It's possible that economic populism is complete bullshit but would also be an effective electoral strategy for the Democrats. After all the American electorate has hardly shown itself to be rational organ of truth-seeking over the past decade.
The problems start when the rubber hits the road. The obvious issue with populism is that it sucks shit at policy - and now you've made a bunch of promises you can't keep. Your newly minted disenfranchised voter will blame you when things go wrong.
Framing yourself as "Sensible" might also be populist tbqh. There is some kind of path dependence to these things - yesterday's Obama voter might be today's Trump voter. You probably need some kind of continuous game theory analysis to observe if this is a paradigm worth operating within. But this is all quite cynical - reality isn't considered, and the side who can come up with the most appealing lies wins. Easy to see how voters go nuts when people practice this for too long.
I think the political messaging truism "explaining is failing" did more damage to democracy than almost anything else. Maybe I am naive - but I would appreciate some long-form political messaging at the level of about an AP history class.
I'm with you. However, I'm reminded of the Adlai Stevenson quote when someone quipped "Every thinking person in America will be voting for you!" and he replied, "I'm afraid that won't do -- I need a majority."
Look, Charlie Kirk blamed EVIL corporations for driving up home prices on *FOX News,* no less. If it's FOX News saying it's so; then I believe it, and that settles it. MAGA!
Besides, the WH prohibited Charlie from talking about Jeffrey Epstein. So he's gotta talk about *something* when he goes on FOX.
Yes - there many pithy quips about it! Maybe FDR's fireside chats can be a counterexample? I'm not much of a historian, but they seemed to be remembered well. I gave this one a read (http://docs.fdrlibrary.marist.edu/090742.html).
Economic populism that is framed without traction to get new votes is the issue.
The Proggy-hard Left recycling of old school socialist anti-capitalism doesn't appear to have wide resonance outside the pre-sold (in specific already D-friendly D-aligned electoral geographies).
Something more tailored, less anti-capitalist / clealry socialist for other geographies seems likely needed.
Tailoring and less Ideology.
One thing Trump is quite good at is being non-ideological and very A-la-carte (and as well jettisoning almost anything quite readily)
I’m starting to have doubts about Noah’s economic presentation in general. In the previous post he posted average data about home prices vs. earnings and concluded that everything was only a tiny bit out of historical norms. But then I went to look at the Atlanta Fed and the data they show there looks wildly different, and even more so if you look at their regional data and not just national data.
So I think if the framing is “I accept Noah’s factual claims and now will ask a political question” maybe it would be worth stopping for a moment and asking if you should accept the factual claims.
Why waste time and energy on the possible and just move on to the likely. Contempt for the average voter hardly seems like a good approach and besides most voters know just what prog/populists on the left are up to which is a naked bid for more power.
This seems to be tilting at progressives. You know, the people in power, the ones who have control of courts, the legislature, and presidency... Oh wait...
I'm sure there were lots of problems with the platform of German Communists in 1934, but they weren't the problem at that moment.
Also, the problem with American insurance companies is their role as middlemen who add no value to patient care. Making low profit isn't a defence. Didn't Amazon, that altruistic company, run at a loss (on paper) for the first 20 years?
Look up medical loss ratios. Look up how literally every other advanced country does universal healthcare. Look at such places as Taiwan, Switzerland, and Israel.
In any comparison, the US system is astoundingly poorly designed. Three key parts of that are the link between employment and insurance, the way that insurance companies are unrestrained, and the way that the US does NOT regulate pharmaceutical prices.
Go find a non Heritage foundation health economist who defends the US system.
"Ironically I could levy the same criticism at Mathew's response to Noah..."
You could learn the English meaning of "levy", and perhaps use the word "level".
But the fact is that Mathew's response is full of specific information and analytical claims. You, on the other hand, provide no evidence that you are not a bot.
In theory, the value that insurance companies add is that they argue for lower prices on everything. They call the doctor and say "why are you prescribing this expensive drug instead of this cheap one?" That's supposed to drive down prices and make care more affordable.
The correct way to assess this claim is with empiricism, and unfortunately I don't know whether the data suggests a real value add here or not.
Au contraire, brother. When it comes to the amazing efficiencies added to the economy by our private health insurance companies, you've just gotta go 100% with your gut. Like when you watch a health insurance ad on TV, does it make your gut feel real good, extremely happy, or even boundlessly upbeat!?
Private health insurance is as American as Mom or apple pie.
And don't you let no stinkin' Lefties tell you otherwise!
This article is about mistaken economic beliefs of ignorant people — both progressive stupidity and TPUSA stupidity. If you don’t want to hear about the ignorance of progressives, and want to read articles about how health insurance companies with low profitability are the real problem, maybe you should read some other SubStack.
> I'm sure there were lots of problems with the platform of German Communists in 1934, but they weren't the problem at that moment.
German communists when the Molotov-Ribbentrop Pact was signed:
> The Communist Party of Germany featured similar attitudes. In Die Welt, a communist newspaper published in Stockholm[f] the exiled communist leader Walter Ulbricht opposed the Allies, stated that Britain represented "the most reactionary force in the world",[218] and argued, "The German government declared itself ready for friendly relations with the Soviet Union, whereas the English–French war bloc desires a war against the socialist Soviet Union. The Soviet people and the working people of Germany have an interest in preventing the English war plan".[219]
By 1939 most German Communists were either in exile, or on the way to the showers.
Surviving leaders like Ulbricht dutifully obeyed the dictates of Moscow post-Molotov-Ribbentrop.
But conflating doctrinaire German Communists c.1939, with 2025 Bernie Sanders-esque Liberals is quite a stretch. Unless one is a paid Heritage Foundation staffer that is.
First, the corporate landlord story is regional, not national. You don't rent in Phoenix for a job in Kansas. The Phoenix market is in Phoenix. There are certain cities where institutional investment dominates. For example, 25-30% of the single family rental homes in Atlanta are owned by a large landlord, which also coincides with large rent spikes. https://www.fox5atlanta.com/news/jon-ossoff-press-conference-corporate-landlords-georgia-homes
Second, its silly to call fears over impacts of corporate acquisition of housing a conspiracy theory or meme, based on the fact that we don't have a lot of clear data. It's a new area and the sources are opaque. The fact that voters are angry about it and that politicians are responding is itself data.
