Billionaires Are Gobbling Up American Land and Homes:
What Does It Mean For The Rest Of Us?
“Do you mean to tell me, Katie Scarlett O’Hara, that Tara, that land, doesn’t mean anything to you? Why, land is the only thing in the world worth workin’ for, worth fightin’ for, worth dyin’ for, because it’s the only thing that lasts.”
Gerald O’Hara, Gone With The Wind
Scarlet’s father might have been right—land may be “the only thing that lasts”, but owning it and passing it to your heirs, like Gerald O’Hara eventually would do with what was left of Tara, also is a super way to build what is called “generational wealth” — assets passed across generations of a family that “can include stocks, bonds, and other investments, as well as real estate and family businesses.”1
This concept of generational wealth is new to me. What was passed to my father and his five siblings from his parents, was the need to chip in a few thousand dollars each and buy them a home. My grandparents had lost most of what they had built in the Great Depression, and although they somewhat recovered financially, they still weren’t able to buy a house. Their adult children combined their cash and bought them a big, dark, drafty place with long, sad windows, and an apartment upstairs where my aunt and great aunt would eventually live, and where my parents stayed with my sister for a time. It was located just south of the downtown, conveniently next to a bar, and only a block or so away from the funeral home where they would all eventually make their way. It was a nice thing to be able to do for your parents, and from what I heard, my dad and his sisters and brother were proud to be able to help.
I mentioned in a previous post that simply owning a home can help you build wealth in just a few short years. And this is one reason that community land trusts are so important: it’s a structure that allows lower income people, for whom a home purchase would otherwise be out of reach, to purchase homes and reap a good part of the equity at sale or pass it to their heirs.
But what about the ultra-wealthy who accumulate vast tracts of land amounting to millions of acres of our country? What does this land grab by the few mean for the rest of us?
A fellow Substack writer, Marlon Weems, who writes a fantastic newsletter called “The Journeyman”, wrote about this issue a few weeks ago, calling these billionaire landowners, “our new feudal overlords”… and for good reason.
Interestingly, Ted Turner, who held the title of the largest land owner in the United States for many years, was dethroned a few years ago by John Malone, who made his fortune in the cable and communications industry. Bill Gates is catching up as the largest owner of farmland in America, with a host of fresh-faced billionaires following suit.
I’ve culled a few articles for your Sunday Evening reading that discuss this buy-up of land and what it might mean for the rest of us.
— First up is a Forbes article from January of this year that explains why owning real estate is great for building that “generational wealth thing” that most of us can only dream about.
— This “Six Facts About Wealth” primer from the Brookings Institution, explains how wealth is distributed in the United States and how home and land ownership fits into that scheme.
“The United States is a rich country, but it is becoming one in which a very small number of citizens own most of the wealth, and from which both younger Americans and the broad middle class are failing to benefit.”
— A CNBC article focuses on the fairly recent purchase of farm land by super wealthy folks like Bill Gates, who is the largest owner of farm land in our country with 269,000 acres as of 2020. Those with large amounts of money to invest are always searching for new ways to increase their wealth, and they’ve found a new place to invade: The American heartland.
“The U.S. Department of Agriculture estimates that 30% of all farmland is owned by landlords who don’t farm themselves. Buyers often purchase land from farmers who have owned it for decades; many of whom may be asset rich but maybe cash poor.”
— Speaking of landlords, this piece from The Atlantic describes Wallstreet’s buy up of foreclosed properties during and after the financial crisis—turns out that major financial institutions don’t make the best property managers from the tenants’ perspective. Check out these horror stories from tenants caught in a twilight zone of burst pipes, broken air conditioning in 100 degree heat and countless insults on top of injury.
With incentives from the federal government, “Between 2011 and 2017, some of the world’s largest private-equity groups and hedge funds, as well as other large investors, spent a combined $36 billion on more than 200,000 homes in ailing markets across the country.”
https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/
— And finally for this evening, see who the largest private landowners are in your state as of this year.
“Approximately 72% of land in the United States is privately owned, and just a few individuals and families control a significant proportion of this land.”
https://worldpopulationreview.com/state-rankings/largest-landowners-by-state
The bottom line seems to be that the concentration of too much wealth of any kind, in too few hands, tips the balance of power to a tiny portion of our citizenry, who have forgotten what it means to be good neighbors. Owning both vast amounts of land and homes leaves less for the rest of us to buy when we are able, and increases the gap between the very rich and everyone else, especially when real estate is used to maximize generational wealth.
What do you think about the increasing concentration of America’s lands in the private ownership of a few billionaires? I’d love to hear your thoughts in the comment section below.
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Read more about generational wealth, here: https://www.investopedia.com/generational-wealth-definition-5189580
Altho I have to admit, my biggest fantasy would be to own thousands of acres of land and keep it as prime wildlife habitat, no hunting, no human development, no housing. Ted Turner did just that with a sizable portion of some of his land, but alas allowed regulated hunting.....some places without people are just better.
It is disturbing that those with the most continue to profit from those with the least. Hasn’t it been that way forever? It is sad.