It's the Rent, Stupid

Home. Like everything else in America, it’s become a commodity. And now the thoughtless auctioning off of the most basic of human needs may cost us our democracy.

The presidential race appears to be coming down to whether women terrified and disgusted by Donald Trump will swing the election to Kamala Harris, outweighing the votes of Black and Latino men who are falling away from the Democrats. There are a number of reasons, but one stands out. According to the data, 78 percent of eligible Latino voters are working class. The numbers are even higher in crucial swing states: 82 percent in Arizona and 85 percent in Nevada.

The New York Times ran an article last week that sounded the alarm about these voters. While Harris is ahead 78-15 percent with these voters (78-15 with black voters and 56-37 with Hispanics) she’s below Joe Biden’s numbers in 2020: 92 percent of black voters and 63 percent of Hispanics.

With the election so painfully close, and Sunbelt states in play, that puts tremendous pressure on Pennsylvania, Wisconsin, and Michigan. And it is alarming for the party's future: according to GOP Latino consultant Mike Madrid, these declines are part of a long-term trend of Hispanic voters falling away from the Democratic Party.

It might be difficult to gauge entrenched sexism or the propensity for younger voters not to be offended by Trump’s dog whistles, but one factor is easy to discern: If you’re working-class, odds are that you’re struggling. Not so surprisingly, Latinos and Black Americans are significantly more likely to be renters and to be low-income renters as well.

I live in a California county where the median income for a single person is $28,485, half the median in Westchester County, New York and less than half the median income in San Francisco. While macroeconomic indicators for the U.S. economy are positive, people aren't feeling it here. I asked a guy who runs a moving company what he thinks. In his early forties, he’s Latino, originally from Texas. Let’s call him Eddie.

"Do you think the economy's good?" I ask him.

“Oh, no,” he says, barking out a short, humorless laugh.

I persist, asking if he thinks the situation is improving No. In fact, Eddie tells me he thinks the economy is “declining.” He points to small businesses have been closing since Covid, when so many people started ordering from Amazon. But it was the housing crisis he talked about most.

“I don’t know what’s causing it,” he said. “It’s been like this for a few years. During the boom when Covid was bringing people out here and everyone was opening AirBnBs, people were forced out of their homes.

“We were physically there, pushing them out. Seniors, people on fixed incomes were becoming homeless. They were crying. They were terrified. As a mover, I was there. What was I supposed to do? It tore me up.”

Now the AirBnB market is saturated, he said, and owners are trying to get long-term renters. But they paid top dollar for their houses, and locals are priced out. "This is a poor area," he said. Too many people are living in their cars.

Talk about inflation usually focuses on gas and grocery prices. But for most of us, housing is our largest expense. Nearly half of Americans paying more than 35 percent of their income on housing, and shelter costs have not improved the way other inflation indicators have. In fact, Axios reports on a study by the Cleveland Fed revealing that rents are standing in the way of inflation dropping to the Federal Reserve two percent target. While food and energy inflation has dropped to roughly two percent, shelter is at 4.8 percent.

Like so many U.S. problems, this one was a long time in the making. While the Covid-19 pandemic ramped up prices dramatically, rent increases had been outstripping wage growth since - you guessed it - Ronald Reagan’s election in 1980. Even before Covid, the Obama administration’s response to the economic meltdown of 2008 set the country up for the current crisis.

In his 2019 book Homewreckers, investigative reporter Aaron Glantz reported that as foreclosures mounted, the federal government took possession of tens of thousands of homes. The American Civil Liberties Union and the Lawyers’ Committee for Civil Rights Under Law proposed that the federal government work with nonprofits to turn foreclosed homes into affordable housing for the poor.

Instead of taking that advice, or helping families buy homes at affordable prices, the administration sold thousands of houses in bulk to vulture speculators like Trump crony Thomas Barrack, who later faced federal indictments for obstruction of justice and acting as the agent of a foreign government, and the more respectable but equally rapacious Stephen Schwarzman of the Blackstone Group.