"Investors are skewing the market with cash offers and fast closings. It's hard to quantify the impact but the build-to-rent and private equity homebuying sectors are directly competing with, and therefore raising prices for, traditional homeowners."
Is Glass a conspiracy theorist? Is he just responding to memes about Blackrock? Or is there something here you might consider actually real?
Even the paper you cite implying corporate landlords lower rents and decrease segregation is held together with about 5-10 big assumptions. It's basically a paper of duct tape and chewing gum that you present as definitive. I don't mind such papers, I like them because they advance the debate. The fact that the author really doesn't have great data should be an indication that we need more evidence, not that concerns of a large group of people are a conspiracy theory.
And not to badmouth the paper itself, but the author has an obvious ideological slant. It's written by someone who didn't consider that landlords might be lowering rental quality as they buy up large swaths of homes. He even found that landlords monopolize, but assumed that was 'pro-competitive.'
Here's what he wrote: "Corporate landlords exhibit high willingness to pay in property acquisitions to achieve geographic concentration and estimate the strength of local scale economies using a revealed-preference approach."
In other words, they are raising housing prices by overpaying to dominate local areas, which is what analysts have found. There's also this:
"It is worth emphasizing why I focus on the procompetitive effects of landlords, and not
the direct effects of landlords on rents of the properties they purchase. The goal of this
exercise is to estimate how corporate landlords affect local rents and prices, not whether
corporate landlords themselves charge higher or lower rents compared to other landlords."
So maybe what's happening is these guys are worsening the quality of the homes by engaging in host of sordid tactics, and that's why rents are down in those neighborhoods even as the corporate landlords might be hiking *their* rates above the neighborhood mean. We don't know, there is of course a bunch of direct evidence for that in law enforcement actions against firms like Invitation Homes. It's not in 'economist-ese,' but inadequate models don't mean something isn't happening, they just mean economists haven't figured out how to measure it.
Mockery of those of us concerned at this new trend reflects a lack of rigor and worse, a lack of curiosity.
Third, you don't engage with direct evidence of higher rents as a result of explicit collusion. According to the Arizona Attorney General's antitrust case against RealPage, which is allegedly engaged in a rent-fixing conspiracy with corporate landlords, "approximately 70% of multifamily apartment units listed in the Phoenix metropolitan area are owned, operated, or managed by companies that have contracted with RealPage for “Revenue Management.”' That's a lot!
The AG did an analysis of both Phoenix and Tucson. Here's the Phoenix example:
"The regression analysis controlled for various property and geographic features such as size of the unit and number of bathrooms. Across over 30,000 units, the regression found an average overcharge of 12% on units priced by RealPage’s Revenue Management Software as compared to units not priced using RealPage’s Revenue Management Software, including 1-bedroom, 2-bedroom, 3-bedroom, and studio apartments. These estimates are conservative and may underestimate the true overcharge, as not every property using RealPage is included in the estimate."
There are many lawsuits and a lot of reporting at this point, and there's some initial academic work. That's data that's useful. A lot of reformers have persuaded me that zoning is a meaningful barrier to more housing. I wish you would be as open-minded and empirically driven.
Also, it's hilarious you think that health insurance companies are efficient.
And nearly 100% of large multifamily homes are corporate owned, yet rent has gone up much more slowly than house prices in recent years. So you have a really high burden of proof to meet here because if corporate landlords are the cause of the price increases you would expect to see the exact opposite.
> The fact that voters are angry about it and that politicians are responding is itself data.
Well by that standard I have a lot of data that shows the COVID vaccines are worse than the disease and that Biden stole the election in 2020.
I know nobody believes us developers, but it really is a combination of restrictive land use controls and building code requirements that keep housing costs high. Sure, realpage, yardi, corporate ownership, etc may cause rents to increase on the margins, but they're not even in the top 10 causes of high rents. Anti-competitive behavior contrary to law should be stopped, so I have no objection to the current lawsuits, but even if successful it won't change rents in a material way. I'd compare these lawsuits to giving the night watchman on the Titanic binoculars--yes he should have had them and therefore would have seen the iceberg sooner, but the ship still would have hit it and sunk.
What do you think of Matt Stoller's argument that certain regional housing markets--like Metro Atlanta--are more impacted by (supposedly) >20% corporate ownership? That there are *specific* regional markets where the Big Boys are skewing market dynamics?
The anti-trust progressives, who I'm sympathetic to in theory but often not in practice, should make a narrower, more subtle, but important and defensible case on this one: one way to create housing abundance is to enable more small developers and landlords, not because the existing ones have monopoly power, but because infill housing is a fine-grained problem that has to be solved at a lot by lot level, and these small operators might be more equipped to do this. A large number of urban and suburban ADUs, duplex conversions, and 4 unit buildings would be a useful addition to a housing sector that's currently only capable of building greenfield mcmansions and five over ones.
But they're not being held back by a monopoly, they're being held back by regulation and lack of a financial mechanism.
Why would I care what the size of the company that built my house is? As for landlords, in my experience the big corporate ones are much better than mom and pop in every way. ADUs and duplex conversions are about the most inefficient way possible to build additional housing. There's a reason larger companies don't get involved. You want to increase density, increase the zoning. Developers will buy up houses, bulldoze them, and build high density housing. It's simple arbitrage. More units on the same land = more money per acre. Infill development is mostly a thing only because cities refuse to do that.
The culprit, they say, is software called YieldStar, "a controversial real estate software that allegedly enables landlords to inflate rents in a cartel-like manner."
This study got some coverage so I'm wondering if anyone with a more critical eye looked into it.
This whole thing doesn't check out. If you own a fraction of a percent of the market there is no magic software that will let you form a cartel. If you have a dominant position in the market then you don't need software to do it. Furthermore the premise that Blackstone raised their prices at twice the average rate in the market is proof that there isn't cartel behavior setting prices at all. This is a scatterbrained and completely biased attempt to find as many unpopular villains to blame as possible and not coherent economic analysis. Exactly what I would expect from a group called the "Private Equity Stakeholder Project."
As an owner of a few rentals in Florida I can tell you that myself and other small fry certainly use tools like Zillow to monitor what large owners ( mostly apartment REIT’s) are doing with rents and price under their umbrella. What is different than a decade ago is that even with rising vacancy they are much firmer at holding price.
Everybody in every industry looks at prices set by competitors when setting theirs. You would be an idiot not to. This isn't really evidence of collusion.
