This behavior just doesn’t matter for the overall real estate market. Sorry. It’s easy to hate but it’s totally irrelevant to prices overall. It is far too small.
Here’s a chart prepared by a real estate research firm, linked by a housing journalist:
If you live in one of the very very few markets where this behavior is slightly more frequent and hate these firms… why not mess up the value of their investment and harm them financially by permitting more housing to be constructed?
>This behavior just doesn’t matter for the overall real estate market. Sorry. It’s easy to hate but it’s totally irrelevant to prices overall. It is far too small.
This reminds me of the recent move to ban AirBnB in Barcelona: they're blaming AirBnB for apartment costs being too high, but if you look at the numbers, there's only around 10k (IIRC) AirBnBs, which is a tiny fraction of the total housing stock. Putting those 10k units back on the rental market isn't going to lower rents significantly. But blaming AirBnB and banning it is easier for the politicians than changing the bureaucracy and rules that prevent more housing from being constructed.
>why not mess up the value of their investment and harm them financially by permitting more housing to be constructed?
The NIMBYs don't want that: "my property values!" "neighborhood character!!"
"where will everyone park?!"
This is a scourge across the country that, once again, reveals how regular citizens' lives are degraded at the behest of lobbyists.
While corporations buy up entire neighborhoods and take housing off the market essentially forever, states pass sham "pro-housing" measures that serve only developers' interests by vilifying "single-family" homes and targeting them for destruction. CA of course stands as a great example; it passed a couple of measures that allow one house to be knocked down and replaced with 10 units, with no approval needed or local review allowed.
And right behind corporate ownership is the scourge of HOAs. According to the U.S. Census, 82% of newly built homes sold in 2021 were a part of one of these scams.
Allowing a SFH to be knocked down to build 10 units is a good thing where additional housing is needed and it will reduce the cost of housing.
Corporations are holding these homes because they are such a safe investment because they know there is so much pushback to building new housing. Those corporate owners will sell housing just as quickly if there is downside risk, look at what happened in Austin.
If it's a ten unit building, how can it be anything but corporate ownership? I suppose we could pretend that all ten of the residents could create a co-op and that would be more like a single-family, owner-occupied home. But really, there's got to be a corporation there somewhere.
I lived in a 15-unit one in L.A. that I don't think was corporate-owned. They put it on the market for something like $8 million.
It was in a pretty good neighborhood on the west side, so I though hm, this price seems pretty low when a glorified garage in Culver City was selling for $1.4 million. But when I looked at the financials, it wasn't a good deal.
Even if we don't pretend, and those ten residents pool their money in some way, what sort of legal vehicle would they choose to use to structure the deal? Forming a corporation is gonna be on that list.
No, it is not. First of all, those areas are already residential. Meanwhile, nearby malls sit with boarded-up anchor stores and vast parking lots growing weeds. Those tracts have already suffered the costs of "density:" trees wiped out, the ground paved over with asphalt and unable to absorb water, and "heat islands" exacerbated. Plus they already have ingress & egress routes.
After that there are the disused and blighted former commercial or light-industrial areas. See the above.
After that there are large traffic conduits that are near SFH neighborhoods but underutilized and underdeveloped. Want to get rid of some shitty strip mall and build mixed-use structures instead? Go for it!
And beyond all that: "Downtowns" are rarely "full." Downtown L.A., for example. Density is available for those who want it. There's no excuse for trying to force it on those who specifically chose something different. They didn't demand that apartments be wiped out to create yards and houses; they moved to an area set up that way.
One approach to the "housing crisis" is to tax the shit out of empty rental properties.
> While corporations buy up entire neighborhoods and take housing off the market essentially forever
Exactly why would corporations do that? They like to throw money and not make a profit? I thought corporations are profit driven, are you saying that's not the case?
presumably the OP meant take it off the ownership market, and replace with rental. AKA, the OP assumes that owning is the end all and be all, and a corp that purchases the house and never sell means there will be less ownership by the individual.
In what remote way did I say anything of the sort? What are you talking about?
Meanwhile: Unlike homeowners, corporations don't typically die and leave their houses to their children.
But when people do, and their out-of-state children want to dispose of the asset quickly, they're going to sell that house to the fat corporate all-cash offer... not to a new family who wants to move into the neighborhood.
At this point we all know that home ownership is the best way for anyone of any walk of life to build wealth. Corporations are destroying that opportunity.
I could get on board with something related. If corps are running their own van transportation around Silicon Valley and such, and so many of us really want WFH to take hold and be embraced industry-wide, we really do need to revisit the "company town" concepts that built mining and oil type industries a century ago, not to mention the small and tight-knit communities that sprang up around national labs such as those involved in the Manhattan Project, space programs, and nuclear weapons testing.
I don't know if these commercial interests in FL are thinking of employee housing right now. BUT, if a corp owns a subdivision and they can place all their employees there, then perhaps they can get away from urban sprawl and all the ugliness that goes with it. The corps can put up their own shops or subcontract with, like, Amazon or Target, and pharmacies and all the other essentials, and they can establish outposts that are more independent from typical civic matters, and insulate their employees from distractions.
In 1995 I worked across the street from Apple, and our office complex featured showers, pinball and video games, a full commercial kitchen, free snacks, and the message was basically "you're family, camp out here, spend the entire day, we'll support you in your downtime." Now magnify that by 10, remove it from Cupertino's smog, and you've got a company town.
