The Big Boys Are Back: Financializing Single-Family Houses

As after the last crisis, fueled by ultra-cheap money, they’re taking financialization of the housing market to the next level: Now it’s buy-to-rent, build-to-rent, sale-leasebacks, and buy-to-sell.

By Wolf Richter. This is the transcript of my podcast last Sunday, THE WOLF STREET REPORT. You can listen to it on YouTube or download it wherever you get your podcasts.

In many parts of the country, house buying has turned into a drunken land rush. Sales of new houses in August jumped 45% from a year ago, after having jumped 50% in July, to the highest sales rate since 2006, which was the end of the prior housing bubble. Sales of existing homes jumped to the highest rate since early 2007, particularly concentrated on single family houses.

This land rush has been ascribed to different factors, including people leaving rental apartments in big cities to move to the suburbs or exurbs; people suddenly deciding to start families; people – especially those that benefited from the crisis and made a killing with the Fed’s schemes – buying a second home outside the city; and people buying a home in a hurry without selling their old home first, hoping for a higher price later.

And this is happening during a massive unemployment crisis; a time when 7% of all mortgages have been moved into forbearance; a time when 17% of the FHA-insured mortgages are 30 days or more delinquent, though many of those loans have also been moved into forbearance and put on ice.

Clearly the housing market has split into two, with one part being red hot, and the other part crumbling before our eyes.

But there is something else going on too: A surge in big money into single family houses as an asset class.

This is now taking different forms: There are the buy-to-rent companies that grew out of the Financial Crisis. And there are companies that are now building new houses specifically as rental houses; and there are the iBuyers – companies that buy houses to then sell them, a business model that is intended to replace the brokerage model though it has done nothing but lose money, but no problem. And then there are companies buying houses and leasing them back to the former homeowners so that they can resolve a mortgage delinquency without having to move.

And these companies have raised many billions of dollars since April in the capital markets that have gone totally nuts.

Homebuilder ResiBuild was set up specifically to build houses as rental properties. The Atlanta-based company is now raising $1.2 billion, including $400 million in equity and $800 million in debt, to build 5,000 houses with three or four bedrooms and a two-car garage that rent for about $1,850 a month. And it plans to manage those rentals.

Co-founder Jay Byce comes out of Colony Capital, which got into the buy-to-rent business that the Fed so hotly encouraged during the mortgage crisis in 2011 and 2012, where these companies with cheaply borrowed billions of dollars swooped in and bought tens of thousands of houses out of foreclosure to then rent them out.

Jay Byce told Bloomberg: “We were already seeing both boomers and millennials move to rental communities because they wanted more room and a low-maintenance lifestyle. Covid has accelerated the shifts that were already happening.”

The theory is that people want more space and live in the suburbs but want to rent instead of owning.

On its website, ResiBuild says that it wants “to make the dream of living in a NEW home a reality for everyone. Our mission is to provide quality homes in desirable areas that are affordably priced for today’s renters, using the most modern, efficient, and customer-focused homebuilding strategies to achieve this.”

And private equity firms are once again chasing after the buy-to-rent market. This includes the asset management division of JPMorgan that nearly tripled the size of its joint venture with American Homes 4 Rent, to $650 million.

American Homes 4 Rent is a buy-to-rent outfit that grew out of the mortgage crisis and the Fed’s efforts to resolve it without taking down the banks. It already owns about 53,000 houses. And it raised an additional $400 million in a stock offering.

American Homes 4 Rent is not only buying houses in the market, it is also now massively building NEW houses specifically to rent, and has become one of the most-active homebuilders in recent months.

Bookfield Asset Management set up a fund to get into the rental house market.

Blackstone Group, which started Invitation Homes during the mortgage crisis and then sent it on its way in an IPO and has since then cashed out, now invested $300 million in Tricon Residential Inc., which owns over 30,000 single-family and multifamily units in the US and Canada.

Invitation Homes, the largest buy-to-rent outfit with 80,000 single-family rental houses, raised an additional $400 million in a stock offering in June, and is buying houses at a rate of about $200 million every three months.

These buy-to-rent companies have also raised almost $6 billion by selling rent-backed structured securities, including three big deals in September, according to Kroll Bond Rating Agency.

Despite the malaise in the big-city rental apartment sector, the buy-to-rent companies, such as Invitation Homes, have reported record high occupancy rates and on-time rent collections that are roughly in line with pre-Covid averages.

Invitation Homes said in an investor presentation in September that it would be getting into the sale-leaseback market – buying single-family houses from homeowners and leasing them back to the former homeowners, who would do this to cash out without having to move.

The sale-leaseback method of raising cash has been practiced for a long time by owners of commercial property, airplanes, equipment, etc. But in terms of single-family houses, it’s fairly new.

But now there is a different angle to the sale-leaseback model, that is totally new: 7% of the mortgages are in forbearance and others are delinquent but are at the moment protected by a moratorium on foreclosures. These homeowners will eventually have to deal with reality, which could mean a forced sale or foreclosure.

But with a sale-leaseback, they could sell the home and lease it back, so they’d become renters and wouldn’t have to move. Startups are getting into this deal, raising lots of money to do this.