My impression is that cap rates are much lower than they were 10 years ago which may explain why people are trying to resist dropping the price more, but not really sure about this.
You are right, we have been doing this for years but the technology aggregators have made it much easier. You get a lot more information than checking the classifieds in the 90’s. You know precisely where and what it looks like inside. In my short term rental business we get alerts about what the trends are in our market - even down the level of building. Maybe this works in both directions but the prevailing direction is up.
Fortunately, Lina Khan and the other Commie scum at the Consumer Financial Protection Bureau were utterly DOGE'd and will be unable to illegally infringe on any Corporation's ability to allegedly collude in alleged price setting! No matter the strength of their supposed "evidence." MAGA!
There's something about property that makes big developers and owners take a long-term view in what are otherwise very short-term capitalist cultures like the US and UK. They seem to be able to allow buildings in their portfolios to remain empty for ages. Perhaps the portfolios are very large and very diverse. Or that there's only so much land to build on.
No, there's no different. The whole "corporations are short sighted and only care about next quarter's earnings" is a nonsensical trope. If it were true, large companies would be crashing and burning constantly when the long term arrived. Amazon lost money steadily for 2 decades because they focused on long term growth.
No, it's definitely true and not a bad thing either. US, and to a lesser extent UK, companies are far more dynamic as a result of the shorter-term approach. It's a trade off. And, of course, a lot of companies do crash and burn in the long-term. On average 7 companies drop out of the S&P 500 every year. Companies like Amazon attract long-term investment because there's a consensus that they've tapped into the future and are going about it in the right way. But why are property companies so patient?
I believe that there are one or two rent software firms that have the vast majority of the market share. If they allow all the landlords, who aren't monopolists by any stretch, to operate like a cartel and exert market power when setting rent prices by effectively coordinating their rents, then this could be a concern. I'm not arguing that it *is* happening yet or that they *are* exerting some market power, but it's worth investigating.
Good morning Noah. The spike in asset prices; real estate, stocks, bonds, art and CEO’s pay is related to the world-wide government creation, out of thin air, of about $300 trillion of new money above and beyond the organic growth from productivity, since 2000. In the form of bonds, and outright printing of cash. Combine this with worldwide market information through such sites as Zillow. We simply have demand outstripping supply. All that excess deficit government spending is now hurting the very people that it was intended to initially to help.
The big picture presented by Noah is persuasive and at the same time here’s a bit of personal experience. I own a single well-maintained, 8 unit apartment complex in a very wealthy suburban town. I keep my rents towards the low end of what I see being asked, to retain long-term tenants, since it’s expensive to loose a tenant, repaint etc and re-rent. The vacancy rate in our town is clearly quite low, and over the past decade or two a number of large, expensive new apartment complexes with pools, weight rooms and other amenities have been built. Looking at rentals offered in Craigslist, Facebook marketplace etc, I regularly notice that these new complexes virtually always have apartments for rent, and, at same time the asking prices for their apartments are typically much much higher per square foot than being asked by everyone else in the area. The difference is easily 150% or more. So what am I to conclude about this? I’m invariably suspicious that the high asking prices are the result of an algorithm that calculates, for a large (corporate) landlord (many units), the tradeoff between vacancies and rents and maximizes (or attempts to maximize) profits by taking in very high rents on most units but setting those rents so high that significant numbers of apartments will always remain vacant.
Of course they always have units for rent. This doesn't really tell you anything unless you know their actual vacancy rate. You said it yourself that they are large complexes. Average tenancy is less than 3 years. So a complex with 30 or so units will average one vacancy a month, and that's not even a large complex. And they probably don't stop advertising even if they don't have vacancies at a given moment as they know they will soon.
> I’m invariably suspicious that the high asking prices are the result of an algorithm that calculates, for a large (corporate) landlord (many units), the tradeoff between vacancies and rents and maximizes (or attempts to maximize) profits
Why are you suspicious of this? I would be surprised if large corporations do it any other way. Why would they? If you can raise your revenue by 10% for a 2% increase in vacancy, it's the obvious choice.
Thanks Noah. I’m not surprised that these institutional investors only own a sliver of the “total” US housing stock, but as you mentioned, much of the US housing stock is largely irrelevant.
I’m more interested in how much of the housing stock in desirable areas these firms own. Not indicating it’s much higher (or higher at all) than the overall percentage owned by institutional investors, but that’s the data point I find most relevant
My guess is almost none. Rental cap rates on single family homes in expensive areas tend to be extremely low and totally unappealing to large investors.
I agree. The big-picture argument doesn’t necessarily mean that large corporate/private equity landlords aren’t locally abusive in some way that simply gets lost in the large-scale statistics. For example, thinking about the strong correlation between national median income and housing cost, it seems likely that corporations would not be buying up housing in depressed (“rust belt” etc) regions of the country, and those same regions would have low median incomes. So instead let’s see the correlation between median income and housing cost in San Diego, or Houston or Dallas etc. And then let’s see the correlation between median income and housing cost if, say, the highest earners and most-expensive housing are left out of the analysis, so that the ultra-wealthy (say, those earning more than x/yr) are left out of the analysis.
> Anyway, I’m sympathetic to the notion that monopoly power has increased in the U.S. economy since the turn of the century, and that this is making life harder for some Americans.
Why are you sympathetic to this? There are two claims here. Is there any evidence for either? Because if there is, I haven't seen it. I don't even believe that progressives are honest when they make this claim. They show their hand by going after the companies in industries with the most wealthy individuals (finance and tech with a bit of oil hate for good measure) rather than the companies that demonstrate the most monopoly power.
Evidence is in the doubling of corporate profit margins and the declining share of wages as a percentage of revenue. Apparently America isn’t very great anymore, but we have record profit margins.
And why would you look at overall numbers? It's meaningless if you want to look at monopoly power. It's more explanatory of overall labor market dynamics. And the highest wages as % GDP actually occurred at the same time as the highest corporate profits as % GDP, so I don't think the inverse relationship exists as you claim. Monopolies operate at the industry level so that's where you would need to look.
Another misconception is that the corporate landlords are keeping their (very small) share of homes vacant to drive up rents and prices. Of course, this means they wouldn’t benefit from the higher rents because they are vacant. Investors don’t leave cashflow on the table.
