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Comment by Lucasoato | Hacker News Reader

I've thought a lot about this, without finding any comprehensive solution. The housing market suffers from inadequate regulation, allowing speculation and profit-making through the mass purchase of properties and subsequent rental hikes. We need safeguards against such practices; perhaps home ownership shouldn't just be a right but a condition actively safeguarded and championed.

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I disagree. It suffers from overregulation. How is a person possible able to sell their own house without doing some bullshit thing wrong and making an illegal sale?

regulation for buyers. Prove that you are going to live here and not just use it for financial speculation and gain.

There is also over-regulation of the supply. Zoning that makes it difficult to build any thing other than single family homes and corporate apartment buildings surrounded by parking lots. HOA's that require proof of 3x rental as income for each tenant or don't allow multiple tenants per house at all.

the root cause is lack of supply, on an incredible scale.

To put in perspective what a program to bring prices down would actually look like, Sweden launched a program in the '70s to build a million homes in ten years, when its population was 8 million. We have not seen homebuilding on that scale in the United States for decades, if ever.

This is the correct answer, full stop. Every other factor is peanuts in comparison. The sheer magnitude of our housing shortage is astonishing: Pre-pandemic, there was something like a ~5 million home deficit. Post-pandemic it grew to ~7 million. This deficit is likely even bigger today.

It's simple supply & demand. We can't reduce demand -- people need shelter. The solution is providing supply. No amount of fiddling with interest rates, corporate real estate investment, or whatever else, will alleviate the housing crisis. (# of houses available) / (# of needy families) << 1. Fix the ratio, or live with the crisis. Everything else is lipstick on a pig.

Within the USA we could reduce demand by reducing immigration. I don't think we should attempt to resolve the housing shortage that way, and I agree that we should build more housing, but let's at least be clear about the available options.

I think that enforcing internal borders, to prevent internal immigration, like people from Ohio trying to move to California or New York, or letting anyone in or out of Texas, is going to face a very strong uphill battle. But yes, let's be clear that is an option.

The free movement of people is in the Constitution itself, not an amendment. That's how fundamental it is to the US.

Obviously I was referring to external immigration from foreign countries.

My vote is to tax/regulate corporate and out-of-state owners. I think landlording should still be an option for everyday middle or lower class people to start a business. But you get cut off after your 2nd or 3rd property, or if you don't reside in the state. Most importantly, though, Blackstone capital should not be able to buy $4bn-worth of single-family homes. If they want to build new urban housing that costs that much, fine. but not allow them to compete at scale with everyday people because they have a tremendous advantage. I think many places would also benefit from a hefty vacancy tax as well.

I don’t know, none of the houses I want to buy are in neighborhoods where any substantial portion of the stock is available to rent. Is there evidence of this kind of “profit-making”?

(Not disputing just no experience personally).

In many first world capitals, it's actually a common investment to buy real estate and not rent it out at all. The running costs are lower, there's no maintenance costs and no one pesters you about miscellaneous issues. All these people do is sit on the homes and wait for them to go up in price while everyone else struggles to find a place to live. Them not renting out reduces supply which further drives up prices. You don't see them up for rent because that's not the business they're in, they're in the buy-hold-sell business instead. It's a good example of ridiculously perverse incentives, and why the regulation needs to be changed to make this a thing of the past.

I could also believe this, but it’s not the claim OP made, which was about rental hikes.

While I see what you mean, these two phenomena are really two sides of the same coin. If I'd wager a guess, I'd say OP is probably referring to cases such as [0]. Regardless of which mechanism is at play though, the end result is the same, either rising prices through collusion or rising prices through lowered supply. Both also benefit anyone else doing it the other way, so it results in highly lopsided markets.

[0] https://www.axios.com/2023/11/02/dc-housing-rent-antitrust-l...

Of course landlords want to make money. Some make a lot and some make a little. But only recently has "profit-making" become a dirty word.

The only reason investors buy homes is because they're a good investment. If you want to get them out of housing all you need to do is make housing a bad investment. That's done by increasing supply. Investors will always find loopholes to whatever regulation you come up with if it's profitable.

It's well established that in high demand areas like CA regulations are excessively burdensome. But go ahead and increase regulations, maybe I can retire earlier as a result!

More likely scenario to solve the affordability issue is 40-50y mortgages, and socialistic handouts by states (like CA is doing).

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