In other words, companies are lining up to take advantage of the mess that will ensue when the forbearance period and the foreclosure moratorium end, which is when these mortgages become officially delinquent and face foreclosure – and it will produce another wave of homes being taken over by investors and becoming an asset class.

Then there are the iBuyers, such as Zillow, Opendoor, Redfin, and others. Zillow and Redfin are already publicly traded and got into the iBuyer craze as an additional activity. They both have booked losses every year, and since they started getting into the iBuyer craze, those losses increased.

But with these crazy stock and bond markets, they can raise funds, no problem. Zillow’s shares more than quadrupled over the past year, despite the losses, and its market capitalization reached $25 billion.

Opendoor is a dedicated iBuyer. It’s going public via merger with a special purpose acquisition company – a SPAC — that values Opendoor at $4.8 billion, after it raises an additional $1 billion. This comes on top of the nearly $3 billion Opendoor has raised from prior investors, including SoftBank. Opendoor has been losing tons of money, but it doesn’t matter as long as investors are willing to supply more money.

So now these huge amounts of money are playing in various ways in the market for single-family houses, throwing many billions of dollars at it, some of them to buy-to-rent, others to build-to-rent, others with sale-leaseback programs, and others again to buy-to-sell.

The funding for all these activities come from share offerings, from bond offerings, from institutional investors investing billions of dollars directly into privately held companies, and from selling rent-backed securities, and so on.

As it happened after the Financial Crisis, when the Fed promoted the buy-to-rent programs to its favorite private equity firms and helped them fund the purchases with ultra-cheap money, we now have another crisis during which the Fed has produced ultra-cheap money and is encouraging the next leg in the financialization of the housing market, leading to vast concentration in ownership of houses and housing market activity.

Fueled by cheap money from the Fed, following another crisis, the Big Boys Are Back, bigger and broader than before. And the financialization of the single-family housing market is now progressing to the next level. You can listen and subscribe to THE WOLF STREET REPORT on YouTube or download it wherever you get your podcasts.

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  87 comments for “The Big Boys Are Back: Financializing Single-Family Houses

  1. A says:

    Corporate America doesn’t want you to own anything. They want to own literally everything and rent it back to you.

    Our dystopian future is nobody owns anything and you merely get “housing as a service.”. Maybe the neighborhood you are allowed to rent it will be determined by your Amazon Prime subscription level.

    • A says:

      If we’re really lucky, we will live to see the day the socialist police department, socialist firefighters, public school, and taxes are all abolished and privitized. All will be provided by your coproate billioanire masters based on your subscription level.

      We can be segregated into “free tier”neighborhoods” and those that subscribe to “platinum plus police protection” to be allowed to live in better neighborhoods. All provided for-profit by our billionaires masters for our monthly subscription fee.

      • economicminor says:

        I think that is called Feudalism!

        • WyleeEconomist says:

          TutTut serf… In Neo-Feudalism… A serf pays for their own, Food, Shelter, Clothing, education, healthcare and water…

          So your ‘job creator’ can afford the mega-yacht they really deserve, since their parents passed down their fortune to the next generation of ‘job creators’.

        • NBay says:

          Modern serfs are “independent contractors” in corporate speak.

          Just think…..a nation of totally “free” entrepreneurs, with no nasty socialist interference. The only ones with more freedom are the homeless, as their “business model” requires far fewer “services” to sustain life.

          There is a good reason that after the founding of the US, the legal concept of a “corporation” was feared and very highly restricted and regulated (chartered for a fixed period of time, and subject to strict scrutiny). By Lincoln’s time the borers (lobbyists) had changed that, and he just referred to corporations as “having been enthroned”.

          Soon the fifty stars in the flag will be replaced by the largest corporations…..kinda like family crests.

      • Paulo says:

        You already have private toll roads. With scanning electronics and automatic billing it could be expanded, everywhere.

        • WyleeEconomist says:

          Good point!

          So when are they going to start the PR campaign that if we adopt toll-everything… eventually that public good will pay for itself and we won’t have to pay tolls anymore :P

          Step one:

          Public Money creates ‘public goods’

          Step two:

          Conservative politicians, sell ‘public goods’ for pennies on the dollar to donors…

          Step Three:

          Tax payers are stuck paying tolls to access ‘public goods’ they already purchased and yet do not get a tax deduction for paying to support government ignorance.

          Step Four:

          New owners, use tolls to make lager bribes… to buy ever larger ‘public goods’.

        • MCH says:

          “So when are they going to start the PR campaign that if we adopt toll-everything… eventually that public good will pay for itself and we won’t have to pay tolls anymore :P”

          Hey, I think I know a word for that…. taxes

    • Seneca's cliff says:

      The big boys have figured out that in future economy most people will depend on an IV drip of monthly Fed stimulus funds directly to their bank account. Their plan is to put up acres of chipboard and sheetrock personal tollbooths (single family homes) . Then they will push through a finance law that all new mortgage holders and landlords have the right to have the fed monthly stimulus checks go directly to the big boys accounts. They they will have a perfect flow of funds directly from the fed to their bank accounts.

    • nodecentrepublicansleft says:

      I couldn’t agree more. They. Want. It. All.

