All rather Upton Sinclair of course, there would be no point in someone writing for the American Prospect understanding markets because anyone who did would lose their job there. But even then this is particularly dismal as an essay upon economic logic:
Speaking of walking away, private equity just closed a chapter on the opportunity it sought out of the misery of the financial crisis. As millions of families suffered the sting of foreclosure, private equity firms fanned out to distressed areas across the country and scooped up foreclosed properties, spending about $100 million a week. They quickly turned over the properties and rented them out, behaving exactly the way you’d expect a Wall Street landlord to: offering substandard and often dangerous rentals with mold and busted pipes, dragging their feet at making repairs, jacking up rents at will, layering on hidden charges, evicting aggressively.
After inventing the industry, firms sought to cash out, consolidating the Wall Street rental market into a few firms. Blackstone, the largest private equity firm, was the last, merging Invitation Homes with Starwood Waypoint for an empire of 82,000 homes. On Wednesday, they sold the last of the stock, bringing their haul to $7 billion since the 2017 Invitation Homes IPO. That’s more than double the initial investment. So Blackstone disrupted rental markets, delivered poor-quality homes to many of the same people who lost theirs in the first place, contributed to the global affordable-housing crisis, according to a U.N. special rapporteur, and made off with billions in the process.
So, what does someone buying lots of houses do? It props up the price of houses. The more people who buy houses the higher houses prices will be than in the absence of such buyers.
The effect upon foreclosures of private equity buying houses was thus fewer foreclosures. Which sounds like a pretty good start to solving a foreclosure crisis, that we have fewer foreclosures.
But then with Upton again. You’re not going to make a living writing like that for the American left.