Affording the unaffordable: corporate home ownership

Sal Iovino, Opinions Co-Editor

Since 2017, Invitation Homes has been the largest owner of single-family homes in the United States. A subsidiary of the Blackstone group, Invitation Homes has been a pivotal but quiet player in the real estate industry since its inception, largely due to its $21 billion backing from the Blackstone group and its ability to buy homes in bunches.  While this may seem like old news for those with a particular interest in real estate, this news has largely managed to fly under the radar for what is now the past five years. This may largely be due to the pandemic, and the ability of many to blame housing crunches and an increased homeownership rate due to people moving out of their city rentals into suburban homes during the pandemic.

In reality, Invitation Homes owns about 80,000 homes, a relatively small number compared to the over 139 million homes in the U.S., but as a single entity, this number is striking.  The company’s ability to enter markets and neighborhoods and almost immediately own up to 80-90 percent of all homes within a particular zip code is somewhat worrying, and something that should definitely be acknowledged by young people looking to become homeowners or renters within the next five-to-ten years.  Homeownership rates amongst young people are already at a record low, dipping to somewhere between 34 and 38 percent by all estimates, and the increase in the privatization of homeownership by corporations is not very inspiring.

The World Economic Forum famously published an article titled, “Welcome to 2030: I Own Nothing, Have No Privacy And Life Has Never Been Better.”  It continues to go on to illustrate a utopian community in which nothing is privately owned, the narrator rents everything they use from their car to the pots and pans of their home, and is supplied by the government/centralized entity that owns just about everything.  This article drew strong controversy in both directions; some claimed that it described the dream society that is the gateway to economic equity, while those critical of the article described it as a communist nightmare in which all rights were to be sacrificed and those living in the state would be oppressed by the ownership entity.

Corporate entities like Invitation Homes are the first step towards this rent-based society, which, while having its merits, could potentially become a dangerous proposition for young people.  The reality that corporate ownership is creating is not that of the communist utopia the most staunch leftists dream of, but an incredibly controlling form of state capitalism.  It has already been observed that privately owned corporations are able to receive lower interest rates on purchasing loans than any single buyer due to their massive financial backing, and that even for those that are renting, these entities are far more detached from their properties than local landlords or businesses.  Companies like Invitation Homes have already been cited as problematic for their ability to raise rental payments, have more detached processes in terms of eviction and have disproportionate rates of control over low-income and minority neighborhoods.  

Corporations taking over home ownership in the U.S. is a step in the wrong direction for the upcoming generation of home-buyers.  With an outdated minimum wage system already existing in the United States in addition to the various barriers to home ownership that already exist for many Americans, the corporatization of home ownership only makes housing less accessible to those already struggling. For those looking to start families and take root in certain areas of the country, they cannot be burdened with the instability that comes with fluctuating rates of rent due to the ebbs and flows of corporate interest with the natural instability of the U.S. financial market. It will be difficult to combat this system, as the wheels are already in motion, but the hope going forward seems to be that a reliable network of social programs to provide economic stability in all other areas of Americans’ lives will be the best response.  The responsibility to implement these programs falls on young Americans, however, through their political and economic choices.  The future of homeownership is in the hands of the potential homeowners, and for those looking forward to starting families and lives of their own, it is pivotal that they understand their impact, and act accordingly.

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