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Because the Iran war front is again comparatively quiet, we’ll turn to how private equity is becoming a bogeyman in US midterm races, which is a big enough zeitgesit shift to have garnered a lead story at the Financial Times.
As an aside, the big new Iran news is an alleged terrorist plot at the UK’s RAF Fairford base, used by the US to prosecute the war in Iran. The BBC has set up a live feed for those who want to follow the official version ot this story closely. Note this incident is absent from Aljazeera’s current live feed.
The Vulnerabilities Behind the Gulf Export Recovery by Nate Wade is a must-read. There are too many asserting that virtually no oil has been getting through the Strait of Hormuz based on transponder data. Even Professor Marandi on a recent Glenn Diesen talk conceded the reverse, but argued that some was Iranian oil getting out via Iraq and that the rest was being permitted by Iran so as not to crash the global economy. Some Twitterati have speculated that Iran is getting paid covertly on some, perhaps most, of these transits.
Now to the main event. A Financial Times lead story, US housing crunch puts private equity in midterm campaign crosshairs, describes how US politicians are increasingly pointing their blame cannons for ever-levitating housing costs away from big banks to private equity. Even if private equity culpability is debatable (housing is ever and always local, and so far private equity is arguably having a price impact only in certain locales), this focus reflects increased public recognition of the degree to which private equity has become a prime mover in rentierism, from hospitals to the looting of many retailers, such as Toys R’ Us, to pet care.
In fact, private equity ownership of rental housing, particularly single-family homes, has come in two flavors. The first was their large scale purchases of foreclosed homes after the financial crisis. We argued that private equity had cost disadvantages compared to the classic mom and pop operator, who would typically manage and rent out 2-10 homes and be located close by, making maintenance easy (even more so if the owner fit the prototype of being in one of the trades, say an electrician or a plumber or even a contractor). By contrast, the foreclosed homes often had not been well maintained after the foreclosure, were seldom concentrated, and could not be migrated without a fair bit of investment to easier-to-maintain formats, such as having the same toilets and sinks. So it was not surprising that the biggest operation in this category, Invitation Homes (spun out from Blackstone), soon developed a reputation for being a bad landlord.
The later wave has had a considerable representation of “build to rent”, of housing newly constructed for the express purpose of rental. A private equity sponsor could thus require common features that would lower the cost of maintenance.
The article skips over that distinction to focus on the political shift:
An FT analysis of campaign language in competitive congressional races over the past decade found that negative comments about private equity and corporate landlords have risen sharply in 2026, with their investments frequently being linked to rising prices. In previous election cycles, Wall Street and the banking sector were singled out for driving up the cost of living….
Interest rates on US 30-year mortgages topped 7 per cent for the first time in almost two years this week. Housing affordability is a central issue in the November elections, and institutional investment is blamed by many voters for the soaring prices.
More than two dozen candidates in competitive House and Senate races have pledged to restrict purchases or ownership by private equity firms, hedge funds and other institutional investors — more than double the level in any previous cycle.
Residents of mobile home parks told [House Representative Chris] Pappas that increased rent and new income requirements imposed after their sites in New Hampshire were acquired by Michigan-based boutique real estate investor Sado Capital made it difficult to remain in place or even to sell their homes.
“Their home, which is essentially their life savings, has been eroded in value, and they’re forking over more every month just to be able to continue to live in their community,” he said.
Pappas said policymakers must address the “corporate private equity influence” that was making housing less affordable. He has backed legislation that would incentivise owners of manufactured home parks to sell to residents or non-profits rather than private sector landlords.
The push by institutional investors into low- and middle-income housing has raised the industry’s profile and led many households to blame private equity for the lack of affordable homes….
In Iowa — one of 12 competitive Senate races — Republican nominee Ashley Hinson acknowledged that families were struggling to find affordable homes and that “massive institutional investors swooping in and outbidding families for starter homes only add to that frustration”.
Her Democratic opponent, Josh Turek, is pledging to ban “Wall Street private equity firms” from purchasing single-family homes and farmland and to crack down on private equity purchases of eldercare facilities and healthcare centres.
Adam Hamilton, the Democratic Senate candidate in an increasingly competitive midterm race in Kansas, has called for an investigation into “private equity consolidation in essential sectors including healthcare, housing and groceries”.
Private equity defender will argue that corporate ownership of housing represents only 4% of residential rentals. But that is misleading.
First, housing is ever and always local. Consider another area targeted by private equity: kidney dialysis. No one will travel far to get their blood cleaned two or three times a week. Private equity focused on getting dominant positions in particularly markets, like Los Angeles. That sort of concentration would not show up on a national review.
