The Housing Crisis is a Lie

Don’t believe it when people say America has a housing shortage. It’s not only untrue; it’s also dangerous propaganda that blinds us to the real crisis and discourages us from fixing it. Yes, there is a problem with housing, but it’s not a shortage of buildings. It’s a shortage of truth.

Ask yourself: who benefits from repeating the idea that there’s a housing shortage? Developers and real estate investors certainly do. They use that message to push for looser zoning laws, faster permitting, generous tax breaks, and even public subsidies, all under the veil of solving a “crisis.” Institutional investors repeat it, too. They use it to justify buying up tens of thousands of single-family homes, claiming they’re putting housing stock to good use, when in reality they’re converting homes for working families into permanent rentals. Politicians benefit as well. By repeating the myth, they help their donors in the finance and real estate industries while avoiding the hard work of proposing policies that support affordable homeownership. And of course, the media goes along because it’s a safe and easy explanation that doesn’t challenge the interests of their corporate owners. In short, blaming the problem on a so-called “shortage” deflects attention away from greed and toward an imagined “free market” that’s been rigged from the start.

The truth is this: America doesn’t lack housing. It lacks affordable housing. According to the U.S. Census Bureau, there were roughly 15.1 million vacant housing units in 2022. That same year, the Department of Housing and Urban Development (HUD) estimated there were about 582,000 unhoused people. That means there were about 26 vacant units for every person without shelter. Let that sink in. We have enough space to house every unhoused American, several times over. The housing is there. What’s missing is access, affordability, and most importantly, political will.

So why aren’t those homes available to the people who need them? Because the market doesn’t serve the needs of the people; rather, it serves the almighty profit of corporations. Builders no longer focus on affordable “starter homes”; instead, they aim for bigger margins by constructing McMansions and high-end developments. Real estate companies follow the same logic. And in the years following the 2008 financial collapse, large financial firms began investing heavily in single-family homes, not to sell, but to rent. They know that young families are desperate for housing, and as long as people believe there’s a shortage, they’ll accept renting as the only option. It’s estimated that by 2030, half of all residential properties in America will be rentals. That’s not by accident. It’s by design.

Making matters worse, the federal government played a key role in enabling this burden on working Americans. After the 2008 financial crisis, it chose to bail out Wall Street rather than directly help families facing foreclosure. Instead, taxpayer funds financed the Troubled Asset Relief Program (TARP), which injected hundreds of billions into banks and financial institutions to stabilize them. Meanwhile, government‑sponsored enterprises Fannie Mae and Freddie Mac were placed under conservatorship and took control of vast inventories of foreclosed homes. Rather than making them available to families or local governments, many of these properties were sold in bulk to large private investors and asset managers. Those investors then rented the houses back to working-class Americans—often the same families who had once owned them. In effect, ordinary taxpayers paid to stabilize the financial industry and ended up renting the very homes they helped rescue.

And it didn’t stop there. For years, the Federal Reserve kept interest rates near zero and flooded the market with cash through quantitative easing. That cheap money didn’t go to working families. It went to asset managers and private equity firms who used it to acquire more properties. The result was massive asset inflation — a boom in the value of financial holdings like real estate — while wages stagnated. The rich got richer while ordinary Americans got priced out of the housing market.

To make things even worse, programs that might have helped were quietly abandoned. The first-time homebuyer tax credit from the 2009 stimulus expired and was never renewed. Down payment assistance and housing counseling programs were defunded. The message was clear: the government would rather support industries than individuals. Meanwhile, a toxic cultural narrative took hold — especially in conservative media — suggesting that those who lost their homes were irresponsible or undeserving. That same mindset now drives calls for work requirements as a condition for receiving government aid like Medicaid, as if human dignity must be earned through labor. It’s an old lie every bit as toxic as Arbeit Macht Frei, but dressed in new clothes.

So here we are, a nation drowning in housing, yet starving for homes. Financial firms, real estate developers, and media outlets continue to spread the myth of a housing shortage to keep the system going. And as long as people keep believing that myth, they’ll keep playing along by signing leases, accepting rent hikes, and giving up on the dream of home ownership.

What’s happening now isn’t capitalism. It’s not even free enterprise. It’s a wholesale transfer of wealth from working Americans to the investor class. It’s a quiet revolution, and it’s turning us into a nation of renters — not because we want to rent, but because we’ve been told we have no choice. In communism, the state owns everything. In today’s America, corporations do. Either way, the outcome is the same: you own nothing.

But it doesn’t have to be this way. The first step is awareness. This “crisis” is not a matter of fate, but of design. The second step is action. We can pass laws to limit corporate ownership of homes. We can restore the first-time homebuyer tax credits and invest in down payment assistance. We can enforce codes, raise taxes on vacant investment properties, and support community land trusts. We can put ownership and power back in the hands of the people who built this country, not the ones who simply move money around all day long.

The truth is simple: wealth doesn’t trickle down. It bubbles up from the working people who create it. If we want to rebuild the American Dream, we must stop subsidizing the wealthy and start investing in hardworking Americans. The market won’t fix this. We must fix it ourselves.