      When on when can our apathetic population see what’s happening and actually do something?! Sometimes I fear nothing will happen unless there’s an interruption in tv, draft beer, sports and now social media.

      By I know for a fact we’re doomed if everybody 30 and below insists on getting their “news” from Facebook.

      • Garage Needed, House Optional says:

        Funny, and here I thought it was most people over 40 were the ones getting their “news” from Facebook. Then again, I don’t have an account anymore so I haven’t the faintest idea what goes on there nowadays. When I left though, it seemed like it was mostly older people that were on there non-stop while younger people had moved to Instagram, Twitter, and TikTok (not that they’re any better).

        Overall, it just reminded me too much of people who get their “news” from TV and still think it’s all accurate information coming from those talking heads. They’re just as much an impediment to people understanding what’s actually going on as the social media sites, but of course they are. They don’t call it the entertainment industry for nothing.

        It’s going to take something miraculous I think. People won’t wake up because it’s too easy not to, and would challenge everything they’ve ever thought they knew.

    • Mira says:

      Yes !!
      But to what end ??
      To become filthy rich ??
      We are going back to the good old days when a mining company built the housing for their workers.
      But ..
      There is the cost of maintenance .. landlords are notoriously loathed to fork out money to replace the hot water service & the property is left to run down to gross deterioration.
      And ..
      Tax due to profit .. will it be a lucrative system for the coffers or will the land lords tax deduct to zero ??
      Also ..
      Won’t the banks be worse off .. isn’t it more lucrative to have many individual borrowers than one massive .. tax deducting whale as your bread & butter ??
      Finally ..
      Either we the people will have more money to live well .. or we will be thrown into serfdom once again.
      Ah, for the good ol’ days of yore.

  2. Seneca's cliff says:

    As empires age and peak out they historically often convert to Rentier economies. The upper classes seek to earn a living “clipping coupons” or running economic toll booths. Production or useful work goes out of style and everyone aspires to a life of collecting payments. This financializing of single family houses is a neon signpost that we are an empire on its last legs.

    • Mr. House says:

      As they peak? You do realize the gilded age was long before the United States peaked. Replace empires with human nature. Without constant vigilance we end up where we are. So who dropped the ball?

      • MonkeyBusiness says:

        Everyone dropped the ball? Or no one did. As you said, it’s human nature. Do you fault a lion for hunting down weaker preys?

        As long as there are human beings, there will always be psychopaths. But the later as a group is also a creation of nature.

      • BuySome says:

        I would not confuse the state of tecnology with economic strength. Seneca’s cliff may be right as the U.S. was in a great position between the 1870’s and 1890’s, just before mass consolidation of smaller enterprises into giant consortiums which based their value upon things which were fallacies…”good faith”?…what the hell is that. The peak probably occured around the time that steam locomotives became superheated and steel was replacing wood in passenger cars…circa 1910. The last needed expansion of a route from Grants Pass Oregon to the Northern California coastal counties was cut short when rail building was cut off in 1916. This was when auto registrations were skyrocketing. Sure, there was some social improvement, but the economy itself has been living on really bad debt structure ever since the country went to war in someone else’s pissing contest.

        • The great depression witnessed a rollout in technology that was unprecedented: new products using electricity, new procedures in medical science, and photography which allowed us to split the atom. Everything since has been innovations to old technology. The next iteration, a nano-technology, will probably require the obsolescence of computers which are limited by the old system of mathematics. Then we will all be really broke.

    • Engin-ear says:

      It is not the existence of Rentiers that hurts, it is the disapperance of productive economy.

      Humans are rational, they naturally tend to look for best possible Cost/Benefit ratio, and when both “Poductive but hard” and “B.S but easy” jobs are priced the same or even in disadvantage for “Productive” work, there comes a day when there’s nobody to bake the bread.

  3. paul maier says:

    regardless, this will NOT END WELL!!! when the free money and
    the super low interest rates rise a bit, there will be the usual
    rush to the exits. i wonder if we will have “government housing” for ALL
    as a result of all this when the SHTF.

    • coalman says:

      Corporate Communism.

      • JBird4049 says:

        So how is it that the people in 10%, and our Oligarchic Rulers, and the Corporatocracy that passes as American “business” are all entitled to the endless stream of free money while entire families are truly going hungry? I’m reading stories of the increasing numbers of malnourished children, never mind the parents who often go hungry to feed them.

        Yet, we cannot afford this “communism” that can put money in their pockets for rent or food, or that might keep all those businesses now failing. We can afford to give actual trillions to the FIRE sector and to endless, unnecessary wars overseas though. It’s like they want a war at home.

        • Lisa_Hooker says:

          Some folks invest in beer at sports bars and snowmobiles and bass boats. Others invest in tools, businesses and bonds.

      • not_hilter says:

        State corporatism is called Fascism. But in this case the oligarchs captured the state, the converse of the Nazis.

    • Glenn says:

      Yes we will . Government housing called FEMA camps.

    • Old School says:

      Throughout history a lot of financial disasters originate with government policy change. This often gets economic activity running to one side of the boat.

