How Billionaire Investors Are Disrupting the US Real Estate Market

Billionaires around the world have purchased billions of dollars in U.S. real estate to diversify their holdings, fostering the creation of luxury housing that functions as “safes in the sky.” Estimates of hidden wealth total $36 trillion globally, billions of which are stored in U.S. land and real estate markets.

Wealthy investors acquire properties and keep homes vacant, so in many communities the number of vacant homes far exceeds the number of unhoused people. There are 16 million vacant homes nationwide, or 28 vacant homes for every unhoused person. These investors also buy up a large portion of the short-term rental market, preventing local residents from living in these accommodations, in order to profit from tourism. These are not small landlords with a single home, but landlord companies with several properties.

A focus on expanding housing supply by encouraging for-profit development has failed to permanently increase the stock of affordable housing. For five decades, American taxpayers have subsidized private, for-profit investors and developers to build tens of thousands of temporarily affordable housing units. Federal programs give for-profit investors unnecessary tax breaks but only require that housing remain affordable for 30 years or less, so many have been converted to market-rate housing.

Policymakers should expand the social housing sector to include community-controlled or publicly-owned housing outside of the speculative market, such as quality social housing and other forms of nonprofit housing like community land trusts or resident cooperatives. New investment in social housing should come from taxing billionaires, collecting taxes on social housing and regulating harmful practices.

Instead of waiting for action from the federal government, local communities can protect existing affordable housing residents and generate revenue for affordable housing.

Policymakers should demand transparency in ownership, so community members know who is buying neighborhoods. They should place limits on corporate ownership of housing and pass ordinances giving tenants the right to ““first option to purchase” apartments and mobile home parks when they are put up for sale; and public funding as well as support structures to make these buyouts possible.

Levying taxes on luxury real estate transactions (known as “mansion taxes”), on speculation, on vacant homes, and on the wealthy, can generate funds that should be devoted to the expansion of the supply of social and non-profit housing.