Is Homelessness Our “Malnutrition & Starvation” Applied to Housing?

 

I suggest reading the whole article.

 https://hartmannreport.com/p/is-homelessness-our-malnutrition

 

Thom Hartmann

Dec. 22, 2022

 

This week’s brutal winter storm’s impact on homeless people across the nation — it will certainly kill many —reminds us how essential safe housing is for us human beings.

There are commodities and there are necessities. Sometimes, they’re the same. Food, for example, is both a commodity and a necessity.

Imagine, then, if a group of giant companies were to buy up a third of America’s food and then begin steeply raising its price. It would produce the same situation I’ve seen both war and drought create when I did international relief work in multiple third-world countries: hunger, malnutrition, and — among the poorest and least able to work — starvation.

Housing is only slightly less a necessity than food (it varies with climate) but the scenario I just described with that food metaphor is very much what is happening in America today. Homelessness, it turns out, is our “malnutrition and starvation” applied to housing.

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About a third of all American houses bought in the past few years were bought for cash; while some of this is wealthy people, most cash purchasers today are giant investment corporations.

These large-scale cash home purchases drive up the price of houses, which in turn drives up rental costs. Homlessness begins to pop when community rent exceeds 22 percent of community income, and explodes above 32 percent.

For every 5 percent increase in house prices, there’s a roughly 4 percent increase in homelessness in the same communities.

And we’re seeing it play out right in front of us in cities across America because a handful of Wall Street billionaires want to make a killing.

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When my dad bought his home in the 1950s the median price of a single-family house was around 2.2 times the median American family income.

Today, the Fed says, the median house sells for $374,900 while the median American income is $35,805 — a ratio of more than 10:1 between housing costs and annual income.

As the Zillow study notes:

    “Across the country, the rent burden already exceeds the 32 percent [of median income] threshold in 100 of the 386 markets included in this analysis….”

As noted, wherever housing prices become more than three times annual income, homelessness stalks like the grim reaper. 

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In 2018, corporations bought 1 out of every 10 homes sold in America, according to Dezember, noting that:

    “Between 2006 and 2016, when the homeownership rate fell to its lowest level in fifty years, the number of renters grew by about a quarter.”

Today, more than one-in-three homes in many of America’s cities are bought by giant corporations. As Oregon Democratic Senator Jeff Merkley notes:

    “Data from 2021 show the fastest year-over-year increase in hedge fund home purchases in 16 years. For example, in 2021, large hedge fund investors bought 42.8 percent of homes for sale in the Atlanta metro area and 38.8 percent of homes in the Phoenix area.”

This trend of giant corporations locking up local real estate really took off a decade ago, when Morgan Stanley published a 2011 report titled “The Rentership Society,” arguing that snapping up houses and renting them back to people who otherwise would have wanted to buy them could be the newest and hottest investment opportunity for Wall Street’s billionaires and their funds.

Turns out, Morgan Stanley was right. Warren Buffett, KKR, and The Carlyle Group have all jumped into residential real estate, along with hundreds of smaller investment groups, and the National Home Rental Council has emerged as the industry’s premiere lobbying group, working to block rent control legislation and other efforts to control the industry.

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As America’s twin housing and homelessness problems have now reached crisis levels — the housing equivalent of malnutrition and starvation — Senator Jeff Merkley has submitted legislation to stop the corporate feeding frenzy.

The End Hedge Fund Control of American Homes Act bans hedge funds and private equity leeches from owning housing at scale. Merkley noted:

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There’s a petition in support of this bill at Daily Kos worth taking a moment to sign.

Call your representative and your two senators and ask them to co-sponsor Merkley’s legislation in the Senate or co-sponsor companion legislation in the House. The Congressional switchboard, which will connect you to any member of Congress, is 202-224-3121.