What Happened When This City Banned Housing Investors

There’s a theory of housing that says the problem we’re facing is fundamentally not a lack of homes or restrictions on building and density. Instead, we face a scourge of investors who buy homes not to live in but to rent out, taking away options from aspiring home buyers and forcing them into renting. As one comment on our channel argued, “the investors are the prime cause of this housing crisis let's stop the gaslighting and verbal gymnastics”. What we really need, then, is to encourage homeownership and clamp down on investors who outbid first-time-homebuyers. “Take out the demand from investors and you have more than enough supply. Which drives costs down.”, according to another commenter on one of our videos. Well, clamping down on investors is exactly what Rotterdam in the Netherlands tried to do - here’s how it turned out.
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References:
First study on Rotterdam: frw.studentthe...
Second study on Rotterdam: papers.ssrn.co...
News coverage: www.dutchnews....
City of Rotterdam policy page: www.rotterdam....

[@wakaflocka37]

As a homeowner, I can confidently say that making money from simply owning a home is a scam. I bought my first home two years ago. We found a cheap one, and it was a financial stretch for us. Now it's worth 35% more than when we bought it, and I didn't do anything significant to improve it. It puts you in a weird position where you're cheering something that makes society worse. If I were trying to buy this same house at the price it's at now, I wouldn't have been able to afford it. And it isn't even like I really benefit from the home price increase, because I'll have to buy my next home at the inflated price too

[@TESkyrimizer]

That's an excellent point. The whole thing is a ladder pull. It incentivizes hoarding as many homes as possible and then selling and exiting the market and moving somewhere else. Helps no one except the investor themself.

[@raftermanhoward1883]

While you're mostly right, for someone who doesn't yet own a home like me, it means I have to step in somewhere, coming from nothing, because if I don't and just wait, I'm still going to have to pay that extra 35%, without putting in extra equity myself.

[@Maskies]

Unless moving out of state or to a rural area, it's an illusion that your house is worth more if it's your primary residence. The next house you buy will also be just as expensive.

[@ReasonableRadio]

You said it. The person who owns their own home might be able to leave their home city/market altogether to make a profit which is always the case anyway. Scarcity only benefits those who own multiple homes and can actually sell them off as assets without having to worry about their own lifestyle being destroyed, and use that cash to just buy a different asset class, or for whatever other luxury they want. This scarcity pushes up rent too, so even if you wanted to move to renting and "retire" on your housing market earnings, you'd have to downsize to a much less luxurious space in order to live comfortably, and if you live too long you might end up losing even that reduced quality of life!

[@lajthabalazs]

Not only that, but as your home appreciates, real estate taxes get higher. The appreciating housing market benefits those who are downsizing. So there's an internal logic in the system: when you're young, you pay more and more for your next house as your family grows. You put money into the system. Then when you're old, you use your house as your pention, selling the four bedroom double garage to move into a townhouse, then an apartment, then a retirement home. More expensive housing is also the only way Realtors can get a raise. They can't possibly sell more houses. They can't raise their percentage. They can't sell bigger houses. So the only option is to sell the same houses for more money.

[@guitarazn90210]

I think most housing problems can be alleviated by a land value tax, as opposed to property tax, and relaxed zoning laws. There should also be laws mandating the quality of housing to prevent slums. Local governments shouldn't be afraid of oversupplying the housing market just to drive down cost.

[@beback_]

The taxing issue you mentioned is brought up a lot in Chicago.

[@adh615]

It's very nice to see the ideas of Georgist like the LVT pop up in more and more discussions around topics like this one. Let's keep spreading the word👍

[@bobuhnitza]

It's frustrating seeing all the parking lots in downtown LA which is what the existing property tax (as opposed to land value tax) incentivizes.

[@eugenetswong]

@@bobuhnitzaI'm slow. How does a land tax incentivize the creation of a parking lot.

[@bobuhnitza]

@@eugenetswong Property tax is paid as a % of assessed property value which is assessed value = land value + development value. Land value in hot property markets goes up every year; the key is that the assessed land value doesn't go up as fast as what it can actually sell for on the market. Generally speaking, cities are underestimating the true land value and overweighting the value of what's built on the land. So long as the market land value increases faster than the assessed land value, it makes financial sense to hold onto your land and do nothing. You have capital gains from property value, consistent income in parking fees, and low property taxes (low land value + 20 year old asphalt). Imagine owning the Saleforce Tower in SF. Remote work has led to a partially vacant building resulting in significantly decreased revenue, and the property taxes are sky high because the assessed property value is in the billions for a skyscraper as opposed to millions of dollars for a vacant lot.

[@aidanknight]

I definitely agree with the end of this video: treating housing as an investment is harming many communities all across the continent and we need stronger tenant unions. I would rather see more co-op housing being built simply because it's one of the only forms of housing that disincentivizes investment behaviour around a good that is a basic human necessity. I'm pretty meh on real estate investors being good "because they rent out their extra homes". Homeownership is overrated fr.

[@eugenetswong]

Speaking of co-op housing, I visited 1 or 2 of them, and they had a real nice village vibe to them. It was very pedestrian friendly.

[@fallenshallrise]

Co-op housing is a good hack but it's massively under supplied and no new co-ops seem to be coming online. It's one of those things that we could develop in the past but now seems impossible. Every co-op here has such a long waiting list that they have closed applications.

[@Idiot-q2j]

Co-op housing may seem like a decent workaround, but ultimately when all the maintenance work involved is so heavily taxed that literally no one wants to deal with the burden of doing it, nothing's going to improve until that core problem is addressed. Land Value Tax could compensate, just sayin'.

[@catairlines-peciarda]

Unions don't work, it was tried in Eastern block in communism.

[@sarah345]

I would never buy a co-op. From what I can tell, It’s basically paying to own something you have no control over. And then there’s the fees. It’s like a condo board or an HOA on steroids. Then if you want out, they can tank the value of your unit because the co-op controls who you can sell to. Better to rent, or buy something you actually control.

[@FullLengthInterstates]

Many small landlords have the expectation that their undiversified and 500% leveraged yolo will be a "risk free" investment. They then take this attitude to local politics to entrench their position, far more aggressively than any other small business owner would have a right to.

[@rlclark50]

Yea, but everyone decries the big house rental corp. cause it's "faceless". Meanwhile greedy mom-and-pop have kids to put through private uni and don't want to have to downgrade to the Audi A5 from the S5 - curses that they should have to work a job!

[@coinbowl]

@@rlclark50 Ohhhhhhh smalllll businesssss ownerssss

[@Wrolffe]

It is easy and fun to blame landlords, but they are greatly outnumbered by normal homeowners who have the exact same economic incentives to block construction and capital "R" Rent seek.

[@Corew1n]

@@Wrolffe Regular homeowners have different incentives that aren't even economic ones. They want to live in a community that invests in the care of their homes and one they feel safe in. Renting generally has a knock on effect of bringing in people who are not invested in the community long term. They have no skin in the game. Neighborhoods that shift from primarily owned residences to primarily rentals see a massive drop in home upkeep, which leads to more home owners moving out because their new renting neighbors don't give a shit. Large investment companies are the direct beneficiaries of those home owners escaping their neighborhood rapidly turning into a rental ghetto because they can keep most of their investments in one place for easy management.

[@echoxu1406]

@@Corew1nyour hatred towards renters are astonishing.

[@DorathyJoy]

For newbies, be aware that this is a grossly oversimplified scenario. For one thing, you can't get a mortgage on an investment property without at least 25% down payment. Two, it's easy to see comps for house purchase prices, but it takes a lot of research to understand the comps on rent prices. The trick is to find a place where renting is more expensive than buying, but those places are less common because of this very type of scenario. Three, you have to remember that rent number he's using is supposed to be net income, not gross. So you have to think about costs for taxes, insurance, maintenance and vacancy when you're researching investments. All that said, real estate investing is a good tool for wealth accumulation. But it isn't foolproof.

[@tribe5569]

let me guess, you used ChatGPT to generate this fake conversation?

[@coke8077]

Very easy to screw yourself financially if you don’t know what you’re doing.

[@lordsleepyhead]

Another policy that Dutch cities adopt is to force quotas on developments to be, for instance, 40% buy to live in, 30% free market rent and 30% social housing. This generally works well enough, BUT... there have to be enough development opportunities to actually build enough housing otherwise the social housing is immediately occupied by people on the waiting list and the houses that are for sale will go for exhorbitantly high prices.

[@michieldame701]

The problem with these plans that in reality as soon as the project hits a snag, it is often the social housing that gets dropped, because that is the least lucrative part for the developer.

[@Jacksparrow4986]

But the idea is sound: réserve about 30% for social housing everywhere and enjoy less problems.

[@paxundpeace9970]

Those and similar quotas when well adjusted can work very well. In Hamburg all developments with more then 12 new units do require 25% of those units the be affordable low income units with strict criteria impossed by they city.

[@secrets.295]

So basically it doesn't work well is what you are trying to say. The more the government tries to intervene in the housing market the worse it will become

[@lordsleepyhead]

@@secrets.295 Not really. We've had a decade of deregulation now and things have gotten exponentially worse. I'd rather have regulation that works somewhat than no regulation at all.

[@calaphos]

The whole zero sum thinking on housing is such a toxic and dangerous thing. Instead of fixing the problem by providing more supply just shifting ownerships around to whoever is better politically established will always result in excluding more marginalized groups.

[@PKM1010]

I am willing to be proven wrong on this, but I do think investors contribute to the high prices. In this scenario, it was a few neighborhoods, investors could simply invest in the surrounding ones which still keeps the prices up in the regulated ones by sheer proximity. Of course, I don't think it's the only piece of the puzzle, but housing has become a speculative investment like stocks.

[@davidfouts1939]

I feel that, as with so many factors in our housing crisis, far too many people conflate symptoms with the illness itself. The whole reason why investors are jumping into the housing market is because they see the value created by scarcity. Deep-pocketed investors make popular villains, so when they get blamed, it's easy for lots of people to accept that without thinking too much about it.

[@machtmann2881]

Corporate investors would never bother to get into private housing if it wasn't such a tantalizing financial opportunity, which is what we've turned it into instead of a roof over our heads. It's relatively illiquid, subject to local conditions you have very little control over, and bad tenants or temporary guests are a risk. Why on earth would a corporation ever deal with that over stocks if stocks had a better return over housing?

[@patrickcameron2950]

It’s also an attractive story because it means all we have to do to solve the housing crisis is pass a few laws, and housing will instantly become affordable. Increasing supply is a much more complicated and slower fix.

[@richardlinares6314]

Yeah, much better to vilify people that want to own a home and paint them all as nimbys putting their property value above the poor and homeless. Even in their flawed 1 year study, housing prices were flat and rent increases were about the same as inflation.

[@rlclark50]

In this case, the symptom exacerbates the underlying condition. Rental owners do not want policies that would increase supply, either of rentals nor owner-occupied housing. They lobby against up-zoning, tax law, etc. that would help increase supply.

[@LucasSilva-sc5vk]

Also people are holding property because currency and other assets are very volatile and housing is more stable and gaining value in most places.

