Originally published at: https://boingboing.net/2017/09/18/invitation-homes.html
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Duh.
In highly unequal societies a tiny minority owns the land.
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Is there no mercy?
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It should be self-evident to Americans at this point that mantra of “securitise all the things!” inevitably results in a lot of people being shut out of access to basic necessities like housing and healthcare. But it seems that at least 40% of Americans (including many of those who are shut out) haven’t yet gotten it through their thick skulls.
“Are there no prisons?”
“Plenty of prisons…”
“And the Union workhouses.” demanded Scrooge. “Are they still in operation?”
“Both very busy, sir…”
“Those who are badly off must go there.”
“Many can’t go there; and many would rather die.”
“If they would rather die,” said Scrooge, “they had better do it, and decrease the surplus population.”
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So that’s a firm NO on the mercy then?
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More like a firm “Bah, humbug!”
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This bit doesn’t sound very profitable…
with more than $330 billion in assets under management […] that generated $1.9 billion worth of income in 2014.
A 0.6% income on such a massive investment is nothing to write home about. But then we always knew the math didn’t add up on hedge funds, right?
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Blackstone has $330B in AUM overall. The homes are only a chunk of that.
Speaking on behalf of Americans with exceptionally thick skulls, I can assure you that we are not the 40% to whom you refer.
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I don’t think the ‘securitization’ actually matters all that much. That’s just an implementation detail. One way or another unless we start reducing inequality the rich will own all the land.
Its done all around the world and all through history, and hedge funds aren’t a necessary component.
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Historically enclosure of the commons and monopolisation and rent-seeking are nothing new, but in the context of this article about current American real estate the general philosophy is relevant (and not limited to hedge funds): privatise and securitise, and the Invisible Hand will save us all from bad ol’ government. That said, it’s been the default economic philosophy in the U.S. for 35 years, so I agree that it will now take more of a rejection of the mantra to change things.
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And on the other side LA’s half dozen private golf courses pay a pittance in property taxes on some of the most expensive real estate land in the world. Thanks to changing the tax code and rather than “best use” assessment which would value the land as if condos were built on it, instead they are valued as if they are agricultural fields.
To make it even worse, is that California’s Proposition 13 locked that tax rate at pre 1978 levels, until of course the ownership changes by 50%. When in 2010 a newspaper published a story saying that since the ownership is a collection of all the individual memberships it must have by now changed since many members have died and been replaced since 1978, but guess what they used some philosophical argument like the ship of Theseus that if you change one plank at a time and over the course of time you’ve changed everything is it still the same ship. Apparently yes, so they get to keep the 1978 property tax levels based on agricultural fields rather than best use. All in a city with little public green space.
Malcolm Gladwell did a podcast on it.
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And of course, some of those golf clubs are notorious for their informal (and once formal) sexist, racist and anti-Semitic membership covenants.
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Yes, they were restricted, and the only African Americans allowed were the cooking staff.
They of course knew that they would eventually be priced out, since the land is valued at around $9 billion and instead of paying around $90 million in property tax, they pay collectively around $200,000.
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Can you show me here on this doll where the invisible hand touched you?
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Which leads the municipalities to get the difference in taxes from the few homeowners left…and if they are on a fixed income, the foreclosure cycle continues.
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There are a whole bunch of reasons home-ownership has fallen and ‘affordability’ is affected by a great many factors well beyond the evil bankster narrative - admittedly a great villain and boogeyman that financial illiterates latch onto as the sole source for every problem.
When you subsidize something you get more of it. When the government guaranteed student loans AND changed the bankruptcy laws so that student loan debt was none dis-chargeable - tuition ANYWHERE skyrocketed to the ludicrous levels seen today - trade school certifications that once were $1200 became $15,000 and THEN those great jobs in computer technology were exported to India or Indians (among others) were imported on visas to work for pittances (without student loans to pay back) Illegal immigration, Chinese imports, the hollowing out the manufacturing economy has decimated middle class jobs that were the backbone of home purchase for generations. Today, you are rich or you are a renter scraping by - there is no middle - particularly in California. Students with questionable degrees that saddled them with gigantic loan debt can’t buy a house.
At one time, not so long ago - the 70s and 80s - full time student tuition at California State Colleges was a couple hundred bucks a year and at the UC system it was 400 a quarter for California residents. Inflation has nothing to do with the explosion of tuition and the generation that can’t afford homes.
But Blackstone and their fellow travelers will happily package student loan debt into securitized vehicles knowing that those loans are really just indentured servitude contracts.
Read The Grapes of Wrath. There you will find your answer.
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There’s something so corny and lovable and hokey about this promo for one of my favorite books… I can’t help but post it.
ETA: plug for the audiobook, there are many versions. I find some enjoyable on long trips, especially where I am the only driver in the car and I must stay awake. This one is ok:
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I’m not sure what your point is?
So - bankers.
Bankers again.
Yup, again.
See above.
So evil bankers gonna evilly bank?
If what you’re saying is don’t blame bankers, blame everyone because we all participate and accept the institutions and decisions that lead to the current state of affairs - well fine.
If not, what is your point?
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