(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Hello, everybody.
Welcome back to another episode of The Way
the World Works.
Today I want to talk a little bit
about the housing shortage that's going on in
the country, but specifically the bad solutions that
politicians propose to fix the problem.
President Trump recently said that he would like
to ban investment corporations from buying up houses
that are for sale on the market.
The reason is, he's saying, when it's not
families who are going to live in the
homes, when it's these big corporations just buying
up homes so that they can rent them
out or maybe sell them, then now people
don't have access to housing because maybe they
don't want to be renters.
They want to buy.
Now you're taking away homes on the market
that people could buy, or it's forcing people
to perpetually rent houses instead of being house
owners.
They're jacking up the prices.
They're making it harder and blah, blah, blah,
blah, blah.
It's easy to see it this way.
I always want us to look at that
a lot of times when there are these
proposals that don't make true economic sense or
they're even harmful to individual liberty, sometimes they
come from a good place.
There is an old saying that the road
to hell is paved with good intentions.
That's basically what that means, that sometimes people
have solutions that come from a really good,
really caring place, but they don't understand that
that's not logically how you fix the problem.
And so this is one of these situations.
All right, so let's dive in.
Let's say your family is moving and so
they are selling their house, they are putting
their house on the market, and some people
come to look at it and they have
a choice.
They can either sell to a family that
wants to move in or they can sell
to an investment corporation, somebody who wants to
buy the house and then they're using it
as an investment, meaning they're not going to
live in it.
They're using it to make money, which is
fine.
We're OK with making money here.
So let's say you're torn because on the
one hand, you know, maybe your parents really
loved that they raised, you know, their family
there and they want to see another young
family have those same opportunities and investment corporations.
They seem kind of cold, right?
Like when I said family and you heard
that word, you probably you probably had some
images in your head of maybe like a
playing fetch with a dog in a backyard
or a family riding bikes or doing something.
Then you hear the word corporation.
I always just think of like a person
in a suit with no face, not like
scary, but like the face is kind of
a shadow or it's too dark to see
it like they're not human, right?
We think of corporations as these shadowy big
business type of type of situations where one,
that's not always the case.
There are investors that are small time investors
who want to flip houses and whatnot.
But also we're forgetting that corporations are also
turning around and either renting this home to
maybe a family who can't afford to buy
a home or they're selling it to a
family, right?
It's not just because a corporation is buying
it does not mean that it's not also
your home is not also going to be
someplace where people get to raise their kids
and have important memories happen.
So we that's the first problem is I
think we're thinking of corporations is really bad
here and we hear that and automatically our
minds start saying this is bad.
Let's protect, you know, the American family.
But there's another part to this too.
So your family is trying to sell their
house.
They've got these two entities they're choosing between,
but the family can't really afford as much
as the house is worth.
But the corporation or the, you know, the
investor, whether it's a big corporation or a
small, small time investing firm, or even a
person, uh, they're able to offer a lot
more and your family's moving.
They could use this money.
Obviously when it comes down to certain things,
making, making more money is good.
So as the buyer, as the person who
owns that property, because right now that's your
family's home, they own it, they're paying the
mortgage on it for them to have the
option to make a lot more by selling
it to an investor.
That's that's a great opportunity for you.
And maybe it's what you need to be
able to pay off some debt and move
into a new house.
And so it's like the perfect solution for
your family.
It could really save you.
And because you are the property owner, it
is your right to choose who you sell
your home to.
So you go with the investor and everything
turns out great.
There's good scenarios to this.
Let's say you live in a home that
you put on the market that no individual
families are looking at.
Maybe it's in a bad area.
Maybe it's in an area that is going
to be re-gentrified soon.
Like it's going to have a, it's like
not great right now, but younger people are
moving in and trying to clean up the
neighborhood.
So right now there's no appeal, but there
might be later and you would like to
move, but nobody's coming to look at your
house and an investor comes and finally is
like, we will pay you this much for
your house because we want to develop new
houses here, whatever it may be.
That's a great opportunity for you.
And as the property owner, you should be
allowed to sell to whoever you want, to
whomever you want.
And that's going to do a lot for
you.
That's going to help you get ahead in
life.
And so I'm focusing now on the buyer
part of it or the seller part of
it, excuse me.
But that's very, very important that you are
able as an individual property owner to sell
your property to whomever you want.
That is economic Liberty.
That is a property rights that should be
allowed to happen.