      I am anticipating the move to electrify the economy to be like that, but who knows for sure. With natural gas nearly free in the US, why spend trillions to electrify? I am not sure it’s the best way to spend the wealth, and when wealth runs low you make the tough choice to provide for needs not wants.

      • Erik says:

        Wolf, this is a great piece but I’m left wondering what investment strategy should follow from the facts you present. Does this imply the single family home market is being artificially inflated right now, so you should avoid buying a single family home?

  4. RightNYer says:

    I don’t know what this country will look like in ten years, but I do know that I don’t like what I see right now.

    • MonkeyBusiness says:

      I think people who lived through the 60s and 70s would probably say the same thing. At the same time though, the stakes are much higher now. We’ve pissed off all our social capital. We are knee deep in debt, and the financialization of our economy has probably reached terminal stage.

      We are indeed in deep s***. Gilfoyle from Silicon Valley said it best: “it’s everyone against everyone”.

      Buy a baz**ka?

      • Thomas Roberts says:

        It’s indeed everyone against everyone, but, against some more than others. Someone has to control that narrative.

      • Frederick says:

        I was young and ignorant to much of this back then but it seems worse today with all the Orwellian survelience, etc brought to us by 911

        • Lisa_Hooker says:

          Frederick, I assure you, it IS worse today. And it appears it will become even worse in the future.

      • Petunia says:

        In the 60’s and 70’s people still had confidence in a better future. That confidence doesn’t exist now.

        • VintageVNvet says:

          Not sure where ya were in that era Pet, but in SoCal 65-68 and NorCal 68-72 + NorFL 72-74 most people had no clue and didn’t care much about what DC and the rest of the holier than thou self righteous eastern folks, especially the coastal elite, thought or did, because those areas were booming bigly.
          Some few of the folks ”in the know” were sufficiently informed to vote against Nixon in 72 because he was a crook, but in FL for example Alachua was the only county to do so.
          Now that we know ever more better,,, thanks to much more available information for everyone with a phone, sometimes if they want to know or not,,,, how really and truly criminal our politician class and their reich masters actually are, along with seeing quite clearly their continuing theft of our productivity and subsequent wealth maintenance, there is no possibility of confidence until their over all ”confidence game” is done away with.

  5. Crush the Peasants! says:

    Asset stripping, but you get to rent the asset you formerly “owned”, and you don’t have to move.

    But why don’t these masses of otherwise soon to be evicted band together, get rid of these middlemen parasites, and create similar investment vehicles, in which they will be fractional owners? I guess that is why there are wolves and why there are sheep.

    • Frederick says:

      Some have done that The Hasidim in Brooklyn, and the Mennonites in Penn for example

      • Lisa_Hooker says:

        Frederick, I do not mean to be too snarky, but I am willing to send you a new keyboard with a functional period (“.”) key. It will help with clarity in your comments which I value highly.

        • The Original Colorado Kid says:

          If he’s commenting using voice recognition, maybe he doesn’t know you can say “period.”

        • VintageVNvet says:

          Good one Lisa,
          I agree that it’s at least disconcerting, if not down right off putting when folks, and F is not the only one, do not use or at least attempt to use standard English.
          One of the things that I value on Wolf Street is the input by the world wide commentariat, so I will put up with the lack of standard punctuation, etc., though I do wish folks using non standard abbreviations and acronyms would write them out first, as has been asked by others on here.
          Maybe Wolf could put together a clickable database of all the abbr. and acks. used on here, with a charge of a nickle per click???
          I hereby volunteer to use it rather that gugli, etc.

    • nodecentrepublicansleft says:

      We’re too busy reading People magazine and surfing Facebook!

      Is that razor blade I feel on my throat? Oh well, can’t be bothered….I’m watching the teevee host (a millionaire controlled by billionaires)….

      He’s a “regular guy”(only make $37M/yr) who rails against the “elites” and tell me poor people from Central America are the biggest threat to me.

  6. There is never a problem with supply and demand. Bankruptcy generates demand regardless of supply, or how do the automakers sell cars no matter what the economy looks like? If your corporate landlord rents you a home on the east coast and the west coast, (your new job demands it) and you split time between them, that expands the supply if he only needs 75% vacancy to be profitable. Car rentals work the same. So long as the Fed controls the collateral upon which businesses form, we will become a permanently nomadic state. Housing is inverted worker mobility. Even retired workers catch the bug.

    • Lisa_Hooker says:

      One of the secondary goals of mortgage homeownership is to reduce worker mobility. Helps to keep the ship from capsizing from rapid and excessive worker migration.

  7. Michael Engel says:

    1) QQQ daily, cloud (9.26,52) : K, day #1 (out of 26TD behind) on top of Sept 2 high.
    2) K will lose it’s highs and turn down.
    3) T&K might have a Bullish flip next Mon. Unless QQQ decide to move lower. Sept 4(C) is resistance, on top of Sept 4/8 gig gap. QQQ closed today on K, under the cloud. If both T&K move lower together ==> the downtrend momentum is high !!
    4) The Nasdaq Futures 1H on the verge of a Bearish flip. It might happen soon, or in the middle of the night.
    5) 10Y Futures, TY 1H with RSI.
    6) Tonight, Alibaba.

