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Billionaire Investors Are 'Supercharging' Housing Crisis: Report
"Billionaires see housing as a way to boost their bottom line, instead of a necessity to survive."
Oct 21, 2024
A new report out Monday puts "into numbers the trend that ordinary Americans have known to be true for years," said economic justice advocates behind the analysis: "Their everyday struggles of affording a home are made worse by the sweeping influence that billionaires have over the market."
The Institute for Policy Studies (IPS) joined Popular Democracy in compiling a 71-page report titledBillionaire Blowback on Housing, aiming to get to the bottom of growing concerns in recent years about how Wall Street, as Democratic vice presidential nominee and Minnesota Gov. Tim Walz said earlier this month, is "buying up housing and making them less affordable."
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.
Billionaires are "supercharging existing problems" in the housing market, according to the report.
The authors take issue with assumptions about what is driving the housing crisis, which is characterized by record-breaking homelessness in 2023 with more than 653,000 people unhoused; half of tenants paying more than 30% of their income on rent, making them cost-burdened; and a significantly widened gap between the income needed to buy a house and the actual cost of a home.
"The real estate industry would like you to believe the problem is entirely one based on supply and demand," and that regulations need to be changed to allow for the construction of more affordable housing, reads the report. But with 16 million vacant homes across the U.S.—28 for every unhoused person—"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."
Signifying the U.S. real estate market's "emerging status as global tax haven," the number of vacant units in some communities exceed the number of unhoused people partially because wealthy investors are acquiring property and intentionally leaving it vacant, found IPS and Popular Democracy.
"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."
For example, in 2017 there were more than 93,500 vacant units in Los Angeles and an estimated 36,000 unhoused residents, with vacancies treated as "a structural feature of the market thanks to the presence of a small class of wealthy investors who engage in speculative financial behavior."
Billionaires and their investment firms, such as Blackstone—now the world's largest corporate landlord—are also "taking advantage of the tight low-income rental market, lack of publicly funded affordable housing, displacement after the foreclosure crisis, and inaccessible homeownership to get into the business of single-family and multifamily home rentals, and buying up mobile home parks," the report reads.
In one section of North Minneapolis, private equity firms including Pretium Partners "snatched up blocks of single-family rental homes, added fees on top of rent, and then proceeded to neglect the maintenance and upkeep of their properties."
Blackstone now owns 300,000 residential units across the U.S. and nearly doubled its portfolio in 2021. With $1 trillion in assets, it owns 63,000 single-family homes, 149,000 apartment units, and 70 mobile home parks.
Corporate ownership of rental housing stock "has not translated into housing stability, particularly for working-class households and communities of color," reads the report. "Rather, corporate landlords have concentrated their predatory investment practices—flipping, rent gouging, habitability violations, and evictions—in lower-income communities of color."
The billionaire class and its private equity firms, said Chuck Collins, co-author of the report and director of the Program on Inequality and the Common Good at IPS, has "severely disrupted" the housing market.
"This is not your grandparent's gentrification—but 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," said Collins. "The billionaires are displacing the millionaires, and the millionaires are disrupting the housing market for everyone else."
The report calls on policymakers to expand social housing—housing developed by the government or a not-for-profit entity to ensure individuals, households, and families are guaranteed housing as a human right, which cannot be sold for profit.
Social housing could be paid for by levying mansion taxes, regulating predatory practices in the real estate market, and taxing billionaires.
Local communities can also protect residents and generate revenue for affordable housing through actions including:
- Establishing "Housing First" programs to rapidly provide permanently affordable housing to the unhoused and end the criminalization of homelessness;
- Limiting corporate ownership of housing and passing laws requiring ownership transparency so corporations can no longer secretly buy up neighborhoods;
- Passing ordinances giving apartment and mobile home tenants the "first option to buy" when their communities come up for sale;
- Prohibiting owners from keeping units vacant for long periods of time; and
- Creating local Offices of Social Housing and Social Housing Development Authorities to function as supportive infrastructure, with the input of tenant unions, unhoused people's organizations, and other impacted community members.
