A Housing Bust Comes for Thousands of Small-Time Investors | Hacker News Reader

A Housing Bust Comes for Thousands of Small-Time Investors

wsj.com

58 pointslxm95 comments

> His company had taken out commercial real-estate loans that carried floating interest rates and were adjusted each month. Those types of loans in 2021 offered initial rates as low as 3.5%. Everything changed when the Federal Reserve began raising rates last year, driving up monthly loan payments. Inflation contributed to higher expenses, and Applesway couldn’t raise rents fast enough to keep pace. After bills went unpaid, company properties went into foreclosure.

Adjustable rate mortgages strike again. Is there ever a legitimate reason to go adjustable rate? It just seems like such a great way to scam investors or blow up your own finances because you're optimizing for a low payment today instead of a consistent payment over the duration of the loan.

"Only when the tide goes out do you discover who's been swimming naked."

- Warren Buffett

The 30-year fixed rate is, unless I am mistaken, somewhat unique to America and only for people buying property where they intend to be primary residents. Commercial property has no such federal assistance and ARM isn't unusual at all.

Notice how the article describes the syndicate runners profiting even if the syndicate fails. This is just a regular pyramid scheme, but part of the pyramid foundation was a low fed rate.

I cannot say I feel too bad for the investors. They're buying with the intent to evict and raise rents. It's unconscionable. And foolish to put all of one's eggs in a single basket.

That's not correct. The 30-year fixed rate is available to investor/landlords as well. It is usually a few basis points more than if you were to buy the house as the primary resident.

We have 30 years fixed rates in Europe.

And most people here would consider taking out a variable rate loan to be a stupid move.

In fact, people in France are usually surprised and shocked whenever they learn of some random city nearby nearly going bankrupt because their local government thought themselves smart signing up for variable rate loans.

The thing I don't get is why more people don't choose */5 (aka adjusts every 5 years) or similar ARMs, if they're going adjustable.

Rates aren't that different than more aggressive adjustables (i.e. */1), and it seems a much better risk bargain.

There is an investment path where no loan is taken at all, but while the per-property returns are better (and the approach is sustainable) the amount that can be earned overall is a fraction of what can be reaped in a “good” leveraged scenario (temporarily, historically).

A /5 means if the rate does adjust upward, its stuck their for five years, while you might ger lucky and miss a transient spike altogether. If its worth locking in for 5 years at the current rates toward the end of the 5 years on a 5/1, refi to a new 5/1.

This was my main takeaway from the article as well. While he does sound like a terrible businessman, he might have actually been 'profitable' and made a profit for his investors had he taken out a 30-year fixed rate mortgage instead of an ARM.

I’ve read that flippers will use ARMs because they plan to flip it before their rate adjusts upwards. There are ARMs that guarantee not to increase payments for, say, two years. But you’re basically just taking on increased risk for a better rate and/or much less money down. The flippers who do it understand the risk, they just don’t care.

Not all countries offer fixed rate mortgages. I’m actually surprised they have lasted so long in the states, but ya, it doesn’t make sense if you can get a low rate locked in. However, fixed rate long term mortgages don’t make so much sense for the financial system.

I’m actually surprised they have lasted so long...

Watching ARM's repeatedly eat unsophisticated investors, it makes a certain sense why.

Oh, they are great products for consumers, but not for providers. Somehow they even out the rate for 30 years…but that doesn’t really work out so someone is caught holding the bag (owning loans whose interest rates are way too low vs current rates). Countries like Canada simply don’t have them (you can get one for 25 years, but at a rate that is pretty high compared to adjustables).

The fed holds the bag, which means those same consumers, but as a group. It works out because stability is generally in everyone’s interest.

Everyone who has a home loan’s interest. Anyone who Can’t afford to take on so much debt…they just help pay for the bill.

Adjustable rates obviously, occasionally, lead to spectacular blowups that make big headlines. But fixed rates "silently" steal hundreds of dollars from homeowners every month. It's a bit like avoiding auto insurance, if you total your car (typically a low-probability event) you're screwed, but in aggregate, most people pay a lot more for insurance than they receive back in claims.

The ability to easily refinance usually tilts the decision towards fixed rates but banks and mortgage originators actually make a bunch of money when you do so.

> But fixed rates "silently" steal hundreds of dollars from homeowners every month.

Not if you account for inflation it doesn't.

And you're basically gambling with adjustable rates; it may be lower... now... but I can work with 1% more over 15-30 years, esp. if the pay rate stays the same but my salary gets occasional inflation-based adjustments.

