[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.

[tptacek]

You didn't answer my question, you defined it away. Obviously, the premise of investors driving housing costs up is that they're artificially reducing supply. Allowing new housing construction increases supply. The question: assume steadily increasing supply --- how are investors making money on this scheme?

It's fine if you just don't have an answer. But then my point is: nobody seems to have an answer about how this is supposed to work.

[grafmax]

Pretty sure I answered your question. As long as scarcity effects outpace price declines investors are incentivized to retain vacancies, and it’s not just vacancies but pricing control over rent. The real housing market isn’t effectively modeled by your simplistic abstraction. If you look at a YIMBY darling like Austin, for example, investor owned housing has actually grown, as well as homelessness, despite a modest decline in median price.

[tptacek]

Your rebuttal here is a market in which prices declined.

You're clearly trying to route around the question and answer some broader question I didn't ask about how the overall housing market works. I'm not interested. I asked: how can investors make money on this? Your answer is: they don't; they lose money, but I guess do it anyways in order to twirl their mustaches.

[grafmax]

The investor class increased as did homelessness in Austin. Not only that but mortgage payments on the median priced home have increased in Austin, comparing 2018-2019 . Houses are even less affordable.

Investors can make money on price fluctuations and rent. And supply increases are neither immediate nor endless, despite what a simplistic model would hold.

Sadly we need structural solutions not superficial answers to the housing crisis.

[tptacek]

No, if they make money on rent, they're supplying housing and competing with all the other landlords.