Everyday homeowners are human shields for Wall Street’s Internet of Shit slumlords
Put Wall Street landlords up against a wall.
The American Dream, such as it is, used to be two dreams, one based on work and solidarity, the other on asset appreciation and disconnected individualism. We killed the first one.
As the New Deal gave way to the post-war social safety net, Americans discovered two paths to social mobility: they could join a union, and they could buy a home. Joining a union meant that your wages would rise with productivity, and that the democratic ideal that you were meant to approach once every two years at the ballot-box could follow you into the building you spent more waking hours in than any other: your jobsite.
Labor unions used their political power to win labor rights, so that even workers who weren’t a union couldn’t be arbitrarily fired, or maimed on the job with impunity, or harassed or abused. And while the labor movement was mired in the same racist legacy that every American institution brought forward out of genocide and slavery, where racialized people started unions of their own or demanded representation from the unions who nominally represented them, they thrived.
Then there were houses. On the one hand, owning your home insulated you from the petty tyranny of the landlord, the threat of eviction, rent hikes, indifferent or dangerous building maintenance, and all the other miseries that arise when you think of a building as your home and someone else thinks of it as an asset, and the board is tilted so that they win every argument.
But homeownership wasn’t just sold as a way to get out from under scumbag landlords: it was primarily sold as a way to build intergenerational wealth. Your house wasn’t just a place to live: it was an asset, and it appreciated.
And if the dividends of labor protection were unevenly distributed between white people and racial minorities, the dividends of home ownership were almost entirely hoarded by white families. Federal policies — redlining — combined with racist lending at the local level, meant that Black families and other racialized groups were stuck in tenancy, while white families build wealth thanks to federal subsidies:
Those were the two American dreams: a good job and your own home. We killed the first one, and the second one devoured us whole.
Without a strong labor movement, wages stagnated. Corporate power waxed, and with it, the power to pollute, to poison, to maim and to defraud. The labor movement wasn’t strong enough to stop Reagan from killing free UC tuition when he was governor of California. It wasn’t strong enough to hold back spiraling health care prices. It wasn’t strong enough to block the business lobby from neutering antitrust and ushering in four decades of market concentration, market capture and corruption. Workers couldn’t save their defined benefits pension and were railroaded into market-based 401(k)s, forcing them to play the stock casino against their bosses, ever the sucker at the poker table.
With stagnant wages and out of control medical, educational and end-of-life bills, homeownership — the thing you do as an individual, where your gain is someone else’s loss — became the American secular religion. Your house wasn’t just a place to sleep and keep your photo albums: if it appreciated enough, you might be able to liquidate it on your deathbed and pay off your eldercare, your healthcare, your kids’ college debt, and leave enough left over for your kids’ downpayments.
And so every American who had a home became the enemy of every American who didn’t — including one another’s children. Every home built threatened your own property values. The racist, batshit American school funding formula, which sees schools funded out of property taxes, meaning the richest kids get the best schools, turned out to be a great way to increase your property values.
Protections for tenants, meanwhile, threatened the entire American way of life — the American dream itself. Every protection a tenant got — protection from eviction or rent hikes, the legal right to a safe and well-maintained home — reduced the value of every home in town.
After all, the better a landlord has to treat their tenants, the less money a landlord can make from a rental property. The less money a landlord can make from a rental property, the less they’d bid on a house like yours if it went up for sale.
And since anyone planning to buy your house to live in it has to outbid a landlord who might want to rent it out, giving tenants any protection threatened everything — the one asset you owned, which was your plan a, b and c for paying off all that health, education, and assisted living debt:
https://pluralistic.net/2021/06/06/the-rents-too-damned-high/
Today, the house-as-asset scam is breathing its last. There are millions more people who need homes than there are homes available. Sure, homelessness is a fantastically complex problem, but you could address every aspect of it — addiction, mental illness, joblessness — and millions of people would still be homeless, because there aren’t enough homes for them to live in:
https://headgum.com/factually-with-adam-conover/myths-about-homeless-people-with-dr-margot-kushel
70% of all inflation in 2024 came from the cost of housing; a quarter of that came from illegal collusive behavior by landlords to hike rents:
https://www.thebignewsletter.com/p/up-to-a-quarter-of-rental-inflation
Wall Street landlords have raised gigantic war-chests and are buying up homes at a rate never before seen, converting every available single-family home in many cities from an owner-occupied home to a rental. Private equity and hedge fund landlords have elevated charging junk fees to an absurdist theater project: you pay a “convenience” charge for paying your rent in cash. But also for paying your rent by direct transfer. Oh, and also for paying in cash. When Wall Street is your landlord, your home is a slum, dangerously undermaintained, sometimes lethally so:
https://pluralistic.net/2022/02/08/wall-street-landlords/#the-new-slumlords
Capitalists hate capitalism. The best thing to sell is something your customer can’t live without, and that no one else has for sale. That’s why “the market” loves private prisons so much:
https://pluralistic.net/2024/04/02/captive-customers/#guillotine-watch
The vast sums Wall Street is putting into buying up all of America’s available housing stock is a bet that they can establish regional monopolies over having a home, and charge all the market can bear.