This only applies in America where fixed rate mortgages are incredibly cheap. The risk is transferred to the consumer in other countries by making them substantially more expensive.

By "silently steal" I'm talking about the fixed rate mortgage at 6% when rates have dropped to 5.25%. Not enough difference to refinance and might be another few years before it is. Yes of course it is a gamble as rates could rise but from about 1982 to 2021 -- almost 40 years -- the trend has been downward almost the entire time. But that's many millions of homeowners paying a lot of extra hundreds of dollars (in interest, not principal) every month for many, many months.

This still doesn't mean ARMs are "better", just different.

I'm open to being convinced the ARMs are better for the individual but I don't buy it with my current info. Having a lower fixed rate for the entire duration of the loan sounds like the most consumer friendly one to me. My current mortgage is 2.87$ APR fixed and I don't see how an ARM could benefit me one bit. Sounds like constant anxiety.

Of course, "having a lower fixed rate for the entire duration of the loan" is optimal... but most people don't initiate their mortgage at the lowest interest rate in history.

In other countries, there's often reasons to go adjustable rate, as the discount for doing so vs the fixed rate can be pretty large at times. Ultimately, on every loan worth decades, one side is carrying the interest rate risk, and you'd expect the terms to reflect it.

In the US, however, the US government have found it politically convenient to have fixed rate loans be the majority. Thus, their interventions on the mortgage market work in such a way as to make the fixed rate mortgage a better deal. So yes, in the US, adjustable rates are rarely the best of ideas if you can get a conforming loan instead. Ever see how a Jumbo loan for a really expensive house suddenly has a higher interest rate, regardless of whether it's really a safe investment on the property or not? That's probably what the fixed rates would be for everyone without government intervention. But then your average voter, who is also probably claiming a mortgage interest deduction, can think they bought their house with nobody's help.

In the case of commercial real estate loans for apartment complexes, I suspect that conforming loans just can't happen, making fixed rates different from what a typical homeowner would get for their own house. As the spread between fixed and adjustable changes, the decision of what is better stops being so simple.

Weird thing is, over the past year to 18 months, Jumbo loans have generally been LOWER in rates than conforming loans for well qualified (80% LTV or less, 720+ credit score) buyers. I know this because I bought a house towards the end of 2022, and I actually had to put less than 20% down so I could qualify for a Jumbo loan, because the rate was a full 75 basis points lower than the conforming loan (at least at my credit union, but the spread was similar at many banks/brokers I shopped).

All people should be taught the financial advice that if you're going to invest your money in something where you don't need to do any work, put it in index funds that are diversified according to the timeframe of your investment. There is simply no other way to get a better return.

Sure, if you have some specific talent or think you can multiply your investment with actual work (e.g. if you're a landlord but actually manage the property yourself), sure, go for it. But if you just want your money to make money without actually doing anything, putting your money into nearly anything else will have a worse risk/return balance.

I am looking at these people, and while they make money (or they try to convince investors they do), they seem poor (the guy fake-punching on instagram with a red "rent's due" t-shirt is the most honest representation of the business model). I don't know what the word for them would be, but they are the equivalent of vassals in a feudal system with a license to make some money (perhaps, if they are lucky with timing and escaping all the angry investors) in a pyramid scheme that has the original owners of all these properties sell-off big time (they are the people who actually made the money in this story...)

The term that applies here is "petite bourgeoisie". They are nominally rentiers, but without the scale of economic control given to the actual bourgeoisie by their relationship to the means of production.

https://archive.ph/8wJUp

> “I’m sick and tired of working for my money.”

That isn’t an origin story I’d ever trust with my investment.

'“When you trust the wrong person, that’s the highest risk,” Haque said, “because you give them everything.”'

Amazing how there's no reflection that his own greed drove him to this trouble. I guess it's not amazing. Many people will take any option to blame anything but themselves

Also not just greed but also laziness and willingness to exploit others.

Cody, Wyoming is a beautiful city with all the natural wonders that could be had for nature lovers and those who would like to escape from metro areas for some peace & quiet.

A very nicely laid out city, ironically settled by members of the Church of Jesus Christ of Latter-Day Saints or Mormons. I was surprised at not reading a whit of this from those opposing the Temple as well as those who would want members to move.

The layout of Cody proper was taken from the plans of then Salt Lake City.

