Part I- Homeownership as Part of the American Dream
Part II- The Corporate Takeover of Rental Housing.
Part III- Diminishing Property Rights
Part IV- The future of Corporate Ownership of Residential Rental Property, both high-density and single-family.
Part I
Introduction:
Corporate ownership of rental housing, including high-density and single-family homes, is a significant threat to the American Dream. The gradual takeover of individual property ownership by giant investment corporations is not just a shift in the real estate landscape; it's a seismic change with profound implications for families and small-time investors.
With their deep pockets, large corporations purchase homes in bulk, creating a challenging environment for individual home buyers. This is not just a market trend; it's a real struggle many individuals face, making it increasingly difficult to find affordable homes. We must understand and empathize with our fellow citizens' challenges as they navigate this increasingly competitive market.
The upward escalation of values and rents has reached levels that surpass the financial means of the average American family. This is not just a statistic; it's a harsh reality that is forcing individuals to explore alternative living arrangements or even face homelessness. The gravity of this situation cannot be overstated, and it's high time we acknowledge and address it.
https://www.statista.com/statistics/555795/estimated-number-of-homeless-people-in-the-us/
The catchphrase You will own nothing and be happy, often attributed to globalists and the World Economic Forum who want to take over ownership of all assets, has become emblematic of a broader concern: the consolidation of all property ownership by the wealthy class, with renters becoming subordinated debt-serfs. 90% of the income-producing real estate is owned by the top 10% of the rich class, while less than 10% of families qualify to purchase a home.
As presidential candidate Robert F. Kennedy Jr. explained, there are three giant companies, BlackRock, State Street, and Vanguard, which all own each other. They're the biggest in the world. They're rich, and I think they own 88 percent of the S&P 500—and now they've decided to buy every single-family home in America. They're on track now to own the corporate control of 60 percent of the single-family homes in America within six years.
America has reached this point through a series of factors, including the artificial manipulation of interest rates, constricting the housing supply, and directing most of the stimulus benefits to the economic elite. The concentration of wealth in the hands of a few raises valid questions about the consequences of such a situation, urging us to consider the future implications.
https://www.zerohedge.com/markets/heres-why-housing-unaffordable-bottom-90
Neither major political party voices significant objections about this trend, causing suspicion that both parties' interests have merged into one, with a new name, The National Republicrat Party (NRP) or Party of the Rich, Famous, Powerful, and well-connected to the government. The ruling class, the state, and giant corporations are focused on ensuring the status quo by distributing propaganda and using psychological manipulations (gaslighting) to sway public perceptions about whom they represent. The objective is to keep the folks fractured, causing Democrats to hate Republicans and vice versa. Many are beginning to understand that this NRP represents only its interest and the interest of those who keep it in power.
Homeownership:
The American Dream, at least for more than a century, was to own a single-family home with multiple bedrooms, baths, a garage, a yard adorned with charming gardens, and a picket fence, a place where two Labradors and two cats in the yard could call home.
Diligence is conscientiousness, determination, or perseverance to accomplish something. Tenacity is the quality or state of tenaciousness or never giving up. Central to this were pillars like education, wealth accumulation, and the dream of home ownership.
A confluence of societal changes drove and continues to push the evolution of the housing landscape. Key milestones include the enactment of The Servicemen's Readjustment Act of 1944 (commonly known as The GI Bill), a law that provided a range of benefits for returning World War II veterans, including low-cost mortgages, low-interest loans to start a business and cash payments of tuition and living expenses, the development of extensive freeway systems, the advent of high-production housing, innovations like heating and air conditioning, the suburbanization of communities, the pervasive promotion of homeownership as an integral to the American dream, and the ability for families to make upward moves, transitioning from urban settings to suburban environments. Moreover, a plethora of financing options proliferated, further fueling housing expansion. Tax incentives further sweetened the deal, permitting homeowners to deduct interest payments on their loans and property taxes.
https://www.history.com/news/post-world-war-ii-boom-economy
When building houses in neighborhoods, rules and regulations ensured that the quality of construction was consistent. Single-family homes were the norm, each with some space in front and on the sides. People would spend time and money making their lawns green and pretty. The family units were portrayed in television shows, such as Ozzie and Harriet and Leave It to Beaver.
Homes came in different sizes and styles. Where you lived depended on your budget and choice. Over time, some older folks wanted smaller homes because large ones were expensive to maintain. Two-story homes with stairs became problematic. Maintenance, both inside and outside the house, became drudgery. That's when neighborhoods with folks aged 55 or greater featured homes designed for mature occupants and situated in private communities.