[@NAUM1]

Absolutely agree even as a homeowner. There is no reason I should get an appreciation of value for doing nothing, especially since the mortgage basically makes it into a rent controlled situation.

[@SoybeanAK]

Considering the value to society before your own benefit? Good on ya!

[@jamesm6082]

The only reason why there is appreciation is due to inflation due to kleptocratic governments. As they print more money to fill their pockets the value of the currency declines and therefore requiring more dollars to purchase that same property. That is the invisible tax.

[@colormedubious4747]

Do you not understand how money works? Locking your hard-earned capital in an illiquid asset isn't "doing nothing." There is an element of risk and an opportunity cost. That's what you're getting a return on investment FOR!

[@planestraveler]

I thought I was a rare kind of homeowner for wanting the exact same thing.

[@5467nick]

​@@colormedubious4747 That is "doing nothing" and it should pay exactly that, nothing. That you are taking a risk means nothing to anyone else unless that risk involves doing work that might pay out, like taking a loan to start a business which might be successful. A house is a depreciating asset like a car, only worse. It always needs maintenance, you pay interest for decades that often adds up to more than the principal (sometimes several times over), and you have to pay property taxes that tend to go up with time as well. The only way you can realistically make a profit is by charging someone else for those costs (landlord renting it out) or by flipping before the taxes and interest payments catch up with you after you renovate a cheap house. In both cases, you are doing actual work to attempt to add value. If what you said was true, houses would (averaged over long periods of time) constantly go up in value until eventually almost nobody who didn't already own one could ever afford to buy one. One major problem with things people can't afford to buy is that you can't sell them. Things you can't sell are worthless.

[@ricardoludwig4787]

The problem this probes isn't that investors specifically are a problem, but with the whole idea of home ownership as a form of wealth building, which is a lot harder to deal with

[@Roxor128]

A Land Value Tax would help. If the land your house is built on is worth $200k, then a 1%LVT would mean you'd have to pay $2k per year to hold onto it. Probably worthwhile if you're living there or renting it out, but absolutely not if it's just sitting there empty.

[@darthutah6649]

@@Roxor128 you said it

[@WillieFungo]

No, the problem is with housing supply and building zoning. Why can't people just accept the facts.

[@paxundpeace9970]

Properties are goods/assets.

[@thedamnedatheist]

You ignored a couple of factors, investors who buy properties but leave them empty, just counting on increasing value to turn a profit, and the amount of rental properties used solely for Air b&b & other short term rentals.

[@ironhammer4095]

Yes, I'm curious as to how "owner-occupied" is defined by the gov't. How is it determined that the owner actually "occupies" the home?

[@BotchFrivarg]

Note speaking from a Dutch experience here, and can say that the private rental market here is extremely exploitative, this often drives people who might want to prefer renting to buy houses because it is that much cheaper. So from this perspective investors buying up a large amount of the market available housing is a problem, but just replacing them with home-owners isn't the solution (as seen in this video), since even with how extremely expensive the private sector rent is (can go well up to 4~5x what the same property would cost in mortgage), it is still often more accessible than getting a mortgage (this is due to the laws around mortgages that can be fairly strict especially for first timers, and on top you need to find a house for sale in the location you want) What these investors really need to be replaced with it is public sector rentals, sadly currently public sector rentals are currently seen as something only for the poorest of poor, and thus have a lot means-testing going on. Expanding the public sector greatly, and removing means testing, should allow for easier access to housing (and hopefully in time also do away with the stigma public sector rentals currently have)

[@rlclark50]

I agree, it seems in the US we have this issue in our urban centers. We an increase in all 3 types of housing supply at the same time: non-investor inflated ownership property (whether it be detached or multi-family units), dense and affordable market rate rental units (i.e. reasonable small units for people who choose not to own), and income-qualified affordable publicly operated units for both small and large households that need it. The mom-and-pop rental landlord arguably cause the most issues impeded these types of markets because they 1) lobby for policies that favor their rental ownership conditions (no add'l tax for non-owner occupied units, rent control etc.) and 2) they take up the most amount of land since they typically can only afford and own a single family unit.

[@BotchFrivarg]

@@nunyabidness3075 housing is like healthcare and has little to no elasticity, you can't really solve that with markets. Over my lifetime policies have only been removed, and the housing market only made "freer" but it still is a complete CF. Not everything can or should be fixed with "markets" we tried it doesn't work

[@AlRoderick]

First thing, if econ 101 was all you needed to understand the housing market, there would be no econ 201 or 301 or master's degrees. Those later higher level classes do teach you some things you need to understand nuance and complexities. Secondly, if your econ 101 class taught you that capitalism would be perfectly equitable and meritocratic only this nasty old government didn't interfere, then you were taught econ 101 by a hack.

[@der94alex]

Just like Vienna once did or maybe a more Singapore approach

[@paulpujeter6340]

@@nunyabidness3075How is it "non-market" when the market created conditions for wealthy to be able to lobby the government? How is that unrelated to the markets?

[@michaelhaney1357]

Surprised you didn’t call out the 4th category; buying housing for use as short term rentals like AirBNB, etc. This has got to be the worst for housing availability.

[@Roxor128]

Cities could bring in a special tax for them. Finding out which properties are being used for such uses would be pretty easy: have a computer in the council offices scrape all the short-term rental sites for addresses in the city, then cross-reference the results with the ownership records and send tax bills to the owners. Set the tax rate high enough and you'd render the practice unprofitable, putting that housing back on the market.

[@tw8464]

​@@Roxor128 exactly cities ought to tax the hell out of AirBnB garbage 🗑

[@_human_1946]

AirBnb also promotes tourism and increases wages for many workers, though. It's hard to research which effect dominates.

[@tw8464]

Airbnb is taking too high a percentage of housing in many areas. Airbnb doesn't increase wages because Airbnb is big part of driving the rents and housing prices into the stratosphere, due to no limits speculation. Airbnb can even make it impossible to find housing in the town you work. There are now many tourist towns where the wage working people and locals who are the ones who actively keep everything running on a daily basis are forced to sleep in tgeir cars or in poverty or homeless because Airbnb and other wealthy speculators have taken all the housing. Airbnb decreases wages because more of the wages must be spent on sky high rents or longer commuting. Better to build hotels for tourists. Apples to apples, hotels employ far more people directly. And more importantly, hotels don't decrease wages by driving up rents.

[@aworldanonymous]

I think my main critique of investors in housing isn't so much the buying up of housing stock as it is the keeping of vacant housing stock as a speculative asset. I think it's fine if private investors buy and rent out housing, it's when they hold onto units and don't rent them out, treating them as an asset on an investment portfolio rather than somewhere that someone could live is the problem.

[@57thorns]

Also when they buy whole city blocks and use them for short term rental on sites like airbnb. The don't need to have full time occupancy to make money, but they can't afford to have neighbours.

[@tw8464]

Exactly. Why is this never discussed in the media? I'm for sure they're not renting out apartments in my city to keep the rents jacked up rather than lowering the rents to actually rent it out. They make more renting out 5 units at exorbitant rents than reducing rent overall to get all occupied. The city does nothing to track any of this. Another problem is landlords have unlimited power to just jack up rent any time they happen to feel like it, without actually doing any improvements. Again the city does nothing to hold accountable. But if renter misses one payment then the government is all over you sheriff at your doorstep evicting

[@tw8464]

Landlords that hold vacant stock vacant units ought to be taxed on every vacant unit.

[@seneca983]

"the keeping of vacant housing stock" Is there really that much of that? I'm rather skeptical.

[@lynn858]

@@seneca983 I don't know numbers. I'd like to. And let me be clear, this is a possible explanation of what could be happening, not a thing I support. But, I can suggest that if a unit is built with more costly finishes and amenities than can attract local tenants at the price point the investors had planned on (possibly because of an unforeseen market change that meant the market analysis they did 5 years ago is no longer accurate) it may be better to leave the rental units vacant until/unless a tenant is willing to pay the asking rent - than to charge what renters can afford, for a unit with overly high end finishes. Having tenants in there will end up requiring maintenance, and cause wear and tear. Having less wealthy tenants in a building that was initially marketed as "upscale" or "luxury" is going to upset the existing tenants, and those tenants are more financially desirable - and can probably afford to leave. If it is a building, of dedicated rental units, the options to legally remove a tenant who makes their rent payments, are limited. Even more so if the unit is subject to rent control during a tenancy (which in Ontario means it existed as a rental unit prior to Nov 2018). If the unit isn't subject to rent control, it's easier, you just jack the rent every 365 days. Thus, lowering the rent to a price the market will bear, may be less financially advisable, than leaving (many) units vacant for a year or two hoping for tenants who can afford what you're asking. That said... were I a speculator, and I could somehow convince a financial institution to provide the loan for my proposed project to build units which are safe, energy efficient, ecologically sustainable, and used durable finishes, and provided less trendy/swanky but highly adaptable amenities... and could be offered for lower rents, including some well below market rate, focusing on long term safety and good function over "image".... I very much would.

[@louisjov]

One aspect of housing investments that has always disturbed me is the market of house flipping. Yes, some flippers buy near teardowns and fix them up, which is cool, but many others buy dated, but perfectly suitable single family homes that otherwise could have been bought by someone as a starter house, or as a longer term fixer upper rather than an outright flip

[@ukestjohn]

And yet, the very concept of "starter house" implies the eventual flipping into a "bigger is better" house, doesn't it?

[@louisjov]

@@ukestjohn yep, but I wouldn't put something living in a house and fixing it up over 5 years in the same category as someone who buys a house for the sole purpose of remodeling it and selling it without even living in it

[@57thorns]

​@@ukestjohn As a student you live in a one bedroom apartment, or even a dorm with shared kitchen and other areas. After school and with a bit more money, you want to live by yourself, perhaps with a decent living room and/or home office (aka computer gaming room) plus a bedroom (depending on how affordable it is). Then you meet someone and start a family, and suddenly you need space for for or five people. 20 to 30 years later the kids are gone and it is time to downsize. But you can't really downsize because your lived-in apartment or house is so much cheaper than anything decent.

[@seneca983]

@@louisjov "but many others buy dated, but perfectly suitable single family homes that otherwise could have been bought by someone as a starter house" If they're buying to *flip* then the house should be soon back on the market. I don't see why this would be harmful.

[@louisjov]

@@seneca983 because they are usually selling it very fixed up, and at a considerably higher price than what it otherwise would have been. If the house was already a wreck, okay that's not a huge deal. Honestly, good on them for bringing this house back to life! But if it's a clean totally functional house that's just really dated, as many flips are as well, someone buying that with cash over a family just starting out, just so they can sell it 12 months later $200k more expensive....yeah that doesn't seem like a good thing for society imo. That young family could have bought it and fixed it up over time, but instead someone who already had half a million dollars in liquid assets is buying it to just make more money, while that young family is stuck renting because they were outbid.

[@Hyperventilacion]

The hard truth is that the root of the problem is commodification of housing itself, and then its financialization. Commodification transformed houses into a product, and tied it to capital, instead society could've considered housing as a right, or a sort of infrastructure, a essential part to make society function. When it financialized, it just got tied to the nasty dynamics of international finance, which amplified the problems cause by financialization. Canada's case may be the most extreme, now the financialzied housing market is embedded into every single portion of our economy, along with car and fossil dependency, these locked-in system are metastasizing and fixing it, if possible, will be extremely hard, especially as decision makers are benefiting from this statu quo.

