In Just Three Months, Corporations Bought 80,000 Family Homes and Turned Them Into Rentals
In Just Three Months, Corporations Bought 80,000 Family Homes and Turned Them Into Rentals
When will society fight back against this horrific economic injustice?
There is a battle stirring for the soul of America and the future of our global civilization.
It will soon become an all-out war between corporations and everyday working humans.
The object of the conflict is housing.
Specifically, over who has the right to own all the houses.
I am of the old-fashioned opinion that legitimately affordable owned shelter is a human right and that private profits for trillion-dollar corporations are not.
Sadly, corporations are handily winning the war, and they are just getting started.
How to rob a generation
The corporate land-lording con is incredibly simple and incredibly devastating:
Attract billions of dollars in investment money from passive extractors.
Leverage up those billions to tens of billions by borrowing vast amounts of cheap debt from bankster buddies.
Use computer algorithms to purchase houses sight-unseen, paying cash and outbidding local working families for houses.
Rent those houses back to local working families for more money than what they would’ve paid to own.
Because of supply suppression and increased (investor-created) demand for housing, not only do they rob rents from tenants, but they enjoy wildly inflated portfolio values (and inflation, of course, is just another way to rob the poor.)
The mechanism that enables corporate land-lorders to extract trillions of dollars from rent-serfs each year has a name:
Monopoly.
They hold a house hostage in order to extract usury from people in desperation.
Land-lording is pure parasitism. Even Adam Smith, the father of modern capitalism, hated rent-seeking because it’s anti-meritocratic and ruinous for society.
This economic disease is a somehow-legal monopoly that enabled wealthy land-lorders to rob more than $2.7 trillion from the working class last year.
So naturally, institutional investors are drawn to the moneypot like flies to honey, with hopes and plans to monopolize all those trillions and then some.
Easy money is hard on the soul
Let’s face it: Building a real, working, contributive business is hard work. It takes effort and sweat and creativity and brains — all things that institutional land-lorders lack entirely.
It’s far easy to let somebody do all the difficult work of building civilization, and then just flay profits off their backs by not letting them own homes.
Perhaps a brief history recap will give us some context on this fraud:
Prior to the Great Recession of 2008, corporate land-lorders were virtually non-existent in the single-family rental market.
But when 6 million American families lost their homes due to bankster greed, a handful of super-rich vulture capital firms swooped in and snatched up the foreclosure carrion.
Now that the post-pandemic bubble is deflating — because corporate-created inflation caused interest rates to rise and made buying unaffordable for humans, private equity has seen yet another opportunity to milk the masses.
Homeownership levels still haven’t recovered to post-2008 crash levels, and when we look back on this next tranche of private equity house purchasing, the story will be similar.
And institutional monopolization will not stop until we stop them.
The hard facts
We now have the stats from Q4 of 2021.
In the last three months of last year, institutional investors bought nearly 20% of all US homes for sale.
Think about how insane that is.
One in five houses for sale in the entire United States of America was purchased by a faceless, soulless, anti-human corporate predator.
In Atlanta, corporations bought up 32.7% of all homes for sale
They gobbled up 32.1% of the homes in Charlotte
They devoured 27% of homes for sale in Las Vegas, Phoenix, and Miami
In just three months in America, these massive funds spent more than $50 billion to buy up more than 80,000 houses, 75% of which were single-family homes.
They paid cash for more than 75% of those deals.
And they turned nearly all of them into rentals.
In other words, in just three months, they pushed 80,000 families out of homeownership and into a rent-trap.
In just three months, they monopolized a human necessity and are now wringing the life out of 80,000 families via usurious rents.
So much for capitalism delivering all that magical “efficiency.”
Built to enslave
Not only is the extraction class buying up local working family homes, but they’re also building purpose-built rentals.
Rather than giving the contributor class a shot at homeownership and a relatively stable way to save their wealth from inflation, single-family built-for-rent housing grew by 16% in 2021.
That’s 51,000 houses monopolized by rent-seekers instead of sold to human beings.
And if you think that’s bad, there’s a town in wretched Canada where 92.1% of new builds were monopolized by investors last year.
Monopolizing shelter will end terribly
How are working local families ever supposed to compete with trillion-dollar multinational shelter monopolies?