Housing choices were based on preferences, budget, job opportunities, and social status. If the folks had the money, they could move wherever they liked. Many families left the crowded inter-city for quieter suburbs.
Homeownership affordability has taken a massive hit:
The government's excessive involvement in anti-capitalist activities and the creation of systemic inflation hinder Americans' ability to fulfill their dream of homeownership.
Inflation is caused by the government injecting fiat currency, a type of currency that is not backed by a physical commodity, into the system supported by nothing, resulting in a massive erosion of the dollar's purchasing power. The government injects at least two trillion dollars annually of newly created fiat currency into the system. The freshly printed dollars do not benefit the taxpayers responsible for producing goods and services. The newly printed dollars are primarily distributed to members of the establishment, including friends of the government, government employees, labor unions, the media complex, the education complex, globalist relationships, big pharma, big tech, and the military-industrial complex. Members of the establishment are summarily protected, while non-members become victims, losing purchasing power and suffering a reduced standard of living.
Higher interest rates have paralyzed new home sales. Homeowners with low-interest-rate loans will not move up into a larger loan or even a loan of the same principal amount that doubles or triples the interest rate, monthly payments, and property taxes. One-third of home resales sales have disappeared.
The government's manipulation of interest rates has destroyed the careers and job prospects of sales agents, mortgage loan agents, title insurance agents, property insurance agents, home inspectors, and others.
The inventory of homes for sale is low. A combination of factors, including inflation, higher interest rates, and economic and political turbulence, has caused the demand for homeownership to crash to a three-decade low. At the same time, home prices remain at their highest level in 30 of the 50 largest metropolitan areas. A nightmare has systematically been delivered to the middle class.
At the same time, property insurance rates are in crisis, and insurance carriers lose billions of dollars annually for apparent reasons. Massive increases in premiums will place additional pressure on home ownership costs.
Diminishing property ownership rights:
Property rights have diminished. Property ownership is just a bundle of rights, such as living there in peace, controlling what happens, keeping other intruders out, and selling it if you want. In earlier years, the bundle you acquired had more legalized and reliable rights. Still, many of these rights have been extinguished:
There are many reasons:
Increased Government Control: State and federal governments and their hundreds of separate bureaucratic agencies control all aspects of our property ownership and use with unwanted intrusions, taxes, and often excessive fees at every turn. There are 232 different California state-level bureaucratically operated agencies and hundreds more when considering counties and cities.
Police Powers: Weaponized and militarized police can now forcibly enter a property for suspicious activity without a warrant. Their powers extend into political harassment. The suspicious activity may be because someone spoke against the interest of the police establishment or the governing elites. Payback comes in the form of a fascist remedy, including brutal force.
Tenant Rights: In many cases, renters possess more branches from the owner's bundle and have more rights than owners by government mandate. The government decided tenants did not have to pay rent for extended periods. Renters could live for free for two years or more playing the COVID-19 card. The free ride was at the expense of continuous losses for the property owner.
Law Enforcement Challenges: The police cannot or refuse to protect our property in some areas, affecting our ownership rights. The government directs them to stand down and allow criminals to commit theft, and organized criminal gangs engage in daily grand theft. Stealing has quickly become a well-thought-out business model by teams of thugs who understand that there are no consequences.
State governments like California passed laws without prosecution for stealing up to $950 per incident. One criminal is invited to steal ten times per incident daily with no consequence.
No-go zones: Some cities have areas where laws are not enforced, police will not respond, and gangs and crime run rampant, with severe, negative impacts on property values and the community.
Squatters: Criminals can break into a property and claim they can stay there forever (a claim of processor fraud). The government protects their criminal rights but not the property owners. An owner may spend $50,000 in attorney fees over two or three years while the criminal lives fat and sassy. When they are finally evicted, the criminal walks away. The owner must continue to pay for debt payments, possible tax consequences, insurance, maintenance and upkeep, and legal costs for the eviction process. The entire miserable experience rewards the owner with the privilege of repairing and cleaning up the damage and neglect caused by the tenant, which can result in a financial loss to the property owner of a single rental home from $100,000 to $150,000. The court system does not care.
There are more ----:
Utility costs are rising beyond the capacity of the average household to pay. Some are forced to choose between gasoline to go to work, home heat, and food for the family. The dramatic increases constrict personal freedoms, mobility, and family stability.
Insurance Costs: The insurance industry is in crisis, with premiums rising. Property owners must pay for insurance that covers many hazards, even if they are unrelated to the property. Socialism is laced into the coverage policy, like uninsured motorists. You pay a premium so that your carrier will pay if someone does not have insurance. It is a disguised tax.
