Pay No Attention To Oligarchs Raising Your Rent
A brief look at the absurd idea that billionaires and corporations have nothing to do with America's housing crisis.
Inside the elite economic discourse, there’s this annoying assumption that while oligarchy may explain many bad trends in our society, it has nothing to do with the housing crisis. It’s a genuinely weird supposition - somehow we’re expected to see billionaires and megacorporations fleecing everyone in every aspect of our lives, but we’re also supposed to believe that oligarchs and megacorporations benevolently spared the housing market from their greed.
Not surprisingly, this assumption does not hold up to even the most cursory scrutiny. Consider some findings:
The Philadelphia Federal Reserve found that institutional investors in housing “raise rents at 60 percent higher rates than the average increase when first acquiring the property, and higher investor share in a neighborhood is correlated with faster rent increases.”
Stanford researcher Sebastian Hanson’s recent study took a look at the post-financial crisis era’s “unprecedented rise in rental purchases by institutional investors.” His study shows that “after entry of these investors into a market, house prices & rents grow 2pp and 1.2pp faster per year.” The study notes that “faster rental growth cannot be accounted for by market timing, suggesting that institutional investors use their size to extract markups.”
A recent White House study of real-estate-focused tech giants like RealPage found that “anticompetitive pricing costs renters in algorithm-utilizing buildings an average of $70 a month. In total, we estimate the costs to renters in 2023 was $3.8 billion. This estimate is likely a lower bound on the true costs.”
University of North Carolina researchers showed a “causal impact of (long-term rental companies’) market share on local house prices…a 1-standard deviation
above the mean increase in (long-term rental companies’) share growth leads to an annual additional house price growth of 2.11pp.”
I could keep going here, but I’m sure you get the basic point: oligarchy may not be the only factor in the housing crisis, but the idea that oligarchy isn’t a huge factor - or has nothing to do with the problem - is absurd, and that’s putting it charitably.
A harsher take is that this “oligarchs aren’t the problem” assumption now being baked into the housing discourse is deliberately deceptive agitprop. And it’s hardly surprising that it is cheered on by conservative dark-money groups and an astroturf “abundance” movement that is in many cases boosted by oligarchs who have a financial interest in undermining an anti-oligarch political movement.
For more on all of this, go read the terrific reporting showing how insane that agitprop really is - and spotlighting what’s actually reducing the availability of affordable housing.
Well yes. Wealth is the singular value, everybody says our generational wealth is in your property. So even more than ever, and elsewhere, the “average Joe” aspires to landlordism. We have writ, (I live here, it might be the same in Beijing) that wealth is fulfillment. If this is actually a human truth, I think it isn’t, but this distortion of nature rules us.
Property is blatant but it is everywhere else. And it cannot last. The US is committed to inequality, from top to bottom. Using banal terms like competition is advertising. The western realized self is their portfolio. People do not suspect landlords because they wanna be one.
As if serfdom wasn’t bad enough with work for healthcare and shackling one to the corporate teet with no hope or free will to escape you now get to join my grandfather in a coal mine company town house paying your boss for housing, family farms were the first as the oligarchs took the food supply, these are all human rights violations.