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Comment by blue039 | Hacker News Reader

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BlackRock and other landlords just convert owner occupied units into rentals, making it relatively more affordable to rent. If they are the problem, then prices would be too high but rents would be too cheap. But if both prices and rents are becoming unaffordable, then lack of overall supply is the underlying problem.

This is such a common misconception that Blackrock has a webpage on their website dedicated to clearing it up:

https://www.blackrock.com/corporate/newsroom/setting-the-rec...

I don't see how this helps the narrative. You'd expect they would. This is like cigarette companies putting out memos defending cigarettes as less-harmful.

"McDonalds sells cocaine to children!"

McDonalds: "No we don't."

"Ha! That's just what they would say".

The ridiculous thing about this set of accusations is that Blackrock is a passive investment management firm. They don't make any more intentional investment decisions than, like, a typical bank.

Their ESG score tells me otherwise. They can single handedly destroy a company or industry with this score. They control trillions in investment capital. They have seats in the largest governments.

You are either legitimately shilling for your employer or watch/read one of the several DOZEN news organizations they own. You need to wake up. The giant, along with it's daemon Aladdin, control the majority of money flow on the planet.

Oh wow it is another instance of "X has investigated X and found that X has done nothing wrong".

You can take it with whatever grain of salt you want, but a public asset management firm saying "we don't own any X" is a pretty categorial statement. Like if they are lying here they would have the FTC and client lawsuits crawling all over them.

Why would the government investigate or punish those who are helping the "own nothing" agenda of the establishment.

The reason institutional investors are buying old homes is because supply restrictions on new homes has made old homes an increasingly good investment. Build lots of new homes, and the old homes will cease to be such attractive investments.

How do they drive up rent or home prices if they dump houses back on the market then? If neither supply nor demand changed as a result, why would the price change?

Also, why does it happen with houses (that provide crappy average returns because they don't capture the effects of productivity growth i.e. do not create real rent, they are more like crypto), not with stocks?

> If neither supply nor demand changed as a result, why would the price change?

If I buy all the lithium supply in the world and sell it back, what price do you think that I will charge?

Monopolies and cartels make prices go up.

You wont change price by buying and selling back. Because neither supply nor demand have changed. You can keep prices up by buying and hoarding over a long time, but it means locking up capital in something that doesn't generate return... And wait, this has been tried in 2008 :) didn't end well especially for investors because no Ponzi scheme can run indefinitely. Eventually the stream of stupid money runs out because there are no bigger fools left, and to generate returns you need to sell, and if you sell, market falls.

BlackRock does not have a monopoly on unoccupied housing stock and acquiring such a position would be extremely expensive.

Why would they willing cause a housing crisis? All that will do is flood the market with cheap inventory that will be quickly snapped up by everyone waiting on the sidelines for the next 2008 so they can get rich in the next boom cycle of real estate investing. Then prices will start rising and BlackRock will find itself trying to buy back inventory again or get left out.

If houses get very cheap again I know for sure I’ll snatch up a property or two.

It’s almost as if the incentive structures were meant to make the rich richer and the poor poorer.

If houses get cheap I know for sure I still won’t be able to afford even 1

Some people are so trapped in poverty mentalities that they can’t even imagine buying a house when it’s cheap, they’ll just imagine they’ll be even poorer.

Isn't the real problem that there are too few desirable places for people to be - state capitals and mega cities urban cores - everybody tries to cram there.

So you actually have to fix the demand problem. The phrase "flyover states" is an early precursor of the current problem. I don't know how - all of the solutions I can think about are bad, but you actually have to convince people that there are other places worth living other than thin slivers of land along the coasts, Chicago and Houston/Austin

One of the problems is that people from Cali, New York, etc have left those states and started competing and jacking up prices in the “flyover states”. I live in Phoenix which was reasonably affordable before Covid but has now gotten ridiculous. Similar things have happened in Utah, Idaho, Montana, the cheaper parts of Texas etc. At some point this may continue and change pricing in the other still cheap states.

We could also just add a lot more supply in these desirable places. There's no reason we can't.

And yet you couldn't cram 300000000 people in manhattan. You can't solve infinite demand with supply.

Demand, like supply, is not infinite. While demand is not (and likely can not be) constrained by local law, supply often is. This imbalance results in high prices.

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