A lot has been written about the news that investment firms like Blackrock bought 15% of U.S. homes for sale in the first quarter of this year. However, Derek Thompson at The Atlantic says BlackRock is not the problem. NIMBY’s are the true threat to affordable housing…
- Blackrock is not competing with families. They are competing with other investors. “…institutional investors tend to buy homes that need significant repairs. That means they’re often competing with other investors—individuals who buy houses to rent them out, as a side gig or a main gig—not with typical young couples who are looking to turn a key and walk into a finished house.”
- Blocking institutional investors wouldn’t change much. If institutional investors were blocked from buying homes other investors would fill in the gaps. Not single-family buyers, “Millions of mom-and-pop investors would still be out there, buying millions of single-family houses and renting them out to millions of people. The overall texture of the U.S. housing market would remain the same.”
- The blame falls on NIMBYs. “Far worse than corporations taking a few thousand units off the market for owners are the governments and noisy NIMBYish residents taking millions of units off the market…Many of the people tweeting about BlackRock are represented by city councils and state governments, or are surrounded by zoning laws and local ordinances that make home construction something between onerous and impossible.”
As has been noted dozens of times, and will be noted hundreds of more, the housing problem is a supply-side issue. A lot of people want to buy homes, and unfortunately, there just aren’t enough homes to buy. Thompson concludes his piece with an important point, “If we can’t see the culprit of America’s housing crisis, that’s because we’re eager to look everywhere except in the mirror.”