Andrew Jobst retweeted
Data is absolutely clear on this, there's scarcely an issue that economists agree on to the extent they agree on rent control, "the fastest way to destroy a city, save for bombing".
Here is summary of the literature on rent control: (-) indicates papers finding a negative effect, (0) no effect, and (+) a positive effect. Rent control is good only for lowering rent in rent-controlled units (who would have guessed?) and bad for everything else.
Feels like a time when buying quality at an excellent basis, with a stable capital structure, will provide outsized returns when looking back 10 years from now.
Just like always.
Live look-in at a GP trying to raise equity today:
xitter.cf/Trail_Cams/status/2108…
Unpopular opinion: There are a lot of renters who are able to purchase homes with today's mortgage rates, but choose not to.
Why would they? In many markets, home prices and rents are flat/down--there is no urgency.
Rising rents could change this dynamic.
With all the AI announcements (and people switching back and forth to different models/agents), this picture keeps going through my head--and I'm trying to figure out where the pile of money is going to accumulate.
Seems like either chips or compute providers.
It was 2006 (5-years after dotcom) when Ted Stevens referred to the internet as "a series of tubes"; average age of congress was 56.
AI is more complicated, and the average age of congress is higher today. And these are the people who we expect to thoughtfully regulate AI?
LOL
Andrew Jobst retweeted
Why stop there? If all trade is an economic loss, then you also shouldn't trade with other states. Or counties. Or towns. Or neighbors. Just grow all your own food, sew your own clothes, and build your own home, cars, and TVs. Think how rich this will make you! 🤪
Trump: We could do tremendous good for ourselves by just not trading with countries.. We lose with Mexico $195 billion a year. They have nothing that we have to have, I mean. Hot tamales, tomatoes, a couple of things
Readers added context they thought people might want to know
While the US trade deficit with Mexico was $197B in 2025, Mexico's top exports to the US are vehicles, machinery, and medical devices, not just agricultural goods ustr.gov/countries-regi…
Additionally, Hot Tamales candy is made in Pennsylvania, US en.wikipedia.org/wiki/Hot_Tamal…
Andrew Jobst retweeted
Chris is a smart guy who has done a lot of good, but I think he (& those like him) still misunderstand what goes on when you go ask rich people or institutions to invest in building housing.
Bc apartment buildings are very long duration assets which are (necessarily) valued based on cashflows far into the future, the specific policy mix at the time of investment is less relevant than the expected direction of policy over time.
When you do something like impose ULA midstream on a bunch of projects that hadn't budgeted for it, or slap on a 4 yr eviction moratorium in response to a (charitably) 18 month pandemic, or invent a city-funded "right to counsel" for simple non-payment evictions, you send a very strong signal about the future direction of policy.
So, if you want to re-build trust, you need to send very strong counter-veiling signals.
Lots of posters say a @nithyavraman victory would further depress housing production in L.A., due to risk of stricter rent control, eviction moratoria, etc.
That's a risk, but she has many ways to mitigate it, including during the general election campaign.
🧵/9
Andrew Jobst retweeted
Sane Californians: Mahan is the guy
Here's @MattMahanSJ, on the lessons — both politics and policy — of trying to cut unsheltered homelessness in San Jose to zero
Andrew Jobst retweeted
I'm a developer who has done condo projects in other states.
The reason: Lack of adequate pre-sale deposits as gated by state law.
Pre-sales drive the condo business. No investor or lender will fund a condo project without substantial, forfeit-able pre-sale deposits if a buyer fails to close.
Takes 3-4 years from project inception to completion and unit closings. The market can change over that period of time. Prices can decline due to economic cycles and other.
Developers/investors/lenders need to know that if prices decline during the development/construction period all their pre-sale buyers can't simply walk away. A substantial, forfeit-able pre-sale deposit inventivizes a buyer to still close, and sufficiently reduces the developer's cost-basis on units when a buyer fails to close
States that build a lot condos allow for large deposits. Florida builds a ton of condos for instance and has no state law limiting deposits. Deposits are determined by the market. 20-30% pre-sale deposits are the norm in FL. (Going to 6% isn't going to cut it.)
I know everyone is celebrating construction defect reform, and well done Buffy. But it is NOT the gating issue for condo development. Pre-sale deposits is the issue.
Andrew Jobst retweeted
There are law firms that specialize in this of course. Very lucrative practice area.
-At year nine an atty will approach an HOA and proposes to conduct forensic testing for construction defects.
-And oh, by the way, the atty has a forensic construction firm he works with.
-If the HOA says everything seems fine, no thanks, the atty will tell them that if they fail to do the forensic investigation they may be personally liable in the event a construction defect appears after year ten. (The HOA President at a TH project i built told me this and explained it was the reason they voted to retain the atty who approached them and the forensic firm.)
-Forensic investigation commences
-Voila, the forensic testing firm and their friendly atty that have a substantial monetary interest to find construction defects, finds alleged construction defects! (Forensic firm would fall out of favor with the atty if they didn't come through. So they always come through.)
-Atty files suit against the developer. Developer tenders claim to his OCIP carrier
-Atty and OCIP carrier settle.
-Insurance obviously becomes much more expensive for condo and TH projects causing the production of condos and THs to fall precipitously, and becoming much more expensive if they do get developed.
If the 21st Century ROAD to Housing Act will raise rents, why are property owners opposed to it?
Because policy makers will continue with the beatings until rents fall (rent control, BMRs, public housing, etc.), none of which will help.
Everything EXCEPT allowing more supply.
It's going to be interesting to watch the screams from politicians when rents on SFHs rise, benefitting large institutional investors, solely because those same politicians destroyed those investors' ability to add supply, which would have kept a lid on rents.
Andrew Jobst retweeted
Who wants to be in the business of renting units just for a little while and then selling them to individual homeowners after some wear and tear? Where that pencils, it'll pencil better to sell immediately to buyers. As such, the provision would effectively end build-to-rent.
Andrew Jobst retweeted
Honored to join @johnburnsjbrec and other housing researchers in this open letter advocating for the ROAD to Housing Act to remove supply-crushing restrictions on build-to-rent constructions.
Andrew Jobst retweeted
SLC needs rent control immediately or rents might stay low forever
The affordable housing we need already exists.
It's just currently occupied by people who, if given the opportunity, would move to a nicer, more expensive place.
Good thing building new expensive housing doesn't need government subsidies.
Oh wait, the government won't let us.
EXACTLY THIS
Slow sales/standing inventory is a housing developer's nightmare. Institutional investors provided another source of demand, which allow builders to take risk building more homes speculatively.
Take that additional demand away, risk goes up, housing starts go down.
Over the past 2 years, we’ve owned and developed 10,000 housing lots in “for-sale” housing.
Everyone is thinking about it like building a single house, but the typical development is 20-50 acres for a community of hundreds of new homes.
The biggest risk is the horizontal land development because it takes 2-4 years and costs millions to turn 20-50 acres of raw land into finished lots (with power, water, roads, grading, etc).
Build-to-rent provided a backstop for the land development in case the housing market crashed. We included it as a backup alternative in our underwriting.
Now that BTR is banned, we would not take the land development risk and I bet we’re not the only ones.
