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Leave the World Behind’s bougie apocalypse

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The big thing in Rumaan Alam’s <a href="https://go.redirectingat.com/?id=66960X1516588&xs=1&url=https%3A%2F%2Fbookshop.org%2Fbooks%2Fleave-the-world-behind-9780062667649%2F9780062667632%3Fsscid%3D61k5_eor46%26utm_source%3DShareASale%26utm_medium%3DAffiliate%26utm_campaign%3D314743%26utm_term%3D1535322&referrer=vox.com&sref=https%3A%2F%2Fwww.vox.com%2Fculture%2F22528433%2Fleave-the-world-behind-rumaan-alam-review" rel="sponsored nofollow noopener" target="_blank" has-subtag="true" data-cdata='{"rewritten_url":"https://go.redirectingat.com?id=66960X1516588\u0026xs=1\u0026url=https://bookshop.org/books/leave-the-world-behind-9780062667649/9780062667632?sscid=61k5_eor46\u0026utm_source=ShareASale\u0026utm_medium=Affiliate\u0026utm_campaign=314743\u0026utm_term=1535322\u0026referrer=vox.com\u0026sref=https://www.vox.com/culture/22528433/leave-the-world-behind-rumaan-alam-review\u0026xcust=___vx__p_22292474__m_m-placeholder__s_s-placeholder__t_w__c_c-placeholder__r_r-placeholder__d_d-placeholder","subtag_max_length":50,"subtag_delim_length":3,"subtag_key":"xcust","subtag_data":{"id":"66960X1516588","xs":"1","url":"https://bookshop.org/books/leave-the-world-behind-9780062667649/9780062667632?sscid=61k5_eor46\u0026utm_source=ShareASale\u0026utm_medium=Affiliate\u0026utm_campaign=314743\u0026utm_term=1535322","referrer":"vox.com","sref":"https://www.vox.com/culture/22528433/leave-the-world-behind-rumaan-alam-review","xcust":"___vx__p_22292474__m_m-placeholder__s_s-placeholder__t_w__c_c-placeholder__r_r-placeholder__d_d-placeholder"},"encode_subtag":false}'>Leave the World Behind</a>, the <a href="https://www.vox.com/culture/22451674/leave-the-world-behind-rumaan-alam-vox-book-club">Vox Book Club’s June pick</a>, is all of the, well, things. This book is nearly encyclopedic in its accounting of the pleasures of modern bourgeois American life.
Marble countertops and a copper pot-filler at the stove. Pasta tossed with herbs and garlic and that salted European butter that comes in a cylinder. All-white linens in the bathroom and the laundry soap hidden in a tasteful wooden box. At times, reading Leave the World Behind can put you in something approaching the same state of blank tranquility you find scrolling through a lifestyle influencer’s Instagram feed.
The trance only lasts for moments, though. Because Leave the World Behind does not think that the pleasures it is cataloging are neutral pleasures that can be enjoyed and then abandoned without thought. You can tell even at the beginning, before the horror begins to emerge, because Alam describes all of these luxuries with a loving precision that becomes its own form of judgment.
You know what kind of woman makes sure to buy the pebbly mud-colored mustard on her beach vacation. You know what kind of man makes his burgers by dabbling Worcestershire sauce into the ground beef “like daubing perfume onto a wrist.” And even if you are that kind of person (I confess I have a weakness for fancy mustard), you know that within the world of this book, such habits are going to feel ridiculous, if not worse.
The mustard-buying woman and the Worcestershire-daubing man are Amanda and Clay, respectively: upwardly mobile middle-class Brooklynites who have AirBnB’ed a house in rural Long Island with their two children. They plan to spend a week of vacation wallowing in the glorious luxuries of a house they are not rich enough to own but are rich enough to aspire toward — but then, on their first night at the house, there’s a knock at the door.
It’s G.H. and Ruth Washington, the house’s wealthy 60-something owners. Discomfiting the politely liberal Amanda and Clay, they are Black, and although they originally planned to spend the week in their Manhattan apartment, something seems to have gone terribly wrong.
There’s been a blackout in New York City. Vague news alerts warn of a hurricane, but the Internet is down. The TV and radio are both playing only a single sentence: “This is the emergency broadcast system.”
Ruth and G.H. don’t know what’s happened exactly, but they know they don’t want to try to climb the 14 flights of stairs to their apartment with the power out. They don’t want to try their luck at a hotel in all this chaos. Instead, they want to be in their lovely country home, with all their lovely things.
So, too, do Amanda and Clay; Amanda keeps repeating that after all, they’ve rented the place. But after some initial awkwardness, the two families enter into an uneasy truce.
G.H. makes drinks and Ruth — side-eying sloppy Amanda — cleans up the house. Amanda makes chocolate-and-brie sandwiches. Clay sneaks clandestine cigarettes. The children frolic in the pool, explore the woods, bake a cake from a box.
Frequently, someone will remark that they really should drive up to the nearest town and figure out what’s going on. Occasionally, one person will even gesture at doing so. Somehow, even as calamity piles atop calamity, even as it becomes impossible to ignore that something terribly wrong has happened — somehow no one ever quite makes it into town. Always they end up returning to that beautiful little house and its soothing, numbing pleasures.
And why not? What are the alternatives? The world is falling apart, they have no idea why, and there’s nothing they can do. They have already done nothing. Whatever it is has already happened.
All of the adults in this novel are used to apocalyptic thinking, because all of it has already come: It’s Kim Jong-un, they think; or no, it’s Trump; or no, it’s global warming finally coming for us all. Whatever is causing the end of the world is something that already went terribly wrong, and when it happened, they turned away from it and chose instead to wallow in their lovely things. So why should that change now, when the consequences are finally here to stay?
Leave the World Behind was written before the pandemic struck, but it came out last fall, right in the midst of everything. After the past year, many of us probably have a loose familiarity with the dynamic at play in Leave the World Behind: Some big amorphous tragedy is happening out in the world, something too big for us to truly grasp, and so instead we nest. The pandemic comes, and we listen to the sirens and we bake banana bread. The body count rises, and we grow our own sourdough starter.
In the case of the pandemic, staying home was, oddly, an active choice: It meant helping to keep the body count down in the only way many people could. So as familiar as it might feel to watch Alam’s characters lose themselves in deciding how to frost their boxed cake, the real parallel in this book is not with quarantine. It’s with everything that led up to quarantine: a class of educated liberals watching a country’s infrastructure and institutions rot, and choosing, instead of doing anything, to enjoy their nice things instead.
It’s that choice that, in Leave the World Behind, is an unmistakable act of sin.
Share your thoughts on Leave the World Behind in the comments section below, and <a href="https://voxmediaevents.com/vox-book-club-june2021">be sure to join us on June 30 for a live discussion event with Rumaan Alam.</a> In the meantime, <a href="http://vox.com/book-club-newsletter">subscribe to the Vox Book Club newsletter</a> to make sure you don’t miss anything.
<ol>
<li>The sin of these characters’ indifference to the rest of the world probably becomes most clear when Clay meets a Spanish-speaking woman in the road, clearly asking for help, and abandons her. How did you take that moment? Did it make Clay feel irredeemable to you?</li>
<li>What detail about your consumption habits would someone use to paint a damning portrait of you in a dark social satire? For me it would probably be the snail slime serum I put on my face. (As Patricia Lockwood wrote, snail slime is a lot more central to modern womanhood than you would expect.)</li>
<li>The omniscient narrator of this novel keeps hinting darkly at what this apocalypse might be — we hear about military planes, about disrupted patterns of animal migration — but we never learn exactly what it is. When did it become clear to you that we would never learn what had happened? How do you feel about that choice?</li>
</ol>
 
 
source <a href="https://www.vox.com/culture/22528433/leave-the-world-behind-rumaan-alam-review">https://www.vox.com/culture/22528433/leave-the-world-behind-rumaan-alam-review</a>

vox Leave the World Behind’s bougie apocalypse

The big thing in Rumaan Alam’s Leave the World Behind , the Vox Book Club’s June pick , is all of the, well, things . This book is nearly e...

The controversy over Bill Gates becoming the largest private farmland owner in the US

