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affordable housing
Stand With Working People and They Will Stand With You
Let's be very clear: the Democrats lost this election because they ignored the justified anger of working class America and became the defenders of a rigged economic and political system.
Nov 12, 2024
The results of the 2024 election have confirmed a reality that is too frequently denied by Democratic Party leaders and strategists: The American working class is angry — and for good reason.
They want to know why the very rich are getting much richer, and the CEOs of major corporations make almost 300 times more than their average employees, while weekly wages remain stagnant and 60 percent of Americans live paycheck to paycheck.
They want to know why corporate profits soar while companies shut down factories in America and move to low-wage countries.
They want to know why the food industry enjoys record breaking profits, while they can’t afford their grocery bills.
They want to know why they can’t afford to go to a doctor or pay for their prescription drugs, and worry about going bankrupt if they end up in a hospital.
Donald Trump won this election because he tapped into that anger.
In the past few years we have made some positive changes. We must acknowledge, however, that what we’ve done is nowhere near enough.
Did he address any of these serious issues in a thoughtful or meaningful way? Absolutely not.
What he did do was divert the festering anger in our country at a greedy and out-of-touch corporate elite into a politics that served his political goals and will end up further enriching his fellow billionaires.
Trump’s “genius” is his ability to divide the working class so that tens of millions of Americans will reject solidarity with their fellow workers and pave the way for huge tax breaks for the very rich and large corporations.
While Trump did talk about capping credit card interest rates at 10 percent, and a new trade policy with China, his fundamental explanation as to why the working class was struggling was that millions of illegal immigrants have invaded America and that we are now an “occupied country.”
In his pathologically dishonest world, undocumented immigrants are illegally participating in our elections and voting for Democrats. They are creating massive amounts of crime, driving wages down, and taking our jobs. They are getting free health care and other benefits that are denied to American citizens. They are even eating our pets.
That explanation is grossly racist, cruel, and fallacious. But it is an explanation.
And what do the Democrats have to say about the crises facing working families? What is their full-throated explanation, pounded away day after day in the media, in the halls of Congress, and in town meetings throughout the country as to why tens of millions of workers, in the richest country on earth, are struggling to put food on the table or pay the rent? Where is the deeply felt outrage that we are the only major country on earth not to guarantee health care for all as a human right while insurance and drug companies make huge profits?
How do they explain supporting billions of dollars in military aid to the right-wing extremist government of Prime Minister Benjamin Netanyahu, which has created an unprecedented humanitarian disaster in Gaza that is causing massive malnutrition and starvation for thousands of children?
In my view, the Democrats lost this election because they ignored the justified anger of working class America and became the defenders of a rigged economic and political system.
This election was largely about class and change and the Democrats, in both cases, were often on the wrong side. As Jimmy Williams Jr., the president of the Painters Union, said, “The Democratic Party has continued to fail to prioritize a strong, working-class message that addresses issues that really matter to workers. The party did not make a positive case for why workers should vote for them, only that they were not Donald Trump. That’s not good enough anymore!”
As an Independent member of the US Senate, I caucus with the Democrats. In that capacity I have been proud to work with President Biden on one of the most ambitious pro-worker agendas in modern history.
We passed the American Rescue Plan to pull us out of the COVID-19 economic downturn; made historic investments in rebuilding our infrastructure and in transforming our energy system; began the process of rebuilding our manufacturing base; lowered the cost of prescription drugs and forgave student debt for five million Americans. Biden promised to be the most progressive president since FDR and, on domestic issues, he kept his word.
But, unlike FDR, these achievements are almost never discussed within the context of a grossly unfair economy that continues to fail ordinary Americans. Yes. In the past few years we have made some positive changes. We must acknowledge, however, that what we’ve done is nowhere near enough.
In 1936, in his second inaugural address, FDR spoke not only of his administration’s enormous achievements in combatting the Great Depression, but of the painful economic realities that millions of Americans were still experiencing.
The Democratic leadership must recognize that, in a rapidly changing economy, working families face an enormous amount of economic pain, anxiety and hopelessness — and they want change. The status quo is not working for them.