Now if there are bans placed on, on
corporations buying homes, that's not even just a
ban on the corporations.
That's a ban on you.
That's a ban on the property owner.
So that's not a win for individual Liberty.
Even if you don't like the idea of
investors buying home, I mean as the property
owner, you might say, I don't want more
money.
I would rather sell to a family and
you have that right because it's your property.
And so this ban isn't just punishing big
corporations who will probably fine.
It's hurting the property owner by telling them
who they can do business with, and that's
not okay.
Now let's talk about before we get into
how this is bad for people who, who
need housing.
Let's talk about why people don't like the
idea of investors buying a properties.
For one, you know, they're scared that these
investors have more money and can outbid people
who, you know, families that want to buy
homes.
And so that is a little bit scary
to people who really want to see families
have the opportunity at home ownership.
Then there's another concern of people, of these
investors coming in, buying the property and then
making the entire neighborhood rentals and property owners
who own their homes don't like that because
that could cause the value of their homes
to go down.
And there's also this idea that people demonize
renting a home, forgetting that not everybody wants
to own a home, that it is something
that you have to choose to do.
It is something that more and more people
are not able to do.
And whether that's because the economy is bad
or because they just have other preferences.
A lot of people like to be nomads.
They don't want to own a home.
Some people don't want to have to deal
with their own repairs.
There are numerous reasons people might want rentals.
And another big reason is some people just
simply, again, can't afford to buy a home.
And so having an opportunity, a good rental,
not just like a small crummy rental is
a really good opportunity for them.
So there's all this fuss right now about,
again, corporations owning so many homes and they're
going to, you know, they're maybe they'll jack
up rent and just they're hurting the little
guy.
That's what you always hear when you hear
the word corporation investors are going to hurt
the little guy.
But here's the thing.
Reason Magazine, they dug into this a little
bit and they found out that large, like
institutional, these big corporation, the investors only own
like I think it was something like three
percent of what they call the single family
home.
So not apartment buildings, but the homes where
a family will live.
They only own three percent.
That is a very small number.
So even generally speaking, even if you don't
want to get into the nitty gritty of
what this means for buyers and sellers, three
percent is a small enough number where you
have to wonder is this even a big
enough deal that they're saying it is.
Is this really contributing to a big problem?
One thing we know for absolute sure is
that our country is in the midst of
a really bad housing shortage right now.
There are not enough housing opportunities or affordable
housing opportunities for the people who need them.
And that is creating a problem.
But blaming it all on investors because they're
buying homes and not living in them is
is one placing way too much blame on
a problem that, as we said, was a
three percent number is very, very small.
It neglects the fact that when the investors
are buying these homes, they do have more
power to fix them up and flip them
and rent them out.
And so they are actually contributing to to
more housing on the market, which is actually
helping to fix the problem.
But it's also ignoring the many other housing
issues that we have in this country.
I think one of the biggest ones being
that there are so many hurdles, so many
barriers to actually being able to build a
home because there are zoning laws and permit
laws and licensing laws.
And these things add up very quickly.
And it's making it harder for people who
want to build more homes to build them.
And that's a government problem.
That's a problem where we need government to
to put their hands up and say, we
don't want to do this anymore.
We don't want to force people to do
this.
So there's so many other problems involved in
the housing problem that blaming it all here
is just kind of ridiculous.
And it's also harming those that it's protecting,
that it's claiming to protect.
And what I mean by that is there
are a lot of people who can't afford
to buy homes and they need homes that
they can rent.
They need affordable homes that that that are
accessible to them.
And when you're telling investors not to buy
these homes and rent them out, you're taking
away opportunities from people who who aren't looking
to buy a home.
We need options for everybody.
And the best way to do that, the
best way to make sure that needs are
met is to make sure that individuals have
the choice, the freedom to choose who to
buy to who to sell from, who to
who to buy from, who to sell to.
I got my prepositions wrong and making sure
that the market is responsible for these interactions
and not the government telling you what you
can do.
And so that is the big takeaway in
almost everything we talk about, right?
The government does not and should not play
a role here.
It should be between buyers and consumers, whether
that be a family selling a house or
a corporation selling a house, whatever it may
be.
So when you're hearing this this narrative in
the news about how this is such a
big problem, really stop and think about it
and say, is this a big problem?
And what would more laws, what would creating
policy do to harm individualism and individual liberty?
We will leave it there.
As always, don't forget to like and subscribe
to the podcast.
And until next time, I will talk to
you later.