How corporations are buying up houses — robbing families of the American Dream

How corporations are buying up houses — robbing families of the American Dream

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"While he notes that companies own around 300,000 US homes so far, this is just the tip of the iceberg, as they’re wealthy enough to buy, and tech-savvy enough to manage, “multiples more” with “ruthless efficiency.” These companies aren’t just depriving potential homeowners of a place to call their own, he writes: they’re destroying the ability for thousands of middle-class American families to accumulate wealth.

“Home-price appreciation has historically been how Americans achieve financial prosperity,” December writes. “Unlike stocks and bonds, ownership of which is concentrated at the top, houses are widely held. Roughly half of housing wealth is owned by America’s middle class.”

The bonanza really took off in 2011, when Morgan Stanley issued a report called “A Rentership Society.” With over 1.6 million foreclosed homes in the United States and more on the way, the report forecast “a surge in the number of renters and a potentially massive opportunity for investors to convert the glut of repossessed homes into rental properties.”

America’s investment managers were all in. By 2012, “more than $1 billion had been raised by investors for the purpose of doing just that. Some of the biggest names in finance were hoarding houses.” Individual investors were soon mostly gone or absorbed into larger companies with investors like Warren Buffett, KKR of “Barbarians at the Gate” fame, and investment behemoth The Carlyle Group. Heck himself wound up joining American Homes 4 Rent, which was founded by billionaire self-storage magnate B. Wayne Hughes, and would own about 48,000 houses by the end of 2016. There is even a lobbying organization, the National Rental Home Council, to look after their interests in the government, such as defeating rent-control laws."

— By Larry Getlen July 18, 2020 | 8:51am



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