{"id":37223,"date":"2024-10-24T13:56:02","date_gmt":"2024-10-24T20:56:02","guid":{"rendered":"https:\/\/occupysf.net\/?p=37223"},"modified":"2024-10-24T13:56:03","modified_gmt":"2024-10-24T20:56:03","slug":"property-pirates-how-billionaires-are-hijacking-affordable-housing","status":"publish","type":"post","link":"https:\/\/occupysf.net\/index.php\/2024\/10\/24\/property-pirates-how-billionaires-are-hijacking-affordable-housing\/","title":{"rendered":"Property Pirates: How Billionaires Are Hijacking Affordable Housing"},"content":{"rendered":"\n
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With every investment home they snatch, the dream of owning a house slips further away from you\u2026<\/h3>\n\n\n\n
THOM HARTMANN<\/a> OCT 23 ,2024<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Image by \u0421\u0435\u0440\u0433\u0435\u0439 \u0421\u0442\u0440\u0430\u0442\u0438\u0435\u043d\u043a\u043e<\/a> from Pixabay<\/a><\/p>\n\n\n\n

Share<\/a><\/p>\n\n\n\n

America\u2019s morbidly rich billionaires are at it again, this time screwing the average family\u2019s ability to have decent, affordable housing in their never-ending quest for more, more, more. Canada, New Zealand, Singapore, and Denmark have had enough and done something about it: we should, too.<\/p>\n\n\n\n

There are a few things that are essential to \u201clife, liberty, and the pursuit of happiness\u201d that should never be purely left to the marketplace; these are the most important sectors where government intervention, regulation, and even subsidy are not just appropriate but essential. Housing is at the top of that list.<\/p>\n\n\n\n

A few days ago I noted<\/a> how, since the Reagan Revolution, the cost of housing has exploded in America, relative to working class income.<\/strong><\/p>\n\n\n\n

When my dad bought his home in the 1950s, for example, the median price of a single-family house was around 2.2 times the median American family income. Today the St. Louis Fed says the median house sells for $417,700 while the median American income is $40,480\u2014a ratio of more than 10 to 1 between housing costs and annual income.<\/p>\n\n\n\n

In other words, housing is about five times more expensive (relative to income) than it was in the 1950s.<\/p>\n\n\n\n

And now we\u2019ve surged past a new tipping point, causing the homelessness that\u2019s plagued America\u2019s cities since George W. Bush\u2019s deregulation-driven housing- and stock-market crash in 2008, exacerbated by Trump\u2019s bungling America\u2019s pandemic response.<\/p>\n\n\n\n

And the principal cause of both that crash and today\u2019s crisis of homelessness and housing affordability has one, single, primary cause: billionaires treating housing as an investment commodity.<\/strong><\/p>\n\n\n\n

A new report<\/a> from Popular Democracy<\/em> and the Institute for Policy Studies<\/em> reveals how billionaire investors have become a major driver of the nationwide housing crisis. They summarize in their own words:<\/p>\n\n\n\n

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\u2014 Billionaire-backed private equity firms worm their way into different segments of the housing market to extract ever-increasing rents and value from multi-family rental, single-family homes, and mobile home park communities<\/strong>. <\/p>\n\n\n\n

\u2014 Global billionaires purchase billions in U.S. real estate to diversify their asset holdings, driving the creation of luxury housing that functions as \u201csafety deposit boxes in the sky.\u201d Estimates of hidden wealth are as high as $36 trillion globally<\/strong>, with billions parked in U.S. land and housing markets<\/strong>.<\/p>\n\n\n\n

\u2014 Wealthy investors are acquiring property and holding units vacant<\/strong>, so that in many communities the number of vacant units greatly exceeds the number of unhoused people. Nationwide there are 16 million vacant homes: that is, 28 vacant homes for every unhoused person<\/strong>.<\/p>\n\n\n\n

\u2014 Billionaire investors are buying up a large segment of the short-term rental market<\/strong>, preventing local residents from living in these homes, in order to cash in on tourism. These are not small owners with one unit, but corporate owners with multiple properties.<\/p>\n\n\n\n

\u2014 Billionaire investors and corporate landlords are targeting communities of color and low-income residents<\/strong>, in particular, with rent increases, high rates of eviction, and unhealthy living conditions.  What\u2019s more, billionaire-owned private equity firms are investing in subsidized housing, enjoying tax breaks and public benefits, while raising rents and evicting low-income tenants from housing they are only required to keep affordable, temporarily. (Emphasis theirs.<\/em>)<\/p>\n<\/blockquote>\n\n\n\n

