[tnmom]

Sure seems like the solution is to get bank money out of housing. I say this as someone who’s usually on the free-market side of debates.

Is there a true downside to the plans occasionally thrown around in Congress to limit/disincent institutional investors housing holdings?

[davidw]

Probably not a big downside, although it might make fewer single family units available to rent. But it really is a supply issue. Those bills, like the one from my Senator here in Oregon, Merkley, tend to be about singling out single family units as worthy of protection as "nice" housing for "families", which in its own small way contributes to the notion of denser, multifamily housing as being... not quite up to the same standard, if that makes sense.

More than anything, we need more housing supply in more places, and high insurance rates make that tricky because they're actually hurting multifamily construction quite a bit. It's sort of a vicious circle.

In lieu of that kind of housing, some reforms that would help are things like eliminating burdensome parking regulations and reducing minimum lot sizes, like Houston did to spur a lot of "gentle density" infill housing. Those sorts of incremental changes might help out some smaller developers who don't need huge loans.

[orange_county]

The ban on renting single family housing is just pure classism used as a way to ban people who can't afford a downpayment on a SFH to live in the same neighborhood.

This is a supply issue and thus why people should be considering joining YIMBY Action.

[austhrow743]

People generally vote for things that benefit them.

People who have a large portion of their wealth in housing, and even more so those who have used debt to take an extremely leveraged position on housing, benefit from increases in housing prices and lose out on decreases.

Having a significant amount of voters be in the above position is to make effective government action to reduce housing prices impossible.

So with that in mind, if institutional investors are disincentivised from investing in housing, which group is supposed to take their place?

[greesil]

You think it's rent seeking as a block, and not a supply problem?

[simoncion]

In the same way telecoms and other incumbent data-services providers can lobby local and state governments to create regulation that ensures that newcomers are prevented from entering the data-services market in the area, folks who are currently making big money from renting housing can lobby their local and state government to do the same.

(One obvious way for the folks making big money from renting housing to do this is to ensure the obstruction of new construction.)

And (of course) both sets of politically-savvy entities can encourage others to agitate on their behalf for the entity's preferred political outcome.