Economist Noah Smith this week once again debunked a common myth often repeated by both the left and the right in a new Substack post titled “Corporations aren’t the reason your rent is too high.” The piece clearly demonstrates that in fact, institutional investors are not the cause of rising housing costs in America. This is an issue Pinpoint has highlighted in the past year.
By focusing on facts rather than fearmongering, Smith highlights how blaming “Wall Street” distracts from the actual problem: restrictive local regulations that artificially limit housing supply.
The Myth of a Corporate Takeover
Smith takes a hammer to these viral claims using charts and simple math:
“Almost zero of the U.S. housing stock gets bought by owners who own more than 9 units. Corporate landlords just aren’t significant enough to be driving the rental crisis in America’s most desirable cities. (Of course, this doesn’t stop anticorporate types from mocking the very idea that high rents are caused by something other than market power.)
“In fact, it gets even worse for the antitrust story here. It turns out that corporate landlords probably don’t even do what antitrust people think they do! The common story is that corporations buy up all the houses in an area, thus creating a local monopoly, and using that local monopoly to jack up rents — which in turn causes gentrification and pushes poor people and minorities out of the neighborhood.”
Pinpoint debunked these virals claims in our May 13, 2024, post, “Housing Lies Outrunning the Facts,” and debunked similar falsehoods like “private equity purchased 44% of single-family homes in 2023,” tracing it to a distorted 2022 statistic about flipped homes.
Beyond these easily debunked claims, the Private Equity Stakeholder Project has made a claim that private equity owns 2.2 million apartment units (10% of U.S. total). In our April 9, 2025, post, “Scrutinizing the Private Equity Housing Tracker: Data Without Definition,” we noted the fatal flaws in the report: no public database or clear methodology, and how it conflates student, senior, and affordable housing with market-rate units, inflating figures while ignoring investment’s role in addressing shortages.
Appropriately, Smith attributes high rents to the actual issue: supply limitations. Pinpoint agrees: excessive regulations stifle construction, exacerbating shortages and driving up costs.
As we’ve previously noted, examples from cities like Austin, Texas, demonstrate that robust permitting and building can cool rents—median rents dropped 22% from 2023 peaks after a surge in construction. Blaming corporations distracts from these barriers, undermining the entrepreneurship and innovation essential to American prosperity.