How America’s Billionaires are Fueling the Housing Crisis

Key Takeaways:

– Housing affordability crisis in the U.S. is primarily caused by billionaires treating housing as an investment commodity.
– Since the Reagan Revolution, the cost of housing relative to income has surged.
– Wealthy investors are acquiring properties, often leaving them vacant, which has escalated homelessness.
– The number of vacant homes is 28 times greater than the number of homeless people.
– Billionaire investors are accountable for the alarming housing affordability crisis.

Homeownership: A Distant Dream For Many

In the U.S., homeownership feels like a dream that’s slipping out of reach for many. Years back, my father walked into a bank, secured a loan, and bought a house that was worth just about twice his yearly earnings. Right now, the situation is dramatically different. For every dollar that an average American makes, they need more than ten to purchase a house, which is about five times more expensive than it was in the 1950s.

Why is Housing Becoming Unaffordable?

So, you might wonder, why are houses so costly now? How did we end up here? The main culprit behind the skyrocketing house prices is a group of super-rich people treating houses not as homes, but as juicy investments. Popular Democracy and Institute for Policy Studies, two reputable research institutions, have indicated how billionaire investors are the driving force behind the housing crisis. Let me share this in a simple way:

These super-rich guys enter the housing market and extract increasing rents and value from the rental homes, including multi-family houses and mobile home park communities. This is juiced up by the inflow of cash from global billionaires stashing their wealth in U.S. real estate. With the huge money power, they acquire property and then… they leave them vacant. Can you imagine that? Right now, there are about 28 vacant homes for every homeless person in the U.S.

To top it off, these billionaire investors, the big fish in the housing market, have also been snatching up a large chunk of the short-term rental market. This has left local residents knocking on doors that are not open for them. The investors’ wallets get fatter while the dream of a personal nook becomes increasingly blurry for the average Joe.

The Math of Homelessness

When the rent for a house becomes more than 32 percent of a neighborhood’s average income, the rate of homelessness quickly picks up speed. An interesting study by Zillow, a well-known real estate company, outlines this. Imagine the tightening grip of rising rents in neighborhoods, pushing more folks into homelessness.

Billionaire-led entities like Blackstone Group have made giant strides in turning the table towards their favor. They bought 1 out of every 10 homes sold in America in 2018. With such insatiable thirst for more homes and swanky investment schemes, these billionaires are leaving a massive footprint on the housing landscape.

Stripping Away The Dream

Let’s not forget that in the past, owning a house was a direct ticket to building personal wealth. But now, as more families are priced out of homeownership, they’re pushed to rent. This leaves them hanging on a thin string, vulnerable to homelessness. It’s simple: housing is a need for life, just like food and water. In a country like the U.S., it’s shocking that people are still without it.

Countries like Singapore, Denmark, New Zealand, and parts of Canada have taken steps to limit billionaire, corporate, and foreign investment in housing. It’s time the U.S. followed suit and made housing affordable for everyone again. Because, at the end of the day, a home is much more than a commodity – it’s where life happens. Let’s not let these billionaire investors forget that.

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