We are pleased to release our new white paper, “Private Equity is Coming: The Future of Housing Security in the Age of COVID-19.“
Thirty to forty million Americans are at risk of eviction due to the COVID-19 fueled economic crisis, but the roots of this housing precarity extend beyond the economic insecurity caused by the pandemic. The American housing market in the past decade has been marked by the crisis of housing affordability and growing homelessness, while housing prices and profits in real estate have skyrocketed. After Wall Street’s gambling forced nearly 10 million households into foreclosure in the aftermath of the 2008 crisis, the financial industry took advantage of a devastated housing market to reap massive profits. The 2008 crisis was fueled by the financialization of housing (i.e. transforming housing into speculative financial products) and in its wake, financialization has only increased. Today’s crisis is creating new opportunities for the financial industry to advance further into the housing market, deepening housing insecurity in the short and long term. This is both harmful to renters and dangerous to the stability of the housing system as a whole and requires alternative thinking much beyond the confines of market orthodoxy.
Sadly, the federal government has done little to address this looming eviction crisis and offer meaningful protections for renters. Instead, the CARES Act provides a number of loopholes for corporate landlords and financial investors behind the financialization of housing. These corporate landlords have a record of exacerbating housing insecurity. In 2016, the Federal Reserve of Atlanta found that large, corporate landlords were up to twice as likely to file evictions in their region compared with small-scale landlords., Today, some of the largest private equity landlords are filing evictions even as the COVID-19 pandemic continues to threaten communities nationwide.
But we can still avert this crisis: both the imminent wave of evictions and homelessness and the long-term crisis of housing financialization and insecurity are not inevitable. To do so requires abolishing the incentives and legal loopholes that enable the financial industry to further turn housing as a site of profit extraction. More importantly, it also requires us to put in place alternatives that bring us closer to decommodified housing that is permanently affordable and under the control of residents and communities.
Go to full text of white paper