Roosevelt’s words remain relevant today: “I see millions of families trying to live on incomes so meager that the pall of family disaster hangs over them day by day … I see millions denied education, recreation, and the opportunity to better their lot and the lot of their children … I see one-third of a nation ill-housed, ill-clad, ill-nourished.”
Of course, the world is today profoundly different than it was in 1936. We are not in an economic depression. Unemployment is relatively low. People are not facing starvation.
But the Democratic leadership must recognize that, in a rapidly changing economy, working families face an enormous amount of economic pain, anxiety and hopelessness — and they want change. The status quo is not working for them.
In politics you can’t fight something with nothing. The Democratic Party needs to determine which side it is on in the great economic struggle of our times, and it needs to provide a clear vision as to what it stands for. Either you stand with the powerful oligarchy of our country, or you stand with the working class. You can’t represent both.
While Democrats will be in the minority in the Senate and (probably) the House in the new Congress, they will still have the opportunity to bring forth a strong legislative agenda that addresses the needs of working families.
Either you stand with the powerful oligarchy of our country, or you stand with the working class. You can’t represent both.
If Republicans choose to vote those bills down, the American working class will learn quickly enough as to which party represents them, and which party represents corporate greed.
In my view, here are some of the working class priorities that Democrats must fight for:
- We must end Citizens United and stop billionaires from buying elections.
- We must raise the $7.25 federal minimum wage to a living wage — at least $17 an hour.
- We must pass the Protecting the Right to Organize Act to make it easier for workers to form unions and end illegal union busting.
- We must protect senior citizens by increasing Social Security benefits and extending the solvency of the program by lifting the cap on taxable income.
- We must bring back defined benefit pension plans so that workers can retire with security.
- We must do what every other wealthy nation does and guarantee health care to all as a human right, beginning with the expansion of Medicare to cover home health care, dental, hearing, and vision.
- We must cut prescription drug prices in half, no more than is paid in other countries.
- We must provide guaranteed paid family and medical leave.
- We must guarantee equal pay for equal work.
- We must create fair trade policies that work for workers, not just corporate CEOs.
- We must build 3 million units of low income and affordable housing.
- We must make public colleges and universities tuition free, childcare affordable for all, and strengthen public education by paying teachers the salaries they deserve.
- We must adopt a progressive tax system which addresses the massive income and wealth inequality we are experiencing by demanding that the very wealthy start paying their fair share of taxes.
- We must save taxpayer dollars by ending the massive waste, fraud and abuse that exists in the Pentagon.
These are extremely popular ideas. The Democratic Party would do well to listen to the clear directive of American voters, and deliver. The simple fact is: if you stand with working people, they will stand with you. In my view, if Democrats deliver on an agenda like this, they can win back the working class of our country and the White House.
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The Pro-Trump Oligarchs Driving Americans Into Homelessness
The principle cause of today’s crisis of homelessness and housing affordability has one, single, primary cause: billionaires treating housing as an investment commodity.
Oct 26, 2024
America’s morbidly rich billionaires are at it again, this time screwing the average family’s ability to have decent, affordable housing in their never-ending quest for more, more, more. Canada, New Zealand, Singapore, and Denmark have had enough and done something about it: We should, too.
There are a few things that are essential to “life, liberty, and the pursuit of happiness” that should never be purely left to the marketplace; these are the most important sectors where government intervention, regulation, and even subsidy are not just appropriate but essential. Housing is at the top of that list.
A few days ago I noted how, since the Reagan Revolution, the cost of housing has exploded in America, relative to working class income.
It seems that everywhere you look in America you see the tragedy of the homelessness these billionaires are causing. Rarely, though, do you hear about the role of Wall Street and its billionaires in causing it.
When my dad bought his home in the 1950s, for example, the median price of a single-family house was around 2.2 times the median American family income. Today the St. Louis Fed says the median house sells for $417,700 while the median American income is $40,480—a ratio of more than 10 to 1 between housing costs and annual income.
In other words, housing is about five times more expensive (relative to income) than it was in the 1950s.
And now we’ve surged past a new tipping point, causing the homelessness that’s plagued America’s cities since former U.S. President George W. Bush’s deregulation-driven housing- and stock-market crash in 2008, exacerbated by former President Donald Trump’s bungling America’s pandemic response.
