$1B is absolutely peanuts, if they spend this yearly on acquiring real estate it will be a hundred years until they could be considered a mega landlord like for example Blackstone with its $550B worth of residential rental properties. They bought a billion and a half worth of properties in the small provincial city of Amsterdam in The Netherlands over the past couple years and it doesn't even make a dent on the housing market. That, and because of their corporate nature they're a lot less shitty landlords than the previous owners were.
I'm in full agreement that big money is a threat to society, but at least be realistic about the numbers. Just imagine how insanely large amounts of money you need to corner the market. I'm not saying it's impossible, but if the articles aren't talking about trillions, then they're simply not relevant.
Maybe if the article was about a thousand JPMorgans becoming "mega" landlords it could be relevant. Also.. who is really losing here? The way I see it, this is a threat to the lower upper class, who are being pushed out of the renting market. Are we supposed to feel bad for them, or is this article intended audience the lower upper class?
I agree with this take, $1b is absolutely nothing in the housing market. It’s like 3000 homes, maybe more in a cheap market, less in an expensive market. It could distort a regional market if it’s all concentrated in one area, but in the grand scheme of things it’s a rounding error.
I am also of the opinion that big landlords are typically preferable to smaller landlords. They are very predictable known entities with brands to protect, and have legal departments that ensure they will follow laws. They may in some cases be more eager to raise rent (although my corporate landlord hasn’t in the last year despite the market rate increasing about 10%) but they’re not gonna do random manual inspections or capriciously fail to perform maintenance, nor do something batshit like change your locks.
The only thing I find problematic is when entities like blackstone purchase SFH for rentals as I see it as a way of capturing value from the middle class (taking the margin that makes home ownership economically attractive) where it wasn’t previously.
Definitely agree, though in Amsterdam they only bought rental units, no SFH, I don't know what their global strategy is in that regard. I'm not sure if there's a clear business case for buying single family homes and turning them into rentals. You're basically competing with the entire mortgage industry then, families have insane buying power when backed by mortgages. They also make decisions that make no financial sense, basically only tempered by governmental regulation and the risk appetite of mortgage lenders.
Indeed it would be surprising if a company in JP Morgan's position did NOT have significant property holdings. It's a foundational investment class.
And frankly, having worked on the inside in the land development industry: the primary clientele of virtually every land development office in the world - from small city to large - is either wealthy old dude/family, or their companies.
Because land = wealth. If you have one, you can have the other. Or already do. In that sense, this JP Morgan topic is, as you say, just a drop in the ocean.
It sounds like they're dipping their feet in the water. If the risk/reward calculation is favorable compared to other assets they'll increase their investment.
I'm in full agreement that big money is a threat to society, but at least be realistic about the numbers. Just imagine how insanely large amounts of money you need to corner the market. I'm not saying it's impossible, but if the articles aren't talking about trillions, then they're simply not relevant.
Maybe if the article was about a thousand JPMorgans becoming "mega" landlords it could be relevant. Also.. who is really losing here? The way I see it, this is a threat to the lower upper class, who are being pushed out of the renting market. Are we supposed to feel bad for them, or is this article intended audience the lower upper class?