Liability Issues: If there's an accident or problem, you might have to pay even if you're not at fault. This coverage is called joint and several liability, or the deep pocket theory. It is a disguised tax.
These social changes make property ownership complicated and challenging. They also make property ownership a less desirable investment and, in many cases, one that does not work.
https://nypost.com/2023/09/05/beverly-hills-boutiques-and-high-end-stores-shuttered/
https://www.theguardian.com/us-news/2023/may/28/san-francisco-vacant-buildings-housing-doom-loop
https://www.newsweek.com/san-francisco-decline-warning-american-cities-1801200
https://www.lewrockwell.com/2023/09/michael-snyder/this-is-how-bad-things-have-become-in-america/
Recorded tract maps, zoning ordinances, and appropriate restrictions to development and building were, and to a significant extent, enforced by zoning and building departments. These restrictions helped single-family developments have conformity, acceptable quality, family orientation, semi-privacy, quietness, tranquility, safety, tradition, and wealth accumulation for the homeowners in these neighborhoods.
Affirmatively Furthering Fair Housing:
Past President Obama issued a regulation known as AFFH (Affirmatively Furthering Fair Housing).
https://www.hud.gov/sites/dfiles/FHEO/documents/AFFH%20Fact%20Sheet.pdf
The objective was and continues to be the creation of progressive urban mini-cities within the suburbs. Suburbs will be swallowed up by larger cities nearby, subject to federal mandates to control zoning and development. Eliminating single-family zoning and forcing the building of medium to high-density low-income housing creates mini urban-styled downtowns.
Turning over local government control to state-level bureaucracies is the key to destroying the suburban lifestyle and appears to be the objective.
AFFH works by holding hostage the issuance of U.S. Department of Housing and Urban Development (HUD) Community Development Block Grants. Suburbs will be prohibited from receiving millions of dollars in HUD grants unless they eliminate single-family zoning, install low- and moderate-cost housing, and agree to consolidate and densify commercial and residential districts like stack-and-pack neighborhoods in urban areas. Non-compliance may lead to Highway funds being withheld. Any objections by local municipalities could get municipal leaders of the suburbs sued for discrimination by civil rights groups or the federal government.
California planned the reconstruction of neighborhoods by elected and unelected bureaucrats: Targeted elimination of Single-family is to be replaced by High-Density stack and pack housing:
The American dream of homeownership was replaced with the chant of a housing affordability crisis, all designed for giant corporations to purchase the housing stock and rent to the middle class. The dream of middle-class homeownership for most families is dead. Examples:
California has eliminated single-family zoning in favor of high-density stack and pack multi-story dwellings, both apartments and condominiums.
S.B. 8 extends the Housing Crisis Act 2019 to jumpstart more housing production.
S.B. 9 gives homeowners additional tools to add critically needed new housing and help ease California's housing shortage.
S.B. 10 establishes a voluntary, streamlined process for cities to zone for multi-unit housing, making it easier and faster to construct housing.
Single-Family Zoning: Can History be Reversed? | Joint Center for Housing Studies (harvard.edu)
The City of Minneapolis and the state of Oregon have passed similar measures, just as many other planners are doing across the country.
High-Density Urban vs. Suburban Housing:
Are California and the Federal Government intending to torpedo our suburban lifestyle and attempt to transplant high-density housing into our communities? They are well in the process.
How will you feel when you wake up one day and the federal or state government mandates force you to relocate your living quarters into a stack and pack high-density cluster dwellings against your will? Your property is too valuable for you to keep for yourself. It would be best if you sold for the benefit of others. Pressure is building because this type of housing unit is all that will be available since state and federal governments have outlawed single-family zoning and housing.
How would you like to be forced to relocate into a quasi-independent living unit within a Section 8 federally sponsored housing project where you are one of the few paying your way? Your taxation subsidizes all your neighbors. How would you like to live among neighbors/members of society in the inner-city where compulsory tax redistributions from you support 80% plus of their housing and family living expenses to enhance their lifestyles? Your obvious response would be, How could that ever happen here in the USA?
Many developers prefer high-density or cluster zoning and housing to maximize density, play, and profits. In cluster housing, homeowner associations take over responsibility for management and maintenance.
Vertical high-density housing, sometimes called stack-and-pack, refers to neighborhoods formed by building tightly packed multi-storied residential units. This allows for more efficient control and expense factors and much higher population density. Population density can increase even more as the buildings become taller, allowing for more units in smaller ground space (footprint). Four to ten stories for high-density residential occupancy will be the norm.
Suburban areas, on the other hand, consist primarily of low-density residential, commercial, and industrial communities located away from urban areas but within commuting distance for employment. Suburban communities usually have their own political and governmental service jurisdictions. Populations grow in suburbs when people want autonomy from the tightly controlled rules and the hectic and congested lifestyles of densely populated urban settings.