And the principal cause of both that crash and today’s crisis of homelessness and housing affordability has one, single, primary cause: billionaires treating housing as an investment commodity.
A new report from Popular Democracy and the Institute for Policy Studies reveals how billionaire investors have become a major driver of the nationwide housing crisis. They summarize in their own words:
— Billionaire-backed private equity firms worm 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.
— Global billionaires purchase billions in U.S. real estate to diversify their asset holdings, driving the creation of luxury housing that functions as “safety deposit boxes in the sky.” Estimates of hidden wealth are as high as $36 trillion globally, with billions parked in U.S. land and housing markets.
— Wealthy investors are acquiring property and holding units vacant, so that in many communities the number of vacant units greatly exceeds the number of unhoused people. Nationwide there are 16 million vacant homes: that is, 28 vacant homes for every unhoused person.
— Billionaire investors are buying up a large segment of the short-term rental market, preventing local residents from living in these homes, in order to cash in on tourism. These are not small owners with one unit, but corporate owners with multiple properties.
— Billionaire investors and corporate landlords are targeting communities of color and low-income residents, in particular, with rent increases, high rates of eviction, and unhealthy living conditions. What’s more, billionaire-owned private equity firms are investing in subsidized housing, enjoying tax breaks and public benefits, while raising rents and evicting low-income tenants from housing they are only required to keep affordable, temporarily. (Emphasis theirs.)
It seems that everywhere you look in America you see the tragedy of the homelessness these billionaires are causing. Rarely, though, do you hear about the role of Wall Street and its billionaires in causing it.
The math, however, is irrefutable.
Thirty-two percent is the magic threshold, according to research funded by the real estate listing company Zillow. When neighborhoods hit rent rates in excess of 32% of neighborhood income, homelessness explodes. And we’re seeing it play out right in front of us in cities across America because a handful of Wall Street billionaires are making a killing.
As the Zillow study notes:
Across the country, the rent burden already exceeds the 32% [of median income] threshold in 100 of the 386 markets included in this analysis….
And wherever housing prices become more than three times annual income, homelessness stalks like the grim reaper. That Zillow-funded study laid it out:
This research demonstrates that the homeless population climbs faster when rent affordability—the share of income people spend on rent—crosses certain thresholds. In many areas beyond those thresholds, even modest rent increases can push thousands more Americans into homelessness.”
This trend is massive.
As noted in a Wall Street Journal article titled “Meet Your New Landlord: Wall Street,” in just one suburb (Spring Hill) of Nashville:
In all of Spring Hill, four firms… own nearly 700 houses… [which] amounts to about 5% of all the houses in town.
This is the tiniest tip of the iceberg.
“On the first Tuesday of each month,” notes the Journal article about a similar phenomenon in Atlanta, investors “toted duffels stuffed with millions of dollars in cashier’s checks made out in various denominations so they wouldn’t have to interrupt their buying spree with trips to the bank…”
The same thing is happening in cities and suburbs all across America; agents for the billionaire investor goliaths use fine-tuned computer algorithms to sniff out houses they can turn into rental properties, making over-market and unbeatable cash bids often within minutes of a house hitting the market.
After stripping neighborhoods of homes young families can afford to buy, billionaires then begin raising rents to extract as much cash as they can from local working class communities.
In the Nashville suburb of Spring Hill, the vice-mayor, Bruce Hull, told the Journal you used to be able to rent “a three bedroom, two bath house for $1,000 a month.” Today, the Journal notes:
The average rent for 148 single-family homes in Spring Hill owned by the big four [Wall Street billionaire investor] landlords was about $1,773 a month…
As the Bank of International Settlements summarized in a 2014 retrospective study of the years since the Reagan/Gingrich changes in banking and finance:
We describe a Pareto frontier along which different levels of risk-taking map into different levels of welfare for the two parties, pitting Main Street against Wall Street… We also show that financial innovation, asymmetric compensation schemes, concentration in the banking system, and bailout expectations enable or encourage greater risk-taking and allocate greater surplus to Wall Street at the expense of Main Street.
It’s a fancy way of saying that billionaire-owned big banks and hedge funds have made trillions on housing while you and your community are becoming destitute.