These concerns about lighting in the evening, disturbing the natural eco system of the area in which Temples are built, concerns of traffic harming the quality of life for the neighborhood are all too familiar and in the end are worry unrealized. Nothing but positives where these Temples land over time, so proactive in addressing concerns and modifying what can be modified in order to be good neighbors to the communities involved. Having experienced this in our lives over 20 years ago in South Richland, WA, as well as recently in Moses Lake, WA, I know first hand.

Calm your fears, you will be a blessed community, member or non-member due to facility. The data is there and shows this to be true, not withstanding those who for their own reason will never think differently.

I find it interesting how regular housing busts happen. It's not exact but you can count on a bust within 15 years of the last bust. No wonder long term investors are so successful. You just have to figure out the cycle and invest accordingly. There's no genius associated with it. You just have to be patient. The ones that really benefit seem to be the children of long term investors. They get a big inheritance and can continue to grow it if they continue with the investments.

Doesn’t housing have a better risk adjusted ( sortino) ratio than all other asset classes?

My favorite version of this observation is asking tenured professors how they picked up their sweet digs. Often the answer is "I knew I would be here indefinitely. I saved cash until the bottom fell out. I bought."

Oh no! Those who wanted to join the ranks of the exploitive wealthy were themselves exploited by the wealthy? Who could have ever guessed?

Renting in Northeast HCOLA old apartments, the buildings in the photo at the top of the article look fairly attractive.

(The pool might need expensive filter repair, but the landscaper is still coming through, there's no other sign of decay or neglect, and they won't have a lot of old-building problems.)

High demand for affordable housing and a limited supply meant working-class renters had few options, Gajavelli told investors. “Unfortunately, they don’t have good credit. They don’t have down payments to buy the home,” he said in a webinar for prospective investors last year. “They live in apartments forever.”

How many tenants ended up on the street because of these “investors”?

> By summer 2022, the pool water had turned a sickly green. High piles of trash littered the parking lot. Tenants complained to city officials about rats, mold, illegal evictions and the failure of management to properly maintain the buildings.

Too many. Note that this property was purchased in Dec 2021, so it only took 6 months for them to turn it into a slum.

When investors buy property to rent out, they are diverting housing away from homeowners, to make them available to renters. By more investors entering the real estate market, they drive down the price of rent through competition and higher vacancy rate. So, yeah I'll go ahead and answer your rhetorical: literally no tenants ever end up on the street because too many investors are competing in the marketplace to provide housing for them.

Drive down the rent? The article is all about how these parasites buy the properties specifically so they can raise the rents, you mewling bootlicker.

Yes, drive down rent. Of course, each producer in a market wants to get as much money for their product/service as they can get, just like every consumer wants to pay the cheapest price. That's why the role of competition amongst landlords is so important, so that their profit is driven to zero and they have no power to raise prices. People entering the real estate market to become landlords are that competition.

Also, from the article it sounds like a lot of these would-be landlords/investors are having a tough go of things, and aren't in fact able to turn a profit which is why they have to foreclose. Your characterization of landlords as parasitic leaches taking excessive profit without doing any work or risking anything isn't super consistent with the fact that many landlords don't beat the market, or even take significant losses.

That assumes the landlords are competing with each other. Currently, an increasing number of landlords are pricing based on each other’s private pricing data [0]. To me, I can only describe this as price-fixing-as-a-service.

[0] https://arstechnica.com/tech-policy/2022/10/company-that-mak...

> When investors buy property to rent out, they are diverting housing away from homeowners, to make them available to renters.

I think you're describing single-family, but bulk of those deals are done in multi-family space, where a building is either an apartment complex (with units intended for rent) or a condo (with units that are owned). So most real estate investors are buying from another investor (or a builder).

While there are some developers that do condo conversions (apartments -> condo), apartment conversions are rarely a thing, probably due to complexity of the deal.

> “I’m sick and tired of working for my money.” That was when he decided to become a landlord, he said.

couldn't have happened to nicer people

Yeah this doesn't seem like a bunch of people who rented out their mother-in-law suite or lake house. This seems like a set of aspiring slumlords.

Part of the article describes a slum. Some of these people are literal slumlords.

It's likely natural to get a certain sense of schadenfreude here, particularly because "residential real estate" but anytime you buy stock, the goal is to benefit from the profits of the company without doing any work yourself. Same if you invest in a REIT, or mutual fund, or even a bank deposit, to an extent.

Bad management is bad management. The head of the featured company apparently stuck with floating-rate borrowing despite the lowest interest rates in history. Bad move. But plenty of CEOs have destroyed company value or imploded altogether.