Untamed monopoly of power is bad, whether it is a president, a group, or an organization. If someone misunderstands that housing market is not a monopoly doesn't mean monopolies aren't bad.
Even in case of monopolies, it isn't the fault of entities reaping monopoly power benefits, it is the system that facilitates monopoly abuse - i.e. the rule makers. Sometimes national monopolies can be good (perhaps for international competition) whereas they can be bad domestically if international competition isn't at play. E.g. I used to have 3 waste management companies in my neighborhood until few years back and now 1 has monopoly after acquiring the rest. Now the cost of waste management has risen couple of times.
I think people (democrats & republicans) need to agree to this ground truth before any meaningful policy can be built to tackle it.
A monopoly is a single provider being the only source from which to buy a particular product or service, so a President, or a group or organization that doesn’t sell anything cannot by definition be monopolies.
In some cases monopolies are efficient, such as utilities which require infrastructure that would be hard or inefficient to duplicate (gas and water pipelines and electric lines) so there are special local government utility rules that are placed to prevent pricing abuse of those kind of monopolies (requiring approval for pricing increases, separation of power generation from distribution).
Garbage collection is a kind of utility, as is cellular phone service but since trucks can use roads, and wireless signals go through the air and there are many good locations for towers they aren’t as burdened by fixed infrastructure. For efficiency, a single company collecting trash from a neighborhood is better, because otherwise multiple trucks, collection days, keeping track of which day and company each household gets service from are extra costs. So there is an incentive for the dominant company in an area to make deals with other companies and the customers (who are typically HOAs) to have more concentration in a given neighborhood. Nationwide there are several large waste management firms, the two largest are WMI and Republic Services, with 25% and 20% of the US market, so there is no nationwide monopoly. In my neighborhood, the HOA has changed waste collection companies 3 times in 20 years, either because of bad service or high prices, so it isn’t a monopoly situation here either.
Noah wrote, “But in the attractive cities where most people would like to live if they had the choice, rent has gone up much faster than in the decayed Rust Belt cities and small towns where most Americans would prefer not to live. The rental crisis is a local one, but it’s real. “
Actually that is NOT where most people would want to live, if they had a choice.
The highest preference for living location, at 47%, is to live in a small town or rural area.
“Migration out of counties with more than one million residents in 2023 remained nearly twice as high as before the pandemic, while migration into the country’s smallest metro areas and rural counties rose in 2023 from already near record levels in 2022. The Census Bureau’s 2023 population estimates show that instead of being an anomaly, 2020 increasingly appears to have been a demographic turning point for much of the country.”
“The latest Census Bureau estimates confirm some previously reported trends — and provide some surprising new insights into them. Among the highlights:
* It’s rural areas, not the state’s metro areas, that are responsible for Virginia becoming a net in-migration state for the first time in more than a decade.
* Almost every rural county in Virginia is now seeing more people move in than move out.
* This includes the coal-producing counties of Southwest Virginia, which are collectively now gaining people rather than losing them.
* In Roanoke, the exodus of residents has nearly ground to a halt.
* Northern Virginia and Hampton Roads continue to hemorrhage people, although the outflows are slowing.”
Northern Virginia, for those unfamiliar, is the DC suburbs.
Letting people actually live where they want would probably ameliorate housing shortages in many big cities. There really isn’t a powerful argument for agglomerating accountants, customer service, and a lot of other functions that work really well remote.
Who is forcing people that really want to live in rural areas to stay in the expensive, crowded big coastal cities? High housing demand in those cities indicates that many people are willing to overpay to live there.
They tolerate it for jobs, and they are forced into it by employers who limit remote work.
High housing demand indicates that people will live there if they have to. New immigrants will go there as they get established. But domestic population flows have trended out of big cities, not into them. When people find alternate ways to make a living, like remote work, many of them gladly move out.
This has been quite notable where I live, as we’re one of the many rural exurbs getting the people who are leaving.
Places that have tended to draw people are exurbs around smaller cities, smaller cities and towns, areas that have outdoor amenities like water or state or national parks, university towns, etc. Not every rural community has the same growth.
The Cardinal News discussion of Census data gives a good idea of how this plays out in real life.
My town has one, half and quarter acre minimum lot sizes and allows apartments only one main artery without greenway. Not even duplexes are allowed on the smaller lots, let alone ADUs on any lot. It's all calculated to keep the browns and poors out. Even luxury condo developments have been forced to surrounding towns with one exception that is completely segregated from residential areas between a nature preserve and an industrial area. The town vote is evenly split between R and D (with elected town leaders quite trumpy) but unified preventing the building of affordable housing.
Can we retire the term "rust belt"? At this point, the rusty parts have rusted away, and there is still some manufacturing left. Also, the take that rent is not an issue in the Midwest is wrong. Many Midwestern cities are facing high rent increases, and in homelessness is becoming a much bigger problem. Cincinnati Public Schools is opening a supervised parking lot for homeless families of students to sleep in. https://constructioncoverage.com/research/cities-with-the-largest-rent-increases-decreases
It's possible that economic populism is complete bullshit but would also be an effective electoral strategy for the Democrats. After all the American electorate has hardly shown itself to be rational organ of truth-seeking over the past decade.
The problems start when the rubber hits the road. The obvious issue with populism is that it sucks shit at policy - and now you've made a bunch of promises you can't keep. Your newly minted disenfranchised voter will blame you when things go wrong.
Well yes, obviously. But the dominance of candidates who overpromise and underdeliver is a perennial problem of representative democracy.
Hilary Clinton already tried branding herself as the sensible candidate. Didn't work for her, did it?
Framing yourself as "Sensible" might also be populist tbqh. There is some kind of path dependence to these things - yesterday's Obama voter might be today's Trump voter. You probably need some kind of continuous game theory analysis to observe if this is a paradigm worth operating within. But this is all quite cynical - reality isn't considered, and the side who can come up with the most appealing lies wins. Easy to see how voters go nuts when people practice this for too long.
I think the political messaging truism "explaining is failing" did more damage to democracy than almost anything else. Maybe I am naive - but I would appreciate some long-form political messaging at the level of about an AP history class.
I'm with you. However, I'm reminded of the Adlai Stevenson quote when someone quipped "Every thinking person in America will be voting for you!" and he replied, "I'm afraid that won't do -- I need a majority."
Look, Charlie Kirk blamed EVIL corporations for driving up home prices on *FOX News,* no less. If it's FOX News saying it's so; then I believe it, and that settles it. MAGA!
