According to a report from inequality.org, the billionaire class and billionaire - backed private equity investors have become a driving force in the US housing crisis. The report states that increased corporate control over housing sector- by billionaire investors- are fuelling these trends and place significant hurdles to the preservation and creation of affordable housing.
How billionaire investors are causing chaos in US housing market The report Billionaire Blowback on Housing- 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. According to the report, the United States has roughly 800 billionaires in the US with combined wealth of $6.2 trillion, ultra-wealthy investors tend to diversify their holdings across multiple kinds of assets. The report suggested that billionaire investors have bought up an unprecedented share of single-family homes, apartment buildings, and mobile home parks to extract more rents from already economically squeezed residents.
It cited an example of Blackstone, the largest corporate landlord in the world, with over 300,000 residential units across the United States. Wealthy investors are buying up properties but holding them vacant to profit from real estate appreciation, it said, adding that billionaire investors are entering the short-term rental industry and removing a substantial portion of rental housing from the market.
Global billionaires have purchased billions in US real estate to diversify their asset holdings, it added.
Corporate landlords and billionaires are profiting from low-income tenants and mobile home residents by increasing rents while neglecting maintenance and repairs, the report said. It mentioned that wealthy buyers are bidding up land and housing prices, inflaming gentrification and resulting in huge increases in the cost of housing. The current housing crunch in the US is not going anytime soon. While lowering interest rates may help, but that alone won't help much to solve this complex problem.
