To the editor:
Owning a home is not only the American dream, but it is a stepping stone to long-term financial security. Families with children need this security to ensure an environment that provides for the needs of the next generation. Unfortunately, this security is under attack, turning the American dream of home ownership into a nightmare of perpetual “rentalship.”
What’s going on here?
Institutional investors are opening their checkbooks and purchasing homes with cash, snagging them away from would-be homebuyers and further driving up the price of homes. Their end game is to turn home buyers into home renters. According to a report from MetLife Investment Management, Wall Street firms could own 40% of single-family rental homes by 2030.
How did this start? In the wake of the 2008 financial crisis, many banks — backed by our tax dollars — swooped in and foreclosed on homes. This presented a tempting target for investors, who purchased these homes at rock-bottom prices. Rather than selling the homes in an era where the interest rate was zero, they found it more profitable to rent them out. This started a trend that continues to this day.
Even when they make less money than homeowners, those who rent their homes end up with far less net worth than homeowners. Essentially, renters fall further and further behind on the economic scale, creating destructive financial — and mental — stress on families. Making matters worse, Wall Street firms are willing to build entire neighborhoods of rental homes, eventually turning us into a nation of permanent renters. Ironically, these investors are — in part — financed by our 401K and pension funds, making our own money work against us.
The solution to this mess is deceptively simple, yet politically difficult. It’s politically difficult because financial and real estate companies contribute heavily to the campaign coffers of our politicians, demotivating them from doing anything about it. Yet there are some, like Oregon Senator Jeff Merkley, who fight this trend by trying to pass legislation that prevents institutional investors from owning our homes.
We need to insist that our politicians sit up and take notice before it’s too late. The American dream of owning a home and raising a family is at risk.
Editor’s note: Roth is a candidate running for Missouri’s 8th District, U.S. House of Representatives. Filing for the Aug. 6 primary election ends Tuesday.
