In November 2021, Mark Zandi, Chief Economist at Moody's Analytics, and his team published a report indicating that housing prices had surged by 30% since the onset of the COVID-19 pandemic on March 11, 2020. The report highlighted a troubling trend: the same financial institutions that contributed to the housing crisis are now positioned as the architects of its supposed solutions.

To examine this, we must first identify the primary players responsible for the housing crisis. The 2008 financial crisis, rooted in the collapse of the subprime mortgage market, exemplifies how major banks, including JPMorgan Chase & Co. and Bank of America, manipulated real estate assets. These institutions offloaded toxic mortgage-backed securities, ultimately leading to a $600 billion bailout funded by taxpayers via the Troubled Asset Relief Program (TARP) initiated on October 3, 2008.

Who Caused It?

Research shows that 90% of subprime mortgages originated from five major banks (Wells Fargo, Citi, JPMorgan, Bank of America, and Countrywide) — all institutions that conveniently regained their footing and raked in profits post-crisis. As a result, in 2019, the Federal Reserve's report documented that the banking system had become increasingly concentrated, with four banks controlling more than 40% of the market.

Fast forward to 2022, and we see the same institutional players pivoting towards 'solutions' such as housing supplies and affordability initiatives. In December 2021, the National Association of Realtors (NAR) released a guideline advocating for policies to spur affordable housing development, heavily underwritten by the very developers who stand to profit from these proposals.

Solutions or Subterfuge?

Furthermore, we observe systematic ties within the infrastructure of influence where corporations lobby for policies that align with their interests. For example, the Real Estate Roundtable, whose members include CEOs from major firms like Howard Hughes Corporation, spent $9.5 million on lobbying in 2020 alone, primarily pushing for rent relief legislation. This is the third time since 2018 that they have played this dual role of problem creator and solution proposer, which begs the question: are these proposals genuinely altruistic?

The evidence of cyclical profit from the crisis is stark. According to a study by the Urban Institute published in June 2022, institutional investors acquired over 15% of single-family homes in several major U.S. cities, including Phoenix and Atlanta. The authors noted that these acquisitions, while positioned as investments in the housing market, are often raising rental prices beyond the means of average citizens.

This interconnected web of influence reveals a stark reality: those who have historically exacerbated the housing crisis are also the ones benefitting from its so-called solutions. The likes of Mark Zandi, while producing important analyses, are deeply embedded in a system that perpetuates inequality by placing economic interests above community stability and social equity.

The funding networks that support these agendas are also concerning. For instance, a significant amount of financing is channeled from real estate investment trusts (REITs) to influential think tanks like the Brookings Institution and the Urban Land Institute. Their reports, often presented as objective research, provide a veneer of legitimacy to pro-developer policies that only serve to line the pockets of their donors.

Ultimately, the cycle of exploitation persists. The same entities that fueled the housing crisis have established a framework to profit from its resolution, ensuring that only they thrive amidst the rubble.

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