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Comment by SilverElfin | Hacker News Reader

Is it that they truly don’t believe it or they don’t want more supply (since that changes their quality of life, neighborhoods, traffic, etc) but still do want lower prices in other ways (like by price caps or other things).

One legitimate reason to not think supply reduces prices is because of big financial companies buying up lots of houses and having effectively free rein to price how they want. It removes the competitive piece. In many areas the new houses are built by a few large home builders doing a few large developments, and the new apartments are owned by a few large corporate owners. That can slow down prices reaching their market value.

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This is another huge myth in the US housing market, that big companies own lots of the housing and are jacking the prices up. It's simply not true. Large corporations own a tiny fraction of the market while the vast majority is owned by individuals and small landlords.

There's a lot of synergy and overlap between small landlords, property management companies, rent-fixing companies, and Wall St. It doesn't matter to the renter that their slum is owned by a tiny LLC that is nevertheless part of the broader constellation of anti-social rent-seeking behavior that is bringing down this republic.

investor market share of homes is down from its peak of 20% a few years ago, but i wouldn’t call it a “tiny fraction”

https://www.redfin.com/news/investor-home-purchases-stabiliz...

That is not limited to the US, in Berlin there was a popular vote to expropriate housing companies with more than 3000 units.

Yet those large housing companies charge on average between 7-8 €/m² and are nowhere near to holding a majority of the housing share.

Is it different in different places though? Like some places have more of this ownership problem and so it looks worse locally?

> One legitimate reason to not think supply reduces prices is because of big financial companies buying up lots of houses and having effectively free rein to price how they want.

Big corporations don't have unlimited money to do this kind of thing.

And in practice, the expensive areas they do it in, are usually very limited in how much new housing goes up, they're still very much supply constrained markets.

If what you're suggesting was really happening, then what you'd expect to see is an area with a relatively high vacancy rate (due to all the new supply), like 8% or even higher, but stubbornly high prices in spite of that. And I can't think of any examples where that happened. Can you?

This is the propaganda they were pushing about RealPage too until it turned out that it was happening and the market was being distorted.

At any rate, if a buyer notices it happening in their area, then "it's not happening that much" is not only not going to make them feel better, it's going to also make them feel like you don't want to fix it.

Again, do you have examples where a ton of supply was added to a market, the vacancy rate shot up to high levels, but prices remained the same?

I agree that the algorithmic price fixing needs to end, though I think it's mostly gonna be strong in a market where vacancy rates are still low. Harder to maintain the cartel the more options people have.

investors actually tend to purchase cheaper homes

https://www.redfin.com/news/investor-home-purchases-stabiliz...

>One legitimate reason to not think supply reduces prices is because of big financial companies buying up lots of houses

This just isn't true and isn't supported by the data. https://www.noahpinion.blog/p/corporations-arent-the-reason-...

> One legitimate reason to not think supply reduces prices is because of big financial companies buying up lots of houses and having effectively free rein to price how they want.

No, its not. If only one big company was allowed to do that in each locality, and they had the ability to buy up all the supply no matter how much new housing was built, that would be a reason; absent monopoly power, they don't have free reign to price how they want, and can price higher the less supply there is, even if you assume all of it is owned by similar big firms and used as rentals.

>In many areas the new houses are built by a few large home builders doing a few large developments, and the new apartments are owned by a few large corporate owners. That can slow down prices reaching their market value.

Because all the same voters (demographically, if not also frequently literally the same individuals) voted for a bunch of red tape that's only passable for the big vertically integrated businesses and even then it's only profitable when they're doing cookie cutter single family on .25ac or 5 over one apartments.

Yep. You need deep pockets to eat the carrying cost of a property while waiting years to get approvals.

> Is it that they truly don’t believe it or they don’t want more supply

If this comment section is anything to go by, there seem to be plenty of people that firmly believe that increasing housing supply doesn't actually increase housing supply, let alone the bigger leap that increasing housing supply decreases prices.

I think what people want is less migration (both domestic and international) but that's not an option. Since it's the primary thing they want they're doing anything they can to get it including essentially destroying their own neighborhoods.

And then they complain (a lot) that their kids have to move away to afford housing.

They want to keep freedom of movement for themselves and restrict other people. Be careful what you vote for: a border keeping “those people” out sounds good until the day you are denied passage!

I'm already not allowed to just declare myself a Mexican citizen. We alone were unusual in allowing that and it turns out it was a mistake.

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