Second, private equity is targeting a particular tenant type (younger people, smaller square footage), which again would lead them to have a bigger impact than if they were buying rentals on a broad basis.
Third, the direction of travel is to more corporate ownership of housing, so any trend in play is set to get worse, absent intervention or oversight.
NPR, in late 2025 in Here’s what happens when private equity buys homes in your neighborhood, explained how private equity investment in housing was detrimental to prospective home buyers and even lowered prices of neighboring homes where they made buys. It starts with the key driver, a decade of low investment in new housing despite population growth and sustained low interest rates:
The response to this development — of Wall Street buying Main Street, or at least some of its cul-de-sacs — has been bipartisan, populist and patriotic condemnation….But now private equity was outbidding aspiring homeowners, making it more expensive to buy a home and pocketing the appreciation in home values….
Now that these institutional investors have been buying and renting out houses for more than a decade, researchers have had time to study their impact. And they’ve found a surprising nuance.
These investors can and do make homeownership harder to attain, just as their critics claim. But by providing rentals, they also make neighborhoods more affordable and more diverse. They are diversifying the suburbs….
[Economist Kohnee] Chang realized these investors’ buy-to-rent strategy provided an ideal case study of what happens when more rentals are available. If someone had built new homes to rent out, that would increase the supply of homes, changing the neighborhood. But since they converted homes into rentals, only one variable had changed, like in an experiment.
So Chang assembled and analyzed data on neighborhoods before and after corporate landlords showed up, including demographic data on the residents. His biggest finding? Institutional investors were reducing segregation. When private equity rented out homes, the new tenants tended to be lower income than the prior owners and more likely to be young and nonwhite…
These results did not turn Chang into a cheerleader for private equity… Plus, he did not investigate other criticisms of corporate ownership…
Most of all, Chang found that the buy-to-rent strategy was hurting the middle class. Creating rentals aided lower-income families and nudged rents down. But reducing the supply of homes available for sale also pushed home prices up, hurting families on the cusp of homeownership.
It was telling to see that a significant majority of the comments on the Financial Times’ story were critical, even with a minority contending that the data indicated that private equity was not a big enough factor nation-wide to be having a meaningful impact. The Financial Times’ comments are usually orthodox. For instance, if anyone had suggested that Russia had been provoked into its invasion of Ukraine or was winning the war would be called a Putin-lover. Here, private equity defenders were deemed to be industry shills.
For instance, from Eclair:
Having been in the field of private equity, I would say that it generally is a calamity.
Most of the time it destroys companies because the financiers don’t know how to operate these. They put too much leverage in order to juice up the returns on invested capital and have 5-7 years horizon vision, no more. The whole management staff has a mercenary mindset with their own interests first and that of the company somewhere down the line.
The fund managers are there for the fees and if by bad luck their promote disappear they vanish.
No long term vision is the common feature of private equity.
anganaca used Spain’s experience to describe what this buyout trend produced longer-temr:
they are displacing or evicting people from their homes and small merchants and workshops from their premises for short term rental to wealthy nomad workers and ever growing tourism in most Spanish cities. They are empting the old historical centre of towns to precisely kill what made them attractive. Gentrification kills culture and genuine diversity while ruining the life of people who have lived there for generations. Next crisis these cities will look empty and dead as downtown in US cities after desagregation
see here
An observation by Hei5enberg elicited many positive replies:
Private equity shouldn’t be allowed near housing, healthcare, infrastructure or anything else that has a social nexus.
One of the many examples from Pointdexter:
Couldn’t agree more – would even suggest that PE is now so omnipresent and so malignant that it deserves serious investigative journalism to expose its true face to the public, and that the beginnings of the backlash we read about here are the beginnings of a much wider revolt.
No commercial activity describes the transfer of wealth from the poor and the middle classes to the rich quite exquisitely as PE does.
Other private equity targets that the commenters wanted off its menu included health care, child care, and insurance.
Some argued (as we have from time to time in our CalPERS’ coverage) that the focus needed to include “cui bono,” as in that public pension funds and endowments were sponsoring this pilfering of ordinary citizens.
While one robin does not make a spring, this surprisingly widespread criticism from Financial Times readers suggests that even educated, upper-class skewing or aspirant members of the public are increasingly aware of the gap between the super-rich, as represented by the private equity and tech fund elite, and that they are not safe from them. Even if they are not directly harmed, people important to them are set to be.