It seems that everywhere you look in America you see the tragedy of the homelessness these billionaires are causing. Rarely, though, do you hear about the role of Wall Street and its billionaires in causing it.<\/strong><\/p>\n\n\n\n

The math, however, is irrefutable.<\/p>\n\n\n\n

Thirty-two percent is the magic threshold, according to research funded by<\/a> the real estate listing company Zillow<\/em>. When neighborhoods hit rent rates in excess of 32 percent of neighborhood income, homelessness explodes. And we\u2019re seeing it play out right in front of us in cities across America because a handful of Wall Street billionaires are making a killing.<\/p>\n\n\n\n

As the Zillow study notes<\/a>:<\/p>\n\n\n\n

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\u201cAcross the country, the rent burden already exceeds the 32 percent [of median income] threshold in 100 of the 386 markets included in this analysis\u2026.\u201d<\/p>\n<\/blockquote>\n\n\n\n

And wherever housing prices become more than three times annual income, homelessness stalks like the grim reaper. That Zillow-funded study laid it out:<\/strong><\/p>\n\n\n\n

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\u201cThis research demonstrates that the homeless population climbs faster when rent affordability \u2014 the share of income people spend on rent \u2014 crosses certain thresholds. In many areas beyond those thresholds, even modest rent increases can push thousands more Americans into homelessness.\u201d<\/p>\n<\/blockquote>\n\n\n\n

This trend is massive.<\/strong><\/p>\n\n\n\n

As noted in a Wall Street Journal<\/em> article titled \u201cMeet Your New Landlord: Wall Street<\/a><\/em>,\u201d in just one suburb (Spring Hill) of Nashville:<\/p>\n\n\n\n

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\u201cIn all of Spring Hill, four firms \u2026 own nearly 700 houses \u2026 [which] amounts to about 5% of all the houses in town.\u201d<\/p>\n<\/blockquote>\n\n\n\n

This is the tiniest tip of the iceberg. <\/p>\n\n\n\n

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\u201cOn the first Tuesday of each month,\u201d notes the Journal article<\/a><\/em> about a similar phenomenon in Atlanta, investors \u201ctoted duffels stuffed with millions of dollars in cashier\u2019s checks made out in various denominations so they wouldn\u2019t have to interrupt their buying spree with trips to the bank\u2026\u201d<\/p>\n<\/blockquote>\n\n\n\n

The same thing is happening in cities and suburbs all across America; agents for the billionaire investor goliaths use fine-tuned computer algorithms to sniff out houses they can turn into rental properties, making over-market and unbeatable cash bids often within minutes of a house hitting the market.<\/p>\n\n\n\n

After stripping neighborhoods of homes young families can afford to buy, billionaires then begin raising rents to extract as much cash as they can from local working class communities.<\/strong><\/p>\n\n\n\n

In the Nashville suburb of Spring Hill, the vice-mayor, Bruce Hull, told the Journal<\/a><\/em> you used to be able to rent \u201ca three bedroom, two bath house for $1,000 a month.\u201d  Today, the Journal<\/a><\/em> notes:<\/p>\n\n\n\n

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\u201cThe average rent for 148 single-family homes in Spring Hill owned by the big four [Wall Street billionaire investor] landlords was about $1,773 a month\u2026\u201d<\/p>\n<\/blockquote>\n\n\n\n

As the Bank of International Settlements <\/em>summarized<\/a> in a 2014 retrospective study of the years since the Reagan\/Gingrich changes in banking and finance:<\/p>\n\n\n\n

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\u201cWe describe a Pareto frontier along which different levels of risk-taking map into different levels of welfare for the two parties, pitting Main Street against Wall Street. \u2026 We also show that financial innovation, asymmetric compensation schemes, concentration in the banking system, and bailout expectations enable or encourage greater risk-taking and allocate greater surplus to Wall Street at the expense of Main Street.\u201d<\/p>\n<\/blockquote>\n\n\n\n

It\u2019s a fancy way of saying that billionaire-owned big banks and hedge funds have made trillions on housing while you and your community are becoming destitute.<\/strong><\/p>\n\n\n\n

Ryan Dezember, in his book Underwater: How Our American Dream of Homeownership Became a Nightmare<\/a>,<\/em> describes the story of a family trying to buy a home in Phoenix.  Every time they entered a bid, they were outbid instantly, the price rising over and over, until finally the family\u2019s father threw in the towel.<\/p>\n\n\n\n

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\u201cJacobs was bewildered,\u201d writes Dezember. \u201cWho was this aggressive bidder?\u201d <\/p>\n<\/blockquote>\n\n\n\n