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Bill Gates might be a tech billionaire — but he and his wife Melinda French Gates, who are <a href="https://www.vox.com/recode/22441627/bill-gates-scandal-divorce-epstein">in the process of divorcing</a>, are also two of the largest private farmland owners in the United States.
Recent reports detailing the extent of the Gates’ land ownership <a href="https://www.nbcnews.com/tech/tech-news/mcdonald-s-french-fries-carrots-onions-all-foods-come-bill-n1270033">have</a> <a href="https://www.theguardian.com/commentisfree/2021/apr/05/bill-gates-climate-crisis-farmland">prompted</a> <a href="https://nfu.org/2021/03/29/why-farmers-are-worried-about-bill-gates-and-other-non-farming-land-owners/?utm_source=rss&utm_medium=rss&utm_campaign=why-farmers-are-worried-about-bill-gates-and-other-non-farming-land-owners">criticism</a> from some environmental advocates and farmers, who say there seems to be a contradiction between his public environmental advocacy and his personal investment strategy.
Others have speculated the farmland purchases may be a part of the billionaire’s overall climate efforts. Bill Gates has said there’s no connection, either way. But the new details on the purchases — and the discussion surrounding them — serve as an important reminder that billionaires can store their massive wealth in all sorts of unexpected places, and that there can often be a tension between their personal investments and their more publicized philanthropic work.
On Tuesday, <a href="https://www.nbcnews.com/tech/tech-news/mcdonald-s-french-fries-carrots-onions-all-foods-come-bill-n1270033">NBC News</a> reported that the Gateses had acquired more than 269,000 acres of farm in the United States in the past 10 years. Those purchases, made with the help of the Washington-based firm Cascade Investment and a number of shell companies, includes farmland in nearly 20 states that cultivate vegetables such as carrots, soybeans, and potatoes (some of which end up in McDonald’s French fries). These details come after the agriculture outlet the Land Report reported in January that the tech billionaire and his wife were the country’s <a href="https://landreport.com/2021/01/bill-gates-americas-top-farmland-owner/">top private farmland owners in the country</a>. An NBC News analysis also identified the Gates as the largest farmland owner in the US.
Almost 300,000 acres is a lot of land for one family or private individual to own, but it’s still just a small part of the <a href="https://www.ers.usda.gov/topics/farm-economy/land-use-land-value-tenure/farmland-ownership-and-tenure/">estimated</a> 911 million acres of farmland in the US. While Gates appears to be one of the largest private farmland owners in the country, he’s far from alone in wanting to incorporate farmland into his investment strategy.
As Mother Jones recently reported, other <a href="https://www.motherjones.com/food/2021/05/bill-melinda-gates-farmland-wealth-cascade-young-farmers-priced-out/">large financial firms</a> have sought to purchase agricultural land, too, even if they have no involvement in the actual, day-to-day farming operations. Land Report, the outlet that named Gates the top private farm owner, notes several other families that claim well over 100,000 acres. The US Department of Agriculture estimates that about 30 percent of US farmland is rented out by owners who serve as landlords and aren’t involved in farming, like Gates.
All this to say, it shouldn’t be surprising that Bill Gates, one of the wealthiest people in the world, makes investments to serve his own financial interests.
“It’s a good investment,” Johnathan Hladik, a farmer and the policy director for the Center on Rural Affairs. “It’s smart, it’s stable, and especially over the past couple decades, it seems to be going up.”
Still, Gates’s landownership has attracted particular attention because the billionaire has tried to make a name for himself in climate advocacy. Gates is currently promoting a book on the subject, and has positioned himself and the Gates Foundation as a leader in what the <a href="https://www.youtube.com/watch?v=BlwnUVjEhsU">future of agriculture</a> should look like, especially in regard to technology.
One Georgia farmer and environmental advocate, John Quarterman, <a href="https://www.nbcnews.com/tech/tech-news/mcdonald-s-french-fries-carrots-onions-all-foods-come-bill-n1270033">told NBC</a> that while he expected that Gates would encourage more sustainable practices after buying farmland nearby, his acquisition of that land didn’t change much. And the National Farmers Union has <a href="https://nfu.org/2021/03/29/why-farmers-are-worried-about-bill-gates-and-other-non-farming-land-owners/?utm_source=rss&utm_medium=rss&utm_campaign=why-farmers-are-worried-about-bill-gates-and-other-non-farming-land-owners">suggested</a> that the growing number of non-farmer owners like Gates buying up farmland — and renting it out — could lead to practices that hurt the environment: Short-term farmers who rent land are less likely to take long-term conservation steps, the organization argues, and non-farmer owners don’t have the experience to “understand the importance of protecting natural resources.”
Others have floated the opposite idea: that Gates’s massive investment in farmland might have a direct relationship to his other climate efforts. Newsweek, for instance, <a href="https://www.newsweek.com/bill-gates-sustainable-agriculture-champion-americas-biggest-farmland-owner-1562072">recently suggested</a> his land ownership “may be connected to his investments in climate change agricultural developments and Impossible Foods,” though it didn’t offer much support for that premise.
While Bill Gates has previously tried to separate his Gates Foundation work on the climate from his private investments, Cascade Investment has defended its record on sustainability.
In response to criticism, a spokesperson for Cascade Investment emphasized that it had enrolled all its farmland in a program by Leading Harvest, a nonprofit that releases standards for sustainability focused on biodiversity, conservation, and soil. “Cascade plans to continue to evaluate and implement new initiatives that will improve the overall sustainability of its farmland portfolio,” the spokesperson told Recode.
More broadly, Gates, and other wealthy buyers of farmland, have also been criticized for contributing to the concentration of land ownership. Because they can usually make higher bids than what local farmers can afford, fewer people end up owning their own farmland. As University of New Mexico professor Nick Estes <a href="https://www.theguardian.com/commentisfree/2021/apr/05/bill-gates-climate-crisis-farmland">wrote for the Guardian</a> in April, this results “in a greater push for monocultures and more intensive industrial farming techniques to generate greater returns,” while Indigenous people and small farmers “are more cautious with the use of land.”
The issues at play go beyond what pieces of land Bill Gates has bought. “People tend to look either for the salvation story — he’s doing this to save the planet — or they look for the opposite — you know, it’s just another greedy landowner,” Bruce Sherrick, a University of Illinois Urbana Champaign agriculture professor, told Recode. Sherrick, who is on the board of Leading Harvest, says that Gates-owned farms are taking a positive step by following Leading Harvest’s standards.
Gates himself made a point to differentiate his climate advocacy and his investments. In a Reddit AMA in March, the billionaire seemed to try to separate his climate advocacy and his personal investments when asked about his wealth of land. “My investment group chose to do this. It is not connected to climate. The agriculture sector is important,” he <a href="https://www.reddit.com/r/IAmA/comments/m8n4vt/im_bill_gates_cochair_of_the_bill_and_melinda/grid8pt/">said</a> in the post, before adding a more general comment about deforestation and biofuels.
But whatever Gates might wish, many observers can’t quite separate the two things. For them, Bill Gates the environmentalist is also Bill Gates the commercial farmland owner, and they think the two roles are connected even if Gates doesn’t consider them to be.
 
 
source <a href="https://www.vox.com/recode/22528659/bill-gates-largest-farmland-owner-cascade-investments">https://www.vox.com/recode/22528659/bill-gates-largest-farmland-owner-cascade-investments</a>

vox The controversy over Bill Gates becoming the largest private farmland owner in the US

Bill Gates might be a tech billionaire — but he and his wife Melinda French Gates, who are in the process of divorcing , are also two of th...

Biden’s plan to increase legal immigration could aid the pandemic economy recovery