[@paxundpeace9970]

Now how could we decommodify housing. Make it like universal health insurance or what?

[@Hyperventilacion]

@@paxundpeace9970 I think there are a diversity of solutions, and they need to be tailored at the local level as there won't be a single solution that will work everywhere. I think a part of would be severely restricting multiple home ownership, heavily taxing and regulating speculation. Municipalities and states have to build and provide housing to some degree, non-comercial development and coops have to become the norm. I think the peace of mind of owning your place is needed for many so there will still be ownership and a market, albeit a reduced one.

[@thajemm4371]

Preach !!!! Americans need to do a 180 if homelessness is ever going to go away. Commodification of housing is a disease

[@seneca983]

@@Hyperventilacion "The hard truth is that the root of the problem is commodification of housing itself" I strongly disagree. Letting markets handle the allocation of housing is efficient.

[@Hyperventilacion]

@@seneca983 It doesn't matter if you strongly disagree mate, it's a fact. The invisible hand and the efficiency of the market are magical thinking. The market can, and will be, manipulated, monopolized, and consolidated. I live in a gentrifying neighbourhood, two buildings down mine there is a 5 apartment building empty, the owner has many properties, and left this one empty to artificially increase the value of rents around, I know of at least 5 buildings like this in my vicinity, downtown a friend lived alone in a 20-unit building because of the same reason, 19 empty units, and she got renovicted. How is that efficient? Here we're discussing real things, real policy, and things that work, gtfo with your magical thinking, this is the real world, and it's complex.

[@fernbedek6302]

People buying a house to they live in but primarily see as an investment are still part of the ‘investor’ class to me. (Also, what we need to push is developers building rentals instead of selling units and then people renting those… that’s an added layer of wallets to have to pad.)

[@knarf_on_a_bike]

I hate to say it, but as long as housing is a commodity, we're going to have a shortage of affordable accommodation. The problem is systemic, and it won't go away until we tear down the system and replace it with something more humane and equitable. If that sounds radical and revolutionary, it is!

[@OhTheUrbanity]

It's not radical so much as vague! I don't know how to judge your proposal because I don't know what actual policies you want.

[@stud6414]

Or you can move to north Korea

[@chefnyc]

Renters are good. They will not go to city council meetings and block new housing developments. But homeowners, even they only own one, will have the incentive to block more housing. So homeownership seems to be the problem. Also forcing people to buy a house decreases labor mobility across different geographic locations.

[@jorper2526]

This is an insane comment. Thank god you aren't writing policy.

[@mdhindley]

Sure but, like you said. They used 16 of the 70+ regions within a single city. So that's not what we want. We want speculative buyers out of the market. This is a rigged option that you are explaining as a standard. The Rotterdam 'results' are not results. Thanks for nothing, I'll move on front this channel now. As a renter, this video was horseshit.

[@Corew1n]

You are mentally broken. Renters are bad because they have zero commitment to where they are living beyond paying X amount and receiving a place to put their stuff / sleep. Homeowners have a stake in the place they live because they've invested their future in it. Renters are literally anti-stability, they want all the amenities of living somewhere, with none of the effort or skin in the game.

[@theultimatereductionist7592]

Well said, chefnyc! Logic!

[@theultimatereductionist7592]

Why? A political position cannot be "insane" just because YOU don't like it. "Insane" is believing a false declarative statement (statements about reality, not the way things should be)@@jorper2526

[@jamalgibson8139]

I gotta say, I really appreciate you guys beating the drum on this issue. I tend to fall into the, "let government build rentals" camp, but mostly because I want to discourage slum lords, or people who exploit their tenants. I think government should be more involved in the housing market in general, whether that's by building housing for homeowners, or by building housing for rentals, but you guys certainly raise excellent points that investors are not really the problem, and it's really the entire housing market in the first place that is the problem. Thanks again for being so informative and staying on top of this topic!

[@rileynicholson2322]

Let's not pretend governments can't be slumlords. Public housing, when done well, is a great idea, but you get good public housing by funding public housing, not stifling private development.

[@jamalgibson8139]

Yeah, to be clear, my position isn't necessarily advocating for banning private rentals, but more so that the government should be the market leaders there by way of public investment. It won't solve all the issues, but it will help.

[@mariusvanc]

Yup, this is absolutely the sentiment I've seen in these movements. These people view renters as a lower class of person, and don't want them around, don't want to be near them. But just as most racists aren't openly racist, neither are these people. Rather than attacking and excluding renters explicitly, they go after "investors", who are the exclusive providers of rental housing, thus, by proxy, excluding renters. Housing is not a zero sum game. There is not a fixed number of houses that get built every year. With more demand, more get built. Today, cities are doing far too much to stifle supply from keeping up with demand, and scapegoating investors won't get any more houses built.

[@lajthabalazs]

I think those who blame the rental market for bad neighborhoods are thinking of one type or rental. But not all landlords are created equal. I think the problems come when there's a disconnect between the landlord and the tenant. If the landlord is a faceless corporation that doesn't care about the tenant, then the tenant won't care about the property or the neighborhood. If the tenant and landlord share a duplex, both will be more considerate. And the property and neighborhood better for it. Landlord and tenant living close also results in a mixed demographic, which is more sustainable: not gentrified not run down.

[@dougpatterson7494]

I will Share this video on some housing forums I visit on Reddit where many people complain about “bad” investors and “greedy” landlords. It’s over some peoples heads how necessary rentals are. I’m currently a renter.

[@Corew1n]

Renters are a lower class. A lack of commitment and effort to live somewhere should not be viewed as admirable. You're literally trading financial growth / ownership for the convenience of laziness. Weak minded people rent.

[@lajthabalazs]

@@Corew1n Trading money for convenience is the basis of society. There are many factors that go into deciding between buying or renting. I think most people who own don't consider how risky it is that all their net worth is invested in a single asset. In many cases the primary residence is a bad investment. Think Toronto during the panedemic. People who took out variable rate mortgages are under water, are paying 1.5-2x the mortgage rate, and as time goes by, will see their property value drop further. I made the calculations, and decided to rent. Did not regret it.

[@birdrocket]

@@Corew1nor you’re just not able to save up for a down payment in an inflated market.

[@kennethridesabike]

“It’s a give away to developers!” Cried the person who lives in a home… built by a developer.

[@krombopulos_michael]

It's crazy how developers are considered so evil by default that the main scary story about a new law is that they will benefit. The lead isn't even about how it will hurt anyone else, it's just a bad thing that it helps developers.

[@mylesrussell]

exactly. I had a heated debate with several home-investor colleagues and I told them that I don't care if my house gains value. If I buy a house and live there for 10 years and sell it for the same value. I've only lost my maintenance costs, not 100% of my rent. Additionally, I prefer more density because a fiscally better off municipality may be able to reduce non tax based fees, or offer better services ergo increasing desirability. Rarely does local construction degrade a property value lest it be a highway or heavy industrial facility.

[@dealbreakerc]

@@mylesrussell and the effective devaluation of the money from failing to keep up with inflation. But if your financial situation is good and stable then that isn't a major problem.

[@jamesphillips2285]

@@mylesrussell If you are over-leveraged you can lose your home when it comes time to renew your mortgage. So we have this situation were the government does not want the bubble to pop, so funds mortgages for "first time home buyers", making the bubble worse.

[@AlRoderick]

It's funny, my house was built by workers. I think that's actually usually how it goes most places. I'd love to know where you are where rich developers are out there building houses, but the usual way is that they give some pieces of paper (which they borrowed from a bank at a ridiculously low interest rate and a tiny down payment of their own) to the workers and demand a slightly bigger pile of pieces of paper back from them at the end. "Oh but what about the risk" well if they actually lose the money they declare a corporate bankruptcy and never have to repay the bank, meanwhile, every day each of those workers goes to work on a construction site he has a reasonable chance of dying. Maybe the developer shows up in his fancy suit and puts on a hard hat and looks at some plans once in a while so he can look like he has the right to take credit. It seems to me that it's relatively easy to keep the workers and replace the bank with a public bond issue and replace the developer with a well-paid salaried functionary with a civil engineering degree. And if that means that some tiny fraction of the population doesn't get to turn their giant pile of money into a gargantuan pile of money at the expense of workers, renters and the government so be it.

[@FlyxPat]

Australia is to bring in a tax on foreign investor-owned homes left empty. "The application fees [A$60k] will triple, and if the property is left empty for six months, they will then have to pay a vacancy fee, which will be double the tripled application fee . . ."

[@adamspencer3702]

No problem with rentals, but I'd rather pay rent to a well funded public housing board than a private landlord. Nice to know when my money is going towards improving my community over making some guy richer.

[@SoybeanAK]

Where do you live that politicians aren't using the public trust to get richer? At least private developments are (usually) more efficient...

[@Comrade3030]

Where do you live that capitalist aren't using the public trust to get richer? I always use a local city's electrical grid as a good example as it is a needed service. Most of the states' towns operate with a for-profit energy company vs some have government run services. The price given to the municipal run is about 25% of that from the for-profit companies and they have less outages. I agree with you that most politicians are corrupt in some way, but that corruption is almost alway behest of a private corporation. @@SoybeanAK

[@machtmann2881]

Government can also be corrupt and make some people richer over others. A private landlord can also invest in their community (it's not like they're not parents or potential local business owners themselves). Public and private is not the same as good and evil, they could be either depending on the incentives.

[@markgiuliano548]

Great episode. Honest and nuanced. A fresh take on the housing challenges of our times. Thanks.

[@lhiggs999]

There does not need to be an either/or situation with banning investors or building more housing. We can do both. Almost all rentals should be managed by the government and nonprofits. There should be an abundance of apartments available for purchase or rent at a low price. Building more housing is obviously the ultimate solution, but investors play a huge role in driving up rents, especially large investors who essentially monopolize certain communities. Decommodifying housing by building far more than necessary should be the ultimate goal, but there are a number of steps we can take alone the way.

[@nathanlandau9408]

This was my thought exactly. Why can’t a city discourage investor buy outs of housing, while building more housing, especially social housing? I also think people can not want mega investors taking over their neighborhood without being anti-renter. Being anti-investor is only being anti-renter if no one else is providing rental housing. I think Oh The Urbanity was too quick to seize on the conclusion it wanted. Rotterdam only banned investors in certain areas, which could have different effects outside the investor banned area. I’ll wait to see what happens over two or three years in a city which banned/ limited investor buyouts across the whole city.

[@lhiggs999]

@@nathanlandau9408 Completely agree

[@paxundpeace9970]

Wouldn't it be banning investors feom building more housing

[@marcovtjev]

Note that there is a giganormous housing shortage in the NL. Most blame in media here doesn't go to the rentor developers, but to real estate project developers that have preferred to build relative high income housing rather than cheaper, affordable housing. And to the government for letting that happen. Both for the rental (e.g. condos for the rich elderly) AND for home ownership. This has been going on since before the financial crisis, but got significantly worse after it.