> but anytime you buy stock, the goal is to benefit from the profits of the company without doing any work yourself.

Which is arguably also bad for the same reason. Not bad, morally, though, and that's kind of the key thing. When you live in a society where scarcity (either real, or cultivated) creates constant precarity for you and your family, doing what you can to exit that precarity is not a bad thing to do, even if the thing you end up doing ends up being something that leads to an overall trend of society into more misery for more people. After all, it's not like you individually choosing not to be a landlord means society would suddenly turn into one that hadn't created a social niche for landlords to occupy.

>doing what you can to exit that precarity is not a bad thing to do, even if the thing you end up doing ends up being something that leads to an overall trend of society into more misery for more people

So your logic is: it's not bad, because even if you didn't do it, there'd still be an opportunity to do it? Not very convincing..

My logic is that just as you don't change the movement of a cloud of gas by changing the velocity of individual molecules one at a time, you also do not change society by imputing moral weight to individual actions. People constantly live in precarity and _should_ seek to exit it. We should also seek to build, _collectively_, a society where that precarity is minimized, and in the meantime, societies where the more deleterious ways to exit it have less incentive for being pursued.

> We should also seek to build, _collectively_

Capitalism has demonstrated over and over it's the best system to produce positive outcomes for the maximum number of people -- including the fastest and most effective way to reduce poverty. Yet somehow people continue to point to "collectivism", whether that is socialism, communism, or something else, as a superior alternative. Good luck to you.

I don't think it's demonstrated that at all, simply that it was better than feudalism. But China has built 15000 miles of high speed rail in ten years, and has functionally eliminated homelessness by the admission of the World Bank (not a pro-Communist organization!). Cuba (and China) had its healthy life expectancy surpass the US for the first time (despite over a half-century of the worst sanctions regime on the planet, save perhaps the one imposed on Palestine). The USSR went from a society of peasants to beating the US in space milestones over five decades. All of these successes have happened over the backdrop of a massively hostile international capitalist presence--imagine how different it could all be if said capitalist societies felt like they should compete on making their citizens happy, rather than by building hundreds of military bases around the world and being involved in violent conflict all but a handful of years out of the last two centuries (the US has eight hundred military bases and spends almost a trillion a year on its military!).

Any time you hear about how terrible ("authoritarian! undemocratic! oppressive!") a society that gives socialism a shot is, remember that it is coming from a context that has baked Cold War propaganda into _literally everything_ we have consumed from it, our entire lives. Question it!

> Syndicators largely favored apartment complexes in the South and Southwest, where real-estate prices were lower, rents were rising and housing regulations were generally looser. Many of these locales had fewer renter protections, which made it easier to evict tenants and raise rents.

Yea, let me go find my tiny violin to play for these societal leeches.

I mean, responding to price signals by providing much needed housing in markets where rentals are scarce, is societally beneficial and not different from any business trying to be successful in producing goods or services for their customers...

“Rentals” are not a product. “Housing” is a product. Buying a house to rent it out doesn’t increase the supply of housing, any more than ticket scalpers increase the number of seats in a stadium.

Investors buying property to rent it out, are in effect speculating on real estate prices. By speculating, they are providing liquidity to the market and absorbing risk from buyers, sellers, and developers. They make the market functional and contribute to price discovery. Having prices that accurately reflect the value of the asset will encourage developers to build the right amount of housing, so in a round about way, yes they do increase supply. The same applies to ticket scalpers. They absorb risk from ticket sellers, so there is less risk in putting on a show that might not sell all the seats, improving its profitability,

>Over the past four years, Gajavelli built his real-estate empire using funds from dozens of small investors who wanted a chance to earn a landlord’s riches without any of the work.

there are few "professions" lower than landlord in my book. they induce artificial shortages in already scarce housing supplies, implement regulatory capture in zoning & rental laws, skirt existing regulations in the quality & livability of their units, require hundreds to thousands of dollars in "application fees" and other upfront charges, help keep home ownership rates down, and more all while playing off rent seeking behavior as some sort of "better than you" game

>there are few "professions" lower than landlord in my book.

Spoken like the classic redditor who had no idea the kind of work goes into being a landlord.

Maybe you should consider how much work goes into being an average landlord and avoid categorizing all property owners as predatory capitalists. Or you could continue lumping the 95% in with the 5% for internet points, if that kind of thing fits you better.

Oh yeah, I see the results of my landlord's hard work every day.

I'm sure you do. If it wasn't for your landlord, your apartment wouldn't be available for rent

lmao.