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President Joe Biden is looking to increase legal immigration levels across the board — a plan that has drawn criticism from immigration restrictionists who warn about the possible economic fallout. But economists say increasing legal immigration to the US could potentially aid the country’s economic recovery from the pandemic recession.
The New York Times recently <a href="https://www.nytimes.com/2021/05/31/us/politics/biden-immigration.html">obtained</a> a 46-page draft blueprint of the Biden administration’s plan to revamp the US legal immigration system to make it easier for foreign workers, trafficking victims, Americans’ family members abroad, refugees, asylum seekers, farmworkers, and American Indians born in Canada to come to the US.
Though it’s unclear exactly how many more immigrants Biden intends to admit to the US, the plan signifies an increase in immigration beyond just a reversion to pre-Trump administration levels, and he could implement it largely without needing Congress’s approval.
It would be a fulfillment of one of Biden’s <a href="https://joebiden.com/immigration/">campaign promises</a> on immigration and would mark a significant departure from the policies of his predecessor, who entered office with a goal of reducing legal immigration by <a href="https://www.cato.org/blog/president-trump-reduced-legal-immigration-he-did-not-reduce-illegal-immigration">63 percent</a>, in addition to curbing unauthorized immigration at the border.
But immigration restrictionists have argued that it could impede the economic recovery from the pandemic by allowing foreign workers to compete with Americans for wages.
“They just want to shovel people in here,” Ken Cuccinelli, former acting head of US Citizenship and Immigration Services under President Donald Trump, <a href="https://www.nytimes.com/2021/05/31/us/politics/biden-immigration.html">told</a> the Times about the Biden administration’s plan. “They are not running an immigration system for the benefit of America, and certainly not for the benefit of ordinary Americans.”
Economic research, however, suggests it’s more complicated than that, and that immigrants could in some ways actually help bolster the recovery by taking jobs that Americans don’t want, creating new jobs, and contributing to economic growth as consumers. How effectively they can do so might depend on the categories of immigrants that Biden chooses to emphasize and on the numbers in which they are allowed to come to the US — two factors that remain unknown.
But economists I spoke to said there isn’t an economic justification for continuing to maintain Trump-era policies that have made immigrating to the US substantially more difficult over the last four years and amid the pandemic specifically. At this point in the recovery, employers need the option of hiring both immigrants and native-born workers in high numbers.
It’s difficult to study the economic impact of immigration on native-born workers because it’s often hard to isolate that impact from other factors. A sudden increase or decrease in immigration can coincide with other economic events that could contribute to fluctuations in wages or unemployment levels.
For example, researchers can’t quantify the economic effect of the near-shutdown in legal immigration during the pandemic because so many other factors were at play, from people’s desire to stay home to local mandates limiting business capacity.
There was evidence of local labor markets suffering due to the lack of foreign workers, particularly in places that rely on seasonal labor, such as one of <a href="https://upnorthlive.com/news/local/temporary-freeze-on-visas-impacting-workers-in-one-of-michigans-busiest-tourist-towns">Michigan’s largest tourist towns</a> and on <a href="https://www.marylandmatters.org/2020/05/03/md-crabbing-industry-fears-long-term-impacts-of-2020-visa-shortages/">Maryland’s eastern shore</a>, the heart of the crabbing industry. But it’s not possible to make any broad pronouncements about how the lack of immigrants has affected the economy.
Some of the best-known research on the topic focuses on a single period of immigration in 1980, a time when the local economy was already suffering from high unemployment and high inflation.
The so-called “Mariel boatlift” brought roughly 125,000 Cubans, more than half of whom were high-school dropouts, to Miami over the course of five months after communist dictator Fidel Castro loosened emigration restrictions. US President Jimmy Carter established a program that granted them temporary legal status and access to asylum processing.
University of California Berkeley’s David Card found <a href="https://davidcard.berkeley.edu/papers/mariel-impact.pdf">no significant effect</a> on the wages of native-born Americans in Miami as a result of the boatlift. Harvard’s George Borjas, on the other hand, found that native-born males without a high school degree <a href="https://journals.sagepub.com/doi/10.1177/0019793917692945">saw their wages decrease</a> between 10 and 30 percent.
Other economists have <a href="https://www.nber.org/system/files/working_papers/w23433/w23433.pdf">shed doubt</a> on Borjas’s results, finding that he failed to account for demographic shifts among the workers he studied before and after the boatlift. Taking that into consideration significantly reduces the negative effect on wages that Borjas observes to the extent that it is no longer discernible.
While the Mariel boatlift studies showed what happens to wages immediately after a wave of immigration, other widely cited research suggests that any effect of immigration on wages tends to diminish in the long term.
<a href="https://www.amazon.com/Immigration-Economics-George-J-Borjas/dp/0674049772/ref=sr_1_1?dchild=1&keywords=immigration+economics&qid=1609190130&sr=8-1" has-subtag="true" data-cdata='{"rewritten_url":"https://www.amazon.com/Immigration-Economics-George-J-Borjas/dp/0674049772/ref=sr_1_1?dchild=1\u0026keywords=immigration economics\u0026qid=1609190130\u0026sr=8-1\u0026ascsubtag=[]vx[p]22292135[m]m-placeholder[s]s-placeholder[t]w[c]c-placeholder[r]r-placeholder[d]d-placeholder","subtag_max_length":99,"subtag_delim_length":2,"subtag_key":"ascsubtag","subtag_data":{"dchild":"1","keywords":"immigration economics","qid":"1609190130","sr":"8-1","ascsubtag":"[]vx[p]22292135[m]m-placeholder[s]s-placeholder[t]w[c]c-placeholder[r]r-placeholder[d]d-placeholder"},"encode_subtag":false}'>Borjas</a>, Bocconi University’s <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/j.1542-4774.2011.01052.x">Gianmarco Ottaviano</a>, and University of California Davis’s <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/j.1542-4774.2011.01052.x">Giovanni Peri</a> estimated that native-born Americans overall saw their wages increase only by about half a percent in the long term. High school dropouts saw a bit of a larger effect on wages, but it was still very small: a 1.7-percent dip in Borjas’s study, and a 1.1-percent increase in Ottaviano and Peri’s study. But the overall takeaway is that the long-term effect, positive or negative, is almost none.
“Immigration just doesn’t affect native-born wages or employment very much, the negative effects tend to be short term and the positive effects tend to be long term,” <a href="https://www.cato.org/blog/american-compass-shouldnt-reject-economics-immigration">writes</a> Alex Nowrasteh, director of immigration studies and the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute.
Conversely, decreasing the legal immigrant workforce also doesn’t necessarily benefit American workers. A cautionary example is the Bracero program, which brought in millions of temporary farmworkers from Mexico starting in 1942. When it ended in 1964, native-born workers’ wages actually <a href="https://www.aeaweb.org/articles?id=10.1257/aer.20170765">rose more slowly</a> because farmers started relying on machine harvesting and growing less labor-intensive crops instead.
Immigration restrictionists, therefore, seem to be overstating the negative effect of immigration on American workers’ wages while overlooking the potential benefits of bringing in more foreign workers.
The US economy is already well on its way toward full recovery. Unemployment was down to 5.8 percent in May, which is still more than two percentage points higher than it was pre-pandemic, but much lower than the peak of 11.3 percent.
But the recovery has been <a href="https://projects.fivethirtyeight.com/us-economy-coronavirus/">unequal</a> across industries and across different kinds of workers. Sectors like retail, leisure, and hospitality, which tend to rely on low-wage workers who are more likely to be Black or Hispanic, have continued to have some of the highest rates of unemployment.
These also tend to be some of the industries that <a href="https://research.newamericaneconomy.org/report/immigrant-workers-in-the-hardest-hit-industries/">rely on immigrant workers</a>. Immigrants make up 22 percent of the workforce in hospitality, one in seven in retail, one in five in food services, and one in three in hotels and accommodations.
Immigration could help these struggling industries fill positions that are needed to support efforts to reopen at full capacity.
“These sectors rely on specific occupations in order to recover,” said Michael Clemens, a senior fellow at the Center for Global Development, where he studies the economic effects and causes of migration. “As restaurants reopen in response to rising demands, they require dishwashers, they require sous chefs — they require everybody involved in order to get going. In this process of reopening and reemploying dishwashers, jobs for the rest of the people are created.”
For some of these jobs, there just aren’t enough willing American workers available. You might have noticed a <a href="https://www.chicagotribune.com/business/ct-biz-us-job-openings-employment-20210608-cvyicuaxyzg4vlk3smrnjfuw7m-story.html">proliferation of “Help Wanted” signs</a> recently. Clemens told me he observed the same effect in a <a href="https://www.iza.org/publications/dp/10492">study</a> of hand-harvest farmworkers in North Carolina during the Great Recession, which brought about a spike from 4 percent to 11 percent unemployment in the state. He found that of the 450,000 North Carolinians who were unemployed in 2010, just 10 accepted jobs in the hand-harvest industry that year.
“There is this idea that when unemployment is high, or as it was extremely high last year, that any immigrant worker takes a job away from an American,” Clemens said. “It’s not true because there is a division of labor in America between immigrants and natives in many industries that is critical to those industries. It’s not that there’s this undifferentiated pool of unemployed workers out there who are happy to do any of those tasks. That’s just not how the American labor market works, even when it’s hurting.”
Indeed, research has shown that native-born workers typically react to immigration by specializing in fields that <a href="https://www.aeaweb.org/articles?id=10.1257/app.1.3.135">require English fluency</a> and pursuing <a href="https://www.aeaweb.org/articles?id=10.1257/app.20150114">communication-intensive jobs</a> where they earn higher wages. Immigrants with limited English skills are comparatively restricted to manual-labor jobs. Even immigrants and Americans who have the same educational levels and who might otherwise seem interchangeable, therefore, might not necessarily be competing for the same jobs.
While some hard-hit industries will need more immigrant workers before they will see unemployment rates decline and recover, others, such as the tech industry, were relatively unaffected by the pandemic because workers could continue to be productive from home. The demand for more workers in those industries never declined — but the availability of immigrants to fill those positions did. If that isn’t rectified, it could stymie companies’ ability to grow and potentially hurt the country’s long-term recovery.
A recent <a href="https://research.newamericaneconomy.org/wp-content/uploads/sites/2/2021/06/NAE-Envoy-Report-V2.pdf">report</a> by New American Economy, a pro-immigration think tank and advocacy group, found that there is a shortage of high-skilled workers, with unemployment rates in sectors such as computer- and mathematics-related occupations dropping and employers even requesting foreign workers in those fields at a slightly higher rate amid the pandemic.
“While many businesses have sought to expand, continued travel restrictions on top of an outdated immigration system may in fact prolong and exacerbate the shortage of high-skilled workers,” the report states. “This ultimately runs counter to the goal of a speedy economic recovery.”
Beyond fulfilling specific labor shortages that are critical to economic recovery, immigrants can also help stimulate the economy in other ways. Thousands of people immigrate to the US every year as <a href="https://www.americanimmigrationcouncil.org/research/eb-5-visa-program-what-it-and-how-it-works">investors</a>, bringing in hundreds of thousands of dollars each.
Immigrants are also <a href="https://www.kauffman.org/resources/entrepreneurship-policy-digest/the-economic-case-for-welcoming-immigrant-entrepreneurs/">more entrepreneurial</a>, launching businesses at about twice the rate of native-born Americans, which creates more jobs and also fosters innovation. That is true of big tech companies such as Amazon, Apple, Google, and Yahoo — which were founded by immigrants or their children — and of <a href="https://www.americanprogress.org/issues/immigration/reports/2019/06/26/471497/building-dynamic-economy-benefits-immigration/">small businesses</a>, which make up 70 percent of employers nationally.
Immigrants can also drive economic growth as consumers because they buy goods and services and create demand for more workers. For at least the first five years after the Mariel boatlift, for example, researchers <a href="https://www.sciencedirect.com/science/article/abs/pii/S0927537108000316?via%3Dihub">observed that effect</a>. It’s the same reason why the quadrupling of women’s workforce participation over the last century didn’t hurt male workers and even saw them <a href="https://hbr.org/2018/01/when-more-women-join-the-workforce-wages-rise-including-for-men">benefit from higher wages</a>.
“Immigrants are consumers, they are investors, they are founders and inventors,” Clemens said. “They are also suppliers of labor. They’re suppliers of specialized labor. And for all those reasons they are very different from this cartoon idea of immigrants as suppliers of undifferentiated labor.”
That’s a power that Biden’s plan seems to be trying to harness — not just for the immediate recovery, but for the long term.
 
 
source <a href="https://www.vox.com/policy-and-politics/22528094/biden-legal-immigration-pandemic-economy-recovery">https://www.vox.com/policy-and-politics/22528094/biden-legal-immigration-pandemic-economy-recovery</a>

vox Biden’s plan to increase legal immigration could aid the pandemic economy recovery

President Joe Biden is looking to increase legal immigration levels across the board — a plan that has drawn criticism from immigration res...

Is there an uncontroversial way to teach America’s racist history?