[@joshuakhaos4451]

This is what we have here in the US. They dont build anything that isnt luxury and high income housing, citing that there isnt enough money to build starter homes compared to luxury/high income housing. And the few actual affordable housing that gets built, is what we used to call sect 8 hosuing. And its income restricted.

[@57thorns]

So if there is a market and money to be made making low income housing, why isn't it done?

[@marcovtjev]

@@57thorns More money to be made in expensive housing.

[@nicknickbon22]

In an area where there’s not enough supply of houses, every house (new or old) is a luxury house. I can guarantee you that if you built a house in a little village in Southern Italy, no matter how luxury it is advertised, it is going to cost you less than 1000€/m2, because there’s no demand for housing in a place that is decreasing in population. In a place with a population boom as the Netherlands supply is simply not keeping up with demand.

[@seneca983]

Building high income housing isn't any worse *unless* it means larger homes which also means a smaller number of homes for a given area (and building height).

[@clawsoon]

In theory developers are great because they build more housing. In practise they seem to be motivated to build housing that sucks. I live in a great neighbourhood, best I've lived in so far in my life: There's a mix of social housing, coops, investor-owned property, and owner-occupied property, along with businesses and parks and schools and community centers and libraries - basically everything you need within a short walking distance, available to (and enjoyed by) lots of different income levels. But the mayor who made this neighbourhood happen had to fight/cajole/coerce/trick developers at every step of the way to get it done, because this is not the kind of neighbourhood that maximizes developer profits.

[@jefftee7354]

Big fan of the channel, but some things in the video irked me. 1. Banning investors from certain parts of a municipality would never have the intended effect IMO. It doesn't drive down demand, it simply shifts it to other areas so prices wouldn't have a need to drop. You'd need to ban at a much larger level to meaningfully drive down the local benchmark prices. 2. A year is no where near long enough a timeframe in terms of the housing market. Housing prices are notoriously sticky, even more so in the current low inventory market. 3. The "Investor" class is most problematic when focusing on non-purpose built rentals (SFHs). When we're looking at purpose built units that increase density there's much less of an issue. 4. I always cringe when people bring up the concept that there is a market segment that prefers or must rent. I think if you polled individuals we'd easily see that's a VERY small segment. 5. I don't think anyone is arguing against building more. But we know the investors class is now larger than FTHB so you're furthering the wealth divide by allowing them to scoop up the new units. Instead of just bailing water out of this sinking ship, let's plug the hole as well.

[@dealbreakerc]

Post-secondary students, short (a few years or less) contract workers, and most freelance workers are very clear and not insubstantial segments of the the population who are through no fault of their own in situations where buying (even if house prices were MUCH lower) doesn't make sense compared to renting.

[@paxundpeace9970]

1. While demand might shift many people will stick to an area because of work or school.

[@nathanedison8692]

8:39 “The pervasive idea that owning housing should be a good investment that should be protected, supported, and encouraged by government policy is one of the most destructive ideas of our time.” Perfectly put. Glad somebody has the courage to say this.

[@willabyuberton818]

Thank you for this video. I see that simply banning investments won't work, and more fundamental changes are needed. I would love to see some studies on efforts to create an alternative to landlords, though. Imagine short-term/medium-term cohousing where people can effectively rent a home or apartment without handing over money and independence to a landlord.

[@a.j.4644]

This example shows that things don't work the same some people want in the shirt term and when you do partial measures. Banning investors in only some neighborhoods means the investors get concentrated in the others. The non-investors in those neighborhoods lack the capital to compete with investors in the non-banning places or deal with investors' higher rents they want now that they pay higher amounts for a lower supply of investor-allowed properties. In short, 1) I think you need at least a decade to know the true results of policies like this, and 2) make it for an entire urban area, not piecemeal. That bit about Toronto CityPlace "only" having 61% investor-owned was ridiculous! It proves the GTA's worst fears of investors trying to force us all to pay more than 50% of our incomes to rent as so many renters already do.

[@jimlabbe8258]

Wouldn’t a land tax incentivize productive socially beneficial investment (development) and discourage antisocial investment (land speculation) while helping recoup public investments that drive real estate value?

[@MagicjavaGames]

Developed land will have more value… they literally own the land so can speculate on it whether it has apartments or not

[@jakeryan4545]

Interestingly enough, Detroit is implementing this. So many investors are hoarding vacant land/abandonded homes because they are speculating it will go up in value. While the proposed changes aren't exactly a land tax, it is an overhaul of the property tax to basically address the issues you are talking about / encourage development. There are lots of interesting issues that it is running into. One of them is community gardens. Detroit actually has alot of community gardens. Funny enough, when they were first started they were considered ways to keep land maintained/provide something useful until it was ready to be developed. However, now residents rely on them / or at the least like them enough to not want them to go away. It's kind of like rails to trails. Urbanists craip on rails to trails as if they are the cause of the lack of rail service, but they were actually implemented as a form of rail "banking" after the effects of the Beeching Cuts in the UK saw lots of former rail line property sold off piecemeal for development. It just goes to show how complicated and complex things can be.

[@NS-pj8dr]

yes!

[@paxundpeace9970]

In general this is an important piece of legislation a vacancy tax for units could be helpfull too.

[@cdw2468]

it feels like there’s a big problem here. the studies only tracked a year out, which isn’t a long time when it comes to things like housing. to say that a policy doesn’t work after only a year in 1 neighborhood in 1 city feels a bit hasty. also, who’s to say that the prices aren’t overinflated already and the train has left the station? if you just prevent new buying from investors and aren’t kicking the investors out of the neighborhood, then why would the prices go down? the existing firms will just keep charging what they would have anyway. if you want to say “sure, but it should have some effect given that the ratio of investors to non investors will change”, that’s fine, just don’t cite a study of only 1 year, since that’s a more granular change that could only bear fruit over a longer time i also think you’re kind of missing the point about why home ownership is so important. at least in the US, probably elsewhere as well, it is the main vehicle for building wealth. being locked out of home ownership is so important and one of the main reasons for things like huge race and class disparities in wealth. to have more people able to tap into that wealth when they’re financially ready and willing is a net good. while yes some people do want to rent, having more rentals units, especially units owned by very powerful investment firms with lots of lobbying power, incentivizes policies that make it harder to buy. and this is all to go without saying that the true way to solve this is the decommodification of housing altogether

[@OhTheUrbanity]

Doesn't the idea of homeownership as "building wealth" rely on a dysfunctional housing market where the cost of housing grows at a greater rate than incomes?

[@cdw2468]

@@OhTheUrbanity sure, but if we’re assuming the status quo and not, like i said at the end of my comment, just decommodifying the whole thing like would be ideal, then you’d want to ensure as much access to these institutions as possible

[@cdw2468]

@@OhTheUrbanity i’d also like to add that building wealth isn’t necessarily the idea that your house is an appreciative asset, although that is often the case, it’s also the fact that it’s an asset at all. many people have 0 or even negative net worth. rent is just an endless money pit whereas ownership means you actually have something at the end of the whole deal

[@5467nick]

@@OhTheUrbanity Building wealth through home ownership doesn't need to be related to the value of the house actually going up. It is normally cheaper to buy than to rent as a landlord needs to both pay the costs to buy and also make a profit. On top of that, someone who owns their home has a lot more freedom to make changes as they see fit. Energy prices going up getting you down? Maybe you'll want to improve your insulation. Your landlord has no such motivation as they don't need to care about your energy costs. This can make renting even more expensive. A lot of people do think that house value should go up over time for no reason other than you should make a profit on your "investment" and I absolutely agree with you that they are wrong.

[@jorper2526]

@@OhTheUrbanity When you buy a house, you build equity. You don't get that when renting. You can then use that equity for loans, improvements, hard times.. Also if you sell, you get money to then purchase a new house and your equity can be the down payment. Compare this to renting, where you just get fucked. You get nothing out of renting besides a roof over your head. Oh, and renting is more expensive than actually owning the home. That's another kicker. Trying to argue otherwise is just wrong.

[@lej_explains]

Thank you for covering this, great vid. I think a lot of this “anti-investor” sentiment could be lessened if good public housing is offered as an alternative from the market. Sadly only a handful of places do that well (Singapore and Vienna for example)

[@je4a301]

One should consider this would mainly alleviate the symptoms, not the cause. The cause being restrictive zoning and little incentive to improve the land. First cause would be alleviated with relaxed zoning, second cause with a land value tax

[@paxundpeace9970]

Vienna and New York as well is famous for large public or semi public housing stock that is rent controlled. Still both systems struggle because maintaince is often pushed further in to the future because of tight city budgets.

[@dylanwelch91]

Ya hit the nail on the head at the end: treating housing as an investment has been immeasurably destructive. Most people (left or right) hold two desires; they want housing to be affordable, and they want the price of their home go go up. Problem is, those desire are at odds. When you get down to it, the former is a preference and the latter is a necessity. You can't be underwater on your mortgage can you? So which desire do we think folk act on?

[@paxundpeace9970]

It is not an issue to be underwater at least in the first few years except you have to move which has been more frequent compared to many decades ago. Still many people find or stick to employment close by which works. Prices for housing inevitable will go up because of high demand and short supply .

[@Roxor128]

You got former and latter swapped. Affordability is the necessity, price going up is the preference.

[@Bradum]

Seems like... not a great study. Unless everyone is only willing to buy in one specific neighbourhood if you don't regulate the whole city you're just going to change the distribution of homehowners/investors, not the actual demand or supply for housing purchases in the area (which drives the price).

[@markuserikssen]

Rotterdam has some serious issues though. They haven't built many apartments over the last decade. In the last 15 years, 30.000 (!!!) social houses have been demolished, sold or who knows what happened to them. Besides that, rents are out of control in big parts of the city. This has to do with the housing shortages. Many people with an average income can't afford living in the city anymore, and rents are going up each year. This problem is not unique for Rotterdam, but is similar in most parts of the country. However, Rotterdam is definitely one of the cities where most social houses have disappeared, making the situation worse for people with low income. Even though they don't say it, Rotterdam basically wants to get rid of poor people. Since it's a city with a relatively poor population, they are trying to become a richer city by demolishing social housing and building expensive apartments instead.

[@noseboop4354]

If rents are going up in bidding wars, it means people can afford to pay them. Make more income or move out, simple as that.

[@markuserikssen]

@@noseboop4354 It's not as simple as that, of course. It's at the point that many people can't afford it, so they leave the city, take loans or whatever. Household debts are very high. One of the main reasons why the prices go up, is because of foreign expats coming in. The locals are basically being kicked out of the city. Besides that, many who can afford it, don't have much money left for other things. So they don't buy much (which limits the economic growth), and they don't get children (because not enough space and money). I know people who can't afford electricity, heating and food because of this. Lines at the food banks are increasing. Some people even live in tents, cars or move abroad. It's a negative spiral.

[@noseboop4354]

@@markuserikssen Locals being kicked out by foreign expats? Hmmm, sounds like something Europeans inflicted to the rest of the world for several hundred years.

[@onlineo2263]

My wife rents out our old home. The last 3 tenants have all been in the home between 12 & 18 months and have used that time to size up the neighbourhood and save for a deposit to purchase there own home.

