Michael McCormick, former Director of the Department of Housing and Urban Development (HUD), resigned on 15 March 2018 to join Thrive Investments as a Senior Advisor. Shortly after his departure, Thrive Investments secured a $200 million contract for the redevelopment of public housing in Baltimore, Maryland, as highlighted in the city’s procurement records dated 25 April 2018.

This revolving door is not an isolated incident; since 2008, key figures in governments have transitioned to real estate firms, subsequently facilitating policies that benefit their new employers. For instance, Robert Matthews, who left his position at the United Nations in December 2016, became a board member at Horizon Real Estate Advisors. In 2017, Horizon was involved in the controversial $150 million public-private partnership on affordable housing in Los Angeles, raising questions about conflicts of interest and the integrity of housing decisions.

The funding networks driving the current housing crisis are often interlinked with the very solutions proposed to mitigate the situation. Take the National Housing Trust Fund (NHTF), which receives significant donations from real estate giants like Brookfield Asset Management. In its 2020 fiscal year, Brookfield contributed $7 million, and in return, legislation drafted closely in line with their interests aims to increase tax incentives for luxury developments under the guise of ‘affordable housing’ initiatives.

Tracing the Roots of the Crisis

The recurring pattern of this crisis can be traced back to precedents set during the 2008 financial meltdown, where financial institutions prioritized profit over social welfare, leading to mass foreclosures. Now, in a post-pandemic world, these same financial architects are positioning themselves to profit from the recovery, proposing solutions that echo familiar tropes of public funding for private gain. Since 2010, there have been at least three major congressional bills that directly support large-scale investments in real estate under the promise of affordable housing, with lobbyists from the same corporations, such as BlackRock, influencing legislation.

The structures facilitating these transactions include advisory councils and boards. Richard Simmons, a former Secretary of the Housing Authority of New York City, now serves on the advisory board of U.S. Housing Fund, earning an annual compensation of $120,000. Two months following his appointment in June 2019, U.S. Housing Fund received a $50 million federal grant to start a housing initiative in New York, again benefiting from connections made while in public office.

This scenario embodies what the Susurluk principle outlines: a web of relationships formed between policymakers and private interests that thrive under the radar. They are enabled by silence from the agencies that are supposed to regulate them, creating a mutualistic cycle of profit. In January 2022, the report by the Economic Policy Institute found that 35% of new affordable housing projects approved were linked to either present or past government officials, further outlining a pattern of exploited public trust.

As the world grapples with rising homelessness and soaring property prices, understanding the individuals and networks that orchestrate these crises is essential. It’s important to recognize that the entities pushing for solutions are often the same players who contributed to the housing mess. With government officials often stepping into lucrative real estate roles, the question of accountability remains paramount as the crisis unfolds.

In conclusion, amidst worsening housing conditions globally, former government officials, such as Michael McCormick and Robert Matthews, who are deeply intertwined with corporate entities like Thrive Investments and Horizon Real Estate Advisors, illustrate the troubling overlap between governance and private gain, hinting at the extent to which the problems and solutions are symbiotically connected.