If you follow politics at all, you’ve likely encountered phrases and terms such as “<a href="https://www.washingtonpost.com/education/2021/05/29/critical-race-theory-bans-schools/">critical race theory</a>” or “<a href="https://apnews.com/article/business-race-and-ethnicity-science-coronavirus-pandemic-health-bdff6225b933e47997291cd6fe7e87a5">anti-racism</a>” recently.
There’s a debate raging over the history and legacy of American racism and how to teach it in schools. The current iteration of this debate (and there have been many) stretches back to 2019, when the New York Times published <a href="https://www.nytimes.com/interactive/2019/08/14/magazine/1619-america-slavery.html">the 1619 Project</a>, but it evolved into a kind of moral panic in the post-Trump universe, in part because it’s great fodder for <a href="https://www.foxnews.com/opinion/parents-critical-race-theory-schools-david-mcintosh">right-wing media</a>.
The hysteria over critical race theory, or CRT, has now spilled beyond the confines of Twitter and Fox News. As I explored <a href="https://www.vox.com/policy-and-politics/22311009/cancel-culture-republicans-wokeness-free-speech">back in March</a>, conservative state legislatures across the country are seeking to ban CRT from being taught in public schools.
There are lots of angles into this story, and frankly, much of the discourse around it is counterproductive. The main issue is that it’s not clear what these concepts mean, as tends to happen when ideas (<a href="https://www.vox.com/features/2019/11/11/18273141/postmodernism-donald-trump-lyotard-baudrillard">à la postmodernism</a>) escape the confines of academia and enter the political and cultural discourse.
Conservatives have appropriated critical race theory as a convenient catchall to describe basically any serious attempt to teach the history of race and racism. It’s now a prop in the never-ending culture war, where caricature and bad faith can muddy the waters. But the intensity of the debate speaks to a very real and difficult question: What’s the best and most productive way to teach the history of racism?
A few weeks ago, I read an essay <a href="https://www.theatlantic.com/ideas/archive/2021/05/whats-missing-from-the-discourse-about-anti-racist-teaching/618947/">in the Atlantic</a> by Jarvis R. Givens, a professor of education at Harvard University and the author of <a href="https://www.indiebound.org/book/9780674983687">Fugitive Pedagogy: Carter G. Woodson and the Art of Black Teaching</a>. Givens studies the history of Black education in America, focusing on the 19th and 20th centuries.
His essay is mostly about the blind spots in the public discourse around race and education. But in it, he raises a point that seems overlooked: The uproar over CRT isn’t about anti-racist education itself — Black educators in Black schools have practiced that for more than a century. Rather, it’s about the form anti-racism takes in classrooms with white students. Teaching this history to Black students comes with its own complications, but we’re having this discussion because white parents are protesting and entire news outlets are obsessed with it.
So, I reached out to Givens to talk about why this conversation is so hard, how he responds to some of the criticisms of CRT, why he thinks it’s crucial to not get stuck with a single narrative of Black suffering, and why an honest attempt to teach the history of race in America is going to create a lot of unavoidable discomfort.
A transcript of our conversation, lightly edited for length and clarity, follows.
<h4>Sean Illing</h4>
The term “anti-racism” has become so muddled that a lot of people probably have no idea what it means. How are you using it?
<h4>Jarvis R. Givens</h4>
It’s about teaching the history of racial inequality and the history of racism, to understand that it’s about more than individual acts of racism.
The idea is that students — and educators — should have a deep awareness of how racist ideas and practices have been fundamental in shaping our modern world. Students need to be able to have these discussions honestly so that new generations of students aren’t just aware of this history, but can also acknowledge and comprehend how our actions can disrupt those historical patterns or reinforce them.
But one thing I tried to do <a href="https://www.theatlantic.com/ideas/archive/2021/05/whats-missing-from-the-discourse-about-anti-racist-teaching/618947/">in my piece</a> was remind people that anti-racist teaching isn’t new. We’ve been talking about it in public as though it’s this novel thing, and perhaps it’s because so much of this discussion is about how to teach white students, but for well over a century, Black teachers have been modeling an anti-racist disposition in their pedagogical practices. They recognized how the dreams of their students were at odds with the structural context in which they found themselves. And they had to offer their students ways of thinking about themselves that were life-affirming, despite a society that was physically organized in a way that explicitly told them they were subhuman.
<h4>Sean Illing</h4>
I don’t want to pass over what you just said about teaching white students, because that does seem to be what this is really about, and you can see it in the debate over “<a href="https://www.vox.com/2020/9/24/21451220/critical-race-theory-diversity-training-trump">critical race theory</a>.”
You gestured at the criticism I hear the most: that CRT (and, I guess by extension, “anti-racism” education) is built on an assumption that the study of racism has to be anchored to a commitment to undoing the power structure, which is seen as a product of white supremacy. To the extent that’s true, the complaint is that it’s not really an academic discipline or an approach to education — it’s a political ideology.
<h4>Jarvis R. Givens</h4>
I hear what you’re saying, and I’m not going to argue that there are no clear political commitments on the part of those scholars who gave us CRT. One thing I’d be interested to hear, however, is an alternative approach to teaching the history of America, or the history of anything, quite frankly, that doesn’t have an embedded set of political commitments.
Any approach to framing history is going to have some political commitments baked into the narrative. The choices we make about what to highlight or omit, all of that reflects certain values and biases. It’s just that we often take these for granted when it’s the “preferred” or “dominant” history.
In the end, I don’t see how you can completely remove politics from the work of education or the production of history. I don’t think it’s ever fully possible, and that’s something that isn’t usually acknowledged in these conversations.
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<aside><q>“Unfortunately, we haven’t had the courage to teach our history honestly”</q></aside>
</div>
<h4>Sean Illing</h4>
From your perspective, what’s missing from the current discourse around anti-racism education?
<h4>Jarvis R. Givens</h4>
The best educational models can teach us to recognize injustices, and they can cultivate a commitment to resisting those things, but equally important — and this is something Black educators have done for a long time in their own communities — is modeling other ways of being in the world, other ways of being in relationship to the world.
If you’re striving to create more justice in the world, you can’t do that if you’re only focusing on the things you’re trying to negate. You can’t just be “anti” whatever. You have to have some life-affirming vision that you can hold on to, a vision that’s more meaningful and points us in the direction of a better world. You have to teach people not just to resist injustice but to transcend it. This is what the Black educational models I’ve studied have always done, and it’s lost in so much of the debate about anti-racism and CRT today.
<h4>Sean Illing</h4>
Why is it so important to move beyond the “anti”?
<h4>Jarvis R. Givens</h4>
I think it’s important because I don’t want to be stuck with this narrative of Black people as frail and suffering and nothing else. If that’s the image that’s necessary to advance some agenda, we need to rethink some things. I’m not interested in painting this picture of Black folks as only living lives in suffering. If our strategy for seeking justice relies on this image of black folks as damaged and down and out, well, it just falls into a lot of old tropes that we have to be wary of.
Absolutely, there’s injustice. This is a part of the story, part of our story, but Black life is much more expansive than that. It always has been. And so many of our efforts to demand justice have relied on painting an image of Black people as damaged and deficient, and I’m always interested in trying to resist that, and to expand the aperture for how we have these conversations.
Our strategy can’t be just about proving injury. At the same time, the public has to stop denying that harm and violence has been and continues to be done. Both of these things are challenges before us.
<h4>Sean Illing</h4>
Take an enormous concept like “structural racism,” which is a catchall to describe how contemporary inequalities have their roots in history and institutions. On the one hand, that’s just obviously true. But at the same time — and I think you share this instinct — we don’t want to reduce people to historical props with no agency, and we don’t want to define any oppressed group by the actions of their oppressors.
So, how do you walk that line as an educator?
<div class="c-float-right">
<figure class="e-image"><picture class="c-picture" data-cid="site/picture_element-1623421878_5708_215730" data-cdata='{"asset_id":22645691,"ratio":"*"}'><source srcset="https://cdn.vox-cdn.com/thumbor/3WbPQ_VFKsqip20WYVvh12m118E=/0x0:1938x2871/320x0/filters:focal(0x0:1938x2871):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 320w, https://cdn.vox-cdn.com/thumbor/f223RfRSLNNH_iMC42vVnlxYoiE=/0x0:1938x2871/520x0/filters:focal(0x0:1938x2871):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 520w, https://cdn.vox-cdn.com/thumbor/sgk4PJHtDCv9OENJtp2KDtnL2Zk=/0x0:1938x2871/720x0/filters:focal(0x0:1938x2871):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 720w, https://cdn.vox-cdn.com/thumbor/ZmXXLViXpF2PMqCIbtfdQ9KF6z8=/0x0:1938x2871/920x0/filters:focal(0x0:1938x2871):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 920w, https://cdn.vox-cdn.com/thumbor/A-Yoj1WAHp6yQ-gPrzL2MJM536s=/0x0:1938x2871/1120x0/filters:focal(0x0:1938x2871):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 1120w, https://cdn.vox-cdn.com/thumbor/okc88OY_3rBZ6ZmOFM5Z0y4KSm8=/0x0:1938x2871/1320x0/filters:focal(0x0:1938x2871):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 1320w, https://cdn.vox-cdn.com/thumbor/zAb_-0fLoLDNjXt9IidCL02VHfM=/0x0:1938x2871/1520x0/filters:focal(0x0:1938x2871):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 1520w, https://cdn.vox-cdn.com/thumbor/MPWs4M8EWKg0qy8gqXKshmjVbG4=/0x0:1938x2871/1720x0/filters:focal(0x0:1938x2871):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 1720w, https://cdn.vox-cdn.com/thumbor/wgGJ_vAT4wSHQj7XQOq5KRbbtbU=/0x0:1938x2871/1920x0/filters:focal(0x0:1938x2871):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 1920w" sizes="(min-width: 1221px) 846px, (min-width: 880px) calc(100vw - 334px), 100vw" type="image/webp" /> <img alt="" data-upload-width="1938" sizes="(min-width: 1221px) 846px, (min-width: 880px) calc(100vw - 334px), 100vw" src="https://cdn.vox-cdn.com/thumbor/y7xK3zCI4h_tIGGgFQM2BBX4zlo=/0x0:1938x2871/1200x0/filters:focal(0x0:1938x2871):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg" srcset="https://cdn.vox-cdn.com/thumbor/g8S-W8fjHP6rW5neV0cG58klgok=/0x0:1938x2871/320x0/filters:focal(0x0:1938x2871):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 320w, https://cdn.vox-cdn.com/thumbor/6lqfpxRfdmTyMgjxozEZ_IDmtWI=/0x0:1938x2871/520x0/filters:focal(0x0:1938x2871):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 520w, https://cdn.vox-cdn.com/thumbor/D8aRQGxd0AqWEAXZ-SoN0Cv5O0U=/0x0:1938x2871/720x0/filters:focal(0x0:1938x2871):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 720w, https://cdn.vox-cdn.com/thumbor/5QecgTrDx3KB__a5OnXWtQKuRD4=/0x0:1938x2871/920x0/filters:focal(0x0:1938x2871):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 920w, https://cdn.vox-cdn.com/thumbor/4cRn9MFImgxS4Vx6iS-KNaQAbuo=/0x0:1938x2871/1120x0/filters:focal(0x0:1938x2871):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 1120w, https://cdn.vox-cdn.com/thumbor/YPBQ1t5rCttHA3PRdi4FbL7Q_t4=/0x0:1938x2871/1320x0/filters:focal(0x0:1938x2871):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 1320w, https://cdn.vox-cdn.com/thumbor/aVtHxxZZ17jBBVb0Uce7H6MteY8=/0x0:1938x2871/1520x0/filters:focal(0x0:1938x2871):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 1520w, https://cdn.vox-cdn.com/thumbor/Z83_78fds2iyEao1kX8jDKjpRJI=/0x0:1938x2871/1720x0/filters:focal(0x0:1938x2871):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 1720w, https://cdn.vox-cdn.com/thumbor/LvyDyeEyKsepBW3x3u0JMfHXdK0=/0x0:1938x2871/1920x0/filters:focal(0x0:1938x2871):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22645691/Givens_jkt_front.jpg 1920w" /></picture> <cite>Harvard University Press</cite></figure>
</div>
<h4>Jarvis R. Givens</h4>
Yeah, it’s about taking both structure and agency seriously.
This is one of the things I tried to get at <a href="https://www.indiebound.org/book/9780674983687">in my book</a>. I was interested in writing against the dominant narrative that we tend to have about Black life and education prior to Brown v. Board. And this is not to diminish the significance of Brown v. Board of Education, but I was interested in thinking outside of the single narrative we’ve inherited: that Brown was necessary because Black people only had schools that were falling apart, with outdated secondhand textbooks, [because] the self-image of Black children was damaged and Black folks had no power.
All of this was baked into the Jim Crow school structure, this racially divided school structure. Proving this, and demonstrating the inherent inequality of Jim Crow, was necessary to achieve the Brown decision.
But to take that as the total narrative of Black educational life is a mistake. Having studied the history, it’s hard for me to paint the story in such a broad stroke. This concern, for me, began with the story of Black teachers that were writing textbooks that challenged the distorted representation of Black life in the dominant curriculum. You have all of these organizations that were created to advocate on behalf of Black educators and students. You have people like Martin Luther King Jr. and John Lewis and Angela Davis, who are the products of these schools and the teaching within them. There was still more to that story than just the narrative of aggressive neglect, of Black schools being starved of resources.
This is all to say, we can hold both things in our minds. We can talk about the violent resistance against Black educational strivings and the intentional underdevelopment of African American schools, but we also have to rigorously account for the things Black folks were doing on a daily basis to make meaningful education possible despite the neglect. And I think that’s necessary if we are to appreciate the suffering and the beauty of Black people’s experience in education, if we are to account for their human striving across generations.
It’s liberating, as a student of history, to realize that so much of it is manufactured. This is essential not just for those of us who write history, but also those of us who are consumers of it. We have to know that the histories presented to us consist of narratives based on decisions people made to represent some aspect of the past. It’s all distortion in some way. It’s important to know that our narratives and origin stories about the past … well, we create them.
One of the best things my high school US history teacher did for me was help me understand that no history is an exhaustive representation of anything. She made me aware of silences. When you allow students to have the agency of knowing that history is not always as authoritative as we tend to imagine, it actually invites them to establish a deeper intellectual relationship with the past. It allows us to think about why certain scholars might have chosen to represent certain aspects of the past in the ways that they did.
<div class="c-float-right">
<aside><q>“I’m not interested in painting this picture of Black folks as only living lives in suffering”</q></aside>
</div>
<h4>Sean Illing</h4>
So much of your work focuses on anti-racist education during the Jim Crow era, but we live in a different world today — a flawed world but undoubtedly a better world. How should anti-racist teaching evolve to meet the realities of this moment?
<h4>Jarvis R. Givens</h4>
This is actually getting at another element that I think is important: A lot of the conversations around anti-racist teaching are directed at white teachers and white students, without actually being named as such. This is obviously very different than talking about how Black educators engaged Black students in the Jim Crow South, or even my own experience growing up in Compton, California, where I attended majority-Black schools with mostly Black teachers.
I’m not going to offer any prescriptive elements about what it means to try and do this work. But I’ll go out on a limb and say this: A fundamental part of being a critical educator, an educator committed to justice and equality, means being committed to reckoning with the history of racial injustice and trying to teach students in a way that supports the development of a critical awareness of that past, which includes acknowledging how that past continues to structure the ways in which we’re in relationship with one another in the present. It means recognizing that many of the institutions we have inherited have very long roots in this history.
There’s a moral imperative for all teachers who choose to face those realities of history and own it in the present. Being an anti-racist teacher in this moment means to honor the depth of human suffering reflected in that history by telling the truth about it. But then again, that’s what anti-racist teaching has always demanded of those educators who chose to teach in a manner that was disruptive to the racial inequality in our society. You can’t look away from it because it’s in every direction you turn.
I do recognize that learning the truth about our histories as different racial groups, and as a country, can be difficult. There’s going to be some level of discomfort, and we have to be real about that. Confronting the history of slavery and Jim Crow has always been difficult for Black people, those who lived through it and their progeny. We don’t experience our ancestors’ suffering in full, but the marks are still there.
<h4>Sean Illing</h4>
“Discomfort” is probably key here. And in that spirit of keeping it real, let’s just say it: There are a lot of white people in this country, especially white parents, who see all the scary headlines about CRT and <a href="https://www.vox.com/identities/2019/8/19/20812238/1619-project-slavery-conservatives">the 1619 Project</a>, and they don’t like it. They see “anti-racism” as “anti-white” and it’s … uncomfortable. I don’t know how to teach the truth about America’s past in such a politically fraught environment, but it’s something we’re going to have to figure it out in real time, and it’s going to be messy.
<h4>Jarvis R. Givens</h4>
To be honest, I don’t really have an answer, because unfortunately, we haven’t had the courage to teach our history honestly. We just haven’t tried it. What we’ve always had instead is a lot of resistance to talking about our past beyond a surface level.
But one thing I do know is that there are some people in this country who never had the luxury of not facing this stuff. And they’ve always encountered a lot of discomfort. It’s not comfortable for Black folks or Native American communities to think about the history of land dispossession or slavery or Jim Crow or lynchings, and how the legacy of these things persist today.
I guess what I’m saying is that certain folks never had the luxury of being comfortable. So now we’re at a place where we’re trying to figure out how to be more intentional in acknowledging our history and its consequences, and that means that discomfort is going to have to be shared in a way it hasn’t been up to this point.
And if we’re going to talk about how to unify the country, the onus can’t just be on the people who are the descendants of enslaved Black people and displaced Native communities, whose forced labor and stolen land were the primary factors of production in building this country. This is something we all have to encounter, and it’s going to be discomforting for everyone.
 
