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Comment by imgabe | Hacker News Reader

Renting it still increases the housing supply, someone can live there.

I doubt there is any significant amount of housing that is just bought and left vacant. Why would you do that? It’s a stupid and expensive place to park money. You have to pay taxes, possibly condo/co-op/HOA fees, pay someone to do maintenance and keep out squatters, pay transaction costs both buying and selling, it can’t be sold quickly.

Why would you do all that instead of just buying treasuries or some other liquid instrument that actually earns money?

There may be some of this from foreign investors that don’t have easy access to financial markets, but again, some Russian oligarch buying a $50M penthouse in Manhattan is not the reason an average 3 bed 2 bath suburban home is $700k. They are not remotely in the same market.

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Banks will not loan you money to put it into the S&P. The wealthy generate money by generating credit in part.

Why would you borrow money and use it to buy a house and leave it vacant? Now you're paying interest on top of everything else. Do you think wealthy people just light money on fire for no reason?

You rent out or naturally. If most buildings in a given area are rented out. Then the owners have leverage on the renters.

If there are more buildings than people who want to live in them, then the owners have no leverage. They have to compete for renters. You make that happen by building more housing.

But once you own a house, it's in your interest financially to stop others from building them. Either as a bloc or as a massive corporate landlord, pressuring cities to "retain the historic character of a neighborhood".

They definitely will. JP Morgan for example charges SOFR+1.85% for 10M+ accounts[0], which is better than the mortgage rate they offered me. Or depending on what you mean by wealthy, you might be able to afford having someone get you a better deal by trading on the markets (e.g. selling SPX box spreads) assuming you don't have the expertise to do that kind of thing yourself/aren't interested in doing your own wealth management.

[0] https://www.jpmorgan.com/wealth-management/wealth-partners/l...

> I doubt there is any significant amount of housing that is just bought and left vacant. Why would you do that?

In high-demand areas property value often increases in value over time. You can literally “buy and hold” property, keeping it empty, doing nothing with it and expecting to sell it for a profit at some point in the future. It’s relatively safe and the rate of return can be significantly greater than inflation.

This ignores property taxes and costs of doing business of course. But there are also situations where you might want a reported tax loss on a profitable asset.

And zoning restrictions are part of the reason why housing prices "always go up." Constrained supply is exactly and precisely what makes housing a profitable investment.

One of many reasons. Supply is also constrained because people are buying it as an investment. It’s a feedback loop.

If I were extremely rich and had a lot of properties to rent in California, I’d look at relaxed zoning laws as an opportunity to buy even more properties.

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