Priced Out of the Market and Other Housing Woes

Photograph Source: antony_mayfield – CC BY 2.0

If you’re a person of average means, you may have noticed the disappearance of affordable housing. It was bad before covid, when a person earning minimum wage couldn’t rent a one-bedroom apartment in any city in the U.S. But what about middle-income people, home-buyers? Well, melancholy news for them since the pandemic hit, as mega-firms like Black Rock grab houses across the nation. This includes, indeed focuses on, affordable houses, which are good investments, since they’re supposedly undervalued, meaning investors can get away with jacking up the price. Pretty soon most Americans won’t be able to achieve the American dream of home ownership. This means, at the low end of the income scale, that the multitudes of homeless people will swell. Those less desperate might want to tell their kids that renting, renting and more renting lies in their future. Welcome to 21st century serfdom.

You think serfdom’s too harsh a term? Well, rents in the U.S. have skyrocketed, as hikes “average up to 40 percent in some cities,” the Guardian reported February 16. And according to Zerohedge – recently and preposterously smeared as a Russian propaganda outlet by American so-called intelligence – on February 20, “rent increases put the Consumer Price Index to shame, soaring an average of 13.5 percent.” In Phoenix, rents jumped 25.3 percent, while numerous other Sunbelt cities exceeded 20 percent. That means all those would-be homebuyers, priced out of the market, now bleed their paychecks to predatory landlords. Lucky them.

Meanwhile, the same publication noted earlier, on Feb. 15, that on-time rent collections have hit an historic low, 92 percent. That’s because people are broke. No more stimulus checks. Rents exploding through the roof. Inflation. Oh, and those jobs the bipartisan Scrooges want folks to grovel back to? Surprise! They don’t pay enough to live on. Who ever woulda thunk it? So when it’s time to cut down to blood and bone, people cut rent, not food.

This latest spasm of housing investment greed dates back to the first lockdown, when anyone who had the cash fled cities and purchased homes outside them. Big Money caught on quick. It scented blood in the air, a financial killing to be made. According to Slate back on June 19, “corporate investors snapped up 15 percent of U.S. homes for sale,” in the first quarter of 2021. In Conroe, Texas, “an investment firm won a bidding war to purchase an entire neighborhood worth of single-family homes.” These investors don’t buy just any houses. They zero in on “inexpensive single-family homes built since the 1970s in growing metro areas.”

As always in the grim and decayed landscape of hyper-capitalism, corporations prey on a captive audience: ordinary people scrabbling for a foothold on the economic precipice, people without lots of options. Investors know which cities (Atlanta, Charlotte, Phoenix) offer younger, working- and middle-class people good-paying jobs, Slate argues, and they scour those markets. They look for “rent growth potential.” Because leasing homes or apartments at exorbitant rates is the preferred corporate method of draining every last cent out of slender pocketbooks.

Investors can siphon off high rents because they’ve boosted prices in the home purchasing market, blocking that avenue of escape from serfdom. “Last year, investors bought nearly one in seven homes in America’s top metropolitan areas,” the Washington Post reported February 16. That was “the most in at least two decades.” These investors do two things: “flip homes to new buyers, while others rent them out.” According to the Post, “neighborhoods where a majority of residents are Black have been heavily targeted…Last year, 30 percent of home sales in majority Black neighborhoods, went to investors, compared with 12 percent in other zip codes.” This is not good.

Meanwhile on February 17, again according to Zerohedge, over the last five years “cities where homes cost an average of $1 million or more have doubled.” These astronomical prices hold true in 481 U.S. cities. Citing Bloomberg, the article reports that 49 more cities are on track this year to bust past the $1 million home price average.

This trend has gathered force for some time, but now, coupled with inflation, it’s expanding, and that bodes very poorly for middle-income Americans. It doesn’t take a shrewd prognosticator to foresee a time, in the not-too-distant future, where multimillion-dollar homes abound nationwide, and million-dollar ones are the norm, squeezing the more modestly priced market down to a skimpy skeleton of its former self. As that market shrivels, the vast majority of Americans not rolling in dough will sweat just to make the rent. Indeed, the Apartment List National Rent Report this month announced that that ugly future is on our doorstep. Over the last year, “rent growth currently stands at a record-setting 17.8 percent.” And this ain’t just happening in the U.S. It’s global.

According to UN News last October, “among the rights at risk from increased speculation in the financial markets by hedge funds and other investment funds are…adequate housing.” A former Special Rapporteur on adequate housing observed that in the Global South, “informal settlements in Southern cities are regularly demolished for luxury housing and commercial development.” That’s been going on since before most of us were born, but, to understate matters, it accelerated lately. Take Edinburgh Scotland, where rents zoomed up to warp speed. Edinburgh’s not even in the Global South. But according to Roaming Charges in last week’s CounterPunch, 15 “super landlords” own 10 percent of that city’s rentals.

Back in the U.S., we’ve recently seen headlines like “Rental Bidding Wars Heat Up as Economy Improves in a Hot Housing Market,” “Showdown Shapes Up in California Over Growing Housing Crisis,” and “A Lot of Buyers Have Had Enough: Bidding Wars for Homes Fall to Lowest Level Since 2020.” It doesn’t take a genius to see where this is heading for ordinary people trying to make ends meet.

What doesn’t make headlines is that some people fight back. A year and a half ago, the Debt Collective battled evictions in Los Angeles with actions to blockade the courts. That was at the start of the pandemic. It’s not too much to say that such high-profile struggles helped bring about the eviction moratorium, something pretty much unprecedented in U.S. history. But that’s gone now, and as Jacobin headlined in September, “America’s Housing Crisis Is About to Get Much, Much Worse.”

Why is that? Because five months ago the supreme court, too lofty to bother with the money-matters of little people, sided “with landlords over the millions of renters on the edge of eviction.” Eight million Americans, to be exact. That’s how many, behind on rent, lost their case before the court. According to Jacobin, 3.5 million of them reported facing eviction post-September. You can assume a good number had no plans besides pitching a tent under the local overpass.

Just because they don’t make headlines now, doesn’t mean those millions of people weren’t booted out on the street. The reporters and the cameras went away, but so did those renters’ homes. That’s not news. It happens every day in America, where housing courts exist to rubber stamp evictions. This lesson impressed itself on me long ago as the lone representative of the press for a couple of years in New York City’s Housing Court. Everything was against the tenants, but most notably, the judges, some of whom, in their ferocious pro-landlord anti-communism, were quite insane. They ran their courts like circuses, and one compelled the luckless tenants to prove their fealty to American capitalism by reciting the pledge of allegiance. Real estate developers, landlords, were treated like pashas. That the whole game was fixed was and remains incontrovertible. The proof is in who has lawyers. The landlords do. The tenants don’t. If a tenant appears in housing court with an attorney, that’s practically a show-stopper.

With no access to justice, tenants know the system is rigged against them. It always has been. That’s because in the U.S., to state the obvious, housing isn’t a human right, it’s a commodity. And the U.S. exports this crass, malignant ideology all over the world, often at gunpoint. No wonder there’s no affordable housing for first-time home-buyers. The miracle is that there ever was any to begin with.

Eve Ottenberg is a novelist and journalist. Her latest book is Hope Deferred. She can be reached at her website.