 
source <a href="https://www.vox.com/policy-and-politics/22464746/critical-race-theory-anti-racism-jarvis-givens">https://www.vox.com/policy-and-politics/22464746/critical-race-theory-anti-racism-jarvis-givens</a>

vox Is there an uncontroversial way to teach America’s racist history?

If you follow politics at all, you’ve likely encountered phrases and terms such as “ critical race theory ” or “ anti-racism ” recently. Th...

Wall Street isn’t to blame for the chaotic housing market

There has to be somebody to blame.
Housing prices have yanked the dream of homeownership out of the desperate, clutching hands of millions. Countless tenants don’t even have that dream, chafing under the increasing rent burdens they are forced to bear. And to top it all off, the rich just keep getting richer: The stock market is booming, homeowners have accumulated more than $1.5 trillion in equity since the Covid-19 recession began, and personal savings are up for most higher-income households.
Enter, stage right: Wall Street.
Some people are furious over reports that institutional investors (often private equity firms) are increasing the demand for homes and pushing prices upward. The Wall Street Journal <a href="https://www.wsj.com/articles/if-you-sell-a-house-these-days-the-buyer-might-be-a-pension-fund-11617544801">wrote</a> earlier this year that “yield-chasing investors are snapping up single-family houses” and “competing with ordinary Americans.” Marketplace <a href="https://www.marketplace.org/2021/04/13/institutional-investors-are-stiff-competition-homebuyers/">reported</a> the same, noting one buyer had been outbid six times by all-cash offers. Inman <a href="https://www.inman.com/2021/04/13/inventory-insanity-the-secret-economic-forces-fueling-the-housing-shortage/">writes</a> that consumers are “increasingly competing against institutional investors.” And the Real Deal goes <a href="https://go.redirectingat.com/?id=66960X1516588&xs=1&url=https%3A%2F%2Ftherealdeal.com%2Fnational%2F2021%2F04%2F13%2Finstitutional-investors-higher-material-costs-lead-to-rising-home-prices%2F&referrer=vox.com&sref=https%3A%2F%2Fwww.vox.com%2F22524829%2Fwall-street-housing-market-blackrock-bubble" rel="sponsored nofollow noopener" target="_blank" has-subtag="true" data-cdata='{"rewritten_url":"https://go.redirectingat.com?id=66960X1516588\u0026xs=1\u0026url=https://therealdeal.com/national/2021/04/13/institutional-investors-higher-material-costs-lead-to-rising-home-prices/\u0026referrer=vox.com\u0026sref=https://www.vox.com/22524829/wall-street-housing-market-blackrock-bubble\u0026xcust=___vx__p_22288870__m_m-placeholder__s_s-placeholder__t_w__c_c-placeholder__r_r-placeholder__d_d-placeholder","subtag_max_length":50,"subtag_delim_length":3,"subtag_key":"xcust","subtag_data":{"id":"66960X1516588","xs":"1","url":"https://therealdeal.com/national/2021/04/13/institutional-investors-higher-material-costs-lead-to-rising-home-prices/","referrer":"vox.com","sref":"https://www.vox.com/22524829/wall-street-housing-market-blackrock-bubble","xcust":"___vx__p_22288870__m_m-placeholder__s_s-placeholder__t_w__c_c-placeholder__r_r-placeholder__d_d-placeholder"},"encode_subtag":false}'>further</a>, claiming that one of the “main reasons for the skyrocketing prices are actually a huge buying spree from institutional investors.”
<a href="https://mobile.twitter.com/APhilosophae/status/1402434266970140676">A recent Twitter thread</a> blaming BlackRock, the world’s largest asset manager, for buying “every single family house they can find ... and outbidding normal home buyers” went viral, prompting even J.D. Vance, the Hillbilly Elegy author making a play for an Ohio US Senate seat, to accuse “The Left” of ignoring the situation because of BlackRock’s corporate diversity initiatives.
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<blockquote class="twitter-tweet">
Blackrock is pursuing an investment strategy that will make it harder for young Americans to own homes. The Left will ignore this, because Blackrock has committed to "racial audits" and other diversity BS. <a href="https://t.co/lgtb3xSlO9">https://t.co/lgtb3xSlO9</a>
— J.D. Vance (@JDVance1) <a href="https://twitter.com/JDVance1/status/1402608156254117894?ref_src=twsrc%5Etfw">June 9, 2021</a></blockquote>
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It’s important to understand that institutional investors play a small role in the American housing market. While there are <a href="https://www.greystar.com/">big firms</a> for apartments and other multi-family housing units, there traditionally hasn’t been the same level of investment in single-family homes. Yield-chasing investors have turned to the real estate market because it has become a very profitable place to put your money. And the main reason it has become so profitable is the preexisting housing shortage created by local governments and certain homeowners seeking to block new homes from being built, <a href="http://www.freddiemac.com/research/insight/20210507_housing_supply.page#:~:text=Future%20outlook%3A%20shortage%20to%20continue,to%203.8%20million%20in%202020.">leading to a nearly 4 million home shortage nationwide</a>.
Investors go where the yield is. They are profit maximizers and face strong pressure to return large gains to shareholders. Want to stop them? Build more homes, ensure that they cannot have a large market share and engage in predatory behavior, and reduce the incentive for yield chasers to further commodify the market.
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<blockquote class="twitter-tweet">
Oh for sure, but the largest investor isn't Blackrock. It's American homeowners. And they already have exactly the same incentive. <a href="https://t.co/1VxpZyyKf9">https://t.co/1VxpZyyKf9</a>
— Jake Anbinder (@JakeAnbinder) <a href="https://twitter.com/JakeAnbinder/status/1403056027491262475?ref_src=twsrc%5Etfw">June 10, 2021</a></blockquote>
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There are still reasons to be concerned. Institutional investors might flip homes and price out some would-be homebuyers, and they might be markedly worse landlords. And private equity has earned its bad name in many cases: <a href="https://bfi.uchicago.edu/wp-content/uploads/BFI_WP_2019122.pdf">increasing the likelihood of layoffs</a> when these firms acquire companies, having <a href="https://www.vox.com/policy-and-politics/2019/12/9/21003480/stop-surprise-medical-bills-legislation">shady connections to springing surprise medical bills</a> on people. And there are worries about what might happen if institutional investors are able to gain significant control of local housing markets — like raising rents above the market rate.
However, the idea that institutional investors are somehow largely to blame for the current housing market catastrophe is wrong and obscures the real problem. Housing prices have been skyrocketing <a href="https://www.vox.com/22264268/covid-19-housing-insecurity-housing-prices-mortgage-rates-pandemic-zoning-supply-demand">due to historically low supply, low mortgage rates, and the largest generation in American history entering the market looking for starter homes</a>.
After the Great Recession, millions of foreclosed homes hit the market as the economy cratered. Investors stepped in to buy these properties as prices bottomed out and a new industry was born: the institutional single-family-home investor/landlord.
In many ways, this was a much-needed source of demand for a sector of the economy in crisis. Investors were the only ones buying up these homes, and <a href="https://www.federalreserve.gov/econresdata/feds/2015/files/2015084pap.pdf">according to research by the Federal Reserve</a>, their entry into the market “appears to have supported house prices in the areas where it is concentrated.” Meaning it may have helped stabilize certain housing markets, as very few people were in the position to buy homes as the financial crisis took hold.
Institutional investors “grew up in 2010-2013 buying distressed properties that no one else would buy and in fact put a floor on the market, so they provided a very, very valuable service and they basically cleaned up the distressed market, a lot of which required repairs,” Laurie Goodman, vice president for housing finance policy at the Urban Institute, explained.
But as the dust settled, some people were outraged as they saw homes in their neighborhoods that once were owned by middle-income families flipped for a profit or turned permanently into single-family rentals.
In a New York Times Magazine article last year, Francesca Mari <a href="https://www.nytimes.com/2020/03/04/magazine/wall-street-landlords.html">documented</a> the egregious harms perpetrated by these landlords on struggling Americans. One man’s house was sold to a private equity firm, which forced their tenant to take on responsibilities usually reserved to the homeowner like “mold remediation, landscaping, [and] carbon-monoxide detectors.” Another woman’s rental home was infested with rats and cockroaches. Many more stories abound about countless fees and the threat of dealing with a giant entity with whom the renter inherently has a large asymmetry of power and information.
Mari attributes the problems with “this new breed of private-equity landlords” to their burning desire to return double-digit returns for their shareholders. It’s an incentive that’s led to patterns like exorbitant fees and onerous requirements in leases — and one that smaller investors and mom-and-pop landlords wouldn’t feel.
However, that doesn’t mean that small landlords are necessarily better or less exploitative than large investors. A 2017 New York Times article <a href="https://www.nytimes.com/2017/03/31/realestate/the-life-of-a-small-time-landlord.html">notes</a> that “some smaller landlords do not fully understand tenant laws, or simply flout them. Rent from a mom-and-pop landlord, and you might get a handshake lease, an informal arrangement that could give you flexibility, or leave you both in a tenuous position.”
But pre-Covid-19 research shows that institutional investors were still very small players. Mari <a href="https://www.nytimes.com/2020/03/04/magazine/wall-street-landlords.html">reported</a> that by 2016, private equity firms had acquired more than 200,000 homes — a fraction of the total number in America. A 2018 <a href="https://ideas.repec.org/a/gam/jsoctx/v8y2018i4p93-d171162.html">research paper</a> notes that these investors “account for less than 1 percent of all single-family housing units across the U.S.”
But as prices have exploded over the past year, could it be that institutional investors have become a much larger player?
Many of the articles claiming that institutional investors are driving up single-family home prices and are competing with average homebuyers rely on research by John Burns Real Estate Consulting. One even claimed that investors are “a main cause” for the hot market, which is not what the John Burns research details. In fact, the report explicitly states that the US is “not in an investor-induced home price bubble today.”
The report found that the share of total home sales that come from investor purchases has actually declined over the past year. And even at its peak in 2013 (when regular sales had bottomed out due to the recession), it only reached 29 percent of total sales. Last year, the firm estimates that investors make up about 20 percent of housing sales.
Importantly, that number is not just the share of institutional investors but anyone who isn’t just buying a house for their own primary residence — that includes people buying second homes or vacation rentals, mom-and-pop landlords, and small investors flipping homes for profit. <a href="https://www.marketplace.org/2021/04/13/institutional-investors-are-stiff-competition-homebuyers/">According to Marketplace</a>, it could also include so-called iBuyers, investors who “make instant cash offers on homes and sell them soon after.” And, yes, it could also include firms like BlackRock. John Burns looked at houses where the property tax records are going to a different address than the home itself, and Rick Palacios, director of research at the firm, explained that it’s not possible to tell from this data what component of these sales comes directly from institutional investors.