[@lolmaker777]

I think part of the problem with banning investors the way rotterdam did, is that it is to local. the investors van just move a few streets over and buy there. The prices of houses will still be high because the prices of houses a few streets over are still high, the only difference is that now home owners buying these specific houses instead of investors.

[@JohnUnit]

exactly. Dropping theoretical demand in a small portion of one city is not going to decrease market value noticeably when they're part of a much larger market.

[@Eggmancan]

Thank you for this video. I see this argument so much in the progressive internet circles I frequent - that housing crises are caused by investors buying up homes - and it just seems wrong. The lack of supply is always the real problem. Cracking down on investors might make the buying market better, but that is completely offset by the rental market becoming worse. On another note, a similar argument tries to fight against short-term rentals like AirBNB, and many cities are now cracking down on these properties. But while this might make the rental market better, it will make the market for short-term housing - for tourists and visitors who put money into the economy - worse. The answer is thus the same: we need more housing supply!

[@juanmacias5922]

I wonder if setting up zoning for said different types of housing would be an option? More housing is definitely needed. Edit: Zoning in a way that merges that different housing options, not segregates.

[@officialbasti]

The problem is just caused by plain old capitalism, that commodifies housing

[@Said_w_the_G]

I would not want tourists in my apartment building, maybe in a townhome situation it’s tolerable, but I would not want random people I’m unlikely to ever see again staying next door.

[@TheTroyc1982]

@@officialbasti The problem is cause by zoning and regulations which try to reduce the amount of housing being built due to nimby concerns

[@joelv4495]

​@@TheTroyc1982also minimum parking rules. Seems the default assumption is 2 cars per dwelling unit in newer complexes. The parking lot is never even close to full in the 2yo complex I live in.

[@mohammedsarker5756]

Housing as an investment is a thing BECAUSE of the scarcity in housing supply. In America despite poor transit and cars being the second most common asset middle-class Americans own after a home, you don't see "car flipping" as a mainstream or under-the-table investment. Why? Because for the most part (until at least COVID hit with a supply shock) you could get a car at nearly any price point or niche. Now, if we implemented an arbitrary quota system where you needed neighborhood/local political permission for the right to obtain a car (not a car the ABILITY to make a purchase) then still needed to fork over the cash to get said car then ask said neighbors/politicians for permissions on each specific use you could have for your car (going to the gym, a date, hospital road trip WHATEVER) and every single time you needed to use it for a new reason you had to go BACK to said community bodies to MAYBE get permission to do so... would you be terribly surprised that car prices would skyrocket, supply would struggle to meet demand and suddenly international investors would pour money into such a market, creating a bubble and flipping cars to rent/lease to people for massive profits at the same scale as our housing market? And for those who think the system I just came up with sounds asinine, well I just described zoning but for automobiles instead of houses. BUILD. MORE. HOUSING. It's not the end all be all but it's step number one

[@paxundpeace9970]

Car reselling is common but often the car doesn't get better or gain value over time. It is getting outdated quickly. Except for the past years where value of mosty cars had been going up by over 50%.

[@Luscinia_Nightengale]

The problem with their ban on real-estate investors isn't that banning the investors is wrong, the problem is that they misidentified the problem as being with the investors themselves and not with the rental ecosystem as a whole. What they needed to implement wasn't a ban on real-estate investment with the intention of renting the property out, but rather they needed to set a limit on the rental price based on an equation which factors in useable space within the property and the amenities therein provided, moderated by the overall quality of amenities; furthermore, the criteria for grading said quality needs to be assessed, designed and implemented by professional consultants who specialize in assessing and grading such amenities, and their assessment needs to be standardized on a national level.

[@paxundpeace9970]

It is how investors act too.

[@boldvankaalen3896]

In the Netherlands we used to have a great system of social housing that was run by non-profit organisations. But they became victims of the "everything should be organised by the free market" craze that started in the 1990s. So the social housing cooperations started to sell houses, often to investors who then rented them out much more expensively, started speculating with their financial reserves, wasted money on useless prestige projects, and so on. The result is that city centers have become the exclusive domain of high incomes and lower income families have been pushed to the edges. You can say: "well the market always give the most efficient solution and if high income families want to pay a premium to live in the city center than so be it. " But if you look at the society as a whole it is not a good thing that everyone lives in a bubble of people with a similar income. To create tolerance and understanding you need to meet people who are different from you. That becomes more and more difficult.

[@spencermillard1]

I feel like the misstep with this is that the banks won’t give mortgages to poor people and thus will give the same mortgages to richer people and then allow those poorer people to pay the rent which would include the price of the mortgage. The problem is that non-assisted home ownership is unaffordable for most people and thus their ability to own is entirely decided by the banks.

[@AnotherDuck]

I live in a rental in a cooperative in Sweden. There are tons of rental apartments here, and nothing wrong with that. Rentals are absolutely necessary.

[@scottisler4906]

One year? They studied the effects after ONE year?? That doesn't seem like a reasonable amount of time to study the effects of the policy.

[@MarianneExJohnson]

It should be mentioned that the housing crisis in the Netherlands has been made worse by the right-wing government selling off social housing, and completely abolishing protections for renters, making it much easier and more lucrative to exploit renters. But there has basically been a shortage for decades. When house prices always go up when interest rates go down, that indicates that people are having to borrow as much as they can in order to win bidding wars.

[@coinbowl]

The worst people today are right wing

[@beback_]

My god I love you guys' analysis. The way you keep switching voices is also a great way to help the audience maintain attention towards a nuanced essay that may otherwise get a bit boring. If you don't have a podcast yet, you should.

[@southend26]

I'd love a video on what happened in Vancouver a few years back. Didn't they ban foreign investment? How did that work out?

[@tubehead101]

If only. No, that has not happened in Vancouver.

[@Swiss2025]

Banned in 2020 for 2 years across Canada . Vancouver and Toronto have more than 40 % empty condos skyscrapers owned by foreigners waiting for the government of Canada to bring them back very fast when there is a war in their horrible countries. .

[@lizziesmusicmaking]

Vancouver is still crazy expensive rent and buy.

[@fallenshallrise]

There are no pressures, or taboos against, pushing housing costs beyond affordability and directly harming people. If you sell a property everyone, including your realtor who takes a percentage, encourages you to set a high asking price and hold out for buyer who will overpay. If you own a rental you're encouraged to raise the rent as much as you are legally allowed or create turnover so that you can avoid rent control and get "market rate" because it's only "fair". These people brag about all the free money at parties and everyone says "good for you".

[@AmericaShrugged]

2 problems here: The duration of the study... And, the partial ban on investors. A ban would need to encompass an entire city or region of a state or province to truly be effective. The gentrification effect is to be expected with a partial enforcement policy. It's a good try, but needs more thorough follow through. Thanks for the discussion.

[@conklegutierrez]

I've literally seen one of my neighbors carrying a sign saying "Renters Should Leave." He was part of a neighborhood demonstration protesting a planned lower income housing development nearby. I rent by the way. It was a very welcoming view outside my window.

[@karmatraining]

Theory? Seriously? At the last Australian Census a couple of years ago, there were over 1 Million vacant homes just hanging around. That's several multiples of the homeless population. Every time you hear "rental crisis" or "housing crisis" remember that there is PLENTY of housing to go around, WAY MORE THAN WE NEED IN FACT. There is in fact a SURPLUS of housing (well, in my country at least). This is like the king of facts. Mind-boggling.

[@coopsnz1]

Australian government crooks they tax luxuries & income to hell .you work harder to spend more you tax more

[@spacecaptain9188]

When I rented, the landlord invited realtors and their customers into my home, several times a week, for months, even after I plead with them to limit the hours people came in. Rentals are not homes when strangers can walk in without your permission. Rentals are not homes. They very much are someone else's investment. I would no more wish to live in a rental I would in a home claimed by an HOA.

[@secondengineer9814]

Thanks for finding some real data and examples! It's always nice to see some hard studies, so thank you for doing the work of finding them, reading them, and summarizing them in an easy to watch video!

[@tubehead101]

It's not though. You would have to know the particulars of the study and how the law was applied to real understand if it worked or not.

[@noisycarlos]

Basic economics. In general more housing availability=cheaper prices. Whether they're owned by investors or not. At a certain point, a particular house doesn't make sense as an investment if there's tons of competition around.

[@MakeMeThinkAgain]

The problem in San Francisco SEEMS to be investment housing that is vacant since (it is said) the investors would rather leave them empty than lower rents.

[@nicknickbon22]

It sounds like the stories that were told during famines that went like that crop was simply stored somewhere but it was not made available because of some conspiracy.

[@masontrinh6880]

The problem with learning basic supply and demand is that everyone thinks they’re an economist.

[@SoybeanAK]

THANK YOU!! Yes, homeownership can be a crucial tool for building wealth for many (not all!) and sometimes community cohesion, but that doesn't mean there aren't valid benefits to renting. Or that homeowners can't be just as bad about "investing" without building a neighborhood! Here in the western U.S., it's depressingly common for whole areas to be filled with people who bought their homes with the express intent of watching them rise in value for just 3-5 years then moving on again. Ultimately it seems like supply and demand is the rule so simple, so fundamental to everything, that people learn it so young they forget it completely by the time they contemplate housing! And while there's nothing wrong with exploring alternate economic and political solutions, including land-use reform, in the interest of social good- it is SO refreshing to hear an urbanist channel actually acknowledge that profitable enterprises can have social value. Not all profit is exploitation, and if it was, we'd still be living in a preindustrial state!

[@ulrichspencer]

Honestly, I think part of the problem is we associate ownership with "building wealth". The reason it's a problem is, in order to be a good investment and "build wealth", housing has to appreciate faster than inflation. But if it's appreciating faster than inflation, it by definition cannot remain affordable! In Japan, they culturally view housing as a place to live and not as an investment, and a result is houses there depreciate in value. We should be buying homes because of the inherent utility of owning a home and having shelter, not as a speculative asset or a retirement plan. Imagine if we said car ownership "builds wealth" and expected our cars to appreciate in value after driving them off the lot.

[@lizcademy4809]

The quality of houses built in the last 40 years or so is terrible (at least in housing developments in the USA). Those 1980s McMansions are falling apart now. This makes these houses poor investments ... maintenance costs are high, and when it's time for your kids to sell (when you're either too old to live there or have passed on), those houses will be so filled with rotting wood and mold that they're worth less than the tiny bit of land they're built on. We're not quite at the point where this is a widely known problem ... but it will be, in about 10 years. FYI: I lived in a 1980s build condo in the 80s, and looked at a lot of houses back then. I saw the structural problems even in new houses. Since then, I lived in a variety of homes built in the 1950s - 70s. I now own a duplex built in 1900, and it will outlast every other home I've lived in.

[@richardlinares6314]

*"it's depressingly common for whole areas to be filled with people who bought their homes with the express intent of watching them rise in value for just 3-5 years then moving on again."* Where are they buying houses after they move on? More than likely houses in similar areas will have risen just the same. So they'd be paying the same price and throwing away all the money you give to middle men selling and buying a home.