Turns out it was Blackstone Group, now the world\u2019s largest real estate investor run by a major Trump supporter.  At the time they were buying $150 million worth of American houses every week, trying to spend over $10 billion. And that\u2019s just a drop in the overall bucket.<\/strong><\/p>\n\n\n\n

As that new study from Popular Democracy <\/em>and the Institute for Policy Studies <\/em>found:<\/p>\n\n\n\n

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\u201c[Billionaire Stephen Schwarzman\u2019s] Blackstone is the largest corporate landlord in the world, with a vast and diversified real estate portfolio. It owns more than 300,000 residential units across the U.S., has $1 trillion in global assets, and nearly doubled its profits in 2021.<\/p>\n\n\n\n

\u201cBlackstone owns 149,000 multi-family apartment units; 63,000 single-family homes; 70 mobile home parks with 13,000 lots through their subsidiary Treehouse Communities; and student housing, through American Campus Communities (144,300 beds in 205 properties as of 2022).  Blackstone recently acquired 95,000 units of subsidized housing.\u201d<\/p>\n<\/blockquote>\n\n\n\n

In 2018, corporations and the billionaires that own or run them bought 1 out of every 10 homes sold in America, according to Dezember, noting that:<\/strong><\/p>\n\n\n\n

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\u201cBetween 2006 and 2016, when the homeownership rate fell to its lowest level in fifty years, the number of renters grew by about a quarter.\u201d<\/p>\n<\/blockquote>\n\n\n\n

And it\u2019s gotten worse every year since then.<\/p>\n\n\n\n

This all really took off around a decade ago following the Bush Crash, when Morgan Stanley published a 2011 report titled \u201cThe Rentership Society<\/a>,\u201d arguing that snapping up houses and renting them back to people who otherwise would have wanted to buy them could be the newest and hottest investment opportunity for Wall Street\u2019s billionaires and their funds.<\/strong><\/p>\n\n\n\n

Turns out, Morgan Stanley was right. Warren Buffett, KKR, and The Carlyle Group have all jumped into residential real estate, along with hundreds of smaller investment groups, and the National Home Rental Council <\/a><\/em>has emerged as the industry\u2019s premiere lobbying group, working to block rent control legislation and other efforts to control the industry.<\/p>\n\n\n\n

As John Husing, the owner of Economics and Politics Inc<\/em>., told <\/a>The Tennessean<\/em> newspaper:<\/p>\n\n\n\n

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\u201cWhat you have are neighborhoods that are essentially unregulated apartment houses.  It could be disastrous for the city.\u201d<\/p>\n<\/blockquote>\n\n\n\n

As Zillow found<\/a>:<\/p>\n\n\n\n

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\u201cThe areas that are most vulnerable to rising rents, unaffordability, and poverty hold 15 percent of the U.S. population \u2014 and 47 percent of people experiencing homelessness.\u201d<\/p>\n<\/blockquote>\n\n\n\n

The loss of affordable homes also locks otherwise middle class families out of the traditional way wealth is accumulated \u2014 through home ownership: over<\/a> 61% of all American middle-income family wealth is their home\u2019s equity.<\/p>\n\n\n\n

And as families are priced out of ownership and forced to rent, they become more vulnerable to homelessness.<\/p>\n\n\n\n

Housing is one of the primary essentials of life.  Nobody in America should be without it, and for society to work, housing costs must track incomes in a way that makes housing both available and affordable.<\/strong><\/p>\n\n\n\n

Singapore, Denmark, New Zealand, and parts of Canada have all put limits<\/a> on billionaire, corporate, and foreign investment in housing, recognizing families\u2019 residences as essential to life rather than purely a commodity. Multiple other countries are having that debate or moving to take similar actions as you read these words.<\/p>\n\n\n\n

America should, too.<\/p>\n","protected":false},"excerpt":{"rendered":"

With every investment home they snatch, the dream of owning a house slips further away from you\u2026 THOM HARTMANN OCT 23 ,2024 Image by \u0421\u0435\u0440\u0433\u0435\u0439 \u0421\u0442\u0440\u0430\u0442\u0438\u0435\u043d\u043a\u043e from Pixabay Share America\u2019s morbidly rich billionaires are at it again, this time screwing the average family\u2019s ability to have decent, affordable housing in their never-ending quest… Continue reading → <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/37223"}],"collection":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/comments?post=37223"}],"version-history":[{"count":1,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/37223\/revisions"}],"predecessor-version":[{"id":37226,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/37223\/revisions\/37226"}],"wp:attachment":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/media?parent=37223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/categories?post=37223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/tags?post=37223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}