According to a nationwide survey, nearly three out of four American households believe the country is facing a housing affordability crisis.

They are right to think that. The NAHB/Wells Fargo Housing Opportunity Index shows that by the third quarter of 2018, the index had plummeted to 56, meaning only 56% of home sales were affordable.

There is a direct link between escalating housing prices and homelessness.

The usual solutions that get offered is that government should ease regulatory requirements and/or provide incentives to build more housing, but that fails to answer the question of what made things so bad to begin with.



Low-cost rental housing also is becoming increasingly hard to find. While renters’ median housing costs rose by 11% between 2001 and 2016, their incomes fell by 2%, according to Harvard University’s Joint Center for Housing Research.

The reason for this rental and housing affordability crisis isn't because of regular people and environmentalists preventing progress.

The actual reason for this rental and housing affordability crisis is because of wealth inequality, financial corruption, and a parasitical economic system.

While rental prices are at record highs, housing vacancies are also near record highs.



The number of unoccupied homes jumped by 26 percent—from 9.5 to 12 million between 2005 and 2010...

The number of vacant units has declined over the course of the recovery, but there are still more today than there were before 2005. Housing units that are considered temporarily vacant—that are neither on the market, being held for future occupancy, or being used seasonally—have increased by more than 50 percent, from 3.7 million in 2005 to 5.8 million in 2016.

More empty houses should force down prices, but that's not happening.

The only logical reason why this could be true is if the home owners simply aren't interested in living in, renting, or selling those houses.

Those owners must also be wealthy, and Wall Street is part of the problem.



No less an entity than the U.N. is wading into the U.S. housing affordability crisis. In a pair of letters to the U.S. government and Blackstone Group, Leilani Farha, the UN Special Rapporteur on the right to adequate housing, calls out the role of private equity in the housing market and blasts the federal government for failing to protect the right of people to housing. Blackstone, the world's largest private-equity fund, also owns the largest single-family rental operation in the U.S. through its Invitation Homes unit. It's not the only private equity firm to invest in housing, but Blackstone's large size and concentration in a few metro areas has made it a dominant player in the rental market, where "it is having devastating consequences for tenants," the letter said. "Blackstone's and its subsidiaries' business model is pushing low-income, and increasingly middle-income people from their homes," the rapporteur wrote. Among the tactics it ascribes to Blackstone, drawing on news reports, are purchasing housing for low-income renters and deeming it "undervalued," renovating it, dramatically increasing the rent and forcing out residents if they can't pay. Farha also cites the addition of processing fees, automatic late fees and "immediate" eviction notices if tenants are late with payments.

The proportion of residential rental properties owned by individuals and families has fallen from 92% in 1991 to 74% in 2015.

While it's tempting to blame Wall Street and stop there, the lion's share of the blame is further afield. To give you a good example of this let's start at the top.



President Trump's real estate sales have gotten much more secretive since he won the Republican nomination in 2016, with the majority of buyers now using limited liability companies to hide to-be owners' names, a USA Today investigation has found. In the two years before Trump was nominated, just 4 percent of buyers used shell companies to make purchases; in the year that followed, and throughout Trump's first year in office, that rate jumped all the way to 70 percent.

What is going on is classic money laundering.



All-cash transactions have come to account for a quarter of all residential real estate purchases, “totaling hundreds of billions of dollars nationwide,” the Financial Crimes Enforcement Network – the financial crimes unit of the federal Treasury Department, also known as FinCEN – noted in a 2017 news release. Thanks to the Bank Secrecy Act, a 1970 anti-money-laundering law, the agency is able to learn who owns many of these properties. In high-cost cities such as New York, San Francisco, Los Angeles and Miami, it’s flagged over 30% of cash purchases as suspicious transactions.

“Current conditions mirror what happened after the housing market collapsed. Prices tumbled and property was abundant, but the only people who could afford to buy were those who hadn’t been crippled by the financial crisis.” Who has cash? Money Laundries. https://t.co/83mXjZQbS3 — CZEdwards (@CZEdwards) January 27, 2019

It looks suspicious because it is suspicious.

That's not my opinion. All-cash purchases through anonymous shell companies is suspicious to regulators too.

That headline leads you to believe that the regulators have the situation under control.

The problem is that one year later we see the EXACT SAME HEADLINE.

To sum this up, we have massive fraud going on in real estate, where prices are at record highs, while regulators decline to enforce the law.

Gee, where have I heard that before?