Wealthy Pro-Trump Tycoons Pushing More Americans Toward Homelessness

America’s ultra-wealthy billionaires are once again impacting the average family’s ability to secure affordable, decent housing as they continue their relentless pursuit of wealth. Countries like Canada, New Zealand, Singapore, and Denmark have already taken action against this issue. It’s high time the U.S. does the same.

Certain sectors crucial to “life, liberty, and the pursuit of happiness” should never be completely left to the whims of the market; these are the areas where government oversight, regulation, and potentially subsidies are not only appropriate but necessary. Housing stands foremost among these.

Just a few days ago, I highlighted how, following the Reagan Revolution, the cost of housing in the U.S. has skyrocketed compared to the incomes of the working class.

In every corner of America, the devastating effects of homelessness, driven by these billionaires, are visible. However, the involvement of Wall Street and its billionaires in this crisis is rarely discussed.

For example, when my father purchased his home in the 1950s, the average price of a single-family home was about 2.2 times the median American family income. Today, according to the St. Louis Fed, the median home price is $417,700 while the median family income is $40,480—a ratio exceeding 10 to 1.

In simpler terms, housing now costs about five times more in relation to income than it did back in the 1950s.

We have reached a critical tipping point, resulting in the homelessness that has been afflicting American cities since the housing and stock market crash during George W. Bush’s presidency, which was intensified by Donald Trump’s mishandling of the COVID-19 pandemic.

The root cause of both that crash and the current housing affordability and homelessness crisis can be traced back to one primary factor: billionaires treating housing as mere investment commodities.

A recent study from Popular Democracy and the Institute for Policy Studies reveals how billionaire investors have become significant contributors to the national housing crisis. They summarize:

— Billionaire-backed private equity firms infiltrate various segments of the housing market to extract escalating rents and value from multi-family rentals, single-family homes, and mobile home park communities.

— Global billionaires invest billions in U.S. real estate to diversify their portfolios, leading to the creation of luxury housing that acts as “safety deposit boxes in the sky.” Hidden wealth estimates reach as high as $36 trillion globally, with billions invested in U.S. real estate markets.
— Wealthy investors acquire properties and leave them vacant, resulting in many communities where vacant homes far outnumber homeless individuals. There are 16 million vacant homes nationwide, which means there are 28 vacant homes for every homeless person.
— Billionaire investors are dominating the short-term rental market, preventing locals from occupying these homes, to profit from tourism. These aren’t small owners but corporate entities owning multiple properties.
— Billionaire investors and corporate landlords specifically target low-income and minority communities, imposing rent hikes, frequent evictions, and substandard living conditions. Additionally, billionaire-owned private equity firms invest in subsidized housing, enjoying tax benefits and public subsidies while increasing rents and evicting low-income tenants from properties that are only temporarily required to be affordable. (Emphasis theirs.)

The tragedy of homelessness caused by these billionaires is evident everywhere in America, yet their role in this crisis is seldom acknowledged.

The numbers speak for themselves.

Research funded by the real estate platform Zillow identifies 32% as the critical threshold. When neighborhood rents exceed 32% of local incomes, homelessness surges. This phenomenon is unfolding across American cities as a few billionaires reap massive profits.

As the Zillow study points out:

Nationally, the rent burden has already surpassed the 32% threshold in 100 of the 386 markets analyzed…

Wherever housing costs exceed three times the annual income, homelessness looms ominously. The Zillow-funded study explains:

The study shows that homelessness rates climb more sharply when rent affordability—the proportion of income spent on rent—crosses certain thresholds. In many places above these thresholds, even slight rent increases can thrust thousands more into homelessness.”

This issue is widespread.

As highlighted in a Wall Street Journal article titled “Meet Your New Landlord: Wall Street,” in one Nashville suburb (Spring Hill) alone:

Four firms own nearly 700 houses in Spring Hill, which represents about 5% of all homes in the town.

This is just the beginning.

