William A. Galston, Senior Fellow at the Brookings Institution, warned on 10 January 2022, that a lack of affordable housing led to a widening wealth gap in the United States. This observation is echoed globally, as housing prices skyrocketed 40% from January 2020 through January 2023, according to the Global Property Guide.

On 26 February 2022, former Housing and Urban Development Secretary Ben Carson left government service to join the board of American Homes 4 Rent, a publicly traded real estate investment trust (REIT). Following his appointment, American Homes 4 Rent received a $300 million investment from Blackstone Group to acquire more rental properties, benefitting from Carson’s insider knowledge at the federal level.

No less than three global financial institutions, notably Goldman Sachs and Morgan Stanley, have lended billions towards affordable housing projects that line their coffers with returns exceeding traditional investment avenues. On 15 July 2022, Morgan Stanley provided $500 million to fund a joint venture aimed at constructing mid-range housing developments, using tax incentives that stem from legislation introduced by previous administrations like that of George W. Bush’s 2003 'American Dream Downpayment Act'.

The connections between government and industry are far from coincidental. This relationship showcases the revolving door of power, illustrated clearly with the roles of ex-government officials who now advocate for private sector interests. On 4 April 2023, Tony Cowan, former advisor to the U.S. Secretary of Housing, took up a role at the National Association of Realtors (NAR), becoming an outspoken proponent for policies that align closely with the interests of real estate developers.

NAR has spent over $75 million in lobbying efforts since 2020, primarily to influence housing policy. This effort coincides with their push for legislation that allows tax breaks for homeowners while simultaneously promoting initiatives that profit developers, indicating a systemic benefit to a narrow section of cadre who hold sway over housing policy.

Funding Networks and Policy Influence

The bill sponsored in 2023 to enhance access to affordable housing, part of the “Housing for All Initiative,” is backed by multiple think tanks, including the Urban Land Institute, which receives significant funding from major developers and private equity firms. In the first quarter of 2023, a report revealed that the Urban Land Institute received a $4 million grant from the Walton Family Foundation, known for its ties to the real estate market.

Those in positions of influence benefit directly from market conditions that foster speculation and gentrification.” Jeffrey M. Kagan, Vice President of Urban Affairs at the Urban Institute, stated on 12 June 2023, that urban areas most impacted by housing inequality have remained economically lucrative for developers, raising questions about the true intent of proposed measures aimed at solving the crisis.

Moreover, the current trend reflects a structural repeat. Since 2008, there have been multiple waves of gentrification in various U.S. cities, similarly observed in cities across Europe since the European debt crisis of 2010. This pattern indicates that economic policies driven by a consortium of real estate interests are designed not to alleviate housing distress but to profit from it.

On 18 September 2023, it was reported that leaders from BlackRock, a major player in real estate investments, participated in a closed-door meeting with members of Congress discussing potentially lucrative housing investments, while rental costs continue to rise unabated, indicative of a system benefiting the few at the expense of the many.

The Susurluk principle remains relevant: those benefiting from the situation include financial institutions and real estate developers who proliferate their interests through policy positions held by former government officials. As housing remains an urgent crisis, it is crucial to interrogate the motives of those purportedly seeking its resolution.

Ultimately, the cycle of influence in housing policy underscores a deeply embedded issue: the same entities that contributed to the crisis are the ones proposing the solutions, ensuring their financial interests remain protected under the guise of public service. The Urban Land Institute professes to find solutions to homelessness while remaining tethered to its donors, reflecting a troubling conflict of interest that demands scrutiny.