Guess whos really to blame for Americas housing crisis

Home prices keep rising. One reason is that today’s houses are bigger: Buyers now want more rooms, washers and dryers and air-conditioning.But even if you adjust for the improvements, houses cost more today.Why?Politicians blame big companies like Blackstone, Invitation Homes and JPMorgan because they’ve been buying thousands of homes.“It’s troubling,” said Sen.Elizabeth Warren (D-Mass.), that homes are bought “not by families who want to live in them, but by speculators who want to use them to generate financial returns.”“It’s shameful,” agreed California Gov.

Gavin Newsom, “that we allow private equity firms in Manhattan to become some of the biggest landlords here.”I was surprised that President Donald Trump seems to agree with the leftists.Last week, he said he wants “to ban large institutional investors from buying single-family homes.” Really? Will that lower prices?“No,” housing economist Stephen Slivinski told me.He points out that those big investors don’t buy homes and take them off the market.They renovate the buildings and build new ones.“They’re turning properties into livable places.That’s not something that would have happened if not for their presence,” Slivinski said.Big investors often buy rundown properties most of us stay away from and then spend more than other buyers do, renovating.“They might have broken plumbing, walls, flooring, framing issues, roofing issues,” said Slivinski.“You need someone who has the capital to be able to resuscitate these properties before they can be buyable or livable again.”Capital, expertise and efficiency — big companies might hire one specialist to repair pipes in a series of homes.The result, said Slivinski, “is that the presence of investors actually brings down housing prices.”Sure enough, the American Institute for Economic Research found house prices fell in markets with more institutional ownership.Unfortunately, most voters don’t understand econ...