There’s a lot of existing research that indicates institutional investors are a very small share of the investor pool. Goodman cited research released earlier this year that found that institutional operators owned just 300,000 single-family units in 2019. For context, the researchers point out that there are roughly 15 million one-unit detached single-family rental homes. (There are <a href="https://www.statista.com/statistics/1072414/number-of-detached-single-family-homes-north-america-timeline/">roughly 80 million detached single-family homes total in the US</a>.)
A 2015 <a href="https://www.federalreserve.gov/econresdata/feds/2015/files/2015084pap.pdf">study</a> found that large investors made up just 1 to 2 percent of all single-family purchases from 2012 to 2014 while other investors made up 18 to 19 percent. They also found that institutional investors are more likely to purchase homes in neighborhoods “where fewer residents can qualify for a mortgage,” which decreases the likelihood that they are competing with regular homebuyers. <a href="https://www.corelogic.com/blog/2019/06/special-report-investor-home-buying.aspx">Research by CoreLogic</a> not only had similar findings, but wrote that they couldn’t conclude that investors were competing with regular homebuyers: “Possible investors are filling a void in markets where there is less owner-occupier demand.”
It’s possible that this trend has changed over the past couple of years, or that it could change in the coming years, as institutional investors look at the gangbusters housing market and decide to get more involved. But at least right now, these appear to be very small players.
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</div>
Redfin’s <a href="https://www.redfin.com/news/second-home-demand-doubles/">data</a> shows that buyer demand for second homes increased nearly 178 percent from April 2020 to April 2021. (April 2020 was the demand bottom, but as you can see from the graph below, second home demand has well-exceeded pre-recession demand.) It’s possible that a good number of these investor purchases come from second-home buyers.
<figure class="e-image"><picture class="c-picture" data-cid="site/picture_element-1623420621_5181_320295" data-cdata='{"asset_id":22647041,"ratio":"*"}'><source srcset="https://cdn.vox-cdn.com/thumbor/LgPzsDyVy544so9f0Kc7Ak24tuk=/0x0:813x603/320x0/filters:focal(0x0:813x603):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 320w, https://cdn.vox-cdn.com/thumbor/Mj_LZ0rYZOsGzAoL3HB6wmWOU1Q=/0x0:813x603/520x0/filters:focal(0x0:813x603):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 520w, https://cdn.vox-cdn.com/thumbor/aqIrUbdT3PnQ4T4mTfZSGXeTtcc=/0x0:813x603/720x0/filters:focal(0x0:813x603):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 720w, https://cdn.vox-cdn.com/thumbor/YttWZYnzu0mmmbZWBcjmTdkybLA=/0x0:813x603/920x0/filters:focal(0x0:813x603):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 920w, https://cdn.vox-cdn.com/thumbor/7wNlppsWvt9VGjVTTQgUOFdXz3k=/0x0:813x603/1120x0/filters:focal(0x0:813x603):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 1120w, https://cdn.vox-cdn.com/thumbor/Gt7hLJLjgGTs1ZPWmUtNutYQK30=/0x0:813x603/1320x0/filters:focal(0x0:813x603):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 1320w, https://cdn.vox-cdn.com/thumbor/ZpvXryE2EkkXu11GxhuoYsBCyVM=/0x0:813x603/1520x0/filters:focal(0x0:813x603):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 1520w, https://cdn.vox-cdn.com/thumbor/fZYczw5B5tzMfwM3YYZoZR1VkpA=/0x0:813x603/1720x0/filters:focal(0x0:813x603):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 1720w, https://cdn.vox-cdn.com/thumbor/AxVGJD5D2CYN6rGhxz_epcUy7Oo=/0x0:813x603/1920x0/filters:focal(0x0:813x603):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 1920w" sizes="(min-width: 1221px) 846px, (min-width: 880px) calc(100vw - 334px), 100vw" type="image/webp" /> <img alt="" data-upload-width="813" sizes="(min-width: 1221px) 846px, (min-width: 880px) calc(100vw - 334px), 100vw" src="https://cdn.vox-cdn.com/thumbor/0cDbvrHMnZQVwudIKr0rT_ESxtY=/0x0:813x603/1200x0/filters:focal(0x0:813x603):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png" srcset="https://cdn.vox-cdn.com/thumbor/pgBPZGxoq4dlQiZC4kx183AvTFc=/0x0:813x603/320x0/filters:focal(0x0:813x603):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 320w, https://cdn.vox-cdn.com/thumbor/XhjcdW9QACGbNlWoj1ALnPKyAJg=/0x0:813x603/520x0/filters:focal(0x0:813x603):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 520w, https://cdn.vox-cdn.com/thumbor/3lx1RMr8V6indejQs_QAh6Mxsfk=/0x0:813x603/720x0/filters:focal(0x0:813x603):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 720w, https://cdn.vox-cdn.com/thumbor/1S-kAdkVoGX4TMaT5YF3WCUL3SM=/0x0:813x603/920x0/filters:focal(0x0:813x603):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 920w, https://cdn.vox-cdn.com/thumbor/QcKLxOFOOAa5EMgvTtGfjGeCq0c=/0x0:813x603/1120x0/filters:focal(0x0:813x603):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 1120w, https://cdn.vox-cdn.com/thumbor/DwYUMhelCAvSj1U_-Si95GlFElM=/0x0:813x603/1320x0/filters:focal(0x0:813x603):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 1320w, https://cdn.vox-cdn.com/thumbor/1jeB4UFTcz7GVEzY8Fu6HaD8uj8=/0x0:813x603/1520x0/filters:focal(0x0:813x603):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 1520w, https://cdn.vox-cdn.com/thumbor/DWnqPuxGik2xocfJ1k6BMw9qXiM=/0x0:813x603/1720x0/filters:focal(0x0:813x603):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 1720w, https://cdn.vox-cdn.com/thumbor/LO6vIC-u7Scs8diMcxUBQmIIW_4=/0x0:813x603/1920x0/filters:focal(0x0:813x603):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22647041/Screen_Shot_2021_06_09_at_3.57.11_AM.png 1920w" /></picture> <cite><a class="ql-link" href="https://www.redfin.com/news/second-home-demand-doubles/" target="_blank">Redfin</a></cite></figure>
However, looking closely at certain sub-markets, John Burns did find very elevated investor activity. In Naples, Florida, the group found investor sales have risen 57 percent year over year. In Fort Walton, Florida, these sales rose 65 percent; and in Flagstaff, Arizona, and Punta Gorda, Florida, there were increases of 50 percent and above in investor sales. Again, this does not necessarily mean institutional investors.
Marketplace’s lead anecdote in a story titled “Institutional investors are still competition for homebuyers” is about a first-time buyer who bid on six houses and was outbid by all-cash offers. But all cash doesn’t necessarily mean institutional investors. With mortgage rates at record lows, <a href="https://www.redfin.com/news/all-cash-home-purchases-smallest-share-since-2007/">some people are using all-cash offers to win bidding wars</a>, which have exploded in frequency over the past year.
“Cash purchases in Florida are mostly from people who are relocating here from other states to purchase a second home or a retirement property,” said Tampa Redfin agent Wendy Peterson in a <a href="https://www.redfin.com/news/all-cash-home-purchases-smallest-share-since-2007/">Redfin press release</a>.
Goodman explains that, traditionally, institutional investors haven’t competed with regular people trying to buy homes because their best investment is to buy a home that needs significant repairs that would be “very hard for an owner occupant to do.” That works for large firms because they can achieve economies of scale by hiring in-house construction and repair workers or bidding down the price by offering stable work to contractors for multiple homes.
“When an institutional investor needs [$20,000] or $30,000 in repairs, it would cost you or I [$40,000] to $50,000 to do the same repairs if we knew what needed to be done,” Goodman added. “Additionally, it’s really hard for a homeowner to finance those repairs. ... That is where the real comparative advantage is, and those are really the homes that they do well and specialize in.” In general, these aren’t homes that homeowners are looking to buy; institutional investors are actually competing with other types of investors, like regular people who make a living flipping properties.
In a market this competitive, it’s certainly reasonable that investors may be competing with people willing to buy homes they would usually balk at due to repairs. But that simply prompts the question: Why is the housing market so competitive? (More on this later.)
There are reports of institutional investors sizing up, but even with these new acquisitions, they are still a very small part of the market. <a href="https://www.bloomberg.com/news/articles/2021-06-01/invesco-backs-mynd-to-spend-5-billion-on-single-family-rentals?sref=MabTy6na">According to Bloomberg</a>, Invesco Real Estate is backing Mynd Management to spend up to $5 billion in order to buy 20,000 single-family rental homes in the US in the next three years. Bloomberg <a href="https://www.bloomberg.com/news/articles/2021-01-28/psp-teams-with-pretium-on-700-million-single-family-rental-bet">also reported</a> that another fund (one that manages Canadian pensions) is investing $700 million into single-family rentals. Business Insider <a href="https://www.businessinsider.com/investors-corporations-buy-houses-single-family-homes-redfin-2021-5">reported</a> on Redfin data showing investors spent a record $77 billion on home purchases in the last two quarters of 2020 — this amounted to just 55,000 total homes and 39,000 single-family homes. Additionally, this included other types of investors that are not buying these homes to rent but are buying them to fix up and sell.
The fundamentals of low supply of houses, low mortgage rates, and the entry of millions of millennials into the housing market armed with higher personal savings help explain most of why the housing market has careened out of control over the past year. <a href="https://www.rentalhomecouncil.org/wp-content/uploads/2021/04/SFR-Get-the-Facts.pdf">According to the National Rental Home Council</a>, a single-family home rental lobbying group, “single-family rental home companies accounted for less than 0.14 percent of homes purchased” and just 0.09 percent of net homes if you count the fact that many single-family rental investors sold homes as well.
