• About
    • What Should I Read to Understand Zoning?
  • Market Urbanism Podcast
  • Adam Hengels
  • Stephen Smith
  • Emily Hamilton
  • Jeff Fong
  • Nolan Gray
  • Contact

Market Urbanism

Liberalizing cities | From the bottom up

“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

  • Email
  • Facebook
  • Linkedin
  • RSS
  • Twitter
  • Podcast
  • Economics
  • housing
  • planning
  • Transportation
  • zoning
  • Urban[ism] Legends
  • How to Fight Gentrification
  • Culture of Congestion by Sandy Ikeda
  • What Should I Read to Understand Zoning?

Where investors invest

February 16, 2022 By Michael Lewyn

One argument I have run across recently is that the high cost of housing is caused by mysterious corporate investors are buying up real estate and forcing up the cost.

The stupidest version of this argument is that investors are hoarding all the real estate. Why is it stupid? Because corporations like to make money, and a corporation that doesn’t sell or rent out real estate is making no money from it.

A more sensible version of the argument is that the existence of investors adds demand for housing, and thus that their presence thus increases housing costs.* But even if this true, are these investors really a significant factor in the housing market?

In today’s Washington Post, an article supplies data for 40 metro areas. If investors are really the problem, one might think that the most expensive metros have the highest investor share. But this is simply not the case. In San Francisco, only 6 percent of for-sale houses are being purchased by investors (about the same as the 2015 share). In metro New York and Los Angeles, that share is around 10-11 percent. The most investor-heavy markets are in growing, medium-cost Sun Belt markets like Atlanta (25 percent), Charlotte (25 percent), Jacksonville (22 percent) and Phoenix (21 percent).

And within those markets, investors are not buying in the most expensive areas. In Atlanta, the highest investor shares are in the lower-income Southside, and low and moderate-income southern and western suburbs. In Jacksonville, the mostly lower-income Northside and the working-class Westside have higher investor shares than the more middle-class Southside. This pattern seems to hold in less investor-heavy metros as well: even though some affluent Manhattan zip codes have high investor shares, most of the high-investor zip codes are in East Harlem, the South Bronx, and other poor areas.

*I note, however, that investors may be a result of high housing costs more than a cause; if housing was not profitable, few would invest in it.

Tweet

Share this:

  • Email
  • Print
  • Facebook
  • Twitter
  • Reddit
  • LinkedIn

Filed Under: housing, Michael Lewyn, NIMBYism, Uncategorized, Urban[ism] Legends Tagged With: financialization, housing, investors

Market Urbanism Podcast

Connect With Us

  • Email
  • Facebook
  • Linkedin
  • RSS
  • Twitter

Recent Posts

  • The conspiracy theory of rent increases
  • Herbert Hoover reconsidered
  • YIMBYs and liberals
  • Introducing Szymon Pifczyk
  • Are the new carbon footprint maps accurate?
  • Wanted: Market urbanist research assistant
  • An Anti-Anti-NIMBY article
  • Would the Vienna strategy work here?
  • Louisville and density regulation
  • Urban Paths “World” Cup
  • Is affordability just, “You get what you pay for”?
  • Before YIMBY
My Tweets

Market Sites Urbanists should check out

  • Cafe Hayek
  • Culture of Congestion
  • Environmental and Urban Economics
  • Foundation for Economic Education
  • Let A Thousand Nations Bloom
  • Marginal Revolution
  • Mike Munger | Kids Prefer Cheese
  • Neighborhood Effects
  • New Urbs
  • NYU Stern Urbanization Project
  • Parafin
  • Peter Gordon's Blog
  • Propmodo
  • The Beacon
  • ThinkMarkets

Urbanism Sites capitalists should check out

  • Austin Contrarian
  • City Comforts
  • City Notes | Daniel Kay Hertz
  • Discovering Urbanism
  • Emergent Urbanism
  • Granola Shotgun
  • Old Urbanist
  • Pedestrian Observations
  • Planetizen Radar
  • Reinventing Parking
  • streetsblog
  • Strong Towns
  • Systemic Failure
  • The Micro Maker
  • The Urbanophile

Meta

  • Log in
  • Entries RSS
  • Comments RSS
  • WordPress.org

Copyright © 2023 Market Urbanism

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.