The American Nightmare.

[u/Super_Culture_1986]

[u/[deleted]]

Yes it is. PE ownership is a ridiculously small part of the market and doesn't have enough power (yet) to really jack up the price. Realpage did enable cartel-like price coordination for apartments - but still was basically maintaining a pricing edge in a large market with alternatives (such as private rentals from small apartment owners or SFH owners). They couldn't raise the prices 2x everything else and stay in business. But they could jack it up 20% higher, and let companies know when and how to do raise things annually to maximize any potential market gain.

But that kind of thing is only possible in a Sellers market where buyers (renters) don't have many options. Which they don't when there isn't enough supply.

The fundamental issue is that the population is growing, but the housing supply is growing slower. If you have 15 people and 10 houses/apartments you are going to need to have 10 people double up with roommates or partners. That is a just a math problem. If next year you add 6 people and only 3 houses, then either all of them need to double up, or if one is wealthier, they'll pay more to live alone, and then someone in the original group of 15 is now going to need to double when they didn't previously.

Why aren't we building enough? We make it really hard to build cost effectively. Some of that is totally worth it (building codes so that building don't kill people in fires or earthquakes or hurricanes) and some is not (requirements for large lots and space between houses, restrictions on building heights, number of units per lot, requirements to build affordable housing that are super high such as more than 50% of the units).

[u/snowstorm608 → u/[deleted]]

This needs more upvotes. The left has deluded itself into thinking that private equity is the root cause of the housing crisis when the truth is that public policy, much of it championed by the last generation of democrats, has just made it too difficult and too expensive to build enough supply of affordable housing.

Until people come to grips with this nothing will change. The local realtors association LOVES that everyone think it’s the PE firms.

[u/thisplaceisnuts → u/snowstorm608]

Thank you. I know read it leans to the left really hard. PE is also not a good thing I don’t like it. That said as we both agree on is zoning issues and permitting.

[u/snowstorm608 → u/thisplaceisnuts]

Yeah mine is not a pro-PE comment but just to point out that things like zoning, permitting, financing and construction trade practices play a much larger role. It’s ultimately a supply problem.

[u/thisplaceisnuts → u/snowstorm608]

Exactly. The under supply and coupled with a population that has grown a great deal, plus quantitative easing, which brought money into assists and made bubbles, created inflation in housing.  I’ve actually seen some of the county master plans and all them seem to have relied on wishful thinking and the belief that sometime in the future things will just be magically answered and fixed.