"Billionaires see housing as a way to boost their bottom line, instead of a necessity to survive. This current system doesn't serve our communities," said Analilia Mejia and DaMareo Cooper, co-executive directors for Popular Democracy. "We need to do better. That starts with re-shaping our systems to look out for the needs and desires of working families, instead of billionaire investment and speculation. We need to safeguard renters' rights, and drastically expand the availability of permanently and truly affordable quality housing."
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El Salvador’s Self-Proclaimed Dictator Is On Trial
Nayib Bukele is persecuting water defenders on trumped up charges. In reality, he’s the one on trial.
Sep 29, 2024
Nayib Bukele has proudly called himself “the world’s coolest dictator.” On October 8, his government will begin an unjust trial of five water defenders from El Salvador. These men are heroes of El Salvador — and they never should have been arrested.
In these two weeks leading up to the trial, human rights supporters across the United States, Canada, Germany, and elsewhere are joining counterparts in El Salvador to call for the five to be freed.
In January of 2023, Bukele’s attorney general arrested five prominent environmental defenders and charged them with a murder that took place in that nation’s brutal civil war 35 years ago. It doesn’t matter that the government has no evidence to back up the charges or that the five are covered by a 1992 amnesty. Bukele has no use for domestic or international law as he bulldozes civil liberties in mass arrests under the banner of eliminating gangs.
Opposition to these mass arrests is now rising — some from parents whose children were wrongly swept into his prisons, some from human rights defenders, and some from communities that fear he will undo the seven-year old ban on mining which was won by communities that placed the health of their rivers and lands over the profits of mining corporations.
This is where Bukele’s argument that he is only arresting gang members gets murky. In a fact-finding delegation to El Salvador last fall, eight of us from the U.S. and Canada found that thousands of innocent people had also been arrested. We found cases of torture. And we found that Bukele had been locking up opponents, including labor leaders and leaders of the successful fight against mining.
In reality, it’s Nayib Bukele who will be going on trial on October 8 — the trial of global public opinion. If there is any justice left in El Salvador, these five will be freed and the charges dropped. If Bukele instead is insisting on total control of his courts, then the public will see him for what he is: a vindictive bully who has no respect for either human rights or the environment in El Salvador.
On September 26, at protests in front of Salvadoran embassies and consulates in Washington, DC, Ottawa, Toronto, and Vancouver, people gathered to call for justice. IPS joined the Committee in Solidarity With the People of El Salvador (CISPES), and the Washington Ethical Society at the Washington protest.
Bukele hopes to squash democratic opposition to his policies with this trial, and the groups that IPS joins under the rubric of International Allies Against Mining in El Salvador are responding that they will not be moved.
A word of hope, and a word of shame.
In terms of hope, the efforts of organizations in Canada, German, France, and the UK have convinced those four governments to express discontent over the arrests of the five by agreeing to send representatives to the October 8 trial.
In terms of shame, the United States government stands tall. Despite a clear condemnation of the arrests by 17 members of the U.S. Congress, the U.S. government is shamefully remaining silent on the trial.
IPS’s Trade and Mining Project has worked with allies on the ground in El Salvador since 2009, when IPS awarded its prestigious Letelier-Moffitt Human Rights Award to the National Roundtable on Metals Mining in El Salvador. And just as IPS has fought for justice for 48 years in the assassinations of our IPS colleagues Orlando Letelier and Ronni Karpen Moffitt, we will fight for justice for the Salvadoran water defenders.
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Report Reveals How US Taxpayers Are Unwittingly Subsidizing Climate Lies
"It is high time for the American public to understand just how much charitable money is funding climate change disinformation and to recognize the key individuals behind this effort."
Sep 18, 2024
A report published Wednesday identifies nearly 140 "climate disinformation organizations" in the United States financed by wealthy donors who receive massive subsidies from the nation's taxpayers.
