Report: How Billionaire Buyers Are Making the Housing Crisis Worse

The financialization of the housing sector is driving up costs for ordinary families and keeping available units off the market.

2 minute read

October 28, 2024, 6:00 AM PDT

By Diana Ionescu @aworkoffiction


Close-up of white sign with red FOR SALE letters and blurred brick single-family home in background.

Michael Flippo / Adobe Stock

The growing impact of institutional investors on the housing market is driving up housing costs for most Americans, asserts a new report from the Institute for Policy Studies (IPS) and Popular Democracy, reinforcing a common belief that the financialization of housing is making it a commodity out of reach for many ordinary households.

According to a Common Dreams article by Julia Conley, “The two groups found that a small number of wealthy individuals and their investment arms, who control "huge pools of wealth," have spent some of their vast resources on "predatory investment and wealth-parking in luxury housing"—contributing significantly to the crises of unaffordable rents, out-of-reach homeownership, and homelessness.”

While the housing crisis is usually blamed on a supply and demand mismatch, “the reality is that the owners of concentrated wealth... are playing a more pronounced role in residential housing, thereby creating price inflation, distortions, and inefficiencies in the market.”

The report includes an example from Los Angeles, where in 2017 there were 93,500 vacant units and roughly 36,000 unhoused residents. Meanwhile, investors are encroaching on the affordable housing market, buying up multifamily properties and mobile home parks and raising costs for tenants. “Corporate ownership of rental housing stock ‘has not translated into housing stability, particularly for working-class households and communities of color,’ reads the report.”

The report urges policymakers to create more public and non-profit housing that can’t be sold at a profit, expand protections for affordable homes, and limit corporate ownership and vacancy periods.

Monday, October 21, 2024 in Common Dreams

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