Hello friends, welcome to Future Faith, a podcast, newsletter, and publication about living faithfully in an age of democratic destruction, ecological collapse, and economic irrelevance, available for free on Substack, Spotify, and Apple Podcasts.
I’m your host, Jared A. Brock, and today we’re going to discuss why the average house will cost $10 million within 50 years.
But first, a personal update: I have a son! His name is Concord Thoreau Brock. Concord means “peace,” and Thoreau means “strength.” Concord is our favorite revolutionary town in America — home to the Alcotts (of Little Women fame), Ralph Waldo Emerson, the Hawthornes, and Henry David Thoreau, the father of environmentalism and philosopher whose pacifist writings inspired Gandhi and Martin Luther King Jr.
If you’d like to contribute to his education fund, head over to JaredBrock.com.
Michelle was in labor for a brutal 38 hours, 11 of which were spent at a pub. (It’s a long and extremely British story.) She saw 28 medical personnel over 5 wards and 3 shift changes, and I recorded over four hundred 60+ second contractions. In the end, we had one 8.0 pound baby boy, the first male of eleven grandbabies in the family, and the first boy born to our church in twelve years! We are now accepting offers for a pre-arranged marriage. I’m feeling extremely grateful to God for this gorgeous little gift, and absolutely astounded by the physical strength and spiritual fortitude of Michelle to endure the whole glorious ordeal.
But I’m greatly troubled by the world Concord will grow up in. If we keep in our insane trajectory…
He’ll have to compete with robots for work.
He’ll have to navigate totalitarian social credit systems and surveillance panopticoins.
He’ll face resource shortages, extreme weather events, species collapses, and massive societal strains caused by climate change refugees.
He’ll witness the complete privatization of public services in the hands of the corporatocracy, and the cessation of the charade of democracy as the world descends into corporate oligarchy.
All of this will have serious implications for his faith and freedom.
Of course, his Daddy and many others are doing their best to fight against all of these corruptions and injustices, but there simply aren’t enough Christians who are awake and understand the challenges that predator elites pose to human life and widespread flourishing. There simply aren’t enough Christian leaders who are willing to stand for the truth unto death and make radical contributions to the common good.
In that sense, having a child amidst this corrupt corporatocracy is part of our act of resistance. It’s our declaration of hope against chance.
One of Concord’s biggest challenges will be affordable shelter.
House prices are currently at an all-time high, but we are not in a real estate bubble — we’re in a pricing paradigm shift.
The old paradigm: A house’s price is the maximum amount that an area’s average local buyer can afford to mortgage over 25–40 years. But because wages have flatlined and purchasing parity is the same as in 1978, the only rational explanation for this current price explosion is a giant debt bubble… right?
The new paradigm: A house’s value is now the maximum amount of annual rental income that can be extracted from it by a global investor, multiplied by maximal institutional leverage.
It’s the biggest paradigm shift in the history of human shelter, and it’s the reason why the vast majority will never own a house in the future.
Because our family homes are just future hedge fund investments.
In 50 years, the average house will cost $10+ million.
Most people think that’s impossible, but I’ll show you the exact math on how it’s going to play out.
Sure, there might be more real estate price crashes, but they’ll just be bigger versions of 2008 — buying opportunities for the hyper-elites. Even with temporary price drops, expect overall prices to continue hard up-and-to-the-right for nine major reasons.
1. Population is growing
Our global family currently contains almost 7.9 billion, headed to 10.5 billion within fifty years. That’s a 33% increase in the number of people who need to be housed. While this doesn’t mean house prices will automatically increase by 33%, population growth does create more demand, which will certainly increase prices significantly.
2. People are moving to cities
The overall population will “only” rise by 33%, but look at the stats on where everyone is moving: Cities. 4 billion people currently live in urban areas, but that number is set to jump to 7 billion within 30 years and will hit 8 billion in fifty. So essentially housing demand where most people live will double. What will the average house cost when twice as many people are bidding on it?
3. More people are living alone
My grandma was raised in a farmhouse with a mom, dad, and a half-dozen siblings. My father-in-law was one of nine kids. Today, both of those homes probably contain less than four people. In major urban centers like New York, it’s less than 2.4 people per unit and falling. As more people live alone, we’ll need far more housing units. When there’s more demand without adequate supply, prices increase.
4. Multiple house ownership
Looking at you, small-time landlords and non-resident Airbnb hosts. More than 23 million American landlords own more than one house. That might seem like a lot, but what it actually means is that 115 million Americans don’t get to own a home because a wealth-extractor owns two.
“Airbnb-type models altered the market irreversibly by proving on a large scale that short term rentals were more lucrative than stable long-term residents.”
— Valerie Kittell
5. Housing construction isn’t keeping up
Now add the fact that…
6. Building costs are soaring amidst material shortages
Lumber, paint, concrete, glass, labor, land… all rising faster than average wages. We live on a finite planet with limited resources, and those resources are becoming more expensive to extract. Accordingly, constructing new houses will continue to cost more and more.