<figure class="e-image"><picture class="c-picture" data-cid="site/picture_element-1623420621_7760_320296" data-cdata='{"asset_id":22650117,"ratio":"*"}'><source srcset="https://cdn.vox-cdn.com/thumbor/NgW7rcIT5kAH1ySm6AKuPSSEwoI=/0x0:548x467/320x0/filters:focal(0x0:548x467):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 320w, https://cdn.vox-cdn.com/thumbor/uLH47nt1LwjwWLFiZhO6ycIpRmw=/0x0:548x467/520x0/filters:focal(0x0:548x467):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 520w, https://cdn.vox-cdn.com/thumbor/RGWHnTY92zv6Qj7RVAg9UBTZsv8=/0x0:548x467/720x0/filters:focal(0x0:548x467):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 720w, https://cdn.vox-cdn.com/thumbor/fRl4TIoQ8qkjt5AIyYVY8sQNjLc=/0x0:548x467/920x0/filters:focal(0x0:548x467):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 920w, https://cdn.vox-cdn.com/thumbor/YOz_QGiuK4FBSZCP21wjEDt5qtk=/0x0:548x467/1120x0/filters:focal(0x0:548x467):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 1120w, https://cdn.vox-cdn.com/thumbor/OFZjQONBYG54V1OM1zIiteSNJs0=/0x0:548x467/1320x0/filters:focal(0x0:548x467):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 1320w, https://cdn.vox-cdn.com/thumbor/aYy62JnE6GVG4ZGOX4ns5IPqtK0=/0x0:548x467/1520x0/filters:focal(0x0:548x467):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 1520w, https://cdn.vox-cdn.com/thumbor/x2Qw2xQWs1viZXRhZJzztocOAxE=/0x0:548x467/1720x0/filters:focal(0x0:548x467):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 1720w, https://cdn.vox-cdn.com/thumbor/nr6-B5sjMw1Co6Q0p1pZXf5UanU=/0x0:548x467/1920x0/filters:focal(0x0:548x467):format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 1920w" sizes="(min-width: 1221px) 846px, (min-width: 880px) calc(100vw - 334px), 100vw" type="image/webp" /> <img alt="" data-upload-width="548" sizes="(min-width: 1221px) 846px, (min-width: 880px) calc(100vw - 334px), 100vw" src="https://cdn.vox-cdn.com/thumbor/Gksqj5xWL3I9nBYNpcoS_xGqUyU=/0x0:548x467/1200x0/filters:focal(0x0:548x467):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png" srcset="https://cdn.vox-cdn.com/thumbor/wJbPP6a2zPf0Pi4oxdhdy7stgPE=/0x0:548x467/320x0/filters:focal(0x0:548x467):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 320w, https://cdn.vox-cdn.com/thumbor/ohBQLAOotX3FoVMCxz5Wa89iNfU=/0x0:548x467/520x0/filters:focal(0x0:548x467):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 520w, https://cdn.vox-cdn.com/thumbor/1ZTxfuSZtD08r3epWnnvNTAaj1U=/0x0:548x467/720x0/filters:focal(0x0:548x467):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 720w, https://cdn.vox-cdn.com/thumbor/yg4Td6kQ_68V3bN9EQKZiJBVeVI=/0x0:548x467/920x0/filters:focal(0x0:548x467):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 920w, https://cdn.vox-cdn.com/thumbor/TQXFJrJkcSR-RqYtFIGA_fg29Q8=/0x0:548x467/1120x0/filters:focal(0x0:548x467):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 1120w, https://cdn.vox-cdn.com/thumbor/1qF7OaI4TvKefwdm3xBjHiSFWx0=/0x0:548x467/1320x0/filters:focal(0x0:548x467):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 1320w, https://cdn.vox-cdn.com/thumbor/6PMjzkVRmJTNlZq7PdWR-IT3-X0=/0x0:548x467/1520x0/filters:focal(0x0:548x467):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 1520w, https://cdn.vox-cdn.com/thumbor/TCOOT4j6tmruDP6RjKNaDaL1ZRA=/0x0:548x467/1720x0/filters:focal(0x0:548x467):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 1720w, https://cdn.vox-cdn.com/thumbor/gN-kODlhq6H0CX4YtMdtStpVfFg=/0x0:548x467/1920x0/filters:focal(0x0:548x467):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22650117/Screen_Shot_2021_06_10_at_10.40.08_AM.png 1920w" /></picture> <cite><a class="ql-link" href="https://www.rentalhomecouncil.org/wp-content/uploads/2021/04/SFR-Get-the-Facts.pdf" target="_blank">National Rental Home Council</a></cite></figure>
But these fundamentals also are why institutional investors are likely to continue to enter these markets. They indicate that prices will continue to appreciate for the foreseeable future (if at a less drastic rate than the past year has delivered). That has spurred <a href="https://www.wsj.com/articles/built-to-rent-suburbs-are-poised-to-spread-across-the-u-s-11623075610">the existence of the “built to rent” market</a>. Instead of simply buying up existing homes, institutional investors are building them so that they can rent them out directly.
Even though they aren’t to blame for the current housing market calamities, it doesn’t mean that it couldn’t happen in the future.
The good: Institutional investors could provide a permanent floor to the US housing market, ensuring that there will always be some demand to hold up the critical industry from complete collapse.
“When the market slows down and there is a recession, housing is super cyclical and [institutional investors] will come in and be buyers throughout that,” Palacios told Vox. “They will, in our view, help support and help put a floor on home prices. If you’re a homeowner, you may in the next recession say, ‘I’m actually thankful for these groups. The entire economy suffers immensely when home prices bottom out. So if we now have institutional industry that will soften that blow, I think that is a good thing.”
<a href="https://www.urban.org/urban-wire/institutional-investors-brought-higher-home-prices-and-lower-vacancies-housing-recovery">According to Lauren Lambie-Hanson</a>, a researcher at the Federal Reserve Bank of Philadelphia, 28 percent of the house price recovery following the bottoming out during the Great Recession could be attributed to the role of institutional buyers.
In some ways, <a href="https://twitter.com/LeftistConnor/status/1378798666203295744?s=20">it can be easier to regulate larger entities</a> — there are formal agreements and lawyers familiar with fair housing law and local tenant protections, and the government can audit hundreds of units en masse instead of trying to go small landlord by small landlord, which would be extremely inefficient.
Even if institutional investors are competing with homeowners for existing homes, that doesn’t mean they’re just taking a home off the market — it simply means they are converting it to a rental property. Since renters are on average less wealthy than mortgage-qualifying would-be homeowners, institutional investors might be creating more housing for lower-wealth Americans. Traditionally, there have been no single-family rentals in desirable neighborhoods, which has made it impossible for less well-off people to live in them. That could start to change.
In the <a href="https://www.federalreserve.gov/econresdata/feds/2015/files/2015084pap.pdf">aforementioned paper</a> by Amherst Holdings and the Fed, researchers found that while increases in institutional investor activity lead to higher house prices, they also lead to more rental units. They note it’s possible that institutional investors were just better at “picking neighborhoods that would have experienced larger price increases anyway.”
<a href="https://ideas.repec.org/a/gam/jsoctx/v8y2018i4p93-d171162.html">A 2018 research paper</a> that looked at the impact of single-family rental REITs (Real Estate Investment Trusts, a.k.a. institutional investors) on Nashville, Tennessee, indicates that single-family rental investors tend to concentrate in “somewhat less diverse” communities where occupants had “higher levels of educational attainment...higher median household incomes, and lower poverty and unemployment rates.” That indicates that the housing stock that is being converted from owner-occupied to rental units is largely not coming from marginalized communities.
Lambie-Hanson has <a href="https://www.urban.org/urban-wire/institutional-investors-brought-higher-home-prices-and-lower-vacancies-housing-recovery">argued</a> that “there really isn’t any evidence in our research that institutional investors led to higher rents or greater eviction rates for our sample of counties tracked through the recovery.”
The bad: Institutional investors’ incentive to profit and return as much as possible to shareholders is a reason to cut as many corners as possible. Stories like the one Mari outlines in her New York Times Magazine piece are chilling, and it’s clear that even if it might be easier to monitor larger entities, it’s not clear that anyone would actually do that. And in the absence of government watchdogs, tenants would face much larger asymmetries of power than they would with small landlords. An army of lawyers and bureaucracy, for instance, could make it more difficult for tenants who have complaints or are being serviced with unreasonable fees.
And if real estate prices continue to appreciate, that means the growing wealth will be concentrated in the hands of these corporations. If these homes were owner-occupied, they would be concentrated in the hands of homeowners. In a <a href="https://www.washingtonpost.com/opinions/2020/08/06/nation-is-facing-housing-crisis-private-equity-firms-just-see-dollar-signs/">Washington Post op-ed</a> last year, Sen. Elizabeth Warren and Carroll Fife, the director of a California-based housing nonprofit, argued that allowing another “private equity real estate grab... would again give Wall Street carte blanche to use a national crisis to enact a massive, generational transfer of wealth from vulnerable Americans to corporations.”
There is also the concern that since these single-family rentals are concentrated in certain markets, institutional investors could gain market power and raise rents as they face diminishing competition from other landlords.
Bloomberg Opinion columnist Conor Sen told me he worries that “if [institutional investors] are seeing this like Amazon in 2005, and years from now they want to be 100 times bigger, I don’t think that’s something a lot of Americans would want — for there to be very few entry-level single-family homes to buy and there are only opportunities to rent.”
The unclear: How will this all affect the housing market, homeownership, and the need for housing abundance?
A lot of this discussion is happening because people <a href="https://www.cp-dr.com/articles/the-phony-debate-over-wall-street-and-homeownership">don’t want to address the core reason the housing market is currently out of control</a>: the marked undersupply of housing, which has made real estate such a compelling investment. Combating potential oligopolies, asymmetries of power between landlords and tenants, high rents, and overly high home prices begins with ensuring housing abundance. And there’s good evidence that institutional investors are drawn to markets where housing supply has been restricted. CoreLogic’s <a href="https://www.corelogic.com/blog/2019/06/special-report-investor-home-buying.aspx">research</a> found that investors are attracted to markets where rents are high and that in tighter markets, there were “larger increases in investor activity.”
Invitation Homes, the country’s largest provider of single-family rentals, <a href="https://aum13f.com/issuer/INVH">explicitly wrote</a> that it “invest[s] in markets that we expect will exhibit lower new supply, stronger job and household formation growth” and in places with “multiple demand drivers, such as proximity to major employment centers, desirable schools, and transportation corridors.” Essentially, it is looking to invest in job-rich areas where it expects local governments to continue blocking the supply of new housing even as more people try to move there.
Some have <a href="https://www.planetizen.com/news/2020/08/110179-protecting-distressed-real-estate-private-equity">cited concerns</a> that this could lead to these investors lobbying against more housing in these communities. However, there’s a countervailing force here: the renters themselves who would want rents to decrease.
It’s possible that increasing shares of renters in these markets will actually reduce the number of people reflexively pushing back against more affordable housing. Sen makes this argument in <a href="https://www.bloombergquint.com/gadfly/home-rental-market-is-the-secret-weapon-against-nimbys">Bloomberg</a>:
<blockquote>
In a neighborhood full of single-family homeowners today, if a big apartment complex is proposed by a developer, nearby residents will probably show up to local government meetings concerned about the impact of the additional housing supply on their home values...But in a build-to-rent community, the proposition of additional high-density housing means potentially lower rents for existing tenants rather than a loss in home values.”
</blockquote>
That means there could be more affordable housing produced in neighborhoods where single-family rentals become a larger share of the market.
The role of institutional investors is still being studied, but the popularity of the narrative strikes at something dangerous: People want a convenient boogeyman and when they get it, they often ignore the structural problems that are harder to combat. Housing undersupply is the result of decades of locals opposing new home building. It’s not something that can be blamed on Wall Street greed and the nefarious tinkering of a private equity firm. And that’s a much harder truth to stomach.
 
