The recent equity investor land grab is threatening America’s way of life.
Early last month, the media began to push a curious idea: that American homeownership is a thing of the past, and that we should be happy about our new life of renting. Bloomberg picked up on a report from Apartment List indicating that, in 2020, 18% of millennial renters said they planned to rent forever, up for the third consecutive year. Moreover, among those who plan to buy a home, 63% have no money saved for a down payment. “The share of millennials living with their parents is also significantly higher than in previous generations,” Olivia Rockeman and Catarina Saraiva add.
Two weeks later, Bloomberg Opinion featured Karl W. Smith in a piece titled “America Should Become a Nation of Renters.” “Rising real-estate prices are stoking fears that homeownership, long considered a core component of the American dream, is slipping out of reach for low- and moderate-income Americans. That may be so—but a nation of renters is not something to fear. In fact, it’s the opposite,” Smith writes. “This process is painful, but it’s not all bad. Slowly but surely, most Americans’ single biggest asset—their home—is becoming more liquid.”
This isn’t the first time this idea has been floated around. In 2018, Richard Florida, author of The New Urban Crisis (2017), argued that “The rise of renting in the U.S. isn’t just about high housing prices, or preferences for city living, but about the flexibility to compete in today’s economy.” In 2019, Jenny Schuetz argued againstwhat she called the “policy bias towards homeownership.” What these commentators are advocating is quite radical: American liberty is—and has always—been tied fundamentally to small, independent freeholds like homes and businesses. The recent media push against homeownership is even more insidious when you consider the context of what’s effectively a land grab by private equity firms that are threatening the human liberty at the core of our national founding.
An April 2021 article in the Wall Street Journal alerted Americans that major investment firms, including BlackRock, are buying up single-family homes at above-market prices. The Journal describes how “Limited housing supply, low rates, a global reach for yield, and what we’re calling the institutionalization of real-estate investors has set the stage for another speculative investor-driven home price bubble.”
The report was picked up by Fox News’s Tucker Carlson, who devoted an alarming segment to the topic. Land and homes are being purchased at 20% to 50% above the asking price, using money that investment capital controls from the Federal Reserve. What this means is that the firm can buy homes using money that was created out of thin air by central bankers, rather than having to commit family wealth to the purchase. Families simply cannot compete with the bottomless funds that the Fed provides.
Along with pandemic trends that have devastated small businesses in favor of mega-corporations, these moves have grave consequences for America’s future. A man who owns his own business owns his means of production and is subject to no boss’ politics (and no H.R. department’s threats) should he express disapproved of opinions. She who owns her own home pays herself with every mortgage payment, building equity and wealth for herself and her family. In a time when massive government spending is promoting inflation, a home is still a sound investment because it will be sold someday in future dollars: even if the dollar is worth less, the home at least will be worth more of them.
American liberty is tied to maintaining these small freeholds: our own businesses and our own homes. It always was. What follows is the story of James Jackson (1757-1806), hero of the Revolution, duelist, Senator, Governor, and a man who stood up against an early corporate land grab. A disciple of Thomas Jefferson, James Jackson knew that allowing all the land in Georgia to be bought up by corporate land speculators would leave the people unfree. The liberties he had fought for in the Revolutionary War were under threat, and not only by British tyrants. If the people of Georgia were not free practically, their hard-won political freedom would amount to nothing.
Jackson thus set himself to undoing the corrupt corporate land grab of his day and succeeded. He left Georgia a land of small farmers and land-holders (what Jefferson liked to call Yeoman farmers). Contemporary Americans watching equity investors buying up land and homes with Federal money can learn from Jackson both how important it is to own their own homes as individuals, and how crucial it is for America as a whole to prioritize widespread economic freeholds like private homes and small businesses.
James Jackson was studying law in Savannah when the Revolution came. He joined the 1st Georgia Brigade and fought in the unsuccessful defense of the city against British expeditionary forces. Though forced to retreat, Jackson’s men linked up with other Continental forces and fought on. At the Battle of Cowpens, Jackson participated in the ruse that broke Tarleton’s Legion. The British cavalry, with their skull-and-crossbone caps, were drawn into over-extending their charge into concealed lines of rock-hard American militia. The battle resulted in the only double-envelopment of the war and the near-destruction of the whole British legion. Only its cavalry survived with enough strength to continue operations.