7. Real inflation is soaring
It’s almost certainly 10+% per year. And real estate always tracks with inflation. These days, in fact, shelter prices are outpacing inflation; in Canada, real estate prices are up 40% since last year. Asset inflation in America is over 30% this year across the stock market and real estate market.
Even without any of the other price-rise factors on this list, if rampant real estate inflation averages 7.5% for the next fifty years, inflation alone will send the average house price over $10 million.
8. The monopolists are here
When you allow speculation and investment in residential real estate, you end up where every other capitalist sector ends up — with a handful of monopolists owning all the assets in the industry.
If you study history, you see this happen with steel (Carnegie), railroads (Vanderbilt), oil (Rockefeller), banking (JP Morgan), online retail (Jeff Bezos), luxury goods (Bernard Arnault), web search (Google+Youtube’s Larry Page and Sergey Brin), and so on.
Monopolists will not stop until they are stopped.
Obviously, up until this point in history, real estate has been a far harder market to corner because of the high upfront investment costs, but that’s changed since the invention of…
9. Outrageous leverage
“A privileged class of investors are allowed to utilize the Fed and private banking system to print nearly infinite quantities of money via leverage, and use that money to out-bid first-time homebuyers who had to work for years to earn their money.” — Throop Von
This is where things get truly ugly. Once monopolies form, they utilize the power of financialization to drop an economic atomic bomb on their competition.
Let’s say a condo is for sale right now.
A first-time buyer can afford maybe $1,200/month, so they’re able to bid up to $250,000.
A landlord can squeeze $1,250/month in rent from a long-term tenant. If they’re expecting half their revenue to go to costs and want a 2.5% ROI plus appreciation, they’re willing to pay up to $300,000.
A non-resident Airbnb host can fetch $2,500/month in nightly rent, double the long-term landlord. So they’re willing to pay up to $600,000.
A predacious hedge fund, like all monopolies, will shave those profit margins to near-nil to destroy competition. (Amazon’s profit margin was negative for seven years while they killed off competitors.) So the hedge fund is willing to pay up to $1,200,000 to turn your house into a vacation property, nearly five times what the average person can afford.
But here’s the really insidious move: The monopoly will partner with banks that — thanks to a corporate-controlled government that constantly prints ultra-cheap money and lets them create credit out of thin air — allow them to leverage their positions to an absurd degree. The monopoly won’t be paying $1.2 million for that house — they’ll be betting <$60,000 with 20+X leverage and a 20+X return on investment. (Prior to the 2008 crash, Lehman Brothers was leveraged a whopping 31X.) A financialized hedge fund will be willing to pay many more multiples than you can ever possibly hope to afford.
It gets worse. Just like the banks spun off millions of mortgages as CDOs during the 2008 subprime debt crisis, the new real estate monopolists will likely take thousands of their underperforming vacation units, bundle them into shiny-looking investment packages, and get their brokers to sell them to the derivatives markets for even more leverage. Before we know it, house prices could soar to astronomical heights.
An unbelievable amount of institutions are getting in on the landlording con. Banks are all announcing targets. 50,000 houses by the end of next year. 100,000 by the end of 2023. In the corporate-captured UK, even clothing department stores like John Lewis have announced their intention to acquire 10,000 residential rentals.
In the same way that our grandparents wouldn’t have believed where real estate prices would be today, most people today cannot fathom how expensive shelter is going to get in the years ahead.
American median house prices have 12X’d in the past 50 years, and if that trend continues, houses in 50 years will average at least $3.7 million. But with these radical new factors at play — especially the abhorrent financialization of a human necessity — we will see exponential house price increases unparalleled in human history.
Average house prices could easily rise to $3.7+ million, likely $5+ million, perhaps even $10+ million, as every desirable location is turned into a vacation property to profit massive monopolies. It’s already happening in major cities like London and Paris, and the financialization curse spreads globally.
At least it won’t affect me, right?
I know what some of you are thinking. “Well that’s cool if prices rise, I already own a house so I’ll just hold onto it for a few decades and retire with ten mil!”
But you’re forgetting about land tax.
Land tax is currently 1–2% per year and rising. Where are you going to come up with $100,000–$200,000 in after-tax income per year to pay for it, especially when your pay is guaranteed not to keep up and a robot will replace half of all jobs within half a century?
The answer is: You won’t. The only people who’ll be able to afford it are highly-leveraged institutional investors extracting top tourist dollar, likely with a corporate land tax rebate like crooked landlords already enjoy in the UK. Everyone else — the real societal contributors — will be living in highly undesirable tenements.
The new economic paradigm is designed to make you a renter.
If we keep on our current course, 99% of the global population will be housing insecure within a generation. According to the elitist World Economic Forum, we’ll own nothing and supposedly be happier, but I don’t believe them for a second.
I don’t want to live in a world where people are forced to be homeless because they can’t afford to live in a society that’s economically engineered to impoverish them. In a civil society, human necessities like shelter wouldn’t be commodified.
The solution is simple
We need to make it illegal to turn a passive profit off basic human necessities like shelter.
There, I said it.
We need to ban for-profit residential real estate investment.
