Yes, because unlike every single detractor here I’m not distilling a complex argument full of nuance into a “1+1=2” baby-splaining session.
Let me put it into simple numbers the detractors can understand:
I build ten homes in a market that needs a hundred. I price them affordably because I’m not an asshole and understand there’s a crisis.
* Statistically speaking, 25% of those homes will be bought by PE or REITs. I cannot deny them the sale because the law says so. Let’s round that up to three homes out of ten. Those homes may be rented out at market rate rent, which is far higher than the mortgage would have been, which doesn’t reduce pricing or improve supply - rent remains high because these groups have data to keep rent that high, and supply remains constrained because a fourth of my inventory just got sold to profiteers instead of people.
* Of the remaining seven homes, all are likely sold to actual people. Due to bidding wars and my obligations to shareholders however, I have to take the highest bids. Because of anti-discrimination laws, I can’t sell to underserved minority groups because that’s considered discrimination. So a plurality of owners will be higher net worth individuals, many of whom likely already own property.
* Because we’re in a housing crisis and everyone wants money for doing nothing, it’s likely that about half of the new homeowners won’t outright sell their existing home, but instead rent it out at or near market rates set by PE/REITs. They want that cash after all, and know there’s a lack of supply. Because their old homes aren’t being added to the market for sale, this doesn’t apply negative pressure on housing prices since a home for rent is not a home for sale
* So now we have just three homebuyers left who bought their only home, aren’t renting it out, didn’t have prior equity, and almost certainly overpaid for what was on offer. This places them in a precarious environment where a job loss could lead to eviction or having to sell the home - but because they’re in the midst of a crisis, they can likely get a quick cash offer from a PE/REIT without actually putting the home on the market, making their problems disappear and putting them back as renters. Maybe one to two homeowners are affected by this.
So out of ten homes built, only three go to people not already on the property ladder in some form, and of which as many as five are likely to end up in the hands of an investor at some point anyway. Ten homes for a net gain of five purchasable properties is not a meaningful increase because the market, government, and tax incentives value less supply and more demand.
Don't those other five now become more rental stock though? This is still 10 homes that didn't exist before, as 5 owner occupied, and 5 new rental properties.
Sounds like a great outcome! Let's do that some more.
Let me put it into simple numbers the detractors can understand:
I build ten homes in a market that needs a hundred. I price them affordably because I’m not an asshole and understand there’s a crisis.
* Statistically speaking, 25% of those homes will be bought by PE or REITs. I cannot deny them the sale because the law says so. Let’s round that up to three homes out of ten. Those homes may be rented out at market rate rent, which is far higher than the mortgage would have been, which doesn’t reduce pricing or improve supply - rent remains high because these groups have data to keep rent that high, and supply remains constrained because a fourth of my inventory just got sold to profiteers instead of people.
* Of the remaining seven homes, all are likely sold to actual people. Due to bidding wars and my obligations to shareholders however, I have to take the highest bids. Because of anti-discrimination laws, I can’t sell to underserved minority groups because that’s considered discrimination. So a plurality of owners will be higher net worth individuals, many of whom likely already own property.
* Because we’re in a housing crisis and everyone wants money for doing nothing, it’s likely that about half of the new homeowners won’t outright sell their existing home, but instead rent it out at or near market rates set by PE/REITs. They want that cash after all, and know there’s a lack of supply. Because their old homes aren’t being added to the market for sale, this doesn’t apply negative pressure on housing prices since a home for rent is not a home for sale
* So now we have just three homebuyers left who bought their only home, aren’t renting it out, didn’t have prior equity, and almost certainly overpaid for what was on offer. This places them in a precarious environment where a job loss could lead to eviction or having to sell the home - but because they’re in the midst of a crisis, they can likely get a quick cash offer from a PE/REIT without actually putting the home on the market, making their problems disappear and putting them back as renters. Maybe one to two homeowners are affected by this.
So out of ten homes built, only three go to people not already on the property ladder in some form, and of which as many as five are likely to end up in the hands of an investor at some point anyway. Ten homes for a net gain of five purchasable properties is not a meaningful increase because the market, government, and tax incentives value less supply and more demand.