Those seeking housing as shelter cannot compete with wealthy households and entities seeking places to park credit-generated capital for income and/or appreciation.
This will get massive pushback because it’s true: either Housing Is Shelter, or Housing Is Just Another Asset in a Bubble Economy–it can’t be both. This reality gets pushback because the conversion of housing from shelter into just another asset bubbling higher in a bubble-dependent economy has been so profitable for those inflating the bubble.
The basic pushback goes like this: housing has always been an investment, nothing has changed. This is classic misdirection. This is like saying “stock market options have always been a way to hedge positions” to justify the transition from hedging to extremes of gambling, i.e. zero-day expiration options (ODTE).
Whenever I suggest that housing is being hoarded by the wealthy and corporations as a low-risk asset to park credit-generated capital, I get pushback: no, I’m told, the percentage of housing that’s empty most or all of the year owned by the wealthy and corporations is tiny, as is the percentage of housing owned as short-term vacation rentals (STVRs).
The problem with these claims is they’re based on completely fraudulent / inaccurate statistics. There is no regulatory system that audits whether owners who obtained “owner occupied” mortgages actually live in the dwelling, or whether owners (especially those hidden behind LLCs and other cloaking mechanisms) are “owner occupants” as claimed.
Owner-Occupancy Fraud and Mortgage Performance (Philadelphia Federal Reserve) Occupancy fraud has been suggested as a contributor to the housing bubble. We show it was pervasive and remains present......