Commercial real estate is another topic of conversation (but it’s a big part of the reason why bookshops and cinemas are closing and restaurants are getting more expensive — gotta support those hungry landlords.)
Not-for-profits like Indwell are great. After all, even in a society with full employment at living wages (which isn’t going to happen) or a society with sustainable universal basic income (which isn’t going to happen), the bottom 10% will likely never own their own home for myriad reasons — mental illness, physical impairments, or just chronic rootlessness.
But for-profit residential real estate investment? It has to be made illegal.
Illegal to be a for-profit landlord.
Illegal to Airbnb a non-owner-occupied house.
Illegal for hedge funds to buy up neighborhoods.
Illegal to financialize houses as tradeable bulk commodities.
While it’s tempting to give little landlords a pass, even they must be eliminated — because financialized investors have an advantage over families, and the latter should always be prioritized in a civil society. The working class can no longer afford to support the non-contributing hyper-extractive land-lording and banking class.
But don’t expect such bans to stick, of course. Hedge funds and Airbnb will continue to sue cities, states, and nations — and lobby-bribing and selecting puppet politicians to do their corporate will.
There’s only one thing we can do:
Make real estate investment wildly unprofitable
There are many ways to do this:
Charge an eye-watered premium on second house purchases. Start at 250% and keep raising it until investors give up and invest in anything but residential real estate. Why should anyone be allowed to own a second house until everyone has the opportunity to buy their first? Why should a fund be able to passively extract wealth from active societal contributors?
Issue outrageously-priced landlord licenses and zoning permits for those bent on running a commercial business in a residential neighborhood.
Drastically increase tenant rights, safety standards, maintenance standards, and cleanliness standards so landlords have to continually invest more than they extract.
Zone all residential neighborhoods as owner-occupied only, so real estate investors have no choice but to allocate their capital to commercial holiday properties in commercial zones.
Start not-for-profit city, state, and federal banks that loan directly to housebuyers without the need for middle-man credit-printing banks.
Tax passive extraction income at 90+% and use the revenue to build owner-occupied houses.
Encourage young entrepreneurs to start blitz-building affordable, eco-friendly owner-occupied houses by the millions. We need to build 1 billion new houses in the next decade to keep up with population growth, so we should invest heavily in innovative startups who can help crush the house-as-investment market.
Bring a class-action lawsuit against Airbnb in every jurisdiction where they’ve stolen even one unit of family housing.
We can debate the exact methods by which we eliminate for-profit residential real estate investment, so long as we understand the fundamental need to do so. We need to scrub culture clean of the notion that a house is an investment or a savings account. Houses can’t be commodities. They need to be homes.
I subscribe to the radical belief that safe, healthy, adequate, and affordable shelter is a universal human right. Yes, a human right. I am aware it’s not a constitutional right. This proves America still has room to improve.
The United Nations, and every nation, need to make affordable homeownership an unconditional universal human right, and make investment in residential housing illegal. If hyper-elites retaining obscene wealth matters more than the majority being able to afford shelter, it’s time for a revolution.
So what should followers of Jesus do?
Clearly, homelessness and shelter insecurity matter to a loving God, and should therefore matter to His church.
Proverbs 19:17 says that “Whoever is generous to the poor lends to the Lord.”
Conversely, Proverbs 14:31 says that “Whoever oppresses a poor man insults his Maker.” This mathematically includes landlording and banking, but that’s a conversation for a future episode.
What are we to do as shelter affordability continues to deteriorate? The answer is obvious: We are to open our homes and our lives to each other.
Matthew 25:35 says that He is the least of these: “For I was hungry and you gave me food, I was thirsty and you gave me drink, I was a stranger and you welcomed me.”
Isaiah 58:7 asks what sacrifice God accepts: “Is it not to share your bread with the hungry and bring the homeless poor into your house?”
If you have two houses, you must give away one.
As Rosaria Butterfield says, “the gospel comes with a house key.”
Christians need to wake up
We’re sitting on trillions of dollars in real estate that sits empty six days a week.
I think it’s absurd that we haven’t already moved to an Acts 2 scattered-gathered model, where most of “church” is done over meals in family homes, with weekly gathered meetings in spaces like cinemas, schools, or rental spaces.
I think every church needs a housing ministry.
It could mean selling the church building and using the proceeds to build houses.
It could mean converting the church building into housing units.
It could mean fundraising to build an apartment cooperative.
It could mean helping others with down payments, or holding interest-free mortgages for them.
It could mean men’s weekends where we build new housing units in basements, attics, old barns, or backyards.
It could mean buying the closed-down cinema or big box store in your community and turning it into housing units.
It could mean investing kingdom resources in building a citadel, a village of owner-occupiers-only, with a restrictive covenant to keep it out of corporate hands forever.
Every church could build a village. Every denomination could build a city.
At present, a new hyper-commodification paradigm is emerging that stands in direct opposition to the human right and need to shelter. Housing-as-investment is a deeply anti-social belief that needs to be quelled if we are to thrive as a global family. I believe the Christian church needs to rise up and lead on this issue.
Family homes or hedge fund investments.
The paradigm that prevails is ours to decide.
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