Besides, the WH prohibited Charlie from talking about Jeffrey Epstein. So he's gotta talk about *something* when he goes on FOX.
Yes - there many pithy quips about it! Maybe FDR's fireside chats can be a counterexample? I'm not much of a historian, but they seemed to be remembered well. I gave this one a read (http://docs.fdrlibrary.marist.edu/090742.html).
Economic populism that is framed without traction to get new votes is the issue.
The Proggy-hard Left recycling of old school socialist anti-capitalism doesn't appear to have wide resonance outside the pre-sold (in specific already D-friendly D-aligned electoral geographies).
Something more tailored, less anti-capitalist / clealry socialist for other geographies seems likely needed.
Tailoring and less Ideology.
One thing Trump is quite good at is being non-ideological and very A-la-carte (and as well jettisoning almost anything quite readily)
I’m starting to have doubts about Noah’s economic presentation in general. In the previous post he posted average data about home prices vs. earnings and concluded that everything was only a tiny bit out of historical norms. But then I went to look at the Atlanta Fed and the data they show there looks wildly different, and even more so if you look at their regional data and not just national data.
So I think if the framing is “I accept Noah’s factual claims and now will ask a political question” maybe it would be worth stopping for a moment and asking if you should accept the factual claims.
Many populist countries fell for this trap.
Why waste time and energy on the possible and just move on to the likely. Contempt for the average voter hardly seems like a good approach and besides most voters know just what prog/populists on the left are up to which is a naked bid for more power.
Power...smells like napalm in the morning. When I'm nakedly bidding for more of it. Because only RW populists like Charlie Kirk can be trusted.
This seems to be tilting at progressives. You know, the people in power, the ones who have control of courts, the legislature, and presidency... Oh wait...
I'm sure there were lots of problems with the platform of German Communists in 1934, but they weren't the problem at that moment.
Also, the problem with American insurance companies is their role as middlemen who add no value to patient care. Making low profit isn't a defence. Didn't Amazon, that altruistic company, run at a loss (on paper) for the first 20 years?
Look up medical loss ratios. Look up how literally every other advanced country does universal healthcare. Look at such places as Taiwan, Switzerland, and Israel.
In any comparison, the US system is astoundingly poorly designed. Three key parts of that are the link between employment and insurance, the way that insurance companies are unrestrained, and the way that the US does NOT regulate pharmaceutical prices.
Go find a non Heritage foundation health economist who defends the US system.
This is such a dumb take for so many reasons. Could we step past the rhetorical frame when having online discussion for just one moment?
Now that is a no-information response that could be thrown at ANY posting. Not one word of it is specific to Matthew's response.
Ironically I could levy the same criticism at Mathew's response to Noah...
"Ironically I could levy the same criticism at Mathew's response to Noah..."
You could learn the English meaning of "levy", and perhaps use the word "level".
But the fact is that Mathew's response is full of specific information and analytical claims. You, on the other hand, provide no evidence that you are not a bot.
thanks for your information-filled response
Bothood achieved!
In theory, the value that insurance companies add is that they argue for lower prices on everything. They call the doctor and say "why are you prescribing this expensive drug instead of this cheap one?" That's supposed to drive down prices and make care more affordable.
The correct way to assess this claim is with empiricism, and unfortunately I don't know whether the data suggests a real value add here or not.
Au contraire, brother. When it comes to the amazing efficiencies added to the economy by our private health insurance companies, you've just gotta go 100% with your gut. Like when you watch a health insurance ad on TV, does it make your gut feel real good, extremely happy, or even boundlessly upbeat!?
Private health insurance is as American as Mom or apple pie.
And don't you let no stinkin' Lefties tell you otherwise!
This article is about mistaken economic beliefs of ignorant people — both progressive stupidity and TPUSA stupidity. If you don’t want to hear about the ignorance of progressives, and want to read articles about how health insurance companies with low profitability are the real problem, maybe you should read some other SubStack.
Or just wait for Noah to do an analysis of our incredibly efficient health care system.
> I'm sure there were lots of problems with the platform of German Communists in 1934, but they weren't the problem at that moment.
German communists when the Molotov-Ribbentrop Pact was signed:
> The Communist Party of Germany featured similar attitudes. In Die Welt, a communist newspaper published in Stockholm[f] the exiled communist leader Walter Ulbricht opposed the Allies, stated that Britain represented "the most reactionary force in the world",[218] and argued, "The German government declared itself ready for friendly relations with the Soviet Union, whereas the English–French war bloc desires a war against the socialist Soviet Union. The Soviet people and the working people of Germany have an interest in preventing the English war plan".[219]
By 1939 most German Communists were either in exile, or on the way to the showers.
Surviving leaders like Ulbricht dutifully obeyed the dictates of Moscow post-Molotov-Ribbentrop.
But conflating doctrinaire German Communists c.1939, with 2025 Bernie Sanders-esque Liberals is quite a stretch. Unless one is a paid Heritage Foundation staffer that is.
A couple of thoughts.
First, the corporate landlord story is regional, not national. You don't rent in Phoenix for a job in Kansas. The Phoenix market is in Phoenix. There are certain cities where institutional investment dominates. For example, 25-30% of the single family rental homes in Atlanta are owned by a large landlord, which also coincides with large rent spikes. https://www.fox5atlanta.com/news/jon-ossoff-press-conference-corporate-landlords-georgia-homes
Second, its silly to call fears over impacts of corporate acquisition of housing a conspiracy theory or meme, based on the fact that we don't have a lot of clear data. It's a new area and the sources are opaque. The fact that voters are angry about it and that politicians are responding is itself data.
Here for instance is a commenter from Derek Thompson's work, a guy named Tim Glass who says he's a Dallas city planner and absolutely loved Thompson's work on zoning. https://www.derekthompson.org/p/whats-the-matter-with-dallas/comment/141216294
"Investors are skewing the market with cash offers and fast closings. It's hard to quantify the impact but the build-to-rent and private equity homebuying sectors are directly competing with, and therefore raising prices for, traditional homeowners."
Is Glass a conspiracy theorist? Is he just responding to memes about Blackrock? Or is there something here you might consider actually real?
