A Distributivist Critique of Real Estate Investors Accumulation of Houses Which is Responsible for the Difficulty of Individuals to Own their Own Home

“Too much capitalism does not mean too many capitalists, but too few capitalists.” --GK Chesterton I personally own or co-own 35 houses and/or buildings. When people ask me why the real estate market is going so crazy, I tell them that three things are responsible: 1. Pot Money (Yakowicz) 2. California money from people who cash out in California (Seelmeyer) 3. The accumulation of houses by investors. In this paper we will only deal with #3: the accumulation of houses by investors. Who is responsible for the current shortage of supply and the subsequent increase in prices for single family homes? Certainly in some small sense I am, since I own more than ‘my fair share’ of houses. Here we will examine how this phenomenon has taken place looking at various statistics, and then we will provide a distributivist critique of this distribution of housing. Catholic social thought principles of solidarity and subsidiarity are at the root of the critique—it is inappropriate or inordinate for a small group of elite to own such a great share of the housing market. In addition, since private property ownership is an essential feature of Catholic Social principles, this concentration of private property in the hands of the few undermines the possibility of dignity. Distributivism attempts to find a middle way (via Catholic Social Thought) between capitalism and socialism. We will turn to Pope Francis’s writings from Evangelii guadium where he says “Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life today, we also have to say ‘thou shalt not’ to an economy of exclusion and inequality.” We will also use his more recent address to the Economy of Communion in 2017 where he says to entrepreneurs that they must be ‘agents of communion’ and that “it is important to act above all before the man comes across the robbers, by battling the frameworks of sin that produce robbers and victims. An entrepreneur who is only a Good Samaritan does half of his duty: he takes care of today’s victims, but does not curtail those of tomorrow.” (Francis, 2017) We will also rely on insights from Thomas Stork, GK Chesterton and Richard Aleman. After providing a distributivist critique of the current growing accumulation of housing by a small group of individuals and corporations, we will consider one objection from a Frank-Knight-Entrepreneur point of view: namely, that the entrepreneur who invests in real estate takes on risks that others do not want. After addressing this objection, we will provide some basic suggestions to discourage this growing trend of the concentration of ownership of housing by investors. One is that generally investors should not purchase homes which are currently owned by homeowners to be converted to rental properties. Second, investment properties should be taxed at a different rate (property taxes) than homeowner homes (perhaps double or triple the rate). Third, some restrictions should be put on the number of single family rental houses an individual or corporation should own. https://www.axios.com/investors-homes-wealth-families-bc792e11-a91e-4da5-97ad-b6e48e5dfd2a.html Bibliography Aleman, Richard 2015. The Hound of Distributism: A Solution for Our Social and Economic Crisis. Chesterton, GK. 2002 An Outline of Sanity, HIS Press. iPropertymanagement “Homeowners vs Renters Statistics” https://ipropertymanagement.com/research/renters-vs-homeowners-statistics#homeowner-vs-renter-statistics Kamin, Debra. 10/21 “The Market for Single-Family Rentals Grows as Homeownership Wanes” New York Times. https://www.nytimes.com/2021/10/22/realestate/single-family-rentals.html Phillips, Matt. “Big Investors are Hogging American Homes” Axios https://www.axios.com/investors-homes-wealth-families-bc792e11-a91e-4da5-97ad-b6e48e5dfd2a.html Pope Francis. ADDRESS OF HIS HOLINESS POPE FRANCIS TO PARTICIPANTS IN THE MEETING "ECONOMY OF COMMUNION",SPONSORED BY THE FOCOLARE MOVEMENT; Paul VI Audience Hall Saturday, 4 February 2017 https://www.vatican.va/content/francesco/en/speeches/2017/february/documents/papa-francesco_20170204_focolari.html _____________. Evangelii guadium. Pope Leo XIII, Rerum Novarum Seelmeyer, John. “California Rich Seeking Nevada Tax Haven” Tahoe Daily Tribune, 8/30/2013 https://www.tahoedailytribune.com/news/california-rich-seeking-nevada-tax-haven/ Storck, Thomas. “Capitalism and Distributism: Two Systems at Ware” in Beyond Capitlaism and Socialism. Tobias J. Lanz, ed, HIS Press, 2008 Yakowicz, Will. “The Marijuana Business Is Really the Real Estate business” Inc., April 2016. https://www.inc.com/will-yakowicz/the-big-opportunity-in-marijuana-is-real-estate.html