because the financial inefficiencies produced by individual owners currently take the place of trillions of dollars of subsidized housing that would be paid by the government to institutional investors to build and maintain housing affordable to teachers, retail workers, police, and firemen that institutional investors DON'T WANT TO OWN MAINTAIN OR BUILD.

I am an individual property investor. I'm a landlord of a single 2-flat up-down duplex. I don't make as much money as I COULD make if I had endlessly deep pockets. It was sold to me by another individual real estate investor who owned and maintained it for 25 years.

Do you know why he sold it? He wanted to buy a luxury property that he would make more profit on and require less maintenance.

Without individual investors with limited pools of money investing in lower margin properties, simply hoping to augment a retirement account or 401k...

Affordable housing would cease to exist.

[runnerup]

> Affordable housing would cease to exist.

Because the guy you bought it from would have torn down the valuable house and then the kit would be left empty forever?

That makes no sense. The unit would exist either way.

[weard_beard]

Institutions used to invest in 2 and 4 unit affordable housing. They’ve spent the last 30 years selling it. To suckers like me.

Now they want it back? They don’t want to own it. They want to flip it.

Rents (just to pay the mortgage) go up. The profit is in institutions pocket. The ongoing maintenance sits where it always has. Individual landlords.

And yes, if an institutional owner can't make 250k profit with a kitchen remodel and a couple buckets of slate grey exterior paint, they do tear it down. And replace it with a luxury unit at twice the local real estate price. It sits empty until the area gentrifies. Or they leave a vacant dirt lot for 10 years. See Chicago.

[nicoburns]

Why would governments subsidise institutional investors rather than simply buying and renting out the housing themselves? (which could be done at cost) I am sympathetic to the idea that individual landlords are better than large profit making businesses though.

[weard_beard]

Because governments don't want to be landlords. They don't want to have to orchestrate painting, drywall, gutters, electrical, plumbing, evictions, improvements, picking out tile, providing services that tenants grouped together with limited income might need like domestic abuse resolution and support, job training, food box distribution.

Institutions don't want to be in this business either. My wife works for one of the largest ones in the midwest, and trust me, they value the land and developments much more than the rents. Government subsidy is AN incentive to maintain the above services at the MINIMUM viable and provable state to get their handout, but they are NOT landlords.

Like McDonalds isn't a food company.

They are real estate developers.

And the experience of living in a 2-flat or a 4-flat is VERY different from a unit in a 500 person building.

The ONLY way institutions would be willing to provide affordable housing would be a constant squeeze on tenants and government and every lever possible to try to make the margins meet that of a luxury apartment. It never will.

And middle to low income families WILL SUFFER. A lot.

Read this, but replace "burgers" with "rent": https://1851franchise.com/why-is-mcdonalds-considered-a-real...

When given the option of direct cash payments to folks who need it, or giving that cash to an ineffectual corrupt business interest to fail to solve the problem in perpetuity... In America we always choose the later. Especially government.

[nicoburns]

> Because governments don't want to be landlords.

Plenty of governments do want to be landlords. If yours doesn't then perhaps you should consider electing a different one.

> They don't want to have to orchestrate painting, drywall, gutters, electrical, plumbing, evictions, improvements, picking out tile.

Why not? Governments ultimately want to serve there electorate. If there electorate wants decent quality affordable housing, then why would a government not want to provide that. Conceptually it's no different to the government running say a police force.

> providing services that tenants grouped together with limited income might need like domestic abuse resolution and support, job training, food box distribution.

Then don't group together tenants with limited income! You don't necessarily even need to group together government owned/run properties at all. There's no reason why a regular house on a regular street couldn't be government owned/run, mixed in with others that are privately owned.

Why are you assuming that government properties or tenants of government properties would be any different to privately owned properties or tenants of private landlords? That's only the case when the government only provides housing as a last resort, but if the government took a wider role in housing many of those problem would go away as the tenants would just be the general population.

[weard_beard]

> Then don't group together tenants with limited income! You don't necessarily even need to group together government owned/run properties at all. There's no reason why a regular house on a regular street couldn't be government owned/run, mixed in with others that are privately owned.

This model was tried in the 70's by institutional affordable housing real estate developers. IMHO this is a great model. Refugees and middle class engineers living side by side sharing schools and pot lucks. It is now anathema to the affordable housing model. I don't know why, but where large affordable housing portfolios had 100s of such properties in their portfolio, they now have 5. Don't know why.

[lotsofpulp]

>Institutions don't want to be in this business either. My wife works for one of the largest ones in the midwest, and trust me, they value the land and developments much more than the rents.

The rent is what determines the value of the land and developments.

>Government subsidy is AN incentive to maintain the above services at the MINIMUM viable and provable state to get their handout, but they are NOT landlords.

This subsidy can directly be given to people as cash. No need for a middleman to take a cut.