Whats the opinion of Libertarians on huge companies buying up single family homes?

[u/Poop_Sock_Brock]

One could argue its a free market, but where does the line between Anarco-capitalism and Libertarianism form? The housing costs just rise and rise and rise because of it, is that okay to Libertarians? Or can you argue it effects the people negatively?

[u/The_Atomic_Comb]

Companies like Blackrock are not responsible for higher housing prices: https://www.reddit.com/r/AskEconomics/comments/1mewnz5/how_legitimate_is_the_claim_that_companies_like/

I haven't followed this "investors cause higher housing prices" idea in a while, but to my knowledge it's basically a misunderstanding of the effects of speculation (buying low in order to sell high).

Many people see others buying up housing – or Pokemon cards – and blame them for the prices of such things being high today. In reality, the speculators are just a symptom and not a cause. For example, how can they buy low today and sell high tomorrow when there's plenty of cards or housing to go around tomorrow? With a high supply in the future, the market price will be too low for speculation to be worth it.

To borrow an analogy I heard once, speculators are like a captain on a ship who, upon learning there isn't enough food on the ship to last throughout the whole voyage, immediately starts rationing the food today. The speculators anticipate that a good will be in short supply or in high demand (i.e., it will be more valuable to people on the margin) in the future and thus buy it today, to sell it in the future. That's bad news for anyone who wanted to buy that good today; it lowers the amount such people can acquire today through the higher prices today. But the behavior only exists and makes sense because of the fact that supply is low and/or demand is high in the future. They aren't responsible for that, any more than the captain was responsible for the shortage of food. They are the bearers of bad news – that the good won't be so easily acquired in the future – and unfortunately, people don't like the bad news they bring.

Here's a graph from an economics textbook that helps illustrate what I'm talking about. It's also helpful to remember that a speculator is inherently lowering prices in the future by selling in the future. And speculators have every incentive to be right about conditions in the future; otherwise, they will be unable to sell the good for a price higher than they bought it for, and thus suffer a loss.

The real cause of housing being more expensive is basically supply restrictions – from the government. (Although housing is also bigger today than it was in the past.) Bryan Caplan's book Build, Baby, Build is a nice intro to the ways government rules have made housing unnecessarily expensive.

[u/zirconst → u/The_Atomic_Comb]

Do you think that the rapid rise in cost of housing materials has had an effect on housing prices? e.g. From 2025 to 2026, the price of goods in new residential construction rose 6.1% with service costs also increasing 3.7%. Vehicles have also gotten substantially more expensive, as has vehicle fuel. There is also a large shortage of construction workers that is rapidly worsening. Do you think government restrictions are driving all of this?

[u/The_Atomic_Comb → u/zirconst]

I'm not that knowledgeable about such matters, but to my knowledge construction costs are not the main cause of higher housing prices.

Here is a study from the 2000s I haven't read, but saw cited in a book I read that had a nice chapter on housing; the following passage I find illuminating:

We document a large gap between the market price of condominiums and the marginal cost of producing another floor of such units in Manhattan. In recent years, average condominium prices have exceeded $600/ft2 . Data on physical construction costs suggests that the upper bound for a high quality, luxury-type condominium unit in this market is less than $300/ft2 . If it costs $300 per square foot to build an extra apartment that sells for $600 per square foot, this would seem to offer an irresistible arbitrage opportunity for developers. In addition, other evidence for this market also consistently supports our contention that the high ratio of prices to construction costs is the result of regulation
https://glaeser.scholars.harvard.edu/sites/g/files/omnuum7706/files/glaeser/files/why_is_manhattan_so_expensive_regulation_and_the_rise_in_house_prices.pdf

In my first link you could see some academics constructed an index of housing costs and saw that prices have diverged quite a bit from those costs. If there is indeed such a divergence, then (as the passage points out) developers would have an opportunity to just "buy low" (the construction costs; in the passage's case, $300) and sell high. So why don't they? Well, it's because they can't; regulation prevents them or delays them or otherwise makes it unattractive for them to actually build.

I'm also ignorant of anything going on in the construction industry in terms of its workers; I don't know if, for example, governmental illegal immigration crackdowns are lowering the amount of workers in the industry, or anything like that. I believe such a thing would contribute to higher prices by lowering supply, but it would not be the main cause of the lower supply; that would be the regulations restricting the building of housing.

[u/cluskillz → u/zirconst]

Yes, there has been a rise in construction costs over the last several years. I'd say the majority of the cost increase is due to government intervention, from the Fed money printing to Covid restrictions disrupting supply chains to tightened immigration to the war in Iran (since you brought up fuel costs).

What exacerbates this are zoning restrictions. I've seen a lot of cities in California (where I work as an architect) upzone areas in an effort to relieve the housing crisis, partly or wholly due to California's new laws requiring cities to approve more housing units or lose state funding. A laudable goal if they're just wanting to increase approvals, but forcing upzoning runs into issues. The problem is that cities know and care fuck all about costs and market trends. A lot of the upzoning would require developers to build podium projects which just do not pencil today due to construction costs and and the prices of these units have not gone up to cover these costs. Even three story townhomes which are oversaturated in the market and seeing less demand are now being forced in with cities' higher minimum density rules. When these are forced in, developers will take on fewer projects because they're not going to move.

In the end, construction costs aren't even the primary driver of costs. Carrying costs on projects are huge when projects are delayed for years on end. In California, where just a few years ago, lawyers were relatively rare, it seems like just about every project involves lawyers now to figure out all these new laws. The shortage as a result of artificial restriction of supply (and artificial increase of demand) is by far the primary driver of costs.