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The “populist” crusade to make the suburbs more segregated and expensive

The crackdown on corporate landlords just got more counterproductive.

To its fiercest critics, “populism” is a politics of mindless resentment: The populist’s animating ambition is not to help people in general — or the downtrodden in particular — so much as to hurt some vilified elite. If afflicting the comfortable also requires discomforting the afflicted, so be it.

Personally, I think this is wildly unfair. But some of the Senate’s populists would seem to disagree with me. Or at least, they have penned a housing policy that validates the most uncharitable caricatures of their ideological tradition.

Last week, Congress’s upper chamber passed the ROAD to Housing Act — a bill that would, among other things, erode regulatory obstacles to homebuilding and encourage investment in affordable housing. The bill’s Democratic co-sponsor, Elizabeth Warren, deserves credit for advancing these worthy causes.

And yet, this legislation also includes a provision that would actually reduce the supply of housing, increase residential segregation, and mandate mass displacement — all to prevent “private equity” from building too many houses.

Put differently, the policy would make housing in the United States less affordable for working-class Americans -- and less profitable for large corporations.

Alas, populist Democrats acted as though this were an appealing trade-off: Warren and her allies did not merely tolerate the regressive statute, but enthusiastically endorsed it.

Wall Street buying up houses is good, actually

The panic over Wall Street investment in houses, briefly explained

The provision in question would all-but prohibit new institutional investment in single-family homes, including “build-to-rent” properties that would not exist in the absence of such investment.

To appreciate why this policy is so misguided, we first need to zoom out — and review the broader controversy over Wall Street investment in single-family housing.

Large financial firms have long owned and rented out apartments. But they didn’t enter the single-family market in a big way until after the 2008 housing crisis. Since then, the share of American houses held by mega-landlords has steadily risen.

This development triggered a populist backlash. In recent years, prominent Democrats like Warren — and Republicans like JD Vance — have accused Wall Street of pricing ordinary Americans out of the single-family housing market by outbidding them with superior cash offers.

Such allegations are wildly overstated. As of 2022, institutional investors owned only 0.55 percent of single-family homes in the United States. And they have never accounted for more than 4 percent of annual home sales in America........

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