[@SoybeanAK]

@@richardlinares6314 Well mostly they're not buying in similar areas. They're using the extra profit to move somewhere not yet as developed/densely populated, then buying a bigger home at a lower price, waiting for it to go up as others move in, selling that home, rinse and repeat. Be it another part of the city not yet gentrified, or even another state. Why do you think the flood of well-off homeowners is leaving California for states with lower (now rapidly rising) real estate prices? They sell a 3bed/2bath there for a million, go to another city in the west where they can get one for 300k, offer 50 over asking to secure the sale against 6 other cash buyers, and act like they got a great deal. But of course, when they sell 5 years later that home lists for 450, because they weren't the only ones to have the idea...

[@SoybeanAK]

@@ulrichspencer Good points, but again, supply and demand. We've run out of really good land near cities to build more suburbs on in NA, and the population (and wealth) continues to rise. Cars, eh, they build 'em every few seconds.

[@anzhalyumitethe]

A few comments. 1. The time frames for those studies are quite short after the enactment of policy. If anyone should have learned something from the consequences of prop 13 in California, then it is the longer term effect that is what should be watched. Policy changes need to have a a built in tracking for the long term changes they induce and if they had the intended effect. 2. It would be a better goal to shift the corporate and investor ownership of housing to larger, multi-unit housing such as apartments. This can be done through the tax incentives, banning corporate ownership of single owner housing, etc. Corporations and large developers can really shine here as the aggregate resources they bring can build significantly denser and larger developments. Encouraging these larger, denser developments should go hand in hand with the other policies. 3. As demand rises, supply needs to as well. The idea of preserving a city or town needs to be curtailed. While I don't want a chaotic mess, we need to have the ability to change the urban environment for the requirements of the day and not set it into stone.

[@talideon]

I've never seen the issue as being investors per se, but institutional investors. REITs are the biggest example of this. I think it's fine to have people invest in housing as long as they're going to rent them out on a consistent basis, but once a landlord or association of landlords gets to a size where they can manipulate the market, then we have a problem. I'd like to see housing cooperatives and similar organisations be encouraged as an alternative to ownership.

[@nate4fish]

Mom and pop investors are very different than institutional investors. Corporations don’t die, they can lock up housing potentially indefinitely and their cost of warehousing can be much less than a mom and pop.

[@richardlinares6314]

Yes, ohTheUrbanity grossly misrepresented this argument.

[@birdrocket]

Is there any evidence that REITs are warehousing homes and not renting them out? The law in question in Rotterdam would have also affected REITs

[@paxundpeace9970]

Got example and we have to be careful and no Monopol can happen on an regional or city area level. AMH housing a Nevada based REIT mostly owned by Americans and Investmentfonds (mostly owned by amercans for pensions) is scooping up homes in Ohio and in some cities they bought so many homes that you can only rent from them.

[@isaacliu896]

It's effectively impossible for a single landlord/association of landlords to monopolize housing. There are so many mom and pops in every city. And if you stop restricting housing supply than any monopoly would be automatically squelched as people could just build more if prices increased. Even single-family homeowners could add accessory dwelling units/rent their garages to shut down any price increases.

[@erins9271]

Here's the issue. Those investors who issue eviction notices almost as soon as they buy a rental unit, forcing those people out of their home. The investor makes some upgrades and then doubles or triples the rent. Who does this help? Those people evicted in many cases cannot afford the current rents elsewhere nor the new increased rent. Every home that turns into a rental by an investor who sees these homes as their primary income source don't give a hoot about providing low income housing. Their goal is to maximize their profits. Our Federal Government needs to get back into the "business", so to speak, of providing housing and not just rely on the private market.

[@alan5506]

It helps the people that decide to move in. If no one moves in after spending money on renovations, money was wasted and lost. It is a positive improvement from the investor. If the tenant that was pushed out have problems finding a new place, there are several solutions: -Get a roommate/significant other -Move to another part of the city -Move to another city -Make it easier for developers to build more (relax zoning laws for example)

[@erins9271]

​@alan5506 that's making assumptions that those who are evicted through no fault of their own can move out of the City they live. No one should be forced to get into a relationship just to afford a place to live. And as for roommates, that's fantastic but can be very uncomfortable for many people to habe complete strangers living in their space.

[@alan5506]

@@erins9271 Haha first world 21st century complaints. Get over it and open your eyes to reality. There has never been a time in history where people can live alone in a spacious living quarter with so many amenities. And quite frankly, while it is great if one day we reach a point where that is a basic expectation for everyone, in the current economic conditions, this is not something everyone should expect. Therefore, the suggestions I made stands. Yes, there are wonderful economic benefits to a relationship. You are not 'forced' into it. But you are certainly nudged into it. Who cares 'ohhh uncomfortable to live with roommate'. Get over it. It is your economic reality. The world is not yet so bountiful for your expectations. So reduce your expectations. Perhaps the future will change that. But the future isn't here today.

[@jamess956]

Love this breakdown. The rhetoric and politics that equates better housing affordability and access with increased homeownership is way too pervasive and unexamined for how reductive it is.

[@joshmnky]

I bought a big house so I could rent rooms. Apartment rents are so crazy, I'm charging less than half what a 2 bedroom would cost, and I include utilities free. Renting 2 rooms (both with their own bathrooms) I actually make money living in my house. I also don't require that insane 2 months advanced notice that they're moving out. It's such a win-win, you'd have to be crazy not to consider it. I'm also fixing up a house that's been sitting for 20 years. I've met landlords that actually do work themselves, and they care a lot more than people think.

[@gallivantingthespian]

I think the issue with rentals lately is not the long-term rental market, but the investors who purchase multiple housing units to rent out on the short-term rental market (re: Airbnb). It drains housing supply for residents of any income level to cater to tourists

[@scruf153]

if I am touring/traveling I stay at campgrounds $15 to $25 a night with showers and rest rooms

[@SpectreMk2]

Once again, thanks for this video. It is really needed!

[@michaelmontgomery9306]

Homeownership is also land ownership which is one of the reasons it's value has usually increased. There are exceptions like the Great Recession's housing crisis that locked people into housing markets where there were no job opportunities lowering their productivity. Similarly, high interest rates are keeping people locked into their current homes when they would have preferred to sell. Homeownership is a lot like marriage it's a choice to eliminate other choices. Sometimes it works out sometimes it doesn't but it isn't for everyone and lots of other people just aren't ready for it right now.

[@NaphthaleneNiemi]

doesnt have to be. people could own condos or apartments, that dont necessarily include land.

[@AlRoderick]

Condominium literally means right there in the name that it's co-ownership of land, "concurrent dominion" over the land. Everyone living in a condo development owns the land together through a legal framework. This is different than a cooperative where the corporate entity owns the land and the structure and the people living there own shares in the corporation that owns that structure and land. In any case, if you own a home, you at least in some sense own the land. It's through a legal contractual framework, but all ownership is effectively made up under the law.

[@nescius2]

home != land also, there are places outside of USA, where some people tend to live together with their friends and family rather than only with their work.. Homeownership: a lot of poeple just aren't ready for it right now.. yes, and we call them homeless and have police to get rid of them for their crime of being poor.

[@paxundpeace9970]

Home ownership has being going up in the US over the past decade due to low rates and now is even holding steady.

[@paxundpeace9970]

​@@NaphthaleneNiemiThat's true and big issue in Florida.

[@rotary65]

There are relatively inexpensive and expensive rentals. Inexpensive rentals are typically smaller, older, less well maintained, and outdated. Expensive rentals are typically larger, newer, well maintained, and modern. It's the same with ownership, it's the risks that are different. Lower cost housing is more inclusive and accessible. To society, residential density is key. Density is more efficient use of land, is more scaleable, supports more efficient transportation, enables better services. Density benefits society.

[@kb_100]

I'd love to hear your thoughts on the Hippodrome debacle in Montréal. The city required developers to include 60% non-market housing in their projects. So the city received zero expressions of interest from the private sector. Meaning no housing is being built on this prime land for the time being. Is this really the outcome we want from such policies?

[@paxundpeace9970]

This can be a temporary issue but incentive has to be maintained.

[@rpvitiello]

Hosting being an “investment” is what creates housing scarcity, doesn’t matter if it’s by inventors or owner occupants. You have a vested interest in restricting new housing, because more supply means lower prices.

[@cristoferwolz-romberger3835]

Question: is there data on what happens when investor buyers *don't* rent? There are stories of significant parts of buildings in large cities - places like NYC, San Francisco, and Vancouver, among others - of condo buildings in which a significant percentage of the condos are owned but unoccupied. I would be interested in a similar study on what happens when cities put restrictions or taxes on unoccupied homes.

[@dominiccasts]

Vancouver (well, the whole province of BC, but largely for Vancouver) did that 5 years ago. I have no idea how much that could have been studied, since at the same time there was also a shift in mortgage insurance policy federally where mortgages over $1m were no longer being insured, which meant you had to have >20% of the cost of the house as your down payment, so if the price went down the reason is complicated; and after two years CoViD happened, everyone rushed to the exurbs because working from home meant they could upsize with no additional commute, and that spiked the prices.

[@cristoferwolz-romberger3835]

@@dominiccasts I wasn't aware of that specific case - I've mostly been paying attention to efforts local to me to tax unoccupied homes - but as you note, it's not a good case study. Even without the federal policy, COVID and work from home policies have significantly altered real estate patterns around the digitally connected world. I would really love a case similar to this one where we can actually filter out some of those outside variables and see specifically what kind of changes a tax or other hindrance on buying homes as purely investments (not to rent) does to home and rental prices.

[@JohnFromAccounting]

Foreign investment is a substantial driver of increased housing prices in Australia and Canada. When wealthy families from China can outbid any local and pay well above the real value, that is a broken system. Foreign citizens should not be allowed to buy investment properties.

[@TheTroyc1982]

they add to the rental supply but putting up those properties for rent. would you rather the rental supply be reduced without foreign investment.

[@5467nick]

​@@TheTroyc1982 They aren't adding anything unless they actually build more property.

[@spongechameleon6940]

Good video. I'd love to hear more about when to build market-rate housing vs when to build non-profit housing and how both approaches affect the city financially.

[@verdiss7487]

Let's be real here, a limited scope trial comparing next-door neighborhoods isn't exactly free of confounding variables. I would hesitate to take anything at all away from those studies, except perhaps that limiting investment ownership in select locations seems to have little effect. It says less than nothing at all about what would happen with a wider scope policy.

[@Dwonis]

Exactly this.

[@dekard3214]

I think of course the study has flaws due to the economy of scale and limited volume of new homes opening because of course they all got gentrified first that's the natural process of migration and there is a massive bottleneck of near-wealthy people waiting in the wings to snatch up a better quality of life however...it's 1 part of a potentially great plan for cities where a near majority of detached & semi-detached homes have become illegal student rentals, slum lords, or just too many families stuffed into a property/neighbourhood that wasn't designed for that many people. We need government back non-market rental buildings, we need to promote construction of smaller homes for first time buyers, keep the ban on private investors in certain zones (each city is different) [target detached homes, semi-detach to allow for upward motility from lower to middle-class so each generation has opportunity while shifting to higher density if required but not at the cost of removal of middle-class homes], tax work from home households higher to prevent demographic migration from richer cities to smaller surrounding areas, and stop all inter-province/state & international private investment homeownship if viable while incentivizing investors in government backed housing projects. Obviously the devil is in the details but overall I don't think it's rocket science...more about timing and practical implementation which is extremely complicated.