The analysis by the Institute for Policy Studies (IPS) and the Climate Accountability Research Project (CARP) explains that wealthy donors are "pouring billions of dollars" into nonprofit organizations to "advance misleading, self-serving agendas that do irreparable harm to our planet"—all while reaping the benefits of charitable contribution deductions in the U.S. tax code.
"Funds directed to fossil fuel industry-friendly think tanks and policy groups help turn disinformation into accepted truth and sow doubt about science," the analysis notes. "Then, these ideas get turned into action—or, more often, inaction—by the policy brass of lawmakers and presidential administrations."
The new report highlights "two troubling examples of this chain of influence: The Competitive Enterprise Institute, or CEI, received $21 million in charitable contributions from 2020 to 2022; it bills itself as 'instrumental' both in blocking ratification of the 1997 Kyoto Protocol and in pressuring former President [Donald] Trump to withdraw from the 2016 Paris agreement."
"And the Heritage Foundation received $236 million in contributions over the same three years; this money allowed Heritage to write Project 2025, a policy blueprint overseen by several former Trump administration appointees, that proposes changes to the Department of Energy and the Environmental Protection Agency that would be disastrous for our climate," the report adds.
IPS and CARP estimate that donors to the two right-wing organizations were able to deduct "much of" their $257 million in gifts—effectively receiving major public subsidies.
"We are calling for fundamental transparency reforms so we can assess the total amount of taxpayer-subsidized charitable donations flowing to climate disinformation organizations."
In total, the report counts 137 "climate disinformation" nonprofits that received charitable donations between 2020 and 2022, with six of them focused "largely or entirely" on climate issues. The 137 organizations collectively received $5.8 billion in contributions over the three-year period examined in the analysis, which estimates that the total sum the nonprofits spent on climate disinformation "could range anywhere from a conservative $219 million into the billions of dollars."
The three "climate disinformation charities" that held the most in assets in 2022, according to the new report, were the Charles Koch Institute, the Heritage Foundation, and the Seminar Network.
Between 2020 and 2022, the climate disinformation groups that received the most in total contributions were the Seminar Network, the Stand Together Foundation, and the 85 Fund—an organization connected to Federalist Society co-chair Leonard Leo.
Chuck Collins, director of IPS' Program on Inequality and a co-author of the report, said in a statement that the analysis "provides some much-needed transparency so that the American public can understand the deceptive ways in which the rich seek to advance and protect their interests."
"Based on our findings from the data sources available to us, we are calling for fundamental transparency reforms so we can assess the total amount of taxpayer-subsidized charitable donations flowing to climate disinformation organizations," said Collins. "Many of these donors have built their fortunes in energy or the banking, insurance, transportation, and legal businesses that support the carbon-intensive industries, so they have strong personal interests in ensuring the world's dependence on fossil fuels."
The report notes that wealthy donors have recently been funneling billions of dollars into so-called donor-advised funds (DAFs), which IPS and CARP describe as a kind of "charitable bank account: a donor can donate to a personalized fund managed by a sponsoring nonprofit organization, and take a charitable deduction for that donation right away, but the donor then retains advisory privileges that let them recommend grants out of the fund to whichever charities they want, on whatever timeline they want."
IPS and CARP found that the three largest sponsors of DAFs between 2020 and 2022 were the National Philanthropic Trust, the Schwab Charitable Fund, and DonorsTrust.
"Because DAFs have a near-complete lack of donor and grantee reporting requirements, they allow for a high level of secrecy in donating funds," the report observes.
Private foundations are also major funders of climate disinformation, according to the new report, which lists the Sarah Scaife Foundation, Searle Freedom Trust, and the Lynde and Harry Bradley Foundation, among others.
The report outlines a number of potential policy changes to stem the ability of individuals and organizations with fossil fuel ties to secretively finance climate disinformation with the help of taxpayer subsidies, including barring private foundations from "using grants to donor-advised funds to meet their payout requirements" and requiring DAF sponsors to disclose "the names of all individual donors who have contributed $10,000 or more to each DAF account."
"It is high time for the American public to understand just how much charitable money is funding climate change disinformation and to recognize the key individuals behind this effort," the analysis says.
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