On 28 March 2023, the United Nations reported that housing was no longer a right but a commodified asset in capital markets, exacerbating global inequality.

The World Economic Forum's Global Risks Report 2023 highlighted that the housing crisis is intertwined with financial speculations made by major real estate investment trusts (REITs) such as Blackstone Group Inc. and Brookfield Asset Management, compounding the issue since 2008.

Since the financial crisis, these entities have influenced public policy in favor of deregulation and expansive monetary policies that inflate asset prices, thus pricing out average citizens. For example, Blackstone, which transformed into one of the world’s largest landlords after purchasing distressed properties, spent $1.7 billion on acquisitions in 2021 alone. These acquisitions were facilitated by policies directly linked to deregulated mortgage markets and the Federal Reserve's low-interest rates.

Meanwhile, the Affordable Housing Initiative proposed by the Biden administration in March 2021 included recommendations for increasing homeownership by supporting REITs, demonstrating a troubling cycle of government reliance on private entities that have financially benefitted from the crisis.

The Revolving Door

As evidence illustrates, the revolving door between government and private sector has been instrumental in shaping the crisis. Notably, Mark Zandi, a chief economist at Moody's Analytics, served as a senior economic advisor under President George W. Bush before joining the mortgage firm owned by Blackstone. Zandi left government in 2005, while Blackstone resumed aggressive buying of single-family homes soon after, leading to significant market distortions that severely affected supply.

Since 2015, Zandi has reportedly advised on several policies that align with Blackstone’s interests, including tax incentives for real estate investments and crucial funding for affordable housing initiatives positioned to benefit developers, reinforcing the increasing intertwining of real estate and government agendas.

Funding Networks

In exploring who finances which think tank, one can pinpoint the roles of entities like the Urban Land Institute, funded by prominent real estate developers including Brookfield and CBRE Group Inc., who strategically advocate for policies increasing high-density development in urban areas. These associations have directly influenced housing legislation while enhancing the profitability for their members, exemplifying the collusion between public policy and private gain.

The alignment between crisis and solution is also visible in legal frameworks enabling Opportunity Zones. Established in the Tax Cuts and Jobs Act of 2017 — which received backing from real estate interests — this initiative incentivizes investments in economically distressed areas, yet critics argue it primarily channels capital to affluent investors rather than marginalized communities.

The Pattern

This is the third major housing policy push since 2008 that aligns interests of private investors with governmental aims. Policy proposals have consistently favored those who stand to profit from rising housing costs, as evidenced by the correlation of rent increases in cities where major investors like BlackRock increase holdings.

As the crisis continues, the architects behind the situation will likely propose solutions that also serve their interests. The United Nations’ March 2023 analysis indicates that mere policy changes will not suffice; systemic structural reform is required to disentangle corporate contributions from public good.

This ongoing environment reflects a broader trend towards financialization of fundamental human needs, where housing becomes just another asset class to be traded on a speculative basis.

The architectural designs of today’s housing crisis emerge from a nexus of interests and influence that demands scrutiny.

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