It's reasonable to wonder how rents and home values doubled over a few years when the population didn't.
It wasn't PE directly buying houses that falsely inflated housing costs, but how they laundered their collusion through software to manipulate the availability of housing across the nation and manufacture demand for property, with global effects. They just set themselves up to massively profit.
PE-backed rental price fixing software allowed a handful of property management companies to control up to 80% of all multi-family dwellings in the nation. They were able to make their repayment obligations by setting non-negotiable rents despite massively warehousing apartments (some areas were maintaining as low as 75% occupancy rates, far below the historical 95% failure threshold).
If you can't increase the population, just artificially shrink the housing supply. And when rental prices are determined by median house prices, and house prices are based on the affordability of rentals... the feedback loop should be apparent.
> It's reasonable to wonder how rents and home values doubled over a few years when the population didn't.
Is it a mystery? As I understand it, more people want to live in the same few places (where jobs are or are otherwise desirable). There are huge parts of the country where real estate is cheaper than ever.
Are you implying that this somehow explains the full price? Those same few places are also the best places to buy investment properties, and this fake demand (not buying to live there) increases prices too, and this impact could be huge.
It wasn't PE directly buying houses that falsely inflated housing costs, but how they laundered their collusion through software to manipulate the availability of housing across the nation and manufacture demand for property, with global effects. They just set themselves up to massively profit.
PE-backed rental price fixing software allowed a handful of property management companies to control up to 80% of all multi-family dwellings in the nation. They were able to make their repayment obligations by setting non-negotiable rents despite massively warehousing apartments (some areas were maintaining as low as 75% occupancy rates, far below the historical 95% failure threshold).
If you can't increase the population, just artificially shrink the housing supply. And when rental prices are determined by median house prices, and house prices are based on the affordability of rentals... the feedback loop should be apparent.