What horror that it might be on the market to be bought as an owner-occupied residence instead.

When people justify landlords as providing housing, it always seems to be without consideration to the particular financing/market circumstances that make "buying a house" something that is difficult for a lot of people these days, a thing that was not true not even that long ago (and did not become true due to simply neutral market fluctuations).

Yes, my tenants certainly do. Thanks for the support.

I expect when the system makes the screws tight enough, of ever increasing rent costs and food prices, with an entire army of executives dedicated to keeping wages low, in a country of massive gun ownership, something will snap and well find out exactly what the distribution of predatory capitalists vs responsible property owners is.

landlords don't work they extract rent. nothing of value is provided, only taken from those who do work bc they have to have a roof over their heads. the maintenance and other work that goes into a property is work separate from being a landlord. any tenant can do maintenance themselves or contract it out, I don't need a landlord for that

Somewhere on Reddit there was a landlord who rented to a couple. 2bd. Couple broke up before moving in. Landlord stated he'd expect one of the remaining people to find a roommate.

How miserable must you be that you literally force random people to live together.

Just rip up the contract.

Therein lies the common, two-faced landlord. "It's just business" when they are exercising what they view as their rights as a landlord; "Won't somebody think of us poor, hardworking, regular people?" the moment things turn on them.

I think its important to distinguish the types of landlords. I rent my house, and the owner is just an old couple across the street. Those two are not part of the problem.

Now the property management company doing the lease paperwork for the couple, now they are part of the problem.

If the landlord wasn’t part of the problem, they wouldn’t wouldn’t be delegating management to a management firm that is (there may or may not be management firms that aren’t, but there are definitely landlords that manage properties themselves that aren’t.)

your landlord across the street isnt the strongest counterargument actually

those are the local forces gambling on the highest possible rent - which they could have done anytime whether richer people were in town or not - , and attention should be directed at them to alleviate price pressures

>> attention should be directed at them to alleviate price pressures

Why is that the responsibility of small landlords who rent out a spare bedroom or second house? That's like saying it should be on independent gas stations to alleviate high oil prices.

Its not the responsibility, its an observation that they are more susceptible to peer pressure while having been largely overlooked as a contributor to housing price pressure

>> more susceptible to peer pressure

This implies that one should pressure people to the degree that you can pressure them, rather than to the degree that they're in the wrong. Which is pretty unjust.

I'm not familiar with that reading of it, and I have no opinion on the existence of that side effect.

My observation is that they have an outsized influence on housing price pressure, while they currently fly under the radar from local disdain about the influences on housing price pressure.

Individual landlords can be moral, upstanding people, and the incentive structure around deriving your income from rents can systemically produce inhumane outcomes. They are not mutually exclusive.

>> the incentive structure around deriving your income from rents can systemically produce inhumane outcomes

It's also the only thing that produces new construction. Properly regulated and harnessed, the incentives are necessary to draw capital to building.

Exactly! And also the rest of the benefits of speculation apply to housing just as much as anything https://en.wikipedia.org/wiki/Speculation#Economic_benefits

Namely, real estate investors provide liquidity to the market, bringing price stability and absorbing risk from developers and homeowners.

From that same section, though:

> On the other hand, as more speculators participate in a market, underlying real demand and supply can diminish compared to trading volume, and prices may become distorted.[8]

Note that I said "properly regulated and harnessed". The creation of bubbles is a temptation for both speculators and governments.

Specifically, derivatives and futures based on real estate should be treated by governments as toxic / illegal speculation. In fact, banning bad money from bubble-making practices amplifies the incentive for small landlords to improve and build living space on property.

Yup. Your comment seemed to present advantages of speculation without saying it’s a pure good. The comment I replied to seemed more pure market.

> It's also the only thing that produces new construction

It's not, though. People constructed housing for thousands of years without landlords. There are plenty of ways to fund constructions without markets. We have built a society that prefers to organize it that way, but that is also a society with more vacant units than there are homeless, where it is _normal_ to spend 50% or more of one's income on rent. Those outcomes, I argue, are inhumane, but also, maybe more controversially, avoidable in a system organized around something other than profit.

I'm just starting being a landlord and I am one bad tenant away from copying the inhumane practices associated with companies that deal with a plethora of bad tenants. I purchase my home last year and I am renting below cost.

If everyone behaves nicely, it works out well for everyone. But if a party doesn't follow the agreement, everyone is in for a world of hurt.

