Donald Trump has made just about everything he’s touched worse. He’s going to spend this week bragging about his peace deal with Iran, but please remember that in 2018 he tore up the Barack Obama–negotiated deal that was working, which led Iran to start enriching far more uranium, which then made Trump decide to go to war to solve a problem he created, which is wrecking the U.S. and global economy, which he’s now trying to fix in part by reportedly preparing to release around $20 billion in Iranian assets (right-wingers wanted Obama tried for treason over $1.7 billion).
So that situation is a disaster entirely of his making. But I’m here to acknowledge something today I’m not sure I’ve ever done, or maybe once (with respect to his Covid vaccine–era Operation Warp Speed), and may never do again: Trump has done something good. I point this out not just to be contrarian and Slate-pitchy, or to “prove” that I’m one of those “open-minded” liberals. Rather I note it because Democrats can learn from it and do him one better.
Last week, the House of Representatives, pushed by Trump, passed a big housing bill that included a provision barring private-equity firms from buying up single-family homes. The Senate had already passed such a bill back in March. The votes in both houses were hugely bipartisan and lopsided. The Senate vote was 89-10. The House vote was 396-13.
All 23 no votes were cast by Republicans. The Senate bill was championed by Elizabeth Warren, who worked with South Carolina Republican Tim Scott. So it’s not as if the Democrats are out to lunch on the issue. They held the right position. But I still say they can take this further.
If you’ve been reading me lately, you know that I’ve been arguing that the Democrats need to do more than just take positions. In this Trump- and social media–driven era, no one pays attention to positions. People pay attention to conflict. That means telling a story about why people’s lives are hard and how Democrats are going to make their lives better. A story requires good guys and bad guys. Hence, the Democrats need to identify villains. Here’s the 1,200-word version, which I wrote Friday. And here’s the 10,000-word version, which I wrote back in February.
Now—there’s some debate about the degree to which the scooping up of single-family homes by private equity firms is making housing more expensive. The numbers, certainly, are small. Private equity seems to own around 2 percent of the country’s single-family housing stock. That’s not much.
Still, it’s considerably higher in certain places, Atlanta being a prime example (note: swing state!). These firms are especially keen on “build to rent” homes, which are built for the purpose of existing as rental units. The bill that Trump is apparently about to sign into law would limit institutional purchasers like private equity firms to seven years of ownership, after which they’d have to sell, giving first dibs to the then-current occupants.
A lot of the usual interests lobbied against that provision, but Congress held firm—led, it must be admitted, by Trump. He issued an executive order on his first day back in office that read in part: “[A] growing share of single-family homes, often concentrated in certain communities, have been purchased by large Wall Street investors, crowding out families seeking to buy homes. Hardworking young families cannot effectively compete for starter homes with Wall Street firms and their vast resources. Neighborhoods and communities once controlled by middle-class American families are now run by faraway corporate interests. People live in homes, not corporations.” As Matt Stoller, the left-leaning neo-Brandeisian anti-monopolist, put it in his always informative newsletter, “honestly, it would be hard for me to write it any better.”
Okay. That’s enough praise for Trump. Now let’s move to the lessons here for Democrats.
First, this is a classic populist issue. No, this bill alone will not solve the country’s housing crisis. But it should help, as it includes more than 40 different provisions, some of them “abundance”-ish in nature (i.e., streamlining regulations), and others, like the ban on most PE home purchases, that are more favored by the anti-monopoly crowd. But much more needs to be done on a range of fronts.
Still, just because something won’t by itself “solve” a problem doesn’t mean there’s no good reason to do it. There are a lot of good reasons to do this. It just offends common sense that huge firms—whose business model is to buy up companies, force them to restructure (that is, fire loads of people), and squeeze every short-term dollar they can out of them—ought to be able to purchase single-family homes.
This makes for some pretty obvious villains. Actually, there are two good villains in this story. One is private equity in general, and not just with respect to housing but with respect to health care, hospitals, youth sports, and so much else. Read this interview in Wired with Megan Greenwell, author of last year’s Bad Company: Private Equity and the Death of the American Dream. If Congress can block these firms from doing one thing, it can logically block them from doing other things.
Another more particular bad guy in this story is Invitation Homes, the country’s largest landlord of single-family homes. During the Biden administration, FTC Chair Lina Khan lowered the boom on Invitation “for an array of unlawful actions against consumers, including deceiving renters about lease costs, charging undisclosed junk fees, failing to inspect homes before residents moved in, and unfairly withholding tenants’ security deposits when they moved out.”
This is the kind of populist politics Democrats need to emphasize. They need to say to working-class people, and to renters who can’t afford to buy a home: You’re getting gouged; here’s who’s gouging you; and here’s what we’re going to do about it if you vote us in. That creates conflict. People will pay attention, and they’ll know which side the party is on.
So Trump has done one good thing, in taking on private equity on this one matter. Democrats should broaden this fight to other areas. Should PE firms own daycare centers, fertility clinics, highways, fire departments, emergency medical services? I’m sure some people think they should. I’m also sure that your average person thinks this makes no sense. They also don’t know about it. Someone, like, oh, a Democratic presidential candidate, ought to tell them.