  8. rich says:

    Trump once bragged that he was “the King of Debt, but Softbank is the King of Banks when it comes to picking losers. In May, Softbank announced that its “Vision Fund lost $17.7 billion in the most recent fiscal year, triggering the worst loss ever in the Japanese company’s 39-year history. SoftBank had to write down the valuations of companies like WeWork and Uber Technologies Inc.”

    Smoke and mirrors are still in place, but even the smoke from the fires in California will disappear in a few months. When that happens, we will be able to see the charred earth that the smoke has been hiding. After the election, we may well be able to see the Kingdom of Debt that the Trump administration has been hiding. Perhaps it will be time for the bondholder class to finally suffer along with the debtor class.

    • nodecentrepublicansleft says:

      I worked on a Softbank funded Telecom project and oddly the company who ran it put people with ZERO Telecom experience in charge of it.

      I was on a team of 7 people with 150+ years of relevant experience and we reported to 2 people who were on their first project.

      I explained this to a friend who said “It sounds like you’re part of a Ponzi scheme.”

  9. Lynn says:

    Buy-to-rent or sell is a real negative for the *actual economy*- the people’s economy, not the stock market.

    Build-to-rent is a positive. Probably a better return for investors as well if what I’m seeing is any indication.

    I lost a bid to an online buyer who paid 20% over asking price without ever going to look at the place. The house had foundation issues- the usual bad issues on houses built in 1904, PLUS the owner had drastically cut into the supporting structure for an addition- had removed an entire corner of the main house and put in a bookcase as a bulging & inadequate support. Needed a new roof with some structural replacement. That alone was a mess. In addition, I stopped looking when it was obvious the house had been used as a grow room. Almost every single stud in the place will have severe water damage and need repair or replacement. Also,1940’s electrical wiring, insulation and plumbing. Add an asbestos ceiling or 2.

    Whoever bought that house paid full price for a shell. It would be cheaper to build a new house.

    I’m trying to buy just one house to live in. All of the houses I’m looking at need repair and are low end. The people outbidding me can’t make any money on these. Most professionals moving out of cities wouldn’t be caught dead in them. Go figure.

    • Brant Lee says:

      That’s why so many houses are razed in high-cost areas. It’s the lot that is valuable, the old house is a money pit. An old house in need of a lot of repairs cost too much compared to building a new structure. Tear out and disposal is expensive even before fixing the problems. In an earthquake zone, the whole structure has to be brought up to code. Just rewiring and plumbing through that old crazy framing is a nightmare. On and on…

      • Lynn says:

        Yes. I should have mentioned that the person or entity that bought the house paid far more than the market value of the lot and the price of tear down and disposal combined.

  10. Petunia says:

    The rent control initiatives are on the ballot in CA and coming to every city and town near you. I wouldn’t want to own more than a couple of rental units anywhere in America right now. You are going to see this movement grow bigger and faster than you thought possible.

    The initiatives in CA include language which will make any owner of more than a few units rent controlled. They also include language allowing only individuals and nonprofits to bid on foreclosures. It’s about time too.

    • TownNorth says:

      Rent control in LA County varies by city (called rent stabilization here) and usually only applies to multi-unit buildings built 1979 or earlier. New builds get market rate. In Beverly Hills, it’s 3% or CPI annual increase, whichever is greater. In Santa Monica and West Hollywood, it’s 75% of published CPI annual increase. In LA City, it’s the CPI as an increase, but not less than 3% or more than 8% annually. I believe the upper cap for LA used to be 10%.

    • Lynn says:

      Yes. In my area people passed a rent control ordinance on the county’s mobile home parks. Big corporations and investors had bought out many of them and raised rents to almost double. The people living in them lost all equity on their mobiles (self owned) and many had to leave. Lots of low income and elderly people.

      That’s really scrapping for money- buying up mobile home parks and turning over their populations. Make elderly people who owned their own homes homeless. What kind of pride or status can anyone take in that? One elderly man was so upset he made a sort of propane bomb and threatened to blow everything up. Most of the parks were originally owned by couples who ran them as low income housing and took some pride in providing that service to the county.

      That ordinance would never have passed in my area if it weren’t for the large corporations scrapping for every last dollar and local people seeing their Grannies priced out. Ironically some of them are almost empty now. I’m sure that brings in a lot of money for their stockholders..

    • NARmageddon says:

      >>They also include language allowing only individuals and nonprofits to bid on foreclosures. It’s about time too.

      I’m for it !!!! No more Wall St jazzholes should be allowed to buy foreclosures. Only fair when the banks losses are being paid by the people and not Wall St.

      • Ethan in NoVA says:

        Wall Street will just use a non-profit to buy them?

        • Petunia says:

          I tend to agree that non profits are just as bad as hedge funds.

          Most of the homes I saw owned by mega landlords are in LLCs. I don’t know how many homes are in each LLC, it could just be one.

    • VintageVNvet says:

      Right Arm Pet!
      The only part/implication of your comment that might be passe’ is that the most recent move in Berzerkeley, whose ordinances and policies are likely to be at least one basis for rent control going forward is that they recently considered rent control for SFH in which the owner rented a room,,, ONE ROOM!! It didn’t come to vote, YET!
      At that point IMO, squatters will rule for at least a decade,,, approximately 30 years at the ”squat” just emptied today in Berlin.
      On the other side of that, Maui housing board just vetoed a so called affordable housing project because the projected sales and rents were too high for the working folks intended to be the owners/renters.