Despite rules requiring the government to try to obtain the best prices possible, the rush to sell meant the houses changed hands when the market was at its lowest. Foreclosure sales were quite the scene, with representatives from investment firms tapping away on laptops, quickly outbidding individual buyers.

With foreclosures reaching 1 million in 2011 alone, Glantz writes, “the federal government did almost nothing to prevent communities from collapsing entirely. ”

“In August 2011 the government moved to unload the properties,” he recounts. “The Treasury Department, the Federal Housing Administration, and the Federal Housing Finance Agency put out a joint request for input, asking the public for the best way to dispose of all their foreclosed homes. Consumer advocates and Realtors argued that they should be sold to individuals to stabilize neighborhoods, and that banks, which had received huge taxpayer bailouts, should be forced to lend to prospective home buyers. But the government request was narrower. The government said it needed help finding the best way to sell the houses in bulk as rentals, in huge blocks valued at between $50 million and $1 billion18—or between about five hundred and ten thousand homes at a time.”

Now firms like Blackstone are on track to own 40 percent of single-family rental homes by 2030, according to CNBC.

“It’s almost a captive market,” said Jordan Ash, director of labor-jobs and housing at the Private Equity Stakeholder Project told CNBC. “They’ve been very explicit about how people are shut out of the homebuying market and are going to be perpetual renters.”

The Covid-19 pandemic deepened the crisis. Since 2019, rents have gone up 70 percent.

The Sunbelt, including the swing states of Arizona and Nevada, bore much of the brunt of the foreclosure crisis. And once home prices went back up, these states, with a high number of Latino voters, “outpaced national figures for rent inflation,” CNBC reported. In just one glaring example, rents rose 43 percent in Phoenix between January 2020 and January 2023.

Not surprisingly, homelessness has increased, too, both regionally and nationally. Looking at national statistics for one night in January 2023, a record-high 653,104 people experienced homelessness, more than a 12.1 percent increase over the previous year. From 2019 to 2023, the number of people entering emergency shelter for the first time rose 23 percent.

That isn’t sticker shock. It’s a full-blown crisis. And it’s not going to be solved by California governor Gavin Newsom donning a hard hat and moving people’s tents away from freeway underpasses.

The nation's housing crisis is bad news for Democrats. Last week, polling showed that 44 percent of Americans say they’re not as well off now as they were when Biden took office. Fifty-nine percent of people say the economy is getting worse, versus 23 percent who say it’s getting better. Among registered voters who say the economy is worse, Trump leads Harris by 53 points, 74 to 21 percent.

Last week, I wrote that there is a difference between the formal use of the word "economy" and the way most people think about it. When James Carville said, “It’s the economy, stupid” he didn’t mean money supply or accelerated share repurchases. He meant: Can you get by? Can you send your kid to college? Can you buy a house or start a business?

He meant, as Anthony Scaramucci, the Goldman, Sachs alum and Trump apostate recently put it: the aspirational economy instead of the desperational one. Unless you made money like Scaramucci, chances are you’re closer to the desperational economy.

When I asked Eddie how he thought the economy was doing, he didn’t cite GDP (up) or wage growth (also up, but only by single digits) or employment (yes, up). He didn’t mention the stock market (way up).

He talked about people. People he’d encountered. Because, as the old Tip O’Neill saw goes: All politics is local.

After I published last week’s article on the election, urging the Harris campaign to convey a stronger, more coherent message on the economy, a former editor of mine accused me of being a “Trump apologist,” telling me I’d failed to give the Biden administration enough credit for restructuring the U.S. economy. He sent me the kind of article I’d seen too many times, an accounting of macroeconomic trends.

Is that even a thing? A Trump apologist?

Just no. I recognize everything Joe Biden did. I appreciate all of it. I wish the American people appreciated him more. I wish he’d had the chance to run for president in 2016. If Obama had anointed him instead of Hillary Clinton, it could have saved us all this tsuris. (If voters had supported Joe instead of Barack in 2008, it might have been even better.)

