[jeffbee]

"They will just buy them and rent them out" you have described investment. Funding the construction of houses using your capital and then letting them out to people without as much capital is how housing gets created. Just let it work! Let a guy build a house and rent it to someone.

[cloverich]

Its also how wealth is transferred up. Because the investor pays gains rates, can do like for like transactions, etc, and effectively grows their wealth faster than the non investor. This means non investors need to continuously compete with investors but where investors are capturing an ever larger share of the wealth.

Eventually if supply keeps up that will change, and longer still the wealth may trickle back down. But imho it would be faster to focus on avoiding the concentration in the first place through SFH as investments, via simple tax policy that discourages mom and pop investors from purchasing extra homes.

[jonplackett]

Thanks for explaining this better than my rant.

[jonplackett]

You know it is also possible to build houses people buy and then live in, right?

House prices are so high because some people own too many of them. A home shouldn’t be an investment strategy

[jeffbee]

The consequences of your policy are that people without a million dollars are sleeping in tents.

[danaris]

...How do you figure that?

No one's trying that policy. It's certainly not what's led us to this point. Building is nowhere near fast enough to keep up with demand, especially in the areas with lots of homeless people, and especially in the affordable price ranges.

Seems to me the policy that has the consequences you describe is, in fact, the policy you described in the GP.

Reminds me of all the posts I've seen with photos of things happening in America—a country which is, quite famously, under capitalism—with captions saying "this is what socialism gets you!"

[jeffbee]

Just think through the consequences of your policy proposal. What you are saying is you will outlaw investment in a second house for rent. The result will be that only the people who can afford to buy a house can live in one. Everyone else, which is half of American households, has to live somewhere else. You haven't specified where that other place is, but I guess it would have to be larger apartment buildings, built and operated by larger organizations (corporations, or at best cooperatives).

I rent my house from the woman who lives next door. I could not afford to buy this house. I have a nice garden and my kids go to great schools. Your policy means that this arrangement is forbidden. My family is not allowed to access this life because I am not rich enough. That is a bad policy.