That’s the plan at Invitation Homes, a company that was just targeted by the FTC for a slate of eye-watering crimes against the tenants in the 80,000 single-family homes they’ve acquired:
Invitation Homes purchases homes as they come on the market, and they’re also a leading customer of the “build-to-rent” housing industry, a fast-growing segment of new housing starts.
Writing about the FTC’s enforcement action against Invitation Homes, Matt Soller brings in Starwood Capital Group, who manage Invitation Homes properties, and own 14,000 more homes in the sunbelt. Invitation and Starwood hate the anti-monopoly movement, and Barry Sternlicht, Starwood’s billionaire CEO, really hates FTC Chair Lina Khan:
https://www.thebignewsletter.com/p/monopoly-round-up-corporate-slumlords
The FTC complaint lays out a suite of just comically sleazy things ways that Invitation abuses its tenants, starting with false advertising. The company lists its houses at relatively low rents, then charges a large fee to apply to live there. When you pass the application process, you’re told the rent is actually much higher, and if you walk away from the deal, you forfeit your application fee. That scam’s netted Invitation $18m since 2019.
Stoller really hates junk fees, calling them “convenience fees without any convenience, service charges without any service performed.” He lays out Invitation’s long list of junk fees, which honestly sound like a list that Chatgpt would spit out if you prompted it for fifty junk fees that wouldn’t pass the giggle-test: “utility management fees” “Lease Easy bundle fees,” “air filter delivery fee,” “smart home technology fees,” etc etc.
“Smart home technology fee?” Yeah, Invitation’s gone in hard for Internet of Shit smart home tech. The SVP who oversees Invitation’s smart home fee program was ordered to “juice this hog” (you guys, juice doesn’t come from hogs).
After decades of recruiting everyday American homeowners to demand anti-tenant policies that benefit giant corporations, American tenants have few rights on paper and even fewer in practice. That’s left the door wide open for Invitation to abuse their tenants in a myriad of dismal and unimaginative ways: stealing their deposits, trashing their credit reports to retaliate against complaints, illegal evictions, busted appliances, mold, vermin, insects — the whole slumlord playbook.
As Stoller writes, there’s a twist: “this landlord isn’t just a random slumlord, it’s one of the biggest Wall Street players in housing.”
There are vast fortunes to be made in converting the human right to housing into an asset class, but those fortunes end up in the hands of a very small number of billionaires. On their own, they wouldn’t have the political power to dismantle protections for tenants.
Realistically speaking, most kids who grew up in their parents’ owner-occupied homes are going to end up tenants, thanks to undersupply and housing inflation. But those kids’ parents have spent decades demanding policies to make their homes as valuable as possible — including mortgage tax breaks (but not rent tax breaks!), looser eviction laws, and less enforcement of what few protections tenants have.
Middle class homeowners are the useful idiots and human shields of the billionaires who are determined to force every American under 40 raise their kids in a rented slum full of spiders, ratshit and black mold, which will still cost 60% of their take-home salary.
That’s why the FTC’s action against Invitation Homes is such a big deal. And as Stoller points out, Chair Khan is really just implementing Kamala Harris’s campaign promise to get Wall Street out of the landlord business.
Wall Street’s raid on your bedroom and kitchen has inspired a generation of “finfluencer” copycats who buy and flip apartment buildings, sucking ever-larger amounts of cash out of them until they’re unfit for human habitation, with mountains of rat-infested garbage ringing their crumbling walls:
https://pluralistic.net/2024/05/22/koteswar-jay-gajavelli/#if-you-ever-go-to-houston
Any future worth living in is going to get housing right. We need to stop thinking of housing as an asset and realize that it is, first and foremost, a human right. That’s the premise of my 2023 solarpunk novel The Lost Cause, which just came out in paperback:
https://us.macmillan.com/books/9781250865946/thelostcause
You can’t protect yourself from rising seas or rising healthcare bills through individual home-ownership. Solidarity — the kind of solidarity that once powered the union movement, and that is powering it again — is the only way to defeat the housing profiteers. The New Deal wasn’t perfect, which is why whatever we do next has to be bigger, further reaching, and more inclusive than what FDR did almost a century ago.
The only minority that should be excluded from the next New Deal is billionaires.
If you’d like an essay-formatted version of this post to read or share, here’s a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2024/10/01/housing-is-a-human-right/#rentier-tech
Image:
Sam Valadi (modified)
https://www.flickr.com/photos/132084522@N05/17086570218/
Carlos Delgado (modified)
https://commons.wikimedia.org/wiki/File:Wall_Street_-_New_York_Stock_Exchange.jpg