It could also reduce the impulses to become a "digital nomad" or expatriate who leaves the US long-term, if employee needs are catered and they feel less burdened by everything else going on, and there's more elbow room and space for them to stretch their legs, grow a garden, do some target practice, ride horses, or encourage their children walk/bike to school unsupervised. Wouldn't that be preferable to some of our urban nightmares? Certainly data centers are already in the middle of nowhere, and nearly unstaffed, but definitely need humans hanging around, so there needs to be a contingent of workers who live conveniently close, like a nuclear power station.
Sure, it has drawbacks. "Company towns" and worker indebtedness to the corporation could get out of control for some. But those structures had merit and built up some really big and powerful industries which were able to provide jobs, benefits, and pensions for thousands of families, and became the backbone of the economy, and that's where I see the IT/SWE world at a crossroads today: facing unionization, consolidation, and industrialization.
Cool trivia about "scrip": I learned this term in the context of charitable donations. Folks at church would purchase "scrip" coupons or vouchers which were only good at a certain store, like the big grocery on the corner. Then we'd use the scrip to purchase whatever we wanted, and a portion of our scrip money was donated to the church (or whatever charity sold it to us.)
Now we use "eScrip" which is really streamlined. We go into our grocery store account and register a charity number with them, and every purchase is credited to that charity for a certain percentage of the proceeds.
But I suppose the name is the same because charitable scrip is only good with a certain vendor, and in the old days, the "paper days" it needed to be purchased in advance, like a gift card, from the target charity, rather than the store itself, and we couldn't convert it back into cash.
So for us in the 21st century, "scrip" is a good thing, a voluntary program, a way to make charitable donations without making charitable donations.
Once awhile ago, my employer called me into the office and said they wanted to increase my pay, but they knew I'd lose some benefits if my income increased. They said if I work enough extra hours, they'd pay me with gift cards beyond my agreed salary. Gift cards for grocery stores, or restaurants, or whatever specific purpose. (my employer was not a grocery store nor a restaurant.)
I declined. I suppose there are a lot of legal regulations that prevent employers from paying "in-kind wages" rather than cash money. But "in-kind" is still a line item on the forms I fill out. I frankly don't see much wrong with "in-kind" wages if the company town provides all essentials and necessities, and hopefully workers can earn a certain percentage of cash for incidentals.
By the way, in mining towns or logging camps, these were often quite remote outposts, where travel and shipping was extremely difficult for workers, and so the company town NEEDED to provide everything, or nobody could live there! And the workers had little hope of calling up Amazon and having a color teevee delivered!!! Cash would be nigh-on useless, and scrip was quite a logical substitute.
The worker-exploitation aspects of scrip are probably quite separate and distinct from the realities and logistics of a company providing goods and amenities, in spite of how Wikipedia makes it sound so intrinsically evil. Some are good at it, most aren't; what do you expect?
The core question is: why would Google be the best entity to directly provide a nice living situation for its employees? And to the extent that it is able to do so, why should Google employees be the only ones with access to the nice living situation in Googleville?
Doesn't need to be Google; could be a smaller corp or it could be Canonical, or Cloudflare, or Motorola or Samsung or something; let's not get hung up on Google-hate for the sake of theoretical speculation?
A company town should be exclusive to company employees and their families, because it would be economically infeasible for the corp to support unaffiliated families or workers. It would also be the type of urban distraction that a company town can avoid: if all your neighbors are fellow employees loyal to the corp, then your leisure time will also be oriented toward a collective good and you'll be less likely to be exposed to disruption, spying, or discontent fostered by corporate rivals or outsiders.
Whichever corp it is, doesn't need to be directly responsible for all the amenities. Clearly they're going to subcontract nearly everything. Already happens: the cafeterias are run by catering professionals and the van transportation is probably also subcontracted by pros. The corp can provide everything within the corp's core compentencies, such as Internet connections and security, but the janitorial and fire safety and pharmacies would be third-parties specifically selected by the corporation and on an exclusive contract to operate there, which contracts could become really lucrative and competitive.
If Google has the money and ostensibly pays for everything, then one of the perks for working for Google would be access to said company town. The problem starts when a person gets fired or quits.
Your family gets screwed not only by the loss of a job, but of a house, and corporations will engage in race to the bottom dynamics, so that a leadership generation or two after the wonderful company housing project gets implemented, you have soulless bureaucrats viciously enforcing arbitrary company guidelines and treating humans like so much excrement to be shoveled. Corporations need to be limited, not necessarily in their profits, but in how they're allowed to spend. Spending money to purchase and squash competition, to file egregious lawsuits on dubious IP claims, to acquire and merge and conglomerate ultimately results in the same sorts of non-human creatures ending up with most of the power over almost every aspect of human life.
These corporate entities own all the food, all the media, the platforms, the entertainment, the entertainers, the gadgets, the clothing, etc, etc, etc. It's not that capitalism is bad; it's not. It's that the particular set of rules we're playing by, especially in treating corporations like people, create toxic incentives and dissolute responsibility for acute harms. If you just forced all the corporate homeowners to divest all their properties, you'd be dooming tens of millions to poverty and blowing up the economy in general - they likely knew and intended to invest in something that is 100% critical to the functioning of society such that the government absolutely has no choice but to bail them out if they ever need it. Blackrock isn't doing this because houses are so lucrative and profitable. They're doing it because the consumers are a captive audience with no choice.
We've created these beasts and now we've got to live with them. Thanks, boomers.
Here’s a chart prepared by a real estate research firm, linked by a housing journalist:
https://x.com/kristoncapps/status/1826701823522341065
If you live in one of the very very few markets where this behavior is slightly more frequent and hate these firms… why not mess up the value of their investment and harm them financially by permitting more housing to be constructed?