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ACCORDING TO LIZ - Millions of Americans have been shut out of the American dream with both rents and home purchase prices spiraling ever upward.
Americans and, especially, Californians already fork over 40 or 50% of their paychecks to keep a roof over their heads… if they can afford one at all. Any city where people spend 33% of their income on housing faces rapidly rising homelessness.
Middle-income households, those earning between $45,000 and $75,000 a year are the fastest-growing cohort of this less than laudable category. More than forty percent of middle-income families who rent are now considered cost-burdened.
The Department of Justice's antitrust division is investigating corporate landlords use of the RealPage software program for maximizing profits as a country-wide price fixing scheme affecting 70% of multifamily apartment buildings.
Accountable.US, a government watchdog, reported that the six largest of these companies vacuumed in a combined $300 million in increased profits for just the first quarter of 2024, mostly from rent escalations.
Their through-the-roof rent hikes based on greed, not need, have kept too many Americans from the quality of life they deserve.
Decades ago, Wall Street started buying single-family homes to use for rental income, driving up rent and making it harder and harder for everyday people to buy homes, promoting REITs and other fiscal instruments to further monetize housing, while the vortex of rising rents further diminishes the ability of ordinary people to escape such a vicious circle. To embrace the American dream.
Monetization of real estate by Wall Street has been a feature of life for at least thirty years. It certainly existed before but, with the removal of banking constraints on Clinton’s watch, has constituted an out-of-control attack on the working class.
The United States lost 6.1 million units renting for under $1,000 between 2012 and 2022 which includes the more than 2 million that were available at less than $600.
Overall, rent prices have skyrocketed over 30% since 2019 while wages have increased by just 23%, meaning tenants must now earn nearly $80,000 a year to stay out of the rent-burdened bracket.
According to the Department of Housing and Urban Development, for every $100 bump in rent, homelessness surges another nine percent.
Despite dumping millions of our tax dollars on programs to tamp it down, thousands more are forced onto the streets of Los Angeles every year while developers and investors pocket our tax dollars and destroy our neighborhoods by leveraging zoning changes to further increase their profits.
Los Angeles and the United States are not alone in the challenges of a lack of affordable housing for many in a wasteland of a glut of overpriced and empty units. The housing bubble in the early oughts followed by the market crash only exacerbated an existing trend driven by the commercialization of housing for the benefit of Wall Street investors and developers.
And the money spent by the profiteers tells the tale.
When Ro Khanna introduced the Stop Wall Street Landlords Act at the federal level to tax existing and future Wall Street acquisitions and ban the Federal Housing Finance Agency from purchasing and securitizing mortgages held by private equity firms, corporate landlords circled the wagons and brutishly brought their corporate might and money to bear.
Having shelled out tens of millions in campaign cash in 2018 and 2020 to kill California pro-rent control Props 10 and 21, many of the same profiteering miscreants are on track to spend a hundred million to put the kibosh on November’s Prop 33 and push through Prop 34 to shut down AIDS Healthcare Foundation’s housing justice advocacy work.
Prop 33 would open the door for every local jurisdiction to address housing affordability and homelessness by reining in the excessive rents of predatory landlords which would no longer be able to bribe their way to extortionate profits in the back rooms of Sacramento. And face herding the cats of city councilmembers, municipal mayors and town officials, all of whom live and work in their communities and have a far greater interest in the personal concerns of their constituents.
Safe, affordable housing is critical for maintaining good health. When rampaging rents and a profiteering real estate industry deny people sufficient disposable income for food and healthcare, everyone is at risk. Enough illness can impact the economy and form the nexus for the next pandemic.
Governor Gavin Newsom’s executive order initiating homeless sweeps across California does nothing to solve homelessness; it just lessens its visibility.
Deaths of the unhoused in Los Angeles County from 2014 to 2021 totaled 7,300. According to its Department of Public Health, numbers increased annually culminating in over 2,200. Numbers that were almost certainly underreported.
The National Health Care for the Homeless Council believes the death toll of the homeless across the country could be as high as 40,000. A year.
Pre-pandemic, research by Zillow determined that a five percent increase in rent could put over 2,000 people in Los Angeles County on the streets.
A Princeton University think tank, the Eviction Lab, determined that people paying over half their income on rent were nine percent more likely to die and over the next twenty years than someone “only” paying a third. For those paying over severity percent, the mortality factor rose to twelve percent.
Homeless Angelenos are living on the streets, not because they wish to but because the rents are just too damned high. And that can not only be fatal for them; it diminishes the City’s potential for a flourishing economy with a vibrant tourism industry, enhanced quality of life for its inhabitants, and its ability for future growth.
Meanwhile millions of taxpayer dollars are being frittered away on unproductive programs, burgeoning bureaucracies, and incentives that line politicians and developers’ pockets while the quality of life for residents and businesses barely getting by is being decimated by concessions to increase construction when Los Angeles is already awash in vacant properties. Ones for which prices are also too damned high.
The only way to rectify this damaging trend is to find creative ways to reverse the commodification of housing so that people can live in the City, not die on its streets.
(Liz Amsden is a contributor to CityWatch and an activist from Northeast Los Angeles with opinions on much of what goes on in our lives. She has written extensively on the City's budget and services as well as her many other interests and passions. In her real life she works on budgets for film and television where fiction can rarely be as strange as the truth of living in today's world.)
