The housing affordability crisis – and how to solve it – has become a major focus during election season, for good reason. Millions of American families struggle to afford and keep a roof over their heads, find themselves unsheltered, or have become frustrated in the hope of owning their own home.
The over-focus on expanding housing supply through for-profit development misses a key contributor to the housing crisis: the concentration of wealth and power. The challenges of the U.S. housing crisis go beyond supply or fixing local land use regulations. The billionaire class and billionaire-backed private equity investors have become a driving force in the U.S. housing crisis.
A new report, Billionaire Blowback on Housing: How concentrated wealth disrupts housing markets and worsens the housing affordability crisis, coauthored by the Institute for Policy Studies and Popular Democracy, examines the myriad ways that billionaire investors are harming local housing markets and diminishing the supply of affordable housing.
With roughly 800 billionaires in the U.S. with combined wealth of $6.2 trillion (and 2,781 billionaires globally with over $14.2 trillion), ultra-wealthy investors tend to diversify their holdings across multiple kinds of assets. A huge amount of this billionaire wealth is invested in property, land, and housing. Billions and possibly trillions of dollars are sucked into predatory investment practices and luxury housing schemes — where global billionaire investors park vast quantities of wealth in U.S markets.
This is not your grandparent’s gentrification, but rather a hyper-gentrification fueled by concentrated wealth driving up land and housing costs, expanding short-term rentals, and treating housing like a commodity to speculate on or a place to park wealth. The billionaires are displacing the millionaires, and the millionaires are disrupting the housing market for everyone else.
Estimates of hidden wealth are as high as $36 trillion globally, with billions parked in U.S. land and housing markets.
Our report found that billionaire-backed private equity firms have wormed their way into different segments of the housing market to extract ever-increasing rents and value from multi-family rental, single-family homes, and mobile home park communities. For instance, Blackstone has become the largest corporate landlord in the world, with a vast and diversified real estate portfolio. It owns more than 300,000 residential units across the U.S., has $1 trillion in global assets, and........