Even the paper you cite implying corporate landlords lower rents and decrease segregation is held together with about 5-10 big assumptions. It's basically a paper of duct tape and chewing gum that you present as definitive. I don't mind such papers, I like them because they advance the debate. The fact that the author really doesn't have great data should be an indication that we need more evidence, not that concerns of a large group of people are a conspiracy theory.
And not to badmouth the paper itself, but the author has an obvious ideological slant. It's written by someone who didn't consider that landlords might be lowering rental quality as they buy up large swaths of homes. He even found that landlords monopolize, but assumed that was 'pro-competitive.'
Here's what he wrote: "Corporate landlords exhibit high willingness to pay in property acquisitions to achieve geographic concentration and estimate the strength of local scale economies using a revealed-preference approach."
In other words, they are raising housing prices by overpaying to dominate local areas, which is what analysts have found. There's also this:
"It is worth emphasizing why I focus on the procompetitive effects of landlords, and not
the direct effects of landlords on rents of the properties they purchase. The goal of this
exercise is to estimate how corporate landlords affect local rents and prices, not whether
corporate landlords themselves charge higher or lower rents compared to other landlords."
So maybe what's happening is these guys are worsening the quality of the homes by engaging in host of sordid tactics, and that's why rents are down in those neighborhoods even as the corporate landlords might be hiking *their* rates above the neighborhood mean. We don't know, there is of course a bunch of direct evidence for that in law enforcement actions against firms like Invitation Homes. It's not in 'economist-ese,' but inadequate models don't mean something isn't happening, they just mean economists haven't figured out how to measure it.
Mockery of those of us concerned at this new trend reflects a lack of rigor and worse, a lack of curiosity.
Third, you don't engage with direct evidence of higher rents as a result of explicit collusion. According to the Arizona Attorney General's antitrust case against RealPage, which is allegedly engaged in a rent-fixing conspiracy with corporate landlords, "approximately 70% of multifamily apartment units listed in the Phoenix metropolitan area are owned, operated, or managed by companies that have contracted with RealPage for “Revenue Management.”' That's a lot!
The AG did an analysis of both Phoenix and Tucson. Here's the Phoenix example:
"The regression analysis controlled for various property and geographic features such as size of the unit and number of bathrooms. Across over 30,000 units, the regression found an average overcharge of 12% on units priced by RealPage’s Revenue Management Software as compared to units not priced using RealPage’s Revenue Management Software, including 1-bedroom, 2-bedroom, 3-bedroom, and studio apartments. These estimates are conservative and may underestimate the true overcharge, as not every property using RealPage is included in the estimate."
There are many lawsuits and a lot of reporting at this point, and there's some initial academic work. That's data that's useful. A lot of reformers have persuaded me that zoning is a meaningful barrier to more housing. I wish you would be as open-minded and empirically driven.
Also, it's hilarious you think that health insurance companies are efficient.
And nearly 100% of large multifamily homes are corporate owned, yet rent has gone up much more slowly than house prices in recent years. So you have a really high burden of proof to meet here because if corporate landlords are the cause of the price increases you would expect to see the exact opposite.
> The fact that voters are angry about it and that politicians are responding is itself data.
Well by that standard I have a lot of data that shows the COVID vaccines are worse than the disease and that Biden stole the election in 2020.
I know nobody believes us developers, but it really is a combination of restrictive land use controls and building code requirements that keep housing costs high. Sure, realpage, yardi, corporate ownership, etc may cause rents to increase on the margins, but they're not even in the top 10 causes of high rents. Anti-competitive behavior contrary to law should be stopped, so I have no objection to the current lawsuits, but even if successful it won't change rents in a material way. I'd compare these lawsuits to giving the night watchman on the Titanic binoculars--yes he should have had them and therefore would have seen the iceberg sooner, but the ship still would have hit it and sunk.
What do you think of Matt Stoller's argument that certain regional housing markets--like Metro Atlanta--are more impacted by (supposedly) >20% corporate ownership? That there are *specific* regional markets where the Big Boys are skewing market dynamics?
Let’s call this what it is: a conspiracy theory.
Look, it was on FOX News. Which makes it gospel, ok?
I think we need a little more moon-brain stuff to make it a full conspiracy theory.
The anti-trust progressives, who I'm sympathetic to in theory but often not in practice, should make a narrower, more subtle, but important and defensible case on this one: one way to create housing abundance is to enable more small developers and landlords, not because the existing ones have monopoly power, but because infill housing is a fine-grained problem that has to be solved at a lot by lot level, and these small operators might be more equipped to do this. A large number of urban and suburban ADUs, duplex conversions, and 4 unit buildings would be a useful addition to a housing sector that's currently only capable of building greenfield mcmansions and five over ones.
But they're not being held back by a monopoly, they're being held back by regulation and lack of a financial mechanism.
That's a core part of the argument we make. The financing mechanism for small builders is seriously limited now: https://www.thebignewsletter.com/p/messing-with-texas-how-big-homebuilders
Why would I care what the size of the company that built my house is? As for landlords, in my experience the big corporate ones are much better than mom and pop in every way. ADUs and duplex conversions are about the most inefficient way possible to build additional housing. There's a reason larger companies don't get involved. You want to increase density, increase the zoning. Developers will buy up houses, bulldoze them, and build high density housing. It's simple arbitrage. More units on the same land = more money per acre. Infill development is mostly a thing only because cities refuse to do that.
A study by something called the Private Equity Stakeholder Project found that private equity rents grew faster than the market average in San Diego.
https://pestakeholder.org/news/new-report-finds-that-corporate-landlord-blackstone-has-raised-rents-in-san-diego-nearly-double-the-market-average/
The culprit, they say, is software called YieldStar, "a controversial real estate software that allegedly enables landlords to inflate rents in a cartel-like manner."
This study got some coverage so I'm wondering if anyone with a more critical eye looked into it.
This whole thing doesn't check out. If you own a fraction of a percent of the market there is no magic software that will let you form a cartel. If you have a dominant position in the market then you don't need software to do it. Furthermore the premise that Blackstone raised their prices at twice the average rate in the market is proof that there isn't cartel behavior setting prices at all. This is a scatterbrained and completely biased attempt to find as many unpopular villains to blame as possible and not coherent economic analysis. Exactly what I would expect from a group called the "Private Equity Stakeholder Project."
As an owner of a few rentals in Florida I can tell you that myself and other small fry certainly use tools like Zillow to monitor what large owners ( mostly apartment REIT’s) are doing with rents and price under their umbrella. What is different than a decade ago is that even with rising vacancy they are much firmer at holding price.
