That’s an easy explanation to reach for, but the theory rapidly breaks down without a unified cartel controlling the entire thing, because it’s opportunity cost down the drain to sit on properties to try to drive up prices across the market - each individual participant would make more money breaking with the cartel and just selling/renting their stock. Hence, the sheer number of actual participants in the market disproves it.
There are a ton of reasons why individuals/corporations would scalp housing units and hold onto them without opening them up to use, from laws requiring fair treatment of renters like in NYC (where 90,000 rent controlled apartments remain vacant), to “unified cartels” actually have incredibly large influence over some areas (there are some companies that hold 10s of thousands of housing units, like blackrock, and these corporations purposefully keep some vacant to inflate the price of all units and control supply).
But even if you want to just close your eyes and ignore my last paragraph, you can try to rationalize away the data, but the data will still be there. There are 16 million vacant housing units in the U.S. Even if you can’t fathom any reason why these might exist, they still do, and they still impact supply even if you’d like to believe they don’t.
I’m not pretending they don’t exist. I’ve called the problem out myself. But simple “capitalists are hoarding them to price gouge” is not a plausible explanation as to why.
Consider more deeply the problem of how competing firms respond to prices. Consider that these firms don’t actually have monopolies over a single geographical area, and also that people would have the option to move somewhere else even if they did. When there is actual competition, the theory immediately breaks down, because sitting on stock without selling/renting it actually just wastes money, and any other competing provider will just slip in below the price you’re trying to sell it at.
No people don’t “just have the option to move away”, that’s an incredibly naive way to look at the world, some people need to be in certain locations for social or work reasons.
Also, what I’m saying isn’t a “theory”, it’s an observation of data. You keep trying to rationalize it away, but whatever way you slice it you can’t get rid of the 16 million vacant houses that are not in use, while we have half a million homeless people and rising costs housing costs.
You seem to be insinuating that people don’t just buy up housing and sit on it, like that’s not a phenomenon that exists because you can’t fathom why, despite my last comment clearly outlining several reasons how it could happen, and more importantly the fact that it does actually happen.
Monopolies in certain areas. Your response? “They can move”
Holding onto vacant rent controlled apartments to force people into more expensive units. Your response? “It wastes money” (untrue, in this situation it makes more money, which is why it happens in the real world).
There are 16 million vacant housing units while we have half a million homeless people. Your response? Nothing, I guess those people’s interests aren’t as important as preserving the right for housing scalpers to hoard unused property.
That’s an easy explanation to reach for, but the theory rapidly breaks down without a unified cartel controlling the entire thing, because it’s opportunity cost down the drain to sit on properties to try to drive up prices across the market - each individual participant would make more money breaking with the cartel and just selling/renting their stock. Hence, the sheer number of actual participants in the market disproves it.
There are a ton of reasons why individuals/corporations would scalp housing units and hold onto them without opening them up to use, from laws requiring fair treatment of renters like in NYC (where 90,000 rent controlled apartments remain vacant), to “unified cartels” actually have incredibly large influence over some areas (there are some companies that hold 10s of thousands of housing units, like blackrock, and these corporations purposefully keep some vacant to inflate the price of all units and control supply).
But even if you want to just close your eyes and ignore my last paragraph, you can try to rationalize away the data, but the data will still be there. There are 16 million vacant housing units in the U.S. Even if you can’t fathom any reason why these might exist, they still do, and they still impact supply even if you’d like to believe they don’t.
I’m not pretending they don’t exist. I’ve called the problem out myself. But simple “capitalists are hoarding them to price gouge” is not a plausible explanation as to why.
You didn’t respond to anything I said. You essentially said “I agree and you’re wrong” with some fluff, so uhm okay good talk buddy.
I really don’t know why convos go this way.
Consider more deeply the problem of how competing firms respond to prices. Consider that these firms don’t actually have monopolies over a single geographical area, and also that people would have the option to move somewhere else even if they did. When there is actual competition, the theory immediately breaks down, because sitting on stock without selling/renting it actually just wastes money, and any other competing provider will just slip in below the price you’re trying to sell it at.
No people don’t “just have the option to move away”, that’s an incredibly naive way to look at the world, some people need to be in certain locations for social or work reasons.
Also, what I’m saying isn’t a “theory”, it’s an observation of data. You keep trying to rationalize it away, but whatever way you slice it you can’t get rid of the 16 million vacant houses that are not in use, while we have half a million homeless people and rising costs housing costs.
You seem to be insinuating that people don’t just buy up housing and sit on it, like that’s not a phenomenon that exists because you can’t fathom why, despite my last comment clearly outlining several reasons how it could happen, and more importantly the fact that it does actually happen.