      • cb says:

        VintageVNvet said: “Maui housing board just vetoed a so called affordable housing project because the projected sales and rents were too high for the working folks intended to be the owners/renters.”

        They just don’t get that any new housing puts downward pressure on rents. New affordable housing is often counter productive. Let developers build all the market rent or high end housing they want. Additional units at any price range opens opportunities.

    • Lisa_Hooker says:

      I’m wondering if rent controls will also cap the “equivalent rent” that BLS uses to maladjust their CPI.

    • cb says:

      Petunia said: “They also include language allowing only individuals and nonprofits to bid on foreclosures.”

      The old nonprofit scam.

  11. Randy Oldman says:

    On and on it goes, that cliche about the capitalist shark having to keep swimming to stay alive, swallowed healthcare, swallowed higher education,now eyeing utilities and family homes. Distressed assets distressed citizens- Zero interest rates-a feast for opportunistic sharks. Where is this hidden hand taking this nation?

    • Mr. House says:

      Yeah, thank god they talk about all this stuff in the debates. The smart thing to do is to not vote, withdraw consent. Its hard, i’m living it now. Every person on my street, heck within the city, wants you to put a biden sign in your yard (i rent, so not really my yard). And when you tell them you aren’t voting, my god do they lose their minds. Is it brave to follow the herd as they stampede off a cliff? Or two stay on your own and be different?

      • Frederick says:

        I came to that conclusion in the early 90s and haven’t wasted my time since I am a big fan of the late George Carlin and we all know how he felt

      • Lisa_Hooker says:

        Voting only encourages them to continue and extend their nefarious scams.

  12. kitten lopez says:

    i need to recant my earlier optimism about San Francisco’s return to the ’90s, when we could afford to live and have free time to have coffee together and come up with new art and ideas.

    just got back from the gym and went through the edge of Potrero Hill, the designer district, and there are sooo many permanent (wood structures) homeless blocks, one after the other.

    i passed a couple of pit bulls pulling on leashes while their people were pushing a wooden living box on wheels across the street and tried to keep cool on my bike so they wouldn’t pull free. another sidewalk tent/tarp home down the block was really nice, with mirrors outside and decorations hanging up. All pretty. James later said “yeah, it’s an old lady who takes care of her spot. It’s really nice.”

    one guy up the hill on my way to potrero, had his head covered with a dirty blanket, with his hand outside the blanket, jerking off in the open air.

    we heard shots the other night from our local homeless encampment under 101, and many many police cars.

    at the gym, a couple of cops came by to ask if we heard all the earlier screams for help. someone got hurt real bad.

    there’s so much hostility out there, i saw a buy in floral pants and amazing matching jacket, having a yelling fight with people outside a store as i was passing by.

    and i’m not seeing it change anytime soon if like the other night, 60 Minutes played a story about old folks living in RVs as if they chose to for the fun and adventure. it was chilling to see them try to spin this Grapes of Wrath thing into a trend, fashion, fun.

    so i recant my earlier psychopathic oblivious clueless self absorbed optimism. gonna have to go back to drawing board on so many things.

    • Thomas Roberts says:

      Yeah, the root issue for all of that is the price of housing (and drrugs). Because, in America, we space everything out(sprawl), cities have a more explosiive rise in costs of living compared to size of the population. As the cost of living spirals out of control so do a cities problems.

      As for the homeless, almost all are addiccts. With various disabilities they often rate people on a scale of low functioning (bad) to high functioning (good, this is a typical person who doesn’t need help for daily life). This scale is very useful to apply to everyone. Unfortunately, as addiccts stay homeless longer or even homeless who are not, they become increasingly low functioning. Once past age of of mid 20s it’s very difficult to raise someone higher on the functioning scale. This is different than someone who is lazy or unmotivated. The homeless who stay homeless longer will become increasingly low functioning and at best you can usually only keep people from falling further. There’s no pleasant solution to dealing with the homeless, unfortunately. As homeless camps become bigger they will learn more and more negative traits from each other.

      I do actually know a person, who owns several small local non profit charities dealing with addiccts and others to get them to live a normal life. Basically, from what I’ve seen is that with the charity route, the height of what you can do is buy old houses across the city, fix them up and turn them into boarding houses (even if very small, ideally everyone has separate bedrooms) if you start out with mostly high functioning people and put them with similar other people you can keep them from becoming low functioning (usually) (many people aware of it, refer to it as babysitting). Large homeless camps and shelters are bad, because, people won’t be able to get along and bad traits will be passed along.

      Some people dealing with various issues or disabilities can be given an apartment and occasionally checked in on/given their daily pills. With the charity route, this is the limit of what you can do. You can keep the majority from getting worse, but, not many become permanently independent (some cycle in and out / can live independently, but may be dependent on a free money/housing program).

    • LeClerc says:

      Sounds like a bad neighborhood.

      BUT, anyone who wants to sell out can flip their house to Opendoor.