 
source <a href="https://www.vox.com/22524829/wall-street-housing-market-blackrock-bubble">https://www.vox.com/22524829/wall-street-housing-market-blackrock-bubble</a>

vox Wall Street isn’t to blame for the chaotic housing market

There has to be somebody to blame. Housing prices have yanked the dream of homeownership out of the desperate, clutching hands of millions....

G7 Eyes Allocating $100 Billion From IMF Funds To Covid-Ravaged Nations: US

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<div class="ins_instory_dv_cont"><img alt="G7 Eyes Allocating $100 Billion From IMF Funds To Covid-Ravaged Nations: US" src="https://c.ndtvimg.com/2021-06/33o6cnpo_g7-logo-reuters_625x300_11_June_21.jpg" title="G7 Eyes Allocating $100 Billion From IMF Funds To Covid-Ravaged Nations: US" /></div>
G7 leaders will discuss the issue on how to help steer the world's recovery from the pandemic.
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Carbis Bay, England:
The United States and other Group of Seven nations are considering reallocating $100 billion from the International Monetary Fund's warchest to help countries struggling most to cope with the COVID-19 crisis, the White House said.
The issue will be on the table when G7 leaders discuss how to help steer the world's recovery from the coronavirus pandemic at a three-day summit in Cornwall, in southwestern England, which begins on Friday.
"The United States and our G7 partners are actively considering a global effort to multiply the impact of the proposed Special Drawing Rights (SDR) allocation to the countries most in need," the US president's office said.
"At potentially up to $100 billion in size, the proposed effort would further support health needs - including vaccinations - and help enable greener, more robust economic recoveries in vulnerable countries, and promote a more balanced, sustained, and inclusive global recovery."
French President Emmanuel Macron on Thursday called on the other G7 nations to find an agreement on reallocating $100 billion in SDRs to African states.
World finance chiefs agreed in April to boost SDRs by $650 billion and extend a debt-servicing freeze to help developing countries deal with the pandemic, although only $34 billion was to be allocated to Africa.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
 
 
source <a href="https://www.ndtv.com/world-news/g7-eyes-allocating-100-billion-from-imf-funds-to-covid-ravaged-nations-united-states-2461664">https://www.ndtv.com/world-news/g7-eyes-allocating-100-billion-from-imf-funds-to-covid-ravaged-nations-united-states-2461664</a>

news world G7 Eyes Allocating $100 Billion From IMF Funds To Covid-Ravaged Nations: US

G7 leaders will discuss the issue on how to help steer the world's recovery from the pandemic. Carbis Bay, England: The United Stat...