[@jessl1934]

This comment was more informative than the video. The first thought I had was without the government offering non-market rental housing, whatever outcome from this experiment would be critically flawed. I'm glad that I'm not the only person to identify this.

[@wilsonli5642]

My understanding of the "investor" critique is that it's not targeted at investing for rental, but wealthy individuals or funds who invest solely with an eye towards the appreciation of the asset, or who own the property only as a pied-a-terre that they live in only for a couple of months out of the year. (I suppose there's also AirBNB owners, which is a different can of worms.) I don't know how valid this is and how big of a slice of the market this constitutes, but it is a different phenomenon than what is discussed here.

[@Hello-bg8hv]

You guys deserve more subs. Way better then Not Just Bikes, he sucks off the Netherlands and that's it. Like you guys provide a solution to the problems you make vids on

[@paxundpeace9970]

I get a bit bored by him too.

[@veganfishcake]

I've said it on your videos about rental housing before and I'll say it again - social housing! Social housing! Social housing! Housing either owned by local government or by a not-for-profit housing association/housing trust. Private renting is just exploitation of vulnerable people who cannot afford to own a house. After the second world war the UK built hundreds of thousands of council homes so that made housing affordable and accessible to so so so many people. In the 1980s Thatcher brought in "right to buy" and many of these homes were bought and eventually rented out at much much higher prices to profit the landlord.

[@moosesandmeese969]

I agree with most of this video on the facts. Totally agree on increasing housing supply even if it's through private development, but not the conclusion that increasing home ownership is not something that we should strive for. There are definitely reasons economic and social to want to increase home ownership. In a market with very high ownership rate (which needs supply to make happen), housing would just be a slightly depreciating asset like cars are. The reality is although renting is useful for certain people, A. most people renting are not doing it by choice and B. it's undeniable that the act of landlording, consolidation of housing, speculative behavior, and increased share of rentals is detrimental to housing costs, although low supply and high occupancy are what help enable that behavior in the first place. The two problems, lack of supply and exploiting rentals, go hand in hand to worsen housing costs. Realistically how long is someone renting for? If it's more than 2 years, which is about how long it takes to pay the interest on a mortgage, home ownership most of the time would be better in the first place. Most people renting are already renewing their leases more often than that and the times they don't are more often than not because the rent was increased beyond what the tenant could afford. Renting housing for profit in itself is unproductive behavior, and tenants are simply paying for the costs of ownership without actually owning the units. The only revenue stream for a rental is tenant rents, and landlords want to make a profit which requires charging rents more than all costs of the unit - mortgage, repairs, etc - plus extra for profit. No actual value is created in that process, so landlords are effectively asking for more than the unit costs for no service provided. That extra rent needed for profit is often 50-100% of the cost of housing. That means the owners of rentals are quite literally living off other people's income while not providing any valuable product or service. The line "Landlords provide housing like scalpers provide tickets" is funny but entirely true no matter what way you try to frame it. Simply put if there was a limit to how many houses you could own, say 2 or 3 units, it would free up a lot of supply for people to purchase and the increased supply decreases prices for those people. Furthermore, because rentals aren't creating any value but demanding profit be made, they're just draining the economy of people's disposable income which could be spent on real products of value in the economy. In the larger picture, the economy is harmed when people have to spend more of their income on housing and decreasing the money they could spend elsewhere or save for larger purchases (like a home). The home ownership rate in Canada is 66% and is trending downward, so each of your examples of developments offering housing for purchase are all doing worse than the national averages, some worse than others. Long term this is going to drain disposable income out of the economy for housing, more than if a higher % of the units were sold instead of rented. It is important to note Rotterdam is comparatively cheaper than other cities in the Netherlands, and that's the second largest city in the country, so indirectly it seems that policy at least on a small scale alleviated demand for housing. 4% increase in rentals sucks but is lower than how much rentals in the rest of the country increased. The results of those studies are not concretely good or bad. If you increase the number of owner occupied units then yeah the share of renters is going to decrease. Whether or not you think the "right" people bought those homes, it's still increasing the availability of homes for sale rather than for rent which should be a goal for us for the reasons I mentioned above. Again, bigger picture this will be beneficial to the economy in the long run. This policy isn't hurting the problem, it's just not solving the supply problem in it's entirety, so more housing supply is needed too. The Netherlands while not as bad as the US or Canada is still pretty NIMBY about actually building housing, which is why housing has become more expensive there.

[@seneca983]

"There are definitely reasons economic and social to want to increase home ownership." What are those reasons, specifically the economic ones?

[@moosesandmeese969]

@@seneca983 I spell it out in my comment, if you actually read it but it seems you didn't. Like directly after the sentence you quoted from me.

[@seneca983]

@@moosesandmeese969 I did read your comment but it still wasn't clear what your economic reasons were. But OK, you're saying it's the next sentence which reads: "In a market with very high ownership rate (which needs supply to make happen), housing would just be a slightly depreciating asset like cars are." But it's not clear to me that a) this "slight depreciation" should be a goal and b) it would happen anyway. Why would you aim for slight depreciation? In any case, I don't think that claim is true. In a city that starts growing fast you would likely see appreciation, not depreciation. This can of course be affected by how much new housing is built but that doesn't depend on whether that new housing (or the old one) is owner occupied or for rent. It's new supply either way. Also, in an emptying town housing wouldn't only depreciate slightly in value but faster than that and it also wouldn't depend on whether the housing was owner occupied or for rent.

[@Earth3077]

Of course landlords provide value. Renters don't have to buy a house, for starters. Real estate transaction costs are very high, so that means they can move easily and quickly. They're also not exposed to the price fluctuations in their city's residential real estate market. And most importantly, it simplifies upkeep. Landlords take care of common areas, taxes, insurance, and often landscaping. Water heater breaks? One call and they're on it, no need to dip into the emergency fund. You might not mind the time and effort needed to take care of a house, but other people do. Saying they don't add value is like saying that a supermarket doesn't add value to the tomatoes they sell. You could buy gardening tools and grow them yourself at a fraction of the cost! But not everybody can or wants to do that. Paying more than cost to a seller to avoid the hassle of doing it yourself is literally what a market economy is about.

[@moosesandmeese969]

@@Earth3077 Except I already debunked this very point if you actual read it. Renters are already paying for all that. Landlords didn't build the units, didn't transport the units, and they almost always call someone else to do maintenance and pay for it with rent revenue. So landlords don't provide much value and renters are just paying for the cost of ownership for someone else. Don't respond to me again unless you're going to have something meaningful to add.

[@richiesd1]

The government should just build housing and sell it at an affordable price like they do in Singapore.

[@arimihalos7598]

Great perspectives here! We need all types of housing to fulfill the needs of different people within a neighborhood. Making a profit off of fulfilling these needs in not inherently a bad thing.

[@howtosober]

Nothing that is essential to survival should be a source of profit. That means: housing; energy; water; utilities; healthcare; and essential foods. In particular, real estate investors are the main cause of the housing crisis under the current capitalist system. Hoarding housing in order to extract profit contributes nothing to the real economy and is bad for society. The only home a person should own is the one they live in.

[@elli6220]

@@howtosober Why shouldn't essentials be a source of profit? If I grow food, I should have to give that away at-cost, but someone making luxury goods should be allowed to take a profit? That's absurd. If you want to abolish capitalism, fine, but screwing up the housing market while not actually abolishing capitalism is not a good solution.

[@leonardneamtu_]

Why not ban investors and force the government to offer social/council housing?

[@AntiHaze]

Have you found in your studies that investors pile into real estate BECAUSE the prices keep going up due to demand outstripping supply? One of the biggest complaints I hear is that “investors are making prices go up” but this seems fundamentally backwards. Since investors are just chasing yield wherever they find it, they wouldn’t be interested in real estate in the first place if prices and rents more or less tended to stay flat if we actually built enough to house our increasing population. I live in a university and college city, and the college especially has dramatically increased admissions without providing any new student housing in over 30 years. This has bled into the suburbs where it is not uncommon to have 8-10 students crammed into a house, and pay $600 per head each month. And then people wonder why a small detached house is still going for $1M+…

[@paxundpeace9970]

No wonder

[@lostcarpark]

In Ireland we used to have large numbers of "council houses" and "council flats" that were owned by local government and rented to qualifying tenants. In general you had to be on a low income to qualify. There were still plenty of private landlords, but I think council rents used to act as a guideline for rental prices. Then in the '90s it became popular for councils to offer tenants who'd rented a property for a number of years to buy it at a reduced price. I think that's not a bad idea, but unfortunately, they sold properties were not replaced, and councils quietly moved out of the rental business, and replaced council properties with rent subsidies. In many European cities, the government takes a very active role in the rental market, and sometimes in construction too. I think having a basis of local government owned rental property gives something of a safety net for renters, and limits how much landlords can charge, at least at the lower end of the market. Logal government building can also help to even out demand in the construction industry. When there is a slack period, local governments can build more, taking advantage of lower pricing, helping to even out economic downturns.

[@nicknickbon22]

I live in a country where homeownership is highly incentivized in every possible way: from deducting your first mortgage rate from your taxes, to the absence of property tax if you have your address in the home you possess, to all the incentives to renovate your home (you can deduct 65% of your renovation costs from your taxes in 10 years). The point is that all these benefits are used by older middle or high income poeple and so the market is very difficult to access if you're young and your parents can't cover the cost of the house you buy. At the same time there are almost no rental benefits and this, combined with the difficulty to evict defaulting tenants (it takes months and even more than a year sometimes) makes the retal market very rigid and in small or middle sized town even nonexisrtent. All this combined creates a very rigid and stagnant society, where people are less likely to move to another city to find a better job bevause they likely possess a house they don't want to rent and they would find a very rigid rental market where there is a better job opportunity. So yeah, rent should be favored in every possible way and homeownership discouraged in every possible way, because if you think about it, the most dynamic cities in the world (NYC, Zurich, LOndon, Paris, ...) are cities where basically everybody rents.

[@Idiot-q2j]

" [...] Renters don't really live in a home, they live in someone else's investment." If only most rental homes actually were someone's investment, anyone's investment. The problem with "investors" is when they're actually not investors at all but speculators instead, content to collect a large income from rental payments and simultaneously reject any and all responsibility for building maintenance, allowing numerous safety hazards to crop up endlessly. In short, being a landlord in a legitimate sense is a job like any other, so how about being prepared to actually do some proper work to earn that income? It also seems extremely arbitrary and just plain silly to seriously suggest there couldn't possibly be any problems with excessive demand from such land value speculators just because property prices are "sticky" (yes, that's the actual economic term as far as I know) since, you know, a little thing called inflation. By the way, I can't help wondering how much of that inflation is itself being perpetuated by this culture of acceptance of land value speculators getting, essentially, enormous subsidies left, right and centre (or "center" for you American English readers). All that said, I'd agree those particular Dutch regulations have apparently missed the point rather impressively. Perhaps with some good old fashioned Land Value Tax instead, would-be speculators might finally be incentivised ("incentivized" in American English) to either begin earning their keep, or sell potential dwellings to someone who will.

