Zombie foreclosures. They sound like the dullest disaster movie ever — but, in fact, represent the grim reality for a rising number of Americans. The theory is simple. First, giant real estate funds buy up properties, deliberately allowing them to deteriorate. That takes homes off the market, and drives up prices, especially when demand is so high and supply so persistently low.

The upshot? A bonanza for investors, with firms like Blackstone betting literally billions of dollars on buying up American homes, before renting them out to desperate tenants. And if 28% of US single family homes were sold to investors in Q1 2022, an 8% jump on the previous year, the trend is increasingly popular on the far side of the Atlantic too. Not content with dolling out mortgages, Lloyds Bank apparently has plans to become Britain’s biggest landlord.

Yet as large corporations gobble up a diminishing supply of houses, they pose an enormous threat to would-be homeowners, particularly those Millennials too young to have cashed in the boom of earlier decades. Combined with frequent complaints that these mega-landlords don’t maintain their new purchases — and signs that they’re keen to scoop up even more real estate — much of the Western world edges closer to genuine disaster territory, even if the antagonists are more feudal vampires than undead shamblers.

Housing now dominates political discourse right across the developed world. Among Americans, it now ranks second only to inflation as a leading economic worry. In my native California, almost 70% of residents are concerned about housing costs; in Britain, housing has risen to become one of the top issues for voters — well ahead of defence, security, poverty and crime. That’s hardly surprising: especially under the country’s inflexible NIMBY regime, projections suggest that nearly five million UK households will live in unaffordable accommodation by 2030.

And if the Anglosphere is especially bad in this respect, it’s hardly unique. Studies have found similar problems stalk the European and East Asian markets too, as prices rise far faster than household incomes or inflation. And if the OECD warns that living standards are bound to “stagnate or decline” in consequence, this is far more than a series of individual catastrophes for the families involved. Rather, the West’s housing crisis, so exacerbated by outfits like Blackstone, has terrifying implications for the maintenance of middle-class democracy.

Small landowners have been the bulwark of democracy for millennia. This was true in the early origins of Athens and Rome, and in the rise of the Dutch Republic during the 17th century, perhaps the first genuinely middle-class society in history. If, however, the rise of property ownership undermined the aristocracy and hastened the end of feudalism, the most dramatic changes came after the Second World War.

Servicemen returning home wanted something better than the dank Victorian apartments they’d inhabited before. Their dreams were embraced, and indeed realised, by a series of progressive governments, often on the Left but sometimes Christian Democratic. There are plenty of examples here: Harry Truman’s GI Bill and Clement Attlee’s welfare state are probably the two most famous, but Australia and Canada pursued similar policies too.

And if President Roosevelt was surely right when he proclaimed that a “nation of homeowners” is unconquerable, the postwar embrace of quality, affordable houses for all provided “the secret sauce” that made liberal capitalism palatable to working people. Throughout the Fifties and Sixties, that was self-evident for those thousands of working-class families that fled the slums of Brooklyn or Wapping, embracing instead a front lawn and back garden in Long Island or its Essex equivalent.

“Was there ever such a stealthy social revolution as the rise of this semi-detached suburbia?” wondered the filmmaker John Boorman, recalling his childhood in a South London suburb.

Read the rest of this piece at: UnHerd.

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Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: Nick Bastian, via Flickr, CC 4.0 License.

The recent jobs report showing declines in almost all high-wage sectors — notably manufacturing, professional and business services — does not augur well for the durability of the MAGA revolution. Read more

For much of America’s history, the South has been a laggard, a poor region weighed down by intense racism and reactionary politics, lacking both industry and newcomers, foreign or domestic, to imbue it with dynamism and energy. But that’s changing — big time. Far from singing romantic paeans to Jefferson Davis, the Confederacy’s president, or celebrating his (blessedly) “lost cause,” the South increasingly embraces the very attitudes and policies that once made the North dominant.

Progressives like Chicago Mayor Brandon Johnson complain that America looks the way it would “if the Confederacy” had won. Yet the South’s triumph today is one the old rebels would barely recognize. The region, to be sure, still has more than its share of Blimpish nativists and religious fanatics. Even so, more people, including African-Americans, led by those with college degrees, now flock there in search of opportunity.

This marks a huge historical turnaround. Well into the Twenties and Thirties, the South was lagging and losing migrants to the North and the West. Slavery, and then segregation, notes historian Gavin Wright, kept down labor costs and, with them, the incentive for innovation and labor-saving technology. The South was almost its “own country,” as Wright says, a poor appendage to a much richer, more dynamic nation.

But now, the South is capturing cutting-edge industries, drawing in capital as well as a swelling tide of migrants from within the country and abroad. Overall, the southeast quadrant of the country is now the most dominant economic region, and since 2018 has produced almost all the country’s population growth and half its new jobs, according to the Texas Stock Exchange.

By contrast, it’s the Northern and Pacific cities that are pursuing John C. Calhoun-style nullification to resist Washington. And the Trump administration has taken note of this. Recently, Treasury Secretary Scott Bessent declared that “we want the US to be more like Florida and less like New York.” With Gotham about to embrace socialism and a globalized intifada, things look good for Trump Central in Palm Beach, the new favored boomtown for millionaires and billionaires.

Of course, inertia still works for the North and California after decades of dominance. Even today, per-capita incomes remain higher in the Northeast and California, but this likely reflects fewer families and higher costs, which often wipe out income gains, particularly for minorities and the working class. The income disparity has been receding since the Forties, as the South grows in power and influence and shifts to sophisticated businesses like aerospace, software, and finance — once unthinkable for the agrarian region.

One key factor to the Southern ascendency has been investment in education, which has long been a critical weak spot, with average expenditures half the national average well into the Forties. With an economy built around labor-intensive farming and light manufacturing, generations of ambitious Southerners sought opportunities elsewhere. Many headed to colleges in the Northeast and West Coast. But today, that flow has reversed, with ever more college students choosing to attend schools in the South.

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Read the rest of this piece at: Unherd.

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Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Homepage photo: SpaceX via Flickr under under CC 2.0 License.