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Felton's avatar

The concern I have is that it creates institutional incentives to manipulate the housing market. In countries like Canada, New Zealand, Australia and the UK, fortunes have been made by limiting housing development and finding ways to profit from the shortage of housing and the corresponding rising prices. These institutional investors now have a stake in a housing shortage, their interest in this market suggest they are they are betting on it.

America is the only English speaking country to largely avoid this trend, I am sure these institutional investors are very aware of that.

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Charlotte's avatar

Thanks for this!

I think there's a good chunk of the populist left/right that's just incoherent on housing. It typically goes like this:

1. Homeownership is good, because it's the only way for middle class families to build wealth.

2. Blackrock buying homes is bad, because it raises housing prices, which makes it harder for middle class families to buy homes.

3. Therefore, to help middle class families, we should prevent Blackrock from buying homes, lowering prices.

BUT YOU CAN'T BUILD WEALTH IF HOUSING PRICES DROP!

Personally, I suspect a lot of this angst is coming from people that also want to be landlords. But as a renter, I don't care if I rent from an institution or from a small landlord. At least the institution doesn't act like I'm taking food away from his family when I request some repairs.

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