The report finds millions of single-family homes arent available for purchase
Home prices remain near an all-time high and there continues to be a shortage of available homes for sale. The fact that builders have reduced activity since the 2008 housing crash may be one reason.
However, a new study, co-authored by the Institute for Policy Studies and Popular Democracy, examines another possible reason. It suggests that real estate investors, from individuals to billion-dollar hedge funds, have removed many single-family homes from the market, converting them to rentals. The result, the study concludes, is there are fewer available homes and those that are available cost more than they should.
Increased corporate control over our housing market by billionaire investors and their for-profit entities are driving these trends and placing significant barriers to the preservation and creation of permanently affordable housing, the authors write.
The report points to an affordability crisis that stems from expensive houses and high interest rates. It says 22.4 million households half of all renters spend more than 30% or more of their income on rental housing.
Housing as an investment
The study found that investors have bought up a huge share of single-family homes, apartment buildings, and mobile home parks to rent to already economically squeezed consumers. Housing has gone from being a basic need to becoming another investment.
For instance, Blackstone is the largest corporate landlord in the world, with over 300,000 residential units across the United States, the authors write. Blackstone owns 149,000 multi-family apartment units, 63,000 single-family homes, 70 mobile home parks with 13,000 lots, and 144,300 beds of student housing in 205 properties. Blackstone also recently acquired 95,000 units of subsidized housing.
While this may be a reason for unaffordable housing, there are other factors that may be limiting the expansion of the housing supply particularly single-family homes. Since the building boom of the early 2000s, there have been a lot of changes.
Other reasons for unaffordable homes
For starters, inflation over the last 20 years has dramatically driven up the cost of construction. Land costs more too. Regulations are also tougher.
After decades of home construction, many of the prime home sites have already been developed in major metro areas. Zoning officials are turning down applications that dont meet new, and tougher local standards. When builders do build, they go for luxury homes, outside of a first-time buyers budget.
But the study makes the case that there is plenty of housing stock. It claims that there are currently 16 million vacant homes, held by investors who are waiting for them to appreciate in value before selling them to other investors.
The study calls on federal, state and local lawmakers to enact stronger protections for low to moderate-income homebuyers, limiting investor access to the housing market.
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Posted: 2024-10-23 10:44:26