New analysis from Popular Democracy and the Institute for Policy Studies reveals how billionaire investors have become a major driver of the nationwide housing crisis – and several common-sense measures to help expand permanently and deeply affordable housing stock.

This report is focused on the United States, but similar conditions exist in Canada. The authors state:

• Huge pools of wealth, controlled by a small segment of wealthy individuals and their investment arms, are supercharging existing problems of gentrification, homelessness, unaffordable rental housing, and out-of-reach homeownership.
• Investors have bought up an unprecedented share of housing to extract more rents from already economically squeezed residents. For instance, Blackstone is the largest corporate landlord in the world, with over 300,000 residential units across the United States. Blackstone also recently acquired 95,000 units of subsidized housing.
• Wealthy buyers are bidding-up land and housing prices, inflaming existing gentrification dynamics, and resulting in huge increases in the cost of housing. Homebuyers are competing against private equity funds and wealthy buyers who make swift cash offers.
• New construction is increasingly unaffordable to low-income households. Nationally, we have sufficient and even an excess of housing for the wealthy, alongside not enough housing priced at rates affordable to low-income households.
• Billionaires have influenced government housing policy, striving to give themselves tax breaks, oppose tenant protections, and expand their housing acquisitions even further, at the expense of the public.

According to Statistics Canada, British Columbia has one of Canada’s highest shares of out-of-province investors and non-resident investors. The Shift is a Canadian organization that recognizes housing as a human right, not a commodity. It says:

Financialization of housing includes en masse purchasing of affordable housing by large corporations. These acquisitions are then repositioned as higher-end rental accommodations, purchased and managed with a healthy return on profit as the motive.

Exponential growth of the financialization of housing has turned real estate into arguably the largest business in the world, worth hundreds of trillions of dollars. Residential real estate makes up by far the largest portion of this.

The financialization of housing is a fairly new phenomenon. While housing has long served as a commodity, it is only in recent years that the intersection of neo-liberal policies and funds with large purchasing power has created a crisis in the housing market that threatens human rights.

The Shift – Financialization