[grafmax]

An unregulated supply will still offer promising investment opportunities to those with enough money to buy them up. Look at crypto or private equity. These markets are lightly regulated. But prices are bid up by big money. Unfortunately just dumping regulation is unlikely to fix housing.

[tptacek]

People say this but then never draw the rest of the owl. It costs money, substantial money, to hold on to a house. As soon as you propose that you're going to close that gap by renting the house out, you're competing in the market with everybody else letting out houses, and supply-and-demand kicks in.

Can you explain the mechanism by which accumulating vacant houses would provide the same reward structure as crypto speculation?

[grafmax]

Professional property managers can scale the cost of ownership in a way individual owners can’t.

Besides that speculators can also withhold supply, artificially inflating prices. 2008 occurred due to speculation, independent of NIMBY regulation.

As for crypto, housing can actually be more profitable than crypto since investors see rentier income not just speculative appreciation.

Ultimately, this isn't just a supply-and-demand problem in an idealized market. It's a resource allocation issue where investors with significant capital can hoard housing, driving up costs, while many people struggle with homelessness. Simply greasing the market with deregulation won't solve this fundamental imbalance.

[tptacek]

I'm sure they can do lots of things homeowners can't, but they can't defy gravity. Again: I'm looking for an explanation for how investors could come out ahead amassing houses they keep vacant in the face of increasing supply.

[grafmax]

A portion of the investor class may divest through deregulation as the character of the housing market changes. But the fundamental issue is the presence of the investor class itself. Markets don’t redistribute wealth equitably; they concentrate it. This will continue even if markets acquire new character through deregulation. At best deregulation can change the membership of the investor class. It does not eliminate the investor class.

In other words you are looking at it from a supply side but ignoring the wealth distribution of buyers. Wealth has further concentrated among the richest buyers over the past few years, while the poorest have grown poor, leading to higher prices for everyone. That’s the cause, not NIMBYism, which has been around forever. It’s a wealth redistribution issue not a deregulation issue.

[tptacek]

You're not answering the question I'm asking. I'm not looking for a treatise. I'm just asking how investors keeping vacant supply off the market could make money in the face of increasing supply. They have to pay to hold the houses. They're not earning income from the houses (they're vacant). Supply of the houses is increasing. Fill in the "???" before "profit".

[grafmax]

If investors keep houses off the market that artificially reduces supply. All they need is for the increased prices to outweigh any price decline that comes from increased supply. This can happen with or without vacancies for example by having pricing power in the rental market.

House vacancies aren’t my central argument however - they are a symptom of the wealth distribution problem causing our housing crisis.

[breakyerself]

I'd never argue for an unregulated market. Just that we stop regulating them to benefit the few over the many.

[grafmax]

Unfortunately deregulating them will do much the same. BlackRock promotes YIMBY because that will allow it to expand its rental property portfolio, effectively generating new cashflows from the poor and middle class to wealthy asset owners. In fact deregulation/regulation is a false choice. Cashflow should go in the opposite direction by raises taxing on the wealthy (including real estate investments) and building public housing.

[breakyerself]

I completely agree we need to tax the rich and build public housing, but we do also need to allow for greater density in metropolitan areas. We have to build more housing and if we aren't increasing density then we're creating sprawl.

Sprawl chews up more and more farmland and forest, lengthens commutes, increases congestion. There's enough subdivisions and single family neighborhoods already.