There is a tradeoff between reducing supply of houses to buy, thus driving up cost of buying, while more rentals bring affording and diversity to the suburbs.
It may well be true that the private equity sector is a small factor now in housing affordability, but it's reasonable to expect rising rents as private equity expands in that market. Health care provides a good example. Although the CATO Institute's Michael Cannon strenuously argues that private equity in health care has net positives, the weight of the scholarly evidence suggests rising prices and glaring inequities where private equity has gained dominant market share. Any thoughts about private equity in health care?
Peter- I don't know enough about the role or the scope of private equity in health care--a term that covers a wide swath of entities. In housing, I see some economic logic in buy-to-rent, lowering the cost of rentals: If the supply of rentals in a given area increases, that should put pressure for lower prices--unless the lower prices increase demand. On the other hand, removing houses from the for-sale segment increases their cost, given constant demand. Concerns about the loss of wealth-building opportunities are real. So, pros and cons.
Hi,
It may well be true that the private equity sector is a small factor now in housing affordability, but it's reasonable to expect rising rents as private equity expands in that market. Health care provides a good example. Although the CATO Institute's Michael Cannon strenuously argues that private equity in health care has net positives, the weight of the scholarly evidence suggests rising prices and glaring inequities where private equity has gained dominant market share. Any thoughts about private equity in health care?
Peter- I don't know enough about the role or the scope of private equity in health care--a term that covers a wide swath of entities. In housing, I see some economic logic in buy-to-rent, lowering the cost of rentals: If the supply of rentals in a given area increases, that should put pressure for lower prices--unless the lower prices increase demand. On the other hand, removing houses from the for-sale segment increases their cost, given constant demand. Concerns about the loss of wealth-building opportunities are real. So, pros and cons.