But we’re a big country. The major pieces of legislation that Joe Biden miraculously convinced Congress to pass amount to turning an ocean liner, not a speedboat. Too many people don’t yet feel the effects of the administration's efforts to rebuild the middle class. Joe Biden is old enough to remember when Democrats were the party of the working class. He's also smart enough to know that the only way to break the hammerlock that a nearly evenly divided electorate has put on U.S. politics is by winning those voters back.

In a recent interview with Dana Bash, Harris campaign senior advisor David Plouffe countered her questions about Democrats losing ground with Black and Latino males by talking about a surge in support among women voters. He’s not necessarily wrong. GOP Latino consultant (and Harris supporter) Mike Madrid has run the numbers. Even with declining support from Black and Latino males, Harris could win the Electoral College if she peels off enough college-educated women from the ranks of Republicans and swing voters. Madrid thinks she can do it.

But with the race so close, do you want to take that risk? The Trump campaign reportedly is reaching out to Nikki Haley to offset the Trump's weakness with women voters. Will Haley join Trump on the campaign trail? If history is any guide, Haley would be unlikely to let integrity stand in the way of a possible Cabinet position.

As the days tick by, the Harris campaign may be recognizing the the angst of renters. Axios Latino recently reported that The Center for Democracy Action is targeting Latino and black renters in swing states who voted in 2020 but haven’t voted since then, presumably coordinating with the campaign.

“The thing that keeps them up at night the most is housing insecurity, housing and affordability" along with the "precariousness" that comes with being a renter, said Analilia Mejia, the group’s co-executive director.

"It is also the thing that they hear the least about" from politicians, Mejia added.

While the Harris campaign has talked about the housing crisis, the major focus has been on expanding homeownership. Her platform includes cracking down on price-fixing by corporate landlords.

That's not enough.

Here’s what we need Kamala Harris and Tim Walz to say: “If you’re a renter, my administration wants to keep your rent affordable. We will do the big things that change the market, but we know those changes may not come soon enough and you need help now.

“We know it's tough out there. Our administration will make it a priority to make sure paying your rent doesn’t mean your kids don’t have new shoes, or if you’re a senior, that you can’t afford your medications. Most of all, we will work to make sure you have a home. Our opponent has 36 felony convictions. He grew up to inherit the real estate company his father built, and they got in trouble for not renting to people of color. We want to make sure everyone has a fair shake, and we know that a home is the essential building block for the American dream."

Honesty, I don’t care if Harris can reel off Liz Warren specifics. I just want to know that she feels our pain. And, yes, a full-scale housing policy is needed. Housing used to be a national priority back in the 1960s. Even in the 1990s, housing was on the agenda. During the administration of the first George Bush, former congressman Jack Kemp, head of the Department of Housing and Urban Development, tried to reform a problem-plagued agency. Even then he was criticized for stressing homeownership over assistance to renters. It's time for a Democrat to move beyond that Republican stance to a more modern approach. Models are out there in countries like Germany and the Netherlands.

As for my editor? The one who told me I was a Trump apologist? He lives in a $700,000 house. I can’t afford to live in the city he lives in. That’s why I encounter people who think the economy sucks in my day-to-day life.

It’s too bad that this election, in particular, is separating so many of us. Americans live in gated communities, whether the gates are metal or mental. Hiding from our fellow citizens behind those gates may be the end of us.

Susan Zakin is the Journal's editor.

The video clip that inspired Mike Madrid to ask: Why is a Latino construction worker asking Trump tougher questions than the media?

Ain't Nothin Going On But The Rent ::: Gwen Guthrie

The Landlord ::: Will Ferrell

Rent Party Rag ::: Spider John Koerner

Movin’ Day :::: Charlie Poole

Rent ::: George Strait

Where's The Money ::: Dan Hicks & His Hot Licks

Rent Party Blues ::: Duke Ellington

The Rent Is Always Due ::: Neil Young

Riley The Furniture Man ::: The Georgia Crackers

I'm Broke :::: Black Joe Lewis & The Honeybears