If bankster-backed predator corporations continue to monopolize shelter for usury — and there are no signs that they’re stopping or even slowing — house prices will rise to an average of $10 million within our lifetime.
Some cities like Cincinnati — where an appalling two-thirds of all citizens are rent-serfs — are at the point of pure desperation. In a pathetic attempt at securing affordable housing for locals, the city has started selling bonds to investors and using the money to outbid corporations for local housing stock.
In other words: They’re bidding up house prices in order to enrich a different set of rich investors, leaving their citizens in worse shape than they started.
How will your children and grandchildren ever be free of the financial vampires who want to bleed them dry via rent-seeking?
The answer is clear:
They won’t.
Monopolizing shelter is all part of the world’s great reset to serfdom.
Fake fixes
Visionless and spineless corporate politicians have come up with all sorts of fake half-measures and tokenistic responses to the housing crisis.
In my county, they’re tripling land taxes on Airbnbs, which corporate land-lorders can offset in about three weeks of rental income.
Some counties are requiring rent-seeking land-lorders to register and pay an annual license fee, which is more than offset by the hundreds of thousands in appreciation they’ll reap during the next market rebound.
In Ohio, they’re trying to pass a bill that will give tenants 45 days to come up with the money to match an offer made by a billion-dollar parasite. Because tenants are sitting on piles of cash for a wildly-overpriced down payment, right? (California already has a similarly stupid law.)
None of these pathetic political moves will work, and everyone knows it.
And let’s face it: Homeowning voters love ever-rising house prices, and tacitly play their role in the global fraud by never voting for real reformers.
Affordable homeownership for everyone forever
It is very simple to create easily-affordable, generationally-achievable homeownership available to everyone on earth who wants it:
The first thing we need to do is ban institutional investment in residential rent-seeking. Heck, we don’t even need to outright ban it — we can just charge 100% corporate tax on unearned rent-seeking profits and 100% capital gains tax on unearned portfolio appreciation, plus maybe 100X their land taxes and use the money to build more owner-occupier-only housing. (After all, if investors and Airbnbers are going to take houses out of the local ownership market, why shouldn’t they be responsible for replacing them?)
Of course, if we did something as “radical” (read: sensible) as this, extractive investors would quickly skitter back out of the rent-seeking market and allocate their capital elsewhere, ideally to a productive, contributive business instead of a parasitical one (but let’s not hold our breath.)
The second thing we need to do is build tens of millions of owner-occupied-only homes. I have received close to a hundred messages, comments, and emails from all over the world in which people tell me the same story: How they have just enough money to buy a small piece of land and the means to erect a humble eco-home, but evil zoning departments won’t let them.
If governments were serious about climate change — and of course, they absolutely are not — every nation would immediately pass a Homestead Act, which would give carte blanch permission for individuals and families to build one (1) reasonably-sized, ecologically-friendly home on any field greater than a quarter-acre in size.
Not only would this allow millions of young WFH families to escape the ugly cities and the clutches of the rentier class, but it would connect them to the land and beautify our countryside on a scale we haven’t seen in a century.
We could also force zoning boards to give large-scale builders the right to construct developments exclusively for owner-occupiers only, once again resurrecting communities that have been torn apart and laid waste by profiteers. Ideally something timeless, high-density, and human-scale:
In conclusion
Legitimately affordable shelter is a human right.
Corporate profit isn’t.
And there is a formula for perpetually-affordable housing:
Destroy rent-seeker demand + build owner-occupier supply.
It’s literally that simple. Purge economic exploitation from human shelter and ensure you build enough homes to meet real human demand, and prices will quickly return to 2–3X the annual median salary of a single earner.
Instead of wasting generations of human life to enrich banksters and land-lorders, we can all get back to the good work of building civilization.
But who would want to live in a flourishing world with widespread wellbeing?
Everyone prefers free money now.
UPDATE: We now have the stats for Q1 2022—investors devoured a record 28% of U.S. single-family home sales.
Jared A. Brock is an award-winning biographer, PBS documentarian, and the cell-free founder of the popular futurist blog Surviving Tomorrow, where he provides thoughtful people with contrarian perspectives on the corporatist anti-culture. His writing has appeared in Esquire, The Guardian, Smithsonian, and TIME Magazine, and he has traveled to more than forty countries including North Korea. Join 24,000+ people who follow him on Medium, Twitter, and Substack.