The nation’s housing crisis is everywhere said to be the result of simple supply and demand; we are told to make room. Do the right thing. But the shortage is fake. Massive residential building projects are proposed throughout the country in unprecedented scale with a new, strident disregard for damage to neighborhoods and rural areas: and the people who resist. The authority of local governments to plan local housing is threatened by a crusading governor in a one-Party state, and developers are licking their chops.
Housing in Massachusetts, and everywhere else, is in crisis. In western Massachusetts, the median price of a single-family home is up by 11% since last year. The median sale price for Franklin County, and Hampden County has risen to nearly $400,000, in Hampshire County approaching $500,000. On Beacon Hill, the Massachusetts State Senate adopted its housing bond bill in response to the Governor’s $4 Billion proposal, which would authorize $5.4 billion to solve what both call a “housing shortage.” House Democrats proposed $6.2 Billion.
The demand for houses is said to be higher, but vacancy is at an all-time high! Meanwhile, more people are leaving Massachusetts than entering, from 2020-2022 a net migration loss, and in 2023 more residents moving out than any state in New England. Do the arithmetic on that. Housing is, suddenly, somehow an emergency. Eh? Lawmakers said they just had to get the bill on Governor Healey’s desk before the end of the formal session on July 31st. No time to talk! It’s an emergency. Sorry, yes $6 Billion. It’s as if a million babies had been born this year.
So, you should ask, is high vacancy a problem or a solution? You have historically low long-term occupancy levels on the one hand, yet you point out a housing shortage with the other. There is a certain absurdity to the situation. Aren’t these questions related? The government acts as if there is nothing it can do about this. We just have to build, build, build! It is left to lawsuits to address criminal activity that is driving up vacancies, rents and property values that enrich developers. But State House housing policy continues to treat high vacancy with high rents as a separate issue. Killing two birds with one stone is not on the Governor’s menu, however: billion dollar taxpayer debt-funded overdevelopment is the only choice.
But no solution will work unless predatory market practices now being allowed are reined in, the FBI having said it has proven criminal corporate behavior to deliberately empty residential buildings and drive up rents and property values all around the U.S.. Housing is not a crisis of shortage, but a crisis of housing financialization. As of 2024, there are fifteen million vacant residential properties in the U.S.. Predatory practices impose costs on each community, many under mandates to provide low-income housing. “Externalities” include ruining neighborhoods and harming local businesses. It is globalization at home. Instead of intervening, the state is complicit. Concentrated financial power enables the crime, while private equity–owned software companies administer destruction of the housing market. Yieldstar, according to state attorneys general investigations and lawsuits, is actually a front for a cartel operating all around the US that implements skyrocketing rents as a way of jacking up real estate valuations between 50 and 80 percent. This has nothing to do with a “shortage” in any normal use of the term, unless being mugged is to be called a shortage, too.
The Massachusetts housing crisis is reminiscent of California’s Energy Crisis at the beginning of this century, which caused the greatest loss of wealth ($57 Billion at one bite) in the state’s history. The state reacted naively to market manipulation by the utilities and their competitors, such as Enron, which had the effect of dramatically raising prices of energy in the year 2000. This led to thousands of local business bankruptcies, and widespread, recurring blackouts. The power industry declared a “shortage of power.” The fact was, energy demand was actually down, but the Governor reacted to market manipulation as a “shortage” because the (criminal) energy industry had called it a shortage. Then the media called it a shortage. It got worse.
This was a critical inflection point in which the state failed to stop criminal behavior, amidst great social and public harm, instead pretending that there was a lack of power plant generation, and that there needed to be many more gas fired power plants built to end the (nonexistent) shortage. Governor Gray Davis’ power plant streamlining initiative, which Republican Schwarzenegger also championed alongside Democratic Senator Diane Feinstein, was the result. So, in addition to costing the state $57 Billion to assume the obligation to serve every person in California, the leadership blithely caused the development of twenty unneeded large gas-fired power plants all around the state, with billions of dollars of fixed capital investment and ten times that in natural gas purchase commitments placed on California ratepayers’ backs for decades. Revising their official doctrine, Democratic leaders renamed natural gas a “bridge to renewables,” adding one damnable lie to another: a perfect crime.
The Housing Crisis is so similar to California’s electricity crisis because the cause is identical: financialization. Housing financialization came from banking deregulation which allowed the invasion of the American home by Wall Street, financializing residential buildings as an asset class, which resulted in the business model of housing taken by Wall Street the way Main Street America was taken by Wall Street Big Box stores in the late 20th century. This has caused untold suffering in our country and throughout the world.
Massachusetts is leading this fanatical orgy of venality. This confuses us. How can a “liberal Democrat” Governor champion the asset strippers of home and hearth? The state House of Representatives recently approved a bill to create a massive construction of housing throughout the state, while threatening communities with the withholding of state funds due to them by if they do not accept the housing projects forced upon them, while simultaneously weakening local control over permitting projects pushed upon them by deep-pocketed developers. Pretending that a physical shortage of housing is the cause is the height of cynicism, especially when our politicians simultaneously play hero-bully as champions of the little people. The political fraud reeks of corporate larceny. For them, the question is not, what is the cause? We shall not regulate it, and neither shall you. To them, the question is: who should be sacrificed? Financialization of housing clearly sacrifices the homeowner: the corporate seizure of housing as a market to control, and the manipulation of that market by leveraged market participants such as large hedge funds and billionaires with unconventional lenders enabling property managers to become little Enrons: causing high vacancy rates to drive up rents. So we get an economic dark magic: high vacancy rates with high rents! Internet-enabled homelessless. This is financialization - and state-sanctioned theft, followed by an assault on people’s neighborhoods, rural farm communities and forests. Finger-wagging: a tactic of effrontery, that is indeed funny in its (criminal) simplicity.
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