Freedom of movement allows families who can afford to move into suburbia to eliminate and avoid traffic congestion, congested commercial corridors, clustered shopping, substandard schooling, environmental issues, and crime.
Freedoms that allow more land and open space make it worth the cost for people to commute into a city for work. Suburbs usually provide a higher standard of living for a comparable income than a metro or urban lifestyle.
Urban Communities: Benefits and detriments of living in urban areas with high-density cluster housing.
Benefits:
- Neighborhood infrastructure: Lower cost per residential unit to install and maintain for municipal governments
- Public roads, services, and utilities: lower price per unit for public roads
- Attracts the professional class, such as lawyers, financial services, entertainment venues, and hospitals
- Property values tend to remain flat or stable.
- Public transportation and schools are more likely to be available
- Ability to walk or ride a bicycle to the desired location
- Access to multiple amenities within a community where density and diversity may add value and quality of life
- Access to recreational and commercial activities, such as sports events, concerts, churches, cafes, etc., is more available
- More likely to be characterized by multiculturalism
Detriments:
- Traffic congestion because of the concentrated population
- Hustle-bustle lifestyles, parking hassles, lines at restaurants, retail stores, banks, and gas stations
- Congestion in shopping, crowded schools, and moving to and from any location
- Less air and environmental quality, including a warmer climate.
- Urban blight: It is more likely for neighborhoods to transition
- More crime per capita
- Higher cost to manage school districts and college facilities
- Social pressure due to the density or closeness of housing units
- Employees are more likely to be unionized, so public and private services cost more
- Negative consequences of neighborhood deterioration disproportionately affect lower-income and disadvantaged households due to limited finances because they are less likely to have choices
- Gentrification changes a neighborhood's character through the planned influx of more affluent residents and upscale businesses. While this process may increase the economic value of the community, it also drives poorer or disadvantaged residents out
Please pause for a moment of humor. Eddie Murphy as Mr. Robinson:
https://www.youtube.com/watch?v=K_MDCH-W2WU
- Poorer or disadvantaged residents are forced into areas with limited job prospects, substandard housing and transportation, poor infrastructure, substandard public education, crime, and congestion
Suburban communities: Benefits and detriments
Benefits:
- The opposite of the above detriments of high-density
- The overall quality of life appears to be higher
- More available land for dwelling and storage of things designated as necessary
- Preference for larger homes, more balconies, more extensive lawns, garages, and open space
- Space for family and neighborhood get-togethers
- Community involvement tends to be easier to obtain and pay for
Detriments:
- Distance to drive to work, shopping, and consumer services locations.
- Difficulty managing public services, transportation, and infrastructure, where costs must be allocated to a smaller group of community homeowners and occupants.
- Public services such as police, fire, hospitals, and specialized medical services are more spread out and less accessible.
- Specialized commercial enterprises are usually less available.
Suburban area residents tend to vote more conservatively or independently than those in urban areas. They are a swing constituency in national elections. Abolishing suburbs is politically expedient. The left has planned for an orchestrated federal takeover, transformation, and de facto urbanization of American suburbs.
Socially Engineered Gentrification:
The poor and less educated are forced out of the central districts of cities. Then, the process begins, and the character of those blighted neighborhoods starts to improve and be rebuilt as more affluent residents and businesses move into the communities and upgrade the properties.
The social engineers want the poor and less educated to move into the suburbs and take their characteristic problems with them.
https://en.wikipedia.org/wiki/Gentrification
Conversions of economically obsolete offices and retail spaces in urban areas into residential rentals and condominiums:
The U.S. has transformed as part of the post-COVID political power struggle between private enterprise and socialist government. Remote work has become a viable option. Working at the office, at home, repurposing the building's usage, or combining both are all possibilities. Why are the changes so pronounced?
- Structural changes in the market are occurring, and hybrid workforces are becoming preferred. However, replacement tenancy for the building is not available.
- Market cyclical factors reflect reduced demand for office space, with hesitancy and fear of a recession causing companies to pull back and cancel plans to take on more space.
- State-sponsored invitations to engage in criminal acts: The state and federal governments have created an open invitation for criminals to steal, rape, and pillage all facilities available to the public and provide products and goods. A criminal can spend the entire day stealing without the threat of criminal prosecution.
- As values plummet because most businesses leave, corporate interests can scoop up real estate at rock-bottom prices.
- Pre-planned economic obsolescence is designed to transfer U.S. real estate stock ownership to large investment management corporations, such as BlackRock and The Vanguard Group, and very wealthy investors.