I don’t have the nerve to become a landlord. It’s just finically risky, can be lots of work, and the payoff…is mostly hoping property prices rise. I hear horror stories about deadbeat tenants who manage to destroy a house before they are evicted.

I have a hard time feeling sorry for landlords in these scenarios. Welcome to the cold world of business. Sadly, your property being damaged is simply a risk of that type of business, and just like I wouldn't be sympathetic to an excavator hire company whose digger comes back in need of repair, I don't think landlords deserve any sympathy either.

It’s just another risky job that involves lots of headaches, but something deserving in sympathy. All of those costs exist for reasons, you don’t have to like them, but we shouldn’t pretend that something being a landlord is like magicking money away from everyone else, it isn’t.

Single unit landlord here. There are slumlords who do the bare minimum and then there are the good ones that try to do everything they can to make the experience enjoyable. I fix things asap, I am super understandable about late rent, I am the landlord I would want if I was renting from me.

I am living abroad and wanted to keep my home in case we returned. Also home purchasing is out of the question for most folks and renting offers a low up front cost to getting into a home.

Let’s not paint all landlords with the same brush. Some are hardened speculators and some of us are just middle-class folks mom and pops.

And the same goes for rentees, especially with some of the covid exceptions that were put into place.

All of what you say is true, for some landlords. Fortunately (around the world) its not true for many of them. That said the primary focus on money in the US makes the situation there much worse.

Western society also sees home-ownershop as a primary "good thing", and positions home ownership as a goal everyone should aspire to.

In truth, a large segment of the population is better served by renting. Those that move area frequently. Those who don't have sufficient capital or income to pay for such a large asset. Those who can't get a mortgage. Those who aren't ready to make a 30 year commitment to a location. Elder folk who don't want to die with a large asset, but would rather cash-out their house and actually spend that capital.

Since most Western governments do not provide rental housing (or are slowly reducing housing stocks) - it falls to the private sector (lumped together as landlords) to provide you need.

Incidentally shortages are not the fault of landlords, but of a population growing faster than housing supply. Supply is mostly constrained directly or indirectly, by existing home owners where the primary reason against any change us "preservation of house prices in our neighbourhood". This is driven by home-owners who have been persuaded that their house is an "investment".

So you may not like landlords, and like any profession there are plenty of bad examples to hate, but the removal of rent completely as a housing option would be disastrous to a huge segment of society.

No one is suggesting the removal of rent. The solution for a higher quality of life for all involved is public housing. This is a problem that Vienna has solved.

https://www.nytimes.com/2023/05/23/magazine/vienna-social-ho...

I agree that public housing is a very good solution. However most countries have not succeeded I providing this and until that happens villifying private landlords is not helpful.

By all means advocate for social housing, an general easing of restrictions to new housing development. I'm right behind you in that.

Vilifying private landlords is helpful in advocating for public housing and denouncing Rentier Capitalism. Rather than seeking to live off the wages of others, people are better served by earning a wage themselves.

The essence of capitalism is that capital can be used to produce income. Rent, and specifically residential property rent are a tiny fraction of that.

Why it's possible to highlight the negative effects of capitalism in general, I feel like that's a "boil the ocean" problem.

The root of the housing issue is supply. It doesn't matter who owns the accommodation - there's a shortage of it - and that's driving prices up.

I more useful strategy IMO is to look at policies that would encourage all levels (private and govt) to develop more housing and increase the supply.

The shortage you mention, do you think it would exist or exist in as significant a degree if landlords were not buying properties they have no intention of occupying?

Under capitalism there's an incentive to manufacture a shortage to drive prices up. That's why Vienna has such a higher quality of life than anywhere in the US: robust public housing which does not have such a detrimental incentive.

https://www.theguardian.com/world/2022/jun/23/vienna-reclaim...

"Walk a mile in someone else's shoes"

I suggest you try being a landlord before proclaiming judgement, even as a thought experiment. Find a property you might purchase (with a mortgage) to rent out. Calculate the cost/liability. Look up the renting laws in your area. Look up the market price for renting. Look up maintenance costs and schedules. Estimate time spent interviewing, handling paperwork and accounting, scheduling maintenance. Calculate net profit.

It is not useful to individualize this. Even if you could make a solid argument that being a landlord might sometimes take more effort than working a job does for someone else to pay your mortgage for you, corporations holding many properties at once (with just a couple of companies holding up to 5% of the rental stock) are going to have a bigger economic impact on the market, and the small-time landlord's experience isn't really relevant to that, vis effort, risk, or graciousness to their lessees.

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