Hacker News Reader

Comment by jfengel | Hacker News Reader

Inflation is the Fed's job, and rent is part of that. That doesn't extend into managing the housing market, but managing interest rates is a big thumb on the scale.

View on HN

It’s a useless thumb for attempting to solve housing inflation. Housing shortages of millions of units means that if you’re priced out of a mortgage, you’re forced to rent with no rent price controls, so instead of mortgage bond investors collecting your housing spend, it’s instead landlords.

The only way to fix housing costs is to build baby build, as fast as you can, and the Fed has no power over fiscal policy (and policy in general) to strongly encourage such a build rate. This should be on the scale of the Manhattan Project or the Inflation Reduction Act.

https://www.fanniemae.com/research-and-insights/perspectives...

https://www.npr.org/2024/01/25/1225957874/housing-unaffordab...

https://www.jchs.harvard.edu/americas-rental-housing-2024

https://youtu.be/Jl7vrujr1J4

I'll agree there needs to be a massive supply boost in the form of entry level housing (only for 1st time owners, get rid of corp land grabs).

That's what Singapore does quite well (I currently live here). The HDB system isn't a free market - new supply is only allowed for the first time home buyer, priced cheaply and you're not allowed to sell for 5 yrs. Covid had very big problems on supply but SG gov has kept it's promise in creating a lot of new housing in the past 2 yrs.

It has a lot of levers to control a housing bubble for its citizens and thusly a big portion of inflation.

I agree with this move.

Tax those who hold single family homes for renting to others and the problems will fix itself.

Housing is seen as an investment. If a big portion of rent starts going into taxes, then it doesn’t become a speculative instrument.

Have apartment complexes managed by corps with central management.

Don’t make single family homes and townhomes a tool of speculative investment.

US economy would grow a lot faster if the money sitting on houses went into companies producing goods and services.

Build baby build doesn't work when Black Rock and so many other private equity companies are content to buy as many houses as they can and then hold them to raise prices further or rent them out. 44% of all Single-Family Home Purchases were from Private Investors in 2023. A huge portion of the problem would be solved immediately by 1) a vacancy tax, 2) banning the purchase of single family homes by corporations.

I agree this is a component of the solution due to the speed at which capital can move.

Those investors are most individuals buying houses to rent. Blackrocks fund accounted for 0.01% of US housing stock.

Disagree [1]. Blackrock owns Invitations Homes, which does indeed own a large portion of US housing stock. They buy in cash or with loans that are a lot less interest rate than you or I would pay.

[1] https://slate.com/business/2021/06/blackrock-invitation-hous...

Your article actually admits they don't own that big a percentage of homes.

Invitation Homes operates in 16 cities, with the biggest concentration in Atlanta, where it owns 12,556 houses. (Though that’s not much compared with the 80,000 homes sold in Atlanta each year

> This should be on the scale of the Manhattan Project or the Inflation Reduction Act.

https://www.politico.com/news/2024/03/21/aoc-sanders-unveil-... ("AOC, Sanders unveil ‘Green New Deal’ for housing")

https://www.politico.com/f/?id=0000018e-5eee-d570-adaf-fefe1...

True, but this article is complaining about the opposite - the housing market can't sustain today's prices because of high interest rates.

What you're talking about is what the fed is already try to do - bring inflation down with high interest rates.

Prices will go further up when interest rates go down. Interest rates haven't been raised enough to reign in inflation.

Reply on news.ycombinator.com