- Technology has saved the day by avoiding a total societal breakdown with open mayhem everywhere. Technology has multiplied our effectiveness and allowed us to increase output dramatically. A tech person is available who can remote into your work computer at your home office and provide quality technical support.
- Vacancy: An estimated two billion square feet of office and retail space are vacant or unoccupied. Unoccupied means the users have vacated the premises but still make lease payments. An average worker needs 250 square feet to function. Hypothetically, eight million workers have been displaced or work remotely.
Developers, planners, development agencies, and engineers are studying empty spaces to convert offices, and some are retained as multi-tenant residential. Revitalizing empty buildings restores the building's footprint and the entire neighborhood. Cities offer cash incentives, including incredibly high tax breaks, for developers to plunge into unknown territory. Tens of thousands of units are in the planning stages for a renewed and revitalized downtown and a form of gentrification.
The Future of Corporate Ownership of Residential Rental Property:
According to CoreLogic, investment companies own about one-fourth of all single-family homes in the U.S. Because people cannot afford a down payment, corporate ownership is expected to increase, driving up rents and values.
https://www.huduser.gov/portal/Publications/pdf/HUD-7775.pdf
https://www.thezebra.com/resources/home/housing-trends-visualized/
https://www.forbes.com/advisor/investing/top-hedge-funds/
https://www.amgnational.com/insights/hedge-funds-gobbling-up-single- family-housing/
Never in our history has a young family home purchaser had to compete with large investment firms to own a piece of the American dream. Private parties wanting to purchase homes find it impossible while competing against mega-corporate enterprises, where government regulations give them preferential purchase and taxation benefits.
Creeping Marxism always diminishes the bundle of rights:
State apparatuses, institutions, private foundations, and giant corporations aim to create a top-down central government planning as the preferred political ideal. The participants merged into a system of a mixed economy run by big government, state monopoly capitalism run by the central government in collaboration with big business, and big unionism. Their primary purpose is the status quo: to maintain power, continuously grow, and be financed by tax dollars with unique benefits from public coffers. They have symbiotic relationships to promote and protect each other's energy and growth through cronyism. Support systems include three lettered agencies and corporate and media companies. Anytime a ministry, authority, or state-subsidized media outlet acts, they act in their interest rather than promoting the welfare of a private enterprise and competitive ordinary society.
https://www.urbandictionary.com/define.php?term=Three-letter%20Agencies
Most of their activities are anti-private enterprise, anti-small business, and pro-establishment, and they serve to diminish the bundle of rights that have historically supported real estate ownership.
How do these societal changes relate to the private money-lending industry? There are unlimited opportunities in the entire cycle of turbulent transformation:
- Turbulence breeds opportunity for private money lenders and their investors. Banks or institutional sources finance fewer transactions during turbulent times.
- When the economy is strong, interest rates are low, and institutional money to lend is abundant, the private money-lending industry is less prevalent.
- When interest rates rise, with threats of civil unrest and around-the-clock media of false reporting, propagandizing, gaslighting, mudslinging, and economic instability, institutional lenders pull back and tighten up on credit requirements. Fear, civil unrest, and cancellation of political advisories are common and cause financial instability.
- Private money becomes a viable option. The difference between institutional and private money loan rates is significantly less.
- Social engineering has created vast opportunities in the private money field for single-family lots to be converted to high-density residential and commercial offices to be converted to residential rentals and condos.
- Residential properties are no longer valued solely based on comparable sales but now on the number of possible units that can be built as a high-density, low-cost replacement.
- A residential property may also be valued based on the income of the primary dwelling and an accessory dwelling unit (ADU).
- Office and retail may no longer be based on projected income streams because there are few or none, and there are not likely to be any in the distant future. The value must be based upon speculative forecasting of conversion to residential rentals, condominiums, work-live spaces, and hybrids such as retail on the bottom and residential above.
According to the most recent estimates from Freddy Mac, the country is short about 3.8 million units of housing, both rental and owner-occupied. Assimilation includes family formations and the influx of millions of immigrants. Assuming there are one billion vacant offices and hundreds of thousands of unoccupied retail spaces to convert to residential, and the average square feet is 1,000, the new formation would be two million new units. The conversion could take as much as ten years or longer. However, we must determine the demand for residential units ten years out and place that estimate into the equation.
A futurist from 1970 could have told us that commercial retail and offices within metropolitan areas would be transformed into high-density residential, rentals, condominiums, and full-service work-live housing some sixty years later; most people would not have believed it. Future Shock! The Third Wave! by Alvin and Adelaide Farrell Toffler; Now, The Shifting Landscape,