[@FamousByFriday]

I’m not sure a year is an adequate amount of time to really see the effects of a law. It also stands to reason that there are people in the whole area of the city that wish to buy a home that can’t and when a small portion of the city opens up they would rush to buy, keeping prices high. So unless they’re going to have enough supply to satisfy the rich people demand, prices are not going to drop to start with middle class demand. Perhaps the answer is to regulate rent costs?

[@bayloon98]

Absolutely not. Rent control is already applied in plenty of cities in throughout European countries (Ireland, Germany, Scotland etc.) and the only one where rent control is “successful” is Vienna, because that city builds enough housing to mostly offset the negative distortionary effects that rent control causes

[@FamousByFriday]

@@bayloon98 … and I’m not trying to pretend like I know the answer (or if there is one answer), but your response made me curious. Which problem was Vienna trying to solve? Seems like there are a number of things people are trying to solve. Affordable rent. Home ownership (for those that want it). Enough housing. Reduction in the involvement of corporate landlords... That said, I agree a short supply vs a high demand will always have problems.

[@morat242]

@@bayloon98 Vienna does build a lot of housing, but it has the additional advantage of having its population peak in 1916. It was 2.3 million, it was 1.5 million in 1990, it's back up to 2. Certainly people have more living space now, but there was a lot of slack capacity for a long time.

[@morat242]

@@FamousByFriday The basic problem with regulating rent costs in a shortage is that the shortage will be allocated *somehow*. That can be by effective rent increases (you can't get an apartment without paying extra "fees"), limiting demand (you need to have connections), or by lottery.

[@FamousByFriday]

@@morat242 Ah… sounds like it may limit how much rent is so you don’t need a bunch of roommates to afford it, but you or your friends and family can’t get a place… so you end up with roommates anyway.

[@leopoldleoleo]

So investors are essentially a device for converting homeownership opportunities to rental opportunities. Seems like whether that’s good or bad just depends on the relative scarcity of each form of tenure

[@paxundpeace9970]

Now you need to consider that 35-45% of households are low income or lower middle income and mostly not able to make even the down nor able to qualify for a mortgage.

[@qolspony]

I think they were referring to investment companies who buy and hold properties until they become marketable in an up market. So this creates a void when there is a shortage of housing. Social housing isolates poverty in selective areas. And the result is higher crime, default maintenance and corruption..

[@ShaedeReshka]

We are switching from an ownership to a rental economy, which is starting to more and more resemble feudalism where it's instead capitalists extracting rent from us in place of feudal lords. We are absolutely at war with landlords and we absolutely have to reign in all forms of passive wealth consolidation. Low income renters are absolutely not served by private profiteers and are not given MORE access to necessary resources by relying exclusively on markets. Markets only distribute goods and services to the highest bidder. Over time, a capitalist market which demands endless growth, will raise prices while depressing wages to the point that many are excluded from the market entirely. This idea that only markets can solve every problem on Earth is one of the major reasons our economic, political, and ecological systems are all collapsing. Markets just aren't up to the task. That being said, simply cracking down on the market isn't enough. Non-market solutions, such as public housing in this case, is an obvious solution. So are housing cooperatives and other non-market strategies. We have to stop running with our tail between our legs back to private profiteers who are only in it for themselves. It's not going to work. Getting investors out of housing is essential. It's just not enough alone.

[@nicknickbon22]

I mean, in New York and Zurich and in most world class cities most people rent, but they don’t look like feudal places, but rather the first cities that comes to mind when you think of modernity, wealth and opportunity. Southern Italy and Italy in general is a place where homeownerships is over 80% and in some areas even 90%, but the first thing coming you to mind I with it is probably stagnation, not opportunity.

[@DanDrory-q5t]

A big issue with the dutch housing ATM is that the market is squeezed to its limit. With 223k~ net immigration in 2022 on a country of 17.4m thats a lot of squeeze. One would say that the local dutch being able to buy a home in that market sounds like a good thing.

[@EmperorNefarious1]

You mentioned tenant protection, but adding vacancy prevention and super short term rental prevention are also improvements. Investors that leave housing empty or that Air B&B it exclusively are a big problem in some cities.

[@dh510]

There should be a "use it or lose it" law for real estate in areas with high demand. The problem isn't investors who buy housing and immediately make it available to the market by renting it out, but investors who buy properties and let them sit empty while they bet on increasing prices to resell them. A lot of real estate is worth more empty than when it's occupied with pesky tenants who are usually pretty well protected by the law and demand steady upkeep and maintenance of the property.

[@dealbreakerc]

@@dh510 Use it or lose it certainly too harsh. A vacancy tax is enough to make it a financial penalty to leave land/property unused.

[@lizcademy4809]

I'm not in favor of vacancy penalties, **unless** they are only applied to people deliberately not trying to rent out their places. I'm the smallest possible landlord (one flat in my duplex), and have had my rental vacant for almost a year at times. It was advertised, we even dropped the rent a couple times, it's just that in my city, *nobody* rents during the cold season.

[@cmmartti]

​​@@dh510This channel made a video on that very topic 7 months ago titled "Why Vacant Homes Won't Solve the Housing Crisis". It's been a while since I watched it, but the summary is that introducing a vacant homes tax won't have any noticeable effects because there are actually very few vacant homes that can realistically be taxed under these schemes. Usually, a home is vacant for a very good reason, and that might be because the owner is in long-term term care, taking a 4-month vacation, the home is undergoing renovations, the owner has just died and it hasn't been sold yet, or a tenant has just moved out and a new tenant has not been found yet*, and those are all temporary vacancies that are normal and shouldn't be punished. Investors in fact don't tend to leave housing empty because they can generate significant revenue by renting it out. *In fact, a moderate vacancy rate is an indicator of a healthy rental market, just like frogs are a marker species of a healthy wetland. If landlords actually have to compete for tenants, then they are more likely to improve their properties and lower prices, and a moderate vacancy rate gives new tenants more options to choose from when they want to move.

[@jasonriddell]

@@lizcademy4809 this is one of those LAWS that NEEDS to be finetuned VERY carefully your example MAY BE like you say low demand season OR might be your place is OVERPRICED and done on intention to "skirt" a vacancy tax that is worded to exempt properties actively on the market going by your comments you are NOT in a high demand location like Toronto or Calgary where a single "well priced" property gats 25+ applications BEFORE the showings start

[@m0ntana137]

It's the landlords, investors, and developers lobbying the government to minimize supply.

[@seneca983]

It's quite common for homeowners to lobby to prevent new developments near them.

[@flarklar2371]

Great video. I feel like the only real solutions are building public housing on city owned land and providing interest-free loans to below market rate housing projects. Making house ownership easier will only hand over the problem to the next generation.

[@drivers99]

Just build more housing, period. Allow it by default. Removing zoning restrictions and approvals to build more housing.

[@ianhomerpura8937]

This is what some countries are doing, i.e. Singapore. Public housing is usuallly built near transit hubs, which are usually state owned as well.

[@guitarazn90210]

@@ianhomerpura8937 The Singaporean scheme is unusual and might be difficult to replicate abroad. From what I understand, most Singaporeans are not renters but "owners." However, their government are legally the true owners of all land in Singapore, and homeowners "lease" the land for 99 years. What happens after 99 years is unclear.

[@ianhomerpura8937]

@@guitarazn90210 they usually do not reach that long. Currently the oldest HDB flats in Queenstown are being demolished for redevelopment, and new HDB flats are being built. Meanwhile, the original homeowners are given slots in newer HDB developments and relocated.

[@finderkeeper836]

Thank you for this video!

[@Standard_Issue_Pedestrian]

Would love to hear you expand on this regarding rental/tenant vacancy laws, which discourage owners from simply buying housing and sitting on it.

[@chefnyc]

Put a high real-estate tax and let them sit on an empty house. Couple that with enough housing and a house sitting empty will be a liability than an asset.

[@paxundpeace9970]

A well structured vacancy tax would mitigate this or even solve it.

[@patriciaherlevi6217]

In the US, investors are purchasing apartment buildings and raising rents. This leads to an increase in homelessness.

[@seaotter42]

There is a big upside to middle class home ownership that is usually overlooked in these discussions, once you buy a house your "rent" stays fixed... yes there are maintenance costs associated with owning a home, but your regular monthly payment is no longer subject to the whims of some corporation or rich person. This should be what we want for everyone. It's a bit of an odd take to suggest that the working class and investor class need to team up against the middle class to preserve rental availability. Maybe if this policy was wide-spread instead of hyper-localized, the purchase price of homes would come down enough that more people could afford to buy and some people who currently rent because they can't afford to buy, would instead be able to buy a home.

[@seaotter42]

One more belated thought... laws like this could help stop problems like whats going on in Billionaires Row in New York City... half empty luxury skyscrapers built almost entirely as a real estate investment. Regular people wouldnt be able to afford those units even if they were on the market, but maybe an investor owner ban would disincentivize those projects to the point where something people actually live in would be built instead.

[@aquaticko]

....Doesn't this suggest that renter protections should include FIXED rents? After all, even if a property owner's interest rate increases annually (which is unusual), the principle doesn't (on the contrary; unless the economy is in deflation, their principle will shrink as a proportion of their income for any other sources. The only reason for rents on a property to regularly increase is to increase property owner's profits. As the situation sits in most places, a landlord can do minimally-required maintenance on a property in perpetuity to keep it to code, all while having paid off a mortgage for decades, and keep raising rents in a location where demand for rental units increases over time. All you've done is point out the instability forced upon renters by property owners due to the fact that it's considered socially-acceptable for property owners to profit off of doing very little for it. It'd be like paying homeowners just because they own the home they live in; I don't see how it's defensible in a vacuum.

[@josephcarreon2341]

I disagree with "This should be what we want for everyone". I would argue that most home owners shouldn't be home owners as most home owners don't understand the responsibility they're taking on with home ownership and, thus, exponentially lowering the home's life by many years. As someone that has been actively looking to buy in the last 6 months, it is very clear that most home owners do not take care of their home and are trying to sell crap homes as is or poorly flipped leaving the younger generations to have to face serious costs later down the road. I love the sentiment, but most people are just not responsible enough for home ownership. I think because of that we shouldn't be opposed to making renting the norm. We would need serious regulations on rentals prior to going that route though.

[@paxundpeace9970]

It does depend on how a mortgage is structured. If you have a 15 or 30 year fix or mortgage that re-sets every few years like in the UK. Variable mortgage often lure people in that might not be able to afford it in the long run see 2008 finanical crisis.

[@paxundpeace9970]

They don't suggest that they should team up. But we need better options for renters like coowning and renter protection.

[@a2dsouza]

This is the most correct video on the internet. 💯

[@Emma.Lily69]

From a US perspective, corporate owned home rentals frustrate a lot of people because many young people can't get approved for mortgages and are stuck renting at a higher monthly cost than the mortgage they were denied for. That feeling of being screwed over by the bank to then pay extra to a company that has never even been to the house and only wants to squeeze it from profit, is a shitty feeling too many people experience.

[@shauncameron8390]

In all fairness, banks are well within their rights to deny people a mortgage. Clinton forcing banks to grant mortgages to just anyone set the country up for what happened in 2008.