Sunday, January 8, 2023

How Wall Street Takeover of Rental Market Is Fueling the Homelessness Crisis — Conor Gallagher

Wall Street’s takeover of the American rental market really took off during Obama’s foreclosure regime as the firms snapped up properties (including from many small landlords) at bargain prices. The pace has continued to accelerat…
There’s constant media talk of a housing shortage to explain the US homelessness crisis, but according to the lawsuit against RealPage, one of its tactics is also keeping units off the market in order to drive up prices.…
By tightening its grip on the American rental market, Wall Street has helped cement the idea of a home as a commodity, spurred the assetization of housing, and embedded these assets in the international financial system. And an growing number of smaller landlords have learned to function like the big dogs on Wall Street.…
Speculative landlords are incentivized to evict tenants by the promise of higher rents, higher sale prices for vacated buildings, or the possibility of just leaving them vacant as the lawsuits against RealPage shows....
Speaking of a lot of money at stake, according to OpenSecrets, members of Congress invest more cash in real estate than any other industry, which has been true every year since 2008 when the research group first began tracking Congressmembers’ investments.
Remember that the financial crisis based on RE speculation and the subsequent bailout of the "big boys" that left ordinary folks swinging in the wind was the start of this now pervasive phenomenon.


Ahmed Fares said...

re: Strawberry box houses

Strawberry box houses or Strawberry-box bungalow was a style of homes built during World War II and into the 1950s to 1960s and found throughout Canada. The style uses a square or rectangular foundation and named due to the similarity with boxes used to hold strawberries. This style has also been called the "Simplified Cape Cod", or "Victory Houses" in the case of certain government advertisements.

In the link below, you can see the floor plan showing one bedroom on the main floor and two bedrooms on the upper floor.

Strawberry box houses

This is interesting from the article:

The style of a Strawberry Box is also referred to as the Simplified Cape Cod because it shares many of the same features in a type that is more compact. The original inspiration dates back to the 1700s, and was a common colonial style beginning in the Massachusetts and Connecticut areas before spreading throughout the greater New England area. The gabled roof has a steep pitch, typical to many New England styles and allowing for an additional half-storey space.

While it's not mentioned in the article, these quotes show the size:

To ensure affordability, the houses were kept small, ranging from 700 to 900 square feet. The quaint little homes came to be known as “strawberry box houses,” referencing their resemblance to the shape of a fruit basket.

These are called ‘Strawberry box houses’. 50,000 of them were built across Canada by the federal government to provide affordable housing for workers and returning veterans after WWII. Small houses (900sf) on small lots. Could this be an affordable housing solution for today?

These are appearing in the media recently as a solution to the housing crisis. e.g.,

Housing costs have soared. Are smaller dwellings the answer?

A government-led push for smaller development isn't without precedent. 

Following the Second World War, demand for housing spiked, but because of the Great Depression and the war, little housing had been built for a decade.

In response, the Canada Mortgage and Housing Corporation designed and built hundreds of thousands of one-and-a-half storey, 900-square-foot dwellings called "victory houses" in communities across the country.

Over time, houses have grown. The average home built today is 2,200 square feet. As cities look to fit more people onto existing parcels of land, Greene said downsizing might be the answer. 

"[Tiny homes] are less intensive use of the land. They are smaller, so you could create places where you have more units on a given piece of land than you could with a big single-family home. So it creates more options," said Greene.

Peter Pan said...

Politicians have been yapping about affordable housing all my life.
They never do anything about it.

Peter Pan said...

Here's another issue Canadian politicians never do anything about:

Ahmed Fares said...

When politicians talk about affordable housing, they mean housing subsidies, government-built housing, rent control, etc. The article that I quoted is a market solution, on the condition that you get government out of the way by allowing the market to actually build these smaller homes.

Peter Pan said...

There is only market failure as far as affordable housing is concerned.