Private equity firms scooping up properties to maximize profits, increasing number of unhoused people

[boingboing]

Originally published at: Private equity firms scooping up properties to maximize profits, increasing number of unhoused people | Boing Boing

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[Mister44]

It seems like we could severely limit this with laws. Housing costs have gotten stupid high.

[DeadWriter]

Last (the year before last) year, the majority of the houses on the block I previously lived on were sold. I could’t fall our land lord when he told us he was selling the place we rented. The only people that showed ever viewed the house were representatives of private investment companies. They offered him money, and then more money, and then gave him more as they failed to meet their contractual deadlines. We had to move, and during the last few days of us moving out, they asked if we wanted to stay.

It’s been a year since we had to move. The house we once lived in is still empty. Our former neighbor’s’ house was vacant for a year before being razed due to squatters (it became a biohazard). Down the street the cottages were rehabbed with fresh paint, plastic grass, modern flooring, fresh paint, and I think the studios now rent for around 3 000. We lost friends and neighbors and then we had to go. There is at least one other house that was sold and is still vacant.

There really should be laws governing how much land any one person or entity can own. There should be rent control. We were lucky and found a place to land, but so many of our neighbors didn’t.

[eerd]

There was a Bloomberg story in January about the ways in which those trades went wrong. The whole model of private equity buying houses and then trying to flip them has not worked out in quite the way that companies like Opendoor and Zillow had planned. There were a number of instances where people sold out to these companies and then bought their house back - making a profit.
As Matt Levine wrote at the time: “Giant corporations swooped into the market for homes and gave everyone cheap houses, because they were dumb.”
Which is a bit of a generalisation but I think that the model does not seem to have worked and therefore may not be repeated. At least until the next house price boom?

[docosc]

Can testify, having just been through helping my daughter and SIL buy their first house. Way too many they put bids in on were snatched up on full price, all cash deals by rental companies within hours of being listed. Ordinary folks have a hell of a time competing in that arena.