      Three cheers for SPACs!

    • Lisa_Hooker says:

      Kitten, never give up. We need every available optimist, most especially vocal ones.

      • kitten lopez says:

        Lease a Hooker*, yes, i AM winding down, losing energy and heart. it’s hard to be an optimist alone; you just become insane. and i get tired of being everyone’s clown or the one who keeps others from blowing their brains out at 3am.

        it’s worse with masks, distancing, and twitter facebook binary fears and stoking hate and divisiveness. i’m throwing in the towel because i don’t like people enough to calm each one down from being afraid of me, just so’s they’ll come out and play.

        no lie that Wolf is one of the few people not afraid of my dancing energy or laughs.

        i’m writing this in sobs because i just can’t see any upsides, that aren’t just more whistles past graveyards with zombies crawling out of graves to avenge themselves of past sins.

        Wolfstreet went from a few Penthouse Form like moments right into Faces of Death: it’s the THINKING in america. this is a sadistic, psychopathic, cruel country and i’m tired of fighting past the burns, blows, and tears to be optimistic, see potential.. that i’m not sure is even there right now, if ever again.

        i make jokes about turning young people over so they don’t get bed sores, but it’s not funny. it’s tragic the apathy fear self absorption etcetera etcetera.

        i know america was supposed to be a good idea, an experiment and i’m shocked at how casual the first ammendment is ignored because without it you can’t even scream out your mother’s name as they’re killing you, without it.

        but the constitution and bill of rights mock this country and those of us who still at least kinda believed in that stuff. but now they are just like first blush love letters in a shoe box from someone who habitually beats the crap out of you, chains you to a furnace, drinks your blood and tells you they love you and ain’t nowhere better than right there with them.

        i believed it for awhile…. maybe i still do, being the stereotypical masochistic cloying woman who sees all the POTENTIAL in HOW you belittle her so you can drink her blood. what talent!

        without James i’d be on the street, too. and hopped up on whatever i could get my hands on to ignore the fact of being thrown away in a country that’s about all this stuff that has little to do with living a good life anymore.

        or i’d be hopped up on whatever i could get my hands on just to ignore what i’ve gotta do to get a sandwich or make a phone call.

        america’s a mean ass place and totally terrifying to grow old in or lose any limb mobility. or be confused lost or unambitious.

        James said the only people who come to america or want to come to america are the total hustlers. i wanted to defend both sides of my family… but then i realized he was right.

        and i’m outta hustler mode. i tried that feministy “give me all the shit, too!” thing, but it stole my youth free time and the idea of family. / but that’s kinda the point, right?


        *Lisa Hooker: i only realized your name really was a joke a few days ago. puns are lost on me as i’m terribly literal right now.

        • Lisa_Hooker says:

          Kitten, you sound like an open wound and I wish I could somehow help to clear your mind for awhile. I believe many of us here feel the same frustration. Slow down. A glass of wine or three, maybe some herb? Get out of the city for a respite among the trees or beside the ocean. Away from crowds, save perhaps, a friend or two. Even if it’s only for half of a day.

          I chose my moniker here from my observations of what appears to be our current operational paradigm.

          No amount of money can buy happiness, enough money can rent it. – Lisa Hooker (c. 2020 ;-)

          SARS-CoV2 has trashed even the most ancient profession (R. Kipling – On The City Wall).

  13. Nevnej says:

    Easy to underestimate house maintenance and repair costs, especially with tenants who don’t take care of the place. It may be the investors who end up losing, but meanwhile there’s a lot of skim from operations …

    • Ethan in NoVA says:

      I rent from a landlord that doesn’t take care of his place. Too busy buying more places. It’s going to hell, but he is building an empire. I would fix the things in a weekend (except the leaking roof, insurance would have covered that.) I offered to buy it, but I doubt we would meet on price.

      Thinking more and more about trying to get a remote job and moving to Florida where the diving is awesome.

      • VintageVNvet says:

        Not sure what your work is Enva, but tpa bay now growing very fast as techie work location, all folks welcome, etc., with bigly ads for techies and such every Sunday in tampabaytimes…
        Huge inflation of RE last few years, and local demand continuing for SFH, but very most likely just another revolution of the wheel going up and down that I have had to deal with since 56, when dad had no work for six months, RE crashed, etc.
        So, keep your powder dry, and be ready to go when this current situation hits bottom, likely, but not necessarily, at least a year or two.

  14. sunny129 says:

    ‘And then there are companies buying houses and leasing them back to the former homeowners so that they can resolve a mortgage delinquency without having to move’

    Isn’t what Blackstone group in Spain during GFC and now ready to unload to unsuspecting ( NOT so savy!?) investors?

    You think it is NOT going to happen in America? B/c it is the bastion of Free Market Capitalism which breathed it’s last in the March of ’09, courtesy our Fed, right?

    Wonder who are going to buy the commercial RE of mall, Offices, high rise condos/apts, unleased aero planes, cruise ships in the months to come ETC?
    Fed has enough QE to infinity to bailout all these!, right?

  15. sunny129 says:

    Wonder why NO 2nd stimulus so far?

