How The Private Equity Business Owns America

Written by David Zimmermann

The trend: Private equity firms are quietly dominating the American economy with little oversight through investing in several sectors including real estate, government, health care, and transportation. Thousands of properties in major U.S. cities, such as San Diego, are directly impacted by this recent trend, which involves firms making a profit at the expense of American citizens.

What is Blackstone? Blackstone is one of the world’s leading investment firms in private equity, an industry that currently manages $7.5 trillion in assets. In the first quarter of 2023, Blackstone reported $991 billion worth of assets under management — investments that fall under real estate, public debt, life sciences, and infrastructure, among other areas. The company is the largest owner of commercial real estate with its global portfolio valued at $585 billion.

Buying up America: In addition to commercial spaces, Blackstone has been purchasing residential neighborhoods. This may decrease the chances of middle-class Americans purchasing homes, with a multibillion-dollar competitor like Blackstone in the market. Blackstone is now acting as the corporate landlord of these rental properties, reportedly imposing rent increases and evicting hundreds of renters for failing to pay the costly bills. Blackstone also lobbies against state and local rent control policies.

The aftermath: The impacts of such actions can lead to significant changes in the national housing market. San Diego County, for example, saw a 92 percent increase in its median rent costs, which was $3,100 in May, since a decade ago; and the county’s average home sale price was much worse. In May, Zillow reported the home value at $860,000 — a drastic 123 percent uptick in 10 years. What’s more, investors like Blackstone may own 40 percent of the single-family housing in America by 2030.

Big picture: Zoning policies and strict housing regulations in cities, mass immigration and its strain on the housing market, and now the gobbling-up of residential properties by investment firms have all contributed to the current housing crisis in America. For the first time in decades, Americans spend more than 30 percent of their income on rent, and homeownership is more difficult than ever.