Corporations aren't the reason your rent is too high

Donald Trump is choking off U.S. manufacturing with tariffs, replacing statistical agency personnel with apparatchiks who will manipulate data to make the President look good, and so on. Yet some progressives remain convinced that the key to winning back the country is to harness a wave of populist anger by attacking big corporations. I’m not sure I see the political logic there, but I guess I’m not much of an expert on politics.

Anyway, I’m sympathetic to the notion that monopoly power has increased in the U.S. economy since the turn of the century, and that this is making life harder for some Americans. But corporate power is simply not the cause of many of the problems regular Americans face — there are a lot of other things going on too. And because antitrust progressives insist on fitting every problem into the paradigm of corporate power, they end up believing a number of false things about the world. One example I’ve written about before is that of health insurers, whom antitrust progressives view as the chief architect of everything that’s wrong with the U.S. health system; in fact, these companies make almost no profits and are fairly efficient.

Another important example is the housing market. Overall, housing has not actually gotten more expensive throughout America; if you compare median personal income to the CPI measure for rent of primary residence, you’ll see that income has actually gone up slightly faster than rent since 1980:

But in the attractive cities where most people would like to live if they had the choice, rent has gone up much faster than in the decayed Rust Belt cities and small towns where most Americans would prefer not to live. The rental crisis is a local one, but it’s real.

Abundance liberals blame this problem on lack of housing supply, and support YIMBY policies to build more housing in cities. But although some progressives are coming around on this, many are strongly opposed to the abundance agenda. Instead, they want to blame high rents on powerful companies who buy up all the houses and then jack up prices.

A few years ago, this manifested as a panic about BlackRock buying up large amounts of the housing stock in America. This was a silly mistake; BlackRock doesn’t buy homes, except indirectly by investing in stocks called REITs. People were probably thinking of Blackstone, a much smaller asset manager with a similar name, which does buy up homes.

In addition to this silly mistake, the broader panic just wasn’t based on facts. In 2021, Derek Thompson did a great job of debunking the myth:

The U.S. has roughly 140 million housing units, a broad category that includes mansions, tiny townhouses, and apartments of all sizes. Of those 140 million units, about 80 million are stand-alone single-family homes. Of those 80 million, about 15 million are rental properties. Of those 15 million single-family rentals, institutional investors own about 300,000; most of the rest are owned by individual landlords. Of that 300,000, the real-estate rental company Invitation Homes—in which BlackRock is an investor—owns about 80,000. (To clear up a common confusion: The investment firm Blackstone, not BlackRock, established Invitation Homes. Don’t yell at me; I didn’t name them.)

Megacorps such as BlackRock, then, are not removing a large share of the market from individual ownership. Rental-home companies own less than half of one percent of all housing, even in states such as Texas, where they were actively buying up foreclosed properties after the Great Recession. Their recent buying has been small compared with the overall market.

The actual number of homes Blackstone (or BlackRock) was buying was tiny — far too tiny to affect rental prices in any significant way, except perhaps in a few very localized areas.

But somehow, despite its lack of connection to reality, the meme stuck around, and the size of the problem grew as the story was repeated around the internet. There are still people who think BlackRock is buying up much of the housing in America. In fact, even some right-wingers are convinced of this:

The exact form of the claim varies. Sometimes it’s 44% of the housing that the evil corporations are buying up, sometimes it’s just 20%. Sometimes it’s BlackRock alone that’s responsible, sometimes it’s the private equity industry:

But the meme remains false. Many news outlets have debunked it over the years. For example, Logan Mohtashami posted the following charts in Yahoo Finance in 2024: