Saturday Hashtag: #InstitutionalHousingCommodification
The Manufactured Housing Crisis: How Institutional Investors Are Robbing Americans of Homes
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To be clear, there is absolutely no housing shortage in America — at least not in the way you’ve been led to believe.
What’s really going on is a classic case of monopolistic investor greed intensified by occasionally compliant legislators and financially-sponsored regulation.
In 2023, outside investors accounted for nearly 29 percent of all home purchases, totalling $43 billion, with 69 percent of those purchases being single-family homes. The so-called “housing crisis” is less about supply and demand — and more about who sponsors the regulation, who does the construction, who controls the stockpile, and who profits from the constrained inventory.
Here’s how it works: Institutional investors are scooping up massive amounts of residential properties, purchasing nearly 20 percent of US homes, not to house people, but oftentimes to keep them vacant and artificially inflate prices.
You think the market is tight? It’s not. The housing market is deliberately constricted, thanks to the very same entities that are buying up entire neighborhoods — entities like Blackstone, private equity firms, Saudi Arabia investment funds, and even Jared Kushner.
These players are turning homes (built for families to live in) into institutional financial assets.
They buy properties, often keeping them vacant, utilizing equity capital and private investment funds, or leveraging instruments (e.g., securitized mortgages, debt financing, corporate bonds), creating artificial scarcity that drives up both purchase and rental prices, ensuring their “investments” appreciate.
The more they own and the longer they keep them empty, the tighter the market gets, and the higher their asset values climb.
But the real kicker? The investors who are hoarding housing stocks are often the same ones controlling the homebuilding industry. That’s right. The very same companies buying up existing homes are the ones managing the construction of new ones — or, more accurately, not constructing middle-class homes.
Developers and investors like Blackstone, Brookfield, private equity, and various hedge funds essentially control both sides of this equation. They don’t need to own the entire industry — just enough to manipulate it for maximum profit.
They’re not interested in building middle-class homes, because there’s more money in keeping the market artificially tight, driving up demand, and inflating both rental and purchased home prices. This game is not about solving the housing problem; it’s about exploiting it.
Even in its most benign form, institutional investing in housing extracts innate local value, accelerates wealth concentration, and undermines community stability.
It prioritizes profits over people, favoring renting over ownership directly conflicting with the broader affordable housing tenants that are essential for a stable society.
And let’s not ignore how this all ties into these actors’ influence over public policy. Local governments often perpetuate the crisis because they benefit from the property taxes generated by these operations. With billions on the line, profit-driven investors relentlessly lobby receptive legislators for restrictive zoning laws that impede or prevent the construction of affordable middle-class housing. This ensures that luxury developments are just a little bit easier to construct. Why build for the people when you can build for investors?
In the rental construction market this group also strategically games the tax incentive system designed to support low-income housing development, essentially using public funds to build high-rent units. Instead of alleviating the crisis, these investors use public funds to maximize their own profits.
This is the “housing crisis” we’re living in: a manufactured shortage created by the very entities that should be solving it. They hoard existing homes, restrict middle-class construction, and inflate purchase and rent prices — all while making billions off the backs of renters and potential homeowners.
FYI: There are no comprehensive federal or state laws in the US (beyond standard SEC regulations) that specifically limit or regulate institutional investment in the residential housing market (i.e., real estate purchased by private equity firms, hedge funds, large corporations, or foreign investors).
Until we stop letting unrestricted institutional and foreign investment control the homebuilding industry, the housing supply, and the regulating legislation, this cycle of greed will continue.
The American Dream isn’t out of reach because there aren’t enough homes or “woke DEI policies”; it’s out of reach because the system is rigged to keep people renting from large scale investors that control zoning legislation and own everything else — from the land to the dwellings to the construction companies, building the luxury investments that no actual people can afford to live in.
So, in this casino Monopoly game, you don’t pass Go, you don’t collect $200 — you don’t even go directly to jail (with three hots, a cot, and free health care). Instead, you just keep landing on Boardwalk with hotels, losing your paycheck, and going bankrupt.
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