Why should we believe the private sector has been doing a craptastic job or that private sector actions are harming the public when the private sector hasn't been the party calling the shots in the housing market for a very long time? But it's a law of nature that no matter how thoroughly regulated a market is, the fans of regulation will blame every problem that arises on whatever smidgen of private decision-making has been allowed to persist, and never on the foreseeable consequences of the mass of regulation already in place.
The reason big real estate investment firms and corporate landlords have been buying up properties in bulk is because tenants' rights legislation has gone to such an extreme it's made renting out residential property so dangerous to the owners that a huge fraction of those moving out of their houses are choosing to sell rather than gamble their life savings on getting into the landlord business. Rental risk is diversifiable, which means the market won't pay you to take the risk, which makes taking the risk irrational for anybody who isn't big enough to diversify his operation over hundreds of tenants. This artificial suppression of competition from traditional mom-and-pop landlords drives up rents, giving corporations an incentive to outbid regular people trying to buy homes. So of course corporations are going to end up owning a ton of the housing.
"Landlords in LA cannot evict tenants from any rental property, including single-family homes, unless there was unpaid rent, documented lease violations, owner move-ins, or other specific reasons that would justify moving the tenant out. The Los Angeles Housing Department keeps a specific list of the allowed “at-fault” eviction reasons and the “no-fault” legal reasons for eviction. Landlords will also have to pay relocation assistance to tenants if the eviction is for “no-fault” reasons. Some tenants already had “just cause” eviction protections in place thanks to the state law, but LA has made them universal, expanding the protections to about 400,000 additional units. If these laws did not apply to your property before, they might apply now. This is one of the most significant new rental laws in LA, because all units in the city are now covered by the protections."
In a capitalist system, the primary objective is to make money and avoid losses. It’s not designed to care about people or take responsibility unless laws, contracts, or market forces make it profitable to do so. - Gospel
I get that tenant protections can change landlord incentives, but they’re neither the main nor major cause of what we’re seeing. Large-scale speculative buying and consolidation by corporate landlords didn’t suddenly appear because LA updated eviction laws, these trends have been building for decades, pushed by cheap capital, stagnant wages, and an investment culture that treats housing as an asset before it’s treated as shelter.
Small landlords selling out doesn’t automatically lead to a handful of corporations controlling huge swaths of housing, unless you already have a system where Wall Street money can outbid working families every time. That’s not created by tenant protections, that’s a feature of the current market structure.
If anything, those laws are a reaction to decades of imbalance, not the trigger for it. And while regulation can create unintended consequences, the private sector’s track record in keeping housing affordable, even
before these protections, wasn’t exactly spotless.
1. Savings-and-loan crisis fallout (late 1980s–early 1990s)
- Long before today’s eviction protections, the U.S. housing market saw speculative overbuilding, predatory lending, and reckless investment strategies by private banks and developers.
When the S&L bubble burst, it left behind foreclosures, vacant properties, and steep price volatility, none of which made housing more affordable for working-class buyers.
2. The subprime mortgage crisis (2000–2008)
- Predatory lending, inflated appraisals, and securitization by the private mortgage industry created a massive housing bubble.
- Prices skyrocketed beyond reach for millions, then collapsed, wiping out generational wealth in many communities, especially in Black and Latino neighborhoods.
This was well before many of the “extreme” tenant protections critics bitch about today.
3. Rent hikes in deregulated markets
- In cities with little to no rent control in the 1990s and 2000s (e.g., Houston, Las Vegas), private landlords regularly raised rents far above inflation simply because the market would bear it, with no regulatory trigger.
Wages didn’t keep pace, pushing working renters into poorer housing or further from job centers.
4. Gentrification waves in the 1990s and early 2000s
- Even in places with minimal tenant protections (e.g., parts of Brooklyn before the expansion of rent stabilization), private development aimed at higher-income tenants systematically displaced low-income residents.
This wasn’t caused by eviction restrictions, it was developers chasing higher returns.
5. Post-disaster displacement
- After events like Hurricane Katrina (2005), private landlords in New Orleans hiked rents by 40–80% almost overnight, even in damaged or barely repaired units.
That was long before today’s California-style tenant laws, it was pure opportunism.
We can go back a little further if you'd like.
1. Massive foreclosure waves (1930–1935)
- In the early years of the Depression, the private mortgage market collapsed.
- By 1933, nearly half of all U.S. home mortgages were in default, and over 1,000 homes a day were being foreclosed.
This wasn’t because of rent control or tenant protections, there basically weren’t any. It was because private banks overextended credit in the 1920s and then called in debts during the crash.
2. Predatory “balloon” mortgages
- Before federal intervention, most mortgages were short-term (3–5 years) with a large final “balloon” payment.
Private lenders refinanced these loans regularly during good times , but when the Depression hit, they refused to renew, forcing mass defaults.
3. Absence of safety nets
- There was no FHA, no Fannie Mae, no federal deposit insurance, and no meaningful public housing policy.
Landlords could (and did) evict tenants almost immediately for missed payments. In cities like New York and Chicago, this sparked rent riots and mass protests.
4. Rent gouging even during crisis
- Despite mass unemployment, some landlords raised rents to cover their own debts, pushing more tenants into homelessness.
This led to extreme situations like “Hoovervilles”, shantytowns on the edges of major cities, while vacant housing stock still sat in private hands. The only real differences between Slab City and Hoovervilles are that some people move to Slab City by choice, and it wasn’t created by a massive economic crash. Capitalism isn’t one of those differences, though.
5. Government intervention out of necessity
- The private sector’s collapse in housing finance is what led to the creation of the Home Owners’ Loan Corporation (1933), Federal Housing Administration (1934), and later public housing programs.
These programs were direct admissions that the private market alone couldn’t stabilize housing in a crisis.
The government has been playing catch-up for over a century. Almost every major regulation is a reaction to some spectacular failure or abuse by the private sector. Yes, the government often botches the execution, but they’re not the cause.