“On the first Tuesday of each month,” the Journal article about a similar trend in Atlanta reports, investors “arrived with duffels filled with millions in cashier’s checks in various denominations, so they didn’t have to pause their buying spree for bank visits…”

This scene is being replicated in cities and suburbs across the country; representatives of billionaire investors employ sophisticated algorithms to identify houses for conversion into rental properties, presenting unbeatable cash offers often just minutes after homes are listed.

After monopolizing neighborhoods and removing affordable purchasing options for young families, these billionaires then hike rents to extract maximum revenue from local working-class communities.

In the suburb of Spring Hill, Nashville, the vice-mayor, Bruce Hull, explained to the Journal that previously, “a three-bedroom, two-bath house could be rented for $1,000 a month.” Now, according to the Journal:

The average rent for 148 single-family homes in Spring Hill owned by the big four [Wall Street billionaire investor] landlords is approximately $1,773 a month…

As summarized by the Bank of International Settlements in a 2014 retrospective analysis post-Reagan/Gingrich banking and finance reforms:

We outline a Pareto frontier where different levels of risk-taking correspond to different levels of welfare for the two parties, pitting Main Street against Wall Street… We also demonstrate that financial innovation, asymmetric compensation schemes, banking system concentration, and bailout expectations either enable or encourage increased risk-taking, reallocating more surplus to Wall Street at Main Street’s expense.

This sophisticated jargon essentially means billionaire-owned major banks and hedge funds have generated trillions from housing, while you and your community suffer financially.

Ryan Dezember, in his book Underwater: How Our American Dream of Homeownership Became a Nightmare, recounts a family’s attempt to buy a home in Phoenix. Each time they placed a bid, they were instantly outbid, with the price continually rising, until the family’s father finally gave up.

“Jacobs was bewildered,” Dezember writes. “Who was this aggressive bidder?”

It turned out to be the Blackstone Group, the world’s largest real estate investor at the time, headed by a significant Trump supporter. They were purchasing $150 million worth of American homes weekly, aiming to invest over $10 billion. And this is just a fraction of the overall situation.

As the new report from Popular Democracy and the Institute for Policy Studies discovered:

[Billionaire Stephen Schwarzman’s] Blackstone is the world’s largest corporate landlord, owning over 300,000 residential units across the U.S., with $1 trillion in global assets, and nearly doubling its profits in 2021.

Blackstone manages 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 has recently acquired 95,000 units of subsidized housing.

In 2018, corporations and the billionaires who own or manage them purchased 1 out of every 10 homes sold in America, according to Dezember, who noted that:

Between 2006 and 2016, when the homeownership rate dropped to its lowest point in 50 years, the number of renters increased by about a quarter.

And the situation has only deteriorated since then.

This trend really gained momentum about a decade ago following the Bush Crash, when Morgan Stanley released a 2011 report titled “The Rentership Society,” arguing that buying up houses and renting them back to would-be buyers could be the next big investment opportunity for Wall Street’s billionaires and their funds.

It turns out, Morgan Stanley was correct. Warren Buffett, KKR, and The Carlyle Group have all entered the residential real estate market, along with hundreds of smaller investment groups, and the National Home Rental Council has emerged as the industry’s leading lobbying group, working to block rent control legislation and other regulatory efforts.

As John Husing, owner of Economics and Politics Inc., told The Tennessean newspaper:

What you have are neighborhoods that are essentially unregulated apartment complexes. It could be catastrophic for the city.

As Zillow discovered:

The areas most vulnerable to rising rents, unaffordability, and poverty encompass 15% of the U.S. population—and 47% of the homeless population.

The disappearance of affordable homes also prevents otherwise middle-class families from accumulating wealth through homeownership: Over 61% of all American middle-income family wealth is tied up in their home equity.

As families are priced out of ownership and compelled to rent, they become increasingly susceptible to homelessness.

Housing is a fundamental human need. No one in America should be without it, and for society to function, housing costs must align with incomes to ensure availability and affordability.

Singapore, Denmark, New Zealand, and parts of Canada have all imposed restrictions on billionaire, corporate, and foreign investments in housing, acknowledging that family residences are essential to life rather than mere commodities. Many other countries are currently debating or moving toward taking similar measures.

America should follow suit.