If you didn’t listen to Lt. Gov. Antonio Delgado’s announcement of his candidacy for governor — and we’re guessing you didn’t — you missed its lone mention of the real estate industry: “Housing should not be the playground of corporate power.”
Populist rhetoric? You bet.
Is Delgado saying that businesses should not be able to buy, sell, rent, renovate, finance or otherwise invest in the housing market? It seems likely that he is going to campaign on the notion that the private sector, in its relentless quest for profits, makes housing more expensive.
Let’s unpack his carefully chosen nine words.
I’m sure Delgado is fine with the real estate version of the American Dream: A young couple goes to their local bank, qualifies for a mortgage, buys a house, makes improvements, raises a family and eventually cashes out to enjoy a comfortable retirement.
Guess what? All of those steps involve capitalists, many of which could be demonized as “corporate power” if a politician were so inclined.
The couple’s mortgage might come from JPMorgan Chase, a $740 billion company. Their brokerage might be Compass, which has more than 33,000 agents. Their title insurance will likely be from one of five massive firms. The tools and materials for improvements may well be purchased at Home Depot, market cap $731 billion.
Selectively branding private interests as evil might win Delgado some votes, but it’s a fool’s errand. Virtually every part of the economy can be defined to some extent as “the playground of corporate power.”
Food manufacturers and retailers. Restaurant chains. Entertainment. Consumer staples. Software. Durable goods such as cars, appliances and furniture. And, of course, services — everything from haircuts to financial advice.
But when something gets more expensive, usually because demand outstrips supply, as it has with housing, along comes a politician to blame “corporate power.” Unless a few companies dominate a market or consumers don’t shop around (as with title insurance), firms must compete hard on price.
Delgado may have been referring to the idea that hedge funds are buying up huge numbers of homes, cornering the market and selling or renting them for inflated prices. Which is pure nonsense, as I and others have documented.
But don’t expect the person he is running against, Gov. Kathy Hochul, to call Delgado out on his housing rhetoric. She said much the same this year, proposing to make “institutional buyers” wait 75 days before bidding on a home that hits the market.
Even members of Congress are in on the grandstanding.
Hochul’s move proved to be worse than rhetoric, though, because she got her plan into the state budget. It is now law.
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