And yet 20% of the market being captured by those who already have a home, while so many go without one, indicates a shortcoming in our society’s ability to distribute resources from those who don’t need them to those who do.
Renting a home out isn't "capturing" the house. Rental housing is a desirable product. Lots of people don't want to own, be locked into a particular house for years to offset transaction costs, and to own all the downside and maintenance risk of the property.
Consider soliciting the opinion of more renters. Plenty of us would happily purchase if prices were more reasonable. Renting out sfh should be rare, imho. The current situation needs many remedies and kicking out sfh as investment vehicles is a very low hanging fruit.
Kicking out sfh as investment vehicles makes it harder to sell homes. This a) increases the risk to home buyers and b) makes owning inventory more expensive. Thats likely to make increasing supply untenable.
This low hanging “remedy” is likely to exacerbate the supply issue, not help it.
Demand would still outstrip supply, so by what mechanism would selling be difficult or risky? It would modestly reduce prices, making it less expensive for all regular home owners. That's a win for everyone but (sfh) investors.
Home builders are “investors” in sfh. So out of the gate you’ve got a problem with making the regulations more complicated to navigate. For the people creating supply.
Some of those homebuilders build because they can rent homes if they can’t be sold. Others build because they have large investors to sell to if necessary. All of them build with their financial models account for carry time, as carry costs are extremely important to their bottom line.
If the average carry time goes up even a little bit (and it will because investors close faster) that can make whole developments untenable.
> So out of the gate you’ve got a problem with making the regulations more complicated to navigate.
Assuming the policy to reduce non-primary home ownership is tax based, carve out tax exceptions for home builders. Personally I would carve out exceptions for home flippers too, but could see that being more contentious. Either way though, this part of the problem would be, IMHO, trivial to solve.
> If the average carry time goes up even a little bit (and it will because investors close faster) that can make whole developments untenable. Others build because they have large investors to sell to if necessary.
I think that's fair. But conversely carry time is also high because prices are high, and investors drive up prices; builders also do this to an extent, by e.g. buying down points to avoid lowering prices, to keep the perceived price elevated. I have no illusions this is a simple problem to solve. The right question here is probably figuring out whether the overall supply going up by X increased rate because of investors will be worth the cost of the total homeownership rate being controlled by a shrinking proportion of the population (I would guess no).
My personal proposed solution here would be to kick out investors (tax policy), and also directly incentivize home builders selling to first time owners (via tax credits, comparable to e.g. EV tax credits). The latter would be quite expensive, but if the overall homeownership rate increases and home prices drop, it would likely be popular.
Spoken like someone who never lost their shirt on a house after discovering they had to move a couple years after buying. No, I'm pretty confident: lots of renters are renters on purpose. Ownership is not categorically better than renting.
To spell it out, they seem to be completely ignoring that those rental properties are not vacant. Instead, they house people, just like they would if they were owner occupied.
20% of market capture does not cause homelessness, but there are many very valid arguments that treating housing as an investment isn't a stairway to ending homelessness.
Turbo Greed (acquire all the things) and lack of monopoly protection and enforcement.
If we're going to tackle homeless, we have to remove systems that incentivize the collection of homes as a financial asset. Make more homes by one person or entity less desirable or simply undoable.