Corporate America is buying up the American Dream of homeownership and putting it up for rent. Magnetar Capital LLC, has bought 1 out of every 11 homes in the Ohio town of Huber Heights and is now pushing for property-tax cuts that will gut the school district’s budget. In a capitalistic society, there is little that can be done to stop corporate America from owning the vast majority of the peoples' living rooms.
Over the past two years, the New York based firm, Blackstone, has scooped up more than 41,000 homes across the country. Focusing on 14 metropolitan areas, Blackstone is now the largest landlord of single family houses in the country. True, these institutional buyers played a major role in stabilizing the real estate market but what will be the long term affect?
Now it's gone from being good to being disturbing. In total, it's estimated that major investors have bought up 1 million homes. Mostly through foreclosure. Today, more than 100 million American's live in rented homes. In January, the U.S. Census bureau released statistics showing that homeownership is at the lowest level in the past 18 years.
You've probably heard how the unemployment numbers are skewed. These numbers are based on people applying for unemployment benefits. The numbers don't count those that have had unemployment benefits run out or those that have given up trying to find work. Something similar is happening with homeownership.
Let's say that 10 friends live in 10 separate homes. Five are renters and five are homeowners. The homeownership rate is 50%. Four of these people lose their homes. One to foreclosure and the other three can no longer pay their rent because they lost their jobs. Each moves in with parents that own a home or a friend that owns a home. That means of the remaining households are two rentals and four homeowners. (3 out of 5 renters lost a home and 1 out of 5 owners were foreclosed on). When the new homeownership statistics come out they report two rentals and four homeowners or that homeownership went up to 67% (4 out of 6 are homeowners). You can't trust the numbers.
What happened to the previous heads of households that are no long either renters or owners? They simply are no longer counted because they live under someone else's roof. Because the largest percentage of people that moved in with someone else were young people, it means the homeownership of young people has decreases significantly.
Besides those that are couch surfing, there are more than 100 million American's that rent their homes. In Atlanta, were home prices fell 40%, three institutional investors bought one out of every three houses that were foreclosed on. Last August, Bloomberg News reported that that several institutional investors were turning away low-income tenants on government housing assistance. Now, that these institutional investors control the rental markets in many metropolitan markets, will they be able to raise the monthly rental rates to drive up profits? The housing crisis may only be shifting from one facet to another. Institutional homeownership has become disturbing.
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Author bio: Brian Kline has been investing in real estate for more than 30 years and writing about real estate investing for seven years. He also draws upon 25 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest in the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.
I lost my home of 22 years no late payment Janet 2007 up to march 17 2010
Did every dam program out there to help save our home only my income did not qualify ssi disability that they put me on late 90's
Come to find out I can prove show all the fraud wrongs errors and I ended up with the exclusive grant deed paid in full released. It was micro filmed stamped with seal plus feb 20 2013 Mers had no standings nor did either or two subsatution of trustees. Jamie diamond can not own duel titles !
I want what was stole back plus I had no place to go but into my car homeless put out to pasture at 53 today still living in out of car hating life only I'm poor cabt afford a lawyer California
Justice was to be served I'm waiting and waiting
How dare they destroy my life tear my family apart and laugh because I contacted everyone even Elizabeth warren who was upset how did the consumer find this not us?
Fraud scam theift greed