Everybody in every industry looks at prices set by competitors when setting theirs. You would be an idiot not to. This isn't really evidence of collusion.
My impression is that cap rates are much lower than they were 10 years ago which may explain why people are trying to resist dropping the price more, but not really sure about this.
You are right, we have been doing this for years but the technology aggregators have made it much easier. You get a lot more information than checking the classifieds in the 90’s. You know precisely where and what it looks like inside. In my short term rental business we get alerts about what the trends are in our market - even down the level of building. Maybe this works in both directions but the prevailing direction is up.
Fortunately, Lina Khan and the other Commie scum at the Consumer Financial Protection Bureau were utterly DOGE'd and will be unable to illegally infringe on any Corporation's ability to allegedly collude in alleged price setting! No matter the strength of their supposed "evidence." MAGA!
Is there a limit where the prices of competitors can be known so easily through technological advancements that it becomes problematic?
There's something about property that makes big developers and owners take a long-term view in what are otherwise very short-term capitalist cultures like the US and UK. They seem to be able to allow buildings in their portfolios to remain empty for ages. Perhaps the portfolios are very large and very diverse. Or that there's only so much land to build on.
No, there's no different. The whole "corporations are short sighted and only care about next quarter's earnings" is a nonsensical trope. If it were true, large companies would be crashing and burning constantly when the long term arrived. Amazon lost money steadily for 2 decades because they focused on long term growth.
No, it's definitely true and not a bad thing either. US, and to a lesser extent UK, companies are far more dynamic as a result of the shorter-term approach. It's a trade off. And, of course, a lot of companies do crash and burn in the long-term. On average 7 companies drop out of the S&P 500 every year. Companies like Amazon attract long-term investment because there's a consensus that they've tapped into the future and are going about it in the right way. But why are property companies so patient?
I believe that there are one or two rent software firms that have the vast majority of the market share. If they allow all the landlords, who aren't monopolists by any stretch, to operate like a cartel and exert market power when setting rent prices by effectively coordinating their rents, then this could be a concern. I'm not arguing that it *is* happening yet or that they *are* exerting some market power, but it's worth investigating.
Good morning Noah. The spike in asset prices; real estate, stocks, bonds, art and CEO’s pay is related to the world-wide government creation, out of thin air, of about $300 trillion of new money above and beyond the organic growth from productivity, since 2000. In the form of bonds, and outright printing of cash. Combine this with worldwide market information through such sites as Zillow. We simply have demand outstripping supply. All that excess deficit government spending is now hurting the very people that it was intended to initially to help.
The big picture presented by Noah is persuasive and at the same time here’s a bit of personal experience. I own a single well-maintained, 8 unit apartment complex in a very wealthy suburban town. I keep my rents towards the low end of what I see being asked, to retain long-term tenants, since it’s expensive to loose a tenant, repaint etc and re-rent. The vacancy rate in our town is clearly quite low, and over the past decade or two a number of large, expensive new apartment complexes with pools, weight rooms and other amenities have been built. Looking at rentals offered in Craigslist, Facebook marketplace etc, I regularly notice that these new complexes virtually always have apartments for rent, and, at same time the asking prices for their apartments are typically much much higher per square foot than being asked by everyone else in the area. The difference is easily 150% or more. So what am I to conclude about this? I’m invariably suspicious that the high asking prices are the result of an algorithm that calculates, for a large (corporate) landlord (many units), the tradeoff between vacancies and rents and maximizes (or attempts to maximize) profits by taking in very high rents on most units but setting those rents so high that significant numbers of apartments will always remain vacant.
Of course they always have units for rent. This doesn't really tell you anything unless you know their actual vacancy rate. You said it yourself that they are large complexes. Average tenancy is less than 3 years. So a complex with 30 or so units will average one vacancy a month, and that's not even a large complex. And they probably don't stop advertising even if they don't have vacancies at a given moment as they know they will soon.
> I’m invariably suspicious that the high asking prices are the result of an algorithm that calculates, for a large (corporate) landlord (many units), the tradeoff between vacancies and rents and maximizes (or attempts to maximize) profits
Why are you suspicious of this? I would be surprised if large corporations do it any other way. Why would they? If you can raise your revenue by 10% for a 2% increase in vacancy, it's the obvious choice.
Thanks Noah. I’m not surprised that these institutional investors only own a sliver of the “total” US housing stock, but as you mentioned, much of the US housing stock is largely irrelevant.
I’m more interested in how much of the housing stock in desirable areas these firms own. Not indicating it’s much higher (or higher at all) than the overall percentage owned by institutional investors, but that’s the data point I find most relevant
My guess is almost none. Rental cap rates on single family homes in expensive areas tend to be extremely low and totally unappealing to large investors.
I agree. The big-picture argument doesn’t necessarily mean that large corporate/private equity landlords aren’t locally abusive in some way that simply gets lost in the large-scale statistics. For example, thinking about the strong correlation between national median income and housing cost, it seems likely that corporations would not be buying up housing in depressed (“rust belt” etc) regions of the country, and those same regions would have low median incomes. So instead let’s see the correlation between median income and housing cost in San Diego, or Houston or Dallas etc. And then let’s see the correlation between median income and housing cost if, say, the highest earners and most-expensive housing are left out of the analysis, so that the ultra-wealthy (say, those earning more than x/yr) are left out of the analysis.
> Anyway, I’m sympathetic to the notion that monopoly power has increased in the U.S. economy since the turn of the century, and that this is making life harder for some Americans.
Why are you sympathetic to this? There are two claims here. Is there any evidence for either? Because if there is, I haven't seen it. I don't even believe that progressives are honest when they make this claim. They show their hand by going after the companies in industries with the most wealthy individuals (finance and tech with a bit of oil hate for good measure) rather than the companies that demonstrate the most monopoly power.
Evidence is in the doubling of corporate profit margins and the declining share of wages as a percentage of revenue. Apparently America isn’t very great anymore, but we have record profit margins.
Do you have data on that? What I see is there has been a small rise, but still not more than it was from 1940-1970 https://fred.stlouisfed.org/series/A445RE1A156NBEA. Wages are down a bit as percentage of GDP https://fred.stlouisfed.org/graph/?g=ans, but you would expect some of that because labor force participation is also down over the last few decades https://fred.stlouisfed.org/series/CIVPART.
