Comrade Lizzie Didn’t Have to Lift a Finger on This One

On March 12, the 21st Century ROAD to Housing Act — the bill banning large institutional investors from buying single-family homes — passed the Senate 89-10.

The bill was co-written by Republican Chairman Tim Scott and ranking Democrat Elizabeth Warren on the Senate Banking Committee. Before the vote, the committee put out a press release listing more than 25 organizations — including the progressive organizations the National Low Income Housing Coalition and the National Housing Law Project — endorsing the bill.

When psychotic leftist Elizabeth Warren is celebrating the advancement of legislation she co-wrote, you might want to be concerned.

The premise of the bill is that greedy Wall Street investors are gobbling up all the homes in America and driving up prices for regular families.

It’s a great story to rile up the proletariat.

It also has almost nothing to do with reality.

Large institutional investors own less than 1% of single-family housing stock in the United States. And roughly 85% of their tenants can’t qualify for a mortgage — meaning these aren’t people who were outbid by BlackRock. They’re people who have no access to homeownership regardless.

To get to the root of the latest reason housing is unaffordable, you just need to look at the Federal Reserve’s pandemic-era monetary policy.

The Federal Reserve held interest rates near zero for years, which fueled a buying frenzy and sent home prices through the roof.

Then inflation hit, and the Federal Reserve jacked rates back up. Now homeowners who locked in a 2.8% mortgage can’t afford to sell — because selling means giving up that rate for a 7% one.

So they stay put, and supply dries up. Meanwhile, builders can’t build because materials cost 40% more than they did five years ago.

None of it has anything to do with institutional investors.

But Washington doesn’t blame itself. It never does.

Which is why I said this is the latest reason for unaffordable housing.

In 1992, Congress told Fannie Mae and Freddie Mac to direct 30% of their mortgage purchases toward lower-income borrowers. By 2008, the target had been ratcheted up to 56%. Fannie and Freddie were sitting on a trillion dollars in subprime mortgage-backed securities. And the whole thing collapsed — taking the global economy with it.

The response wasn’t to unwind the interventions that caused the crisis. It was 2,300 pages of new regulations called Dodd-Frank.

This is the same pattern with everything the government touches: it gets more expensive.

College tuition has risen roughly three times faster than inflation since Congress began backing student loans in 1965. The New York Federal Reserve studied this directly and found that for every dollar increase in subsidized student loans, tuition rose by up to 60 cents.

Healthcare is the same story — before Medicare and Medicaid were created in 1965, the government’s share of healthcare spending was about 31%. Today it’s roughly 64%. The “Affordable” Care Act promised to fix it — and family premiums nearly doubled, from $13,770 to almost $27,000 a year.

We saw the obvious solution earlier this year when Robert F. Kennedy Jr. got 18 states to ban SNAP purchases of junk food, and PepsiCo cut Doritos prices by 15%. The moment the government stopped subsidizing demand, the company had to compete.

But it’s not just the federal government strangling housing supply. It’s local government too.

In January 2025, the Palisades fires destroyed roughly 16,000 structures across Los Angeles County. Fifteen months later, 28 have been rebuilt. Only 2,900 permits have been issued out of more than 6,100 applications. Homeowners who lost everything are still waiting on approvals to rebuild on land they already own.

Southern California has some of the strictest permitting requirements in America — and some of the worst housing shortages. The state is short somewhere between 840,000 and 3.5 million units, with median home prices above $850,000.

Now compare that to what happens when government gets out of the way.

Missouri has no mandatory statewide residential building codes — in some Ozark counties you can build a home with nothing more than state septic approval. No plan reviews, no inspections, no 15-month permitting nightmare.

Idaho’s Boundary and Bonner counties have no county-level building codes. In West Texas, counties like Hudspeth and Presidio have no enforcement at all — land goes for $500 to $3,000 an acre.

None of these places have a housing shortage. Vacancy rates run 20-30%. Homes sit on the market for months. Supply meets demand.

Which makes the fine print of this Senate bill even worse than the headline ban. The legislation hands the Treasury Secretary broad authority to redefine the law’s key terms — “large institutional investor,” “single-family home,” “excepted purchase” — and to issue new rules as he sees fit.

Penalties for violating the investor ban run up to $1 million per transaction or three times the purchase price — whichever is greater.

Weren’t Republicans supposed to be dismantling the administrative state — the one where unelected bureaucrats rewrite laws instead of Congress?

And Section 205 is the same playbook the federal government has used to drive up costs in healthcare and education — just applied to housing.

First the government hooks communities on federal block grant funding.

Then it uses that funding as a lever: communities that don’t hit Washington’s housing production targets get a 10% cut, and that money gets redistributed to communities that do. The bill even exempts communities that lack the legal authority to change their zoning — which tells you exactly what the penalty is designed to do to everyone else.

The places in America where housing actually works — cheap, available, no 15-month permitting disasters — work precisely because the federal government has left them alone.

This bill starts stretching Washington’s tentacles into local housing rules.

No wonder Elizabeth Warren loves it.

Source

Simon Black is an international investor, entrepreneur and permanent traveler. His daily letter is both educational and entertaining, and we suggest that those who want unbiased, actionable information about global opportunities sign up for Sovereign Man’s free, actionable newsletter at http://www.SovereignMan.com.

From Simon Black of SovereignMan.com

Source: https://www.schiffsovereign.com/trends/comrade-lizzie-didnt-have-to-lift-a-finger-on-this-one-154978/