Ryan Dezember, in his book Underwater: How Our American Dream of Homeownership Became a Nightmare, describes the story of a family trying to buy a home in Phoenix. Every time they entered a bid, they were outbid instantly, the price rising over and over, until finally the family’s father threw in the towel.
“Jacobs was bewildered,” writes Dezember. “Who was this aggressive bidder?”
Turns out it was Blackstone Group, now the world’s largest real estate investor run by a major Trump supporter. At the time they were buying $150 million worth of American houses every week, trying to spend over $10 billion. And that’s just a drop in the overall bucket.
As that new study from Popular Democracy and the Institute for Policy Studies found:
[Billionaire Stephen Schwarzman’s] Blackstone is 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 nearly doubled its profits in 2021.
Blackstone owns 149,000 multi-family apartment units; 63,000 single-family homes; 70 mobile home parks with 13,000 lots through their subsidiary Treehouse Communities; and student housing, through American Campus Communities (144,300 beds in 205 properties as of 2022). Blackstone recently acquired 95,000 units of subsidized housing.
In 2018, corporations and the billionaires that own or run them 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 50 years, the number of renters grew by about a quarter.
And it’s gotten worse every year since then.
This all really took off around a decade ago following the Bush Crash, 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.
As John Husing, the owner of Economics and Politics Inc., told The Tennessean newspaper:
What you have are neighborhoods that are essentially unregulated apartment houses. It could be disastrous for the city.
As Zillow found:
The areas that are most vulnerable to rising rents, unaffordability, and poverty hold 15% of the U.S. population—and 47% of people experiencing homelessness.
The loss of affordable homes also locks otherwise middle class families out of the traditional way wealth is accumulated—through home ownership: Over 61% of all American middle-income family wealth is their home’s equity.
And as families are priced out of ownership and forced to rent, they become more vulnerable to homelessness.
Housing is one of the primary essentials of life. Nobody in America should be without it, and for society to work, housing costs must track incomes in a way that makes housing both available and affordable.
Singapore, Denmark, New Zealand, and parts of Canada have all put limits on billionaire, corporate, and foreign investment in housing, recognizing families’ residences as essential to life rather than purely a commodity. Multiple other countries are having that debate or moving to take similar actions as you read these words.
America should, too.
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Meet the Billionaire Investors Behind the US Housing Affordability Crisis
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.
Oct 23, 2024
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 nearly doubled its profits in 2021.
Global billionaires have purchased billions in U.S. real estate to diversify their asset holdings, driving the creation of luxury housing that functions as “safety deposit boxes in the sky.” Estimates of hidden wealth are as high as $36 trillion globally, with billions parked in U.S. land and housing markets.
Wealthy investors are acquiring property and holding units vacant, so that in many communities the number of vacant units greatly exceeds the number of unhoused people. Nationwide there are 16 million vacant homes: that is, 28 vacant homes for every unhoused person. These investors are also buying up a large segment of the short-term rental market, preventing local residents from living in these homes, in order to cash in on tourism. These are not small owners with one unit, but corporate owners with multiple properties.
The focus on expanding housing supply by giving incentives to for-profit development has failed to add to the stock of permanently affordable housing. For five decades, U.S. taxpayers have subsidized private for-profit investors and developers to build tens of thousands of temporarily affordable units of housing. Federal programs give for-profit investors wasteful tax breaks, but only require the units to remain affordable for 30 years or less, so many have been converted to market-rate housing.
Policy makers should expand the social housing sector of community-controlled or publicly owned housing that is outside the speculative market, such as quality public housing and other forms of nonprofit-owned housing like community land trusts or resident cooperatives. New investment in social housing should come from taxing billionaires, levying mansion taxes, and regulating harmful practices.
Instead of waiting for action from the federal government, local communities can protect residents in existing affordable housing and generate revenue for affordable housing.
Policymakers should require ownership transparency, so community members know who is buying up neighborhoods. They should institute limitations on corporate ownership of housing and pass ordinances giving tenants the right to “first option to buy” apartments and mobile home parks when they come up for sale; and public funding as well as support structures to make these buy-outs possible.
Levying taxes on luxury real estate transactions (known as “mansion taxes”), on speculation, on vacancy, and on the rich, can generate funds that should be dedicated to expanding the supply of nonprofit and social housing.
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