And why would you look at overall numbers? It's meaningless if you want to look at monopoly power. It's more explanatory of overall labor market dynamics. And the highest wages as % GDP actually occurred at the same time as the highest corporate profits as % GDP, so I don't think the inverse relationship exists as you claim. Monopolies operate at the industry level so that's where you would need to look.
Another misconception is that the corporate landlords are keeping their (very small) share of homes vacant to drive up rents and prices. Of course, this means they wouldn’t benefit from the higher rents because they are vacant. Investors don’t leave cashflow on the table.
Regarding BlackRock vs Blackstone, here's a hilarious grid I saw about all the similar names and which are investment firms, mercenaries, or tires: https://www.reddit.com/r/Superstonk/comments/nx2yoe/a_guide_to_not_getting_confused_with_names_of/
Untamed monopoly of power is bad, whether it is a president, a group, or an organization. If someone misunderstands that housing market is not a monopoly doesn't mean monopolies aren't bad.
Even in case of monopolies, it isn't the fault of entities reaping monopoly power benefits, it is the system that facilitates monopoly abuse - i.e. the rule makers. Sometimes national monopolies can be good (perhaps for international competition) whereas they can be bad domestically if international competition isn't at play. E.g. I used to have 3 waste management companies in my neighborhood until few years back and now 1 has monopoly after acquiring the rest. Now the cost of waste management has risen couple of times.
I think people (democrats & republicans) need to agree to this ground truth before any meaningful policy can be built to tackle it.
A monopoly is a single provider being the only source from which to buy a particular product or service, so a President, or a group or organization that doesn’t sell anything cannot by definition be monopolies.
In some cases monopolies are efficient, such as utilities which require infrastructure that would be hard or inefficient to duplicate (gas and water pipelines and electric lines) so there are special local government utility rules that are placed to prevent pricing abuse of those kind of monopolies (requiring approval for pricing increases, separation of power generation from distribution).
Garbage collection is a kind of utility, as is cellular phone service but since trucks can use roads, and wireless signals go through the air and there are many good locations for towers they aren’t as burdened by fixed infrastructure. For efficiency, a single company collecting trash from a neighborhood is better, because otherwise multiple trucks, collection days, keeping track of which day and company each household gets service from are extra costs. So there is an incentive for the dominant company in an area to make deals with other companies and the customers (who are typically HOAs) to have more concentration in a given neighborhood. Nationwide there are several large waste management firms, the two largest are WMI and Republic Services, with 25% and 20% of the US market, so there is no nationwide monopoly. In my neighborhood, the HOA has changed waste collection companies 3 times in 20 years, either because of bad service or high prices, so it isn’t a monopoly situation here either.
Noah wrote, “But in the attractive cities where most people would like to live if they had the choice, rent has gone up much faster than in the decayed Rust Belt cities and small towns where most Americans would prefer not to live. The rental crisis is a local one, but it’s real. “
Actually that is NOT where most people would want to live, if they had a choice.
The highest preference for living location, at 47%, is to live in a small town or rural area.
Big cities are preferred by 27% and suburbs of big cities by 25%. See https://news.gallup.com/poll/328268/country-living-enjoys-renewed-appeal.aspx
This preference was confirmed by actual choices made when remote work was available, as seen in this report from UVAs Cooper Center https://www.coopercenter.org/research/remote-work-persists-migration-continues-rural-america
“Migration out of counties with more than one million residents in 2023 remained nearly twice as high as before the pandemic, while migration into the country’s smallest metro areas and rural counties rose in 2023 from already near record levels in 2022. The Census Bureau’s 2023 population estimates show that instead of being an anomaly, 2020 increasingly appears to have been a demographic turning point for much of the country.”
It has continued to the present https://cardinalnews.org/2025/05/13/rural-communities-are-the-ones-that-are-keeping-virginia-from-becoming-an-exporter-of-people/
“The latest Census Bureau estimates confirm some previously reported trends — and provide some surprising new insights into them. Among the highlights:
* It’s rural areas, not the state’s metro areas, that are responsible for Virginia becoming a net in-migration state for the first time in more than a decade.
* Almost every rural county in Virginia is now seeing more people move in than move out.
* This includes the coal-producing counties of Southwest Virginia, which are collectively now gaining people rather than losing them.
* In Roanoke, the exodus of residents has nearly ground to a halt.
* Northern Virginia and Hampton Roads continue to hemorrhage people, although the outflows are slowing.”
Northern Virginia, for those unfamiliar, is the DC suburbs.
Letting people actually live where they want would probably ameliorate housing shortages in many big cities. There really isn’t a powerful argument for agglomerating accountants, customer service, and a lot of other functions that work really well remote.
Who is forcing people that really want to live in rural areas to stay in the expensive, crowded big coastal cities? High housing demand in those cities indicates that many people are willing to overpay to live there.
They tolerate it for jobs, and they are forced into it by employers who limit remote work.
High housing demand indicates that people will live there if they have to. New immigrants will go there as they get established. But domestic population flows have trended out of big cities, not into them. When people find alternate ways to make a living, like remote work, many of them gladly move out.
This has been quite notable where I live, as we’re one of the many rural exurbs getting the people who are leaving.
Places that have tended to draw people are exurbs around smaller cities, smaller cities and towns, areas that have outdoor amenities like water or state or national parks, university towns, etc. Not every rural community has the same growth.
The Cardinal News discussion of Census data gives a good idea of how this plays out in real life.
My town has one, half and quarter acre minimum lot sizes and allows apartments only one main artery without greenway. Not even duplexes are allowed on the smaller lots, let alone ADUs on any lot. It's all calculated to keep the browns and poors out. Even luxury condo developments have been forced to surrounding towns with one exception that is completely segregated from residential areas between a nature preserve and an industrial area. The town vote is evenly split between R and D (with elected town leaders quite trumpy) but unified preventing the building of affordable housing.
Can we retire the term "rust belt"? At this point, the rusty parts have rusted away, and there is still some manufacturing left. Also, the take that rent is not an issue in the Midwest is wrong. Many Midwestern cities are facing high rent increases, and in homelessness is becoming a much bigger problem. Cincinnati Public Schools is opening a supervised parking lot for homeless families of students to sleep in. https://constructioncoverage.com/research/cities-with-the-largest-rent-increases-decreases