    Employment in the lowest earning sector remains 25% below its February level while employment in the highest wage category has fully returned to its pre-crisis level

    “The experience of this recession at the top of the income ladder is just qualitatively different than it is at the bottom, said David Wilcox, now a fellow at the Peterson Institute for International Economics……’

    MW -story/coronavirus-relief-effort-stalled-because-only-the-poor-are-hurting-former-fed-economist-

    • Petunia says:

      QueenNan thinks desperate peasants turn into motivated voters. She expects to reap the the rewards of their despair. Let’s see how many line up for another whipping.

  16. Ben says:

    AEI is reporting they have 867,000 going to foreclose. Not mentioned. Not nearly enough capital raised for price controls after forebearance ends

  17. Brant Lee says:

    Why don’t we just destabilize the economy through printed money and war, collect 28 trillion debt on the backs of Americans, then before the bust, loan more free money to banks and corporations to buy up all the property. Simple, but most didn’t see it coming.

    Rah Rah, be sure to vote. The same lifers are on the ballets.

  18. Lisa_Hooker says:

    The new American Dream: home rent-ship. No wealth accumulation for the hoi polloi, just indentured negative cash flows.

    • kitten lopez says:

      that’s why i’m so blue. / i thought things would let up but they CAN’T. we’re already competing with the whole world for our homes and now REITs? really?

      so now that they’ve got people used to paying half their income on rent, why let up now??? so no one will have free time or time to think or do anything else but work.

      that’s why i’m not so sure of any art renaissance in anything. the arts are already long gentrified by trust funders and you wonder why there ain’t nothing to watch anywhere?

  19. nodecentrepublicansleft says:

    Does anybody think having a pandemic incompetent President who may be a super-spreader himself (30+ people connected to Oval Office have come down w/the virus), ranting on TV while possibly dying (it took Herman Cain 5 weeks to succumb and he also kept saying “I feel fine!”) AND hopped up on steroids is bad for the USA and the world?

    I keep waiting to hit the bottom and it never comes.

    • Candyman says:

      Is it worse than a no mask wearing , self indulged Pelosi, manipulating stimulus bill with non civic related items? Not exactly working on my behalf.

  20. Disgusted In Mount Pleasant says:

    For those of you who aren’t yet old farts & might not know of it – read “Gladiator At Law” from around 1954/1955.

  21. DanS86 says:

    Has anyone used or have an opinion on it? I know someone that wants to sell and rent back then move to split those two activities apart.

  22. Mira says:

    Victoria State Government .. Department of Health & Human Services.
    Delivering a vibrant future for local tenants & communities. The sites at Bell/Bardia & Tarakan Heidelberg West are 10 km from the CBD in the city of Banyule.
    Sounds great .. N’est Pas !!
    Google Real Estate Heidelberg West & see townhouses & apartments.
    The once 600 m2 plus blocks now accommodate .. EMPTY .. housing at marked up prices ??
    The down sizing of land is good but is the housing desirable ??

  23. Sound of the Suburbs says:

    The classical economists could observe the world of small state, unregulated capitalism in the world around them.
    Today’s economists worked up from micro foundations and got very confused.

    How different is classical economics?
    Ricardo was part of the new capitalist class, and the old landowning class were a huge problem with their rents that had to be paid both directly and through wages.
    “The interest of the landlords is always opposed to the interest of every other class in the community” Ricardo 1815 / Classical Economist
    What does our man on free trade, Ricardo, mean?
    Disposable income = wages – (taxes + the cost of living)
    Employees get their money from wages and the employers pay the cost of living through wages, reducing profit.
    Employees get less disposable income after the landlords rent has gone.
    Employers have to cover the landlord’s rents in wages reducing profit.
    Ricardo is just talking about housing costs, employees all rented in those days.
    Low housing costs work best for employers and employees.

  24. JBird4049 says:

    To: Lisa_Hooker
    Oct 9, 2020 at 10:18 am

    Some folks invest in beer at sports bars and snowmobiles and bass boats. Others invest in tools, businesses and bonds.
    What point is being made here? Seriously. What does beer or bonds have to do with anything? The economy has collapse to the level where tens of millions of people can not invest in their own housing or even food right now.

    • Lisa_Hooker says:

      I mentioned beer and toys as examples of spending wages on consumption before investment in one’s future. Many of the folks here that are doing well now, or at least surviving well, are doing so because they weighed the future against immediate and transient good times. Those who fail to consider today’s actions often end up experiencing negative future consequences. I can’t recall anyone promising me that life was going to be fair, but I’m an old codger. I do agree that fewer and fewer viable choices are available to younger folks. It has become more difficult to even get on the treadmill.

  25. Mick says:

    Renting homes is a problematic business. Evicting a non-paying tenant is a long and expensive process. If the economy sinks, these investors are on the hook for debt payments based on an regulated rent reimbursements. If unemployment increases as it looks like it will, rental income will fall short.

  26. Dis says:

    Wolf – just one more question for you, intrepid investigative financial journalist (keep up the good work!) —

    “So when I sign the lease, does the McMansion come with a Mercedes, or do I need to get that lease separate?” ;)

    House dealership?
    Auto dealership?

    Is there a difference, in the era of Amazon, Carvana, and these iBuyers?

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