Friday, December 03, 2021

First they came for our news, then our homes, now our pets


There are many reasons life is unaffordable for many Americans. Stagnant wages and the high costs of housing and healthcare have been well covered by the media. What there’s been less writing about is how private equity has impacted the houses we live in, the news we read and even how we care for our pets. Mass changes in ownership overtaking entire economic sectors raise important questions for Americans: Should we be pressuring our politicians to create policy that ensures whole industries don't get eaten up by the investor class? If so, at what point should we intervene?

Once upon a time, homebuyers bought houses. Now investors do: According to Housingwire, in the first quarter of 2021, “[o]ne of every five low-priced homes that sold in the U.S. (20.8%) was purchased by an investor, compared to 12.5% of high-priced homes and 11.3% of mid-priced homes.” Vox begs to differ on the importance of the investor trend. They give a nuanced view of the many factors affecting supply and demand in  "Wall Street isn’t to blame for the chaotic housing market."

When it comes to newspapers, however, things are more clear cut. It used to be that local newspapers were owned by families. Now they’re increasingly owned by a type of investor referred to as “vulture capitalists.”Today, half of all daily newspapers in the U.S. are controlled by financial firms, according to an analysis by the Financial Times, and the number is almost certain to grow…The [business] model is simple: gut the staff, sell the real estate, jack up subscription prices, and wring out as much cash as possible.”

Healthcare for pets is the most egregious example of a covert industry takeover. “Last year, in the U.S., spending in the veterinary care market totaled $31 billion. Today we spend more than double what we did a decade ago on our pets.” There’s a reason for that. In recent years, “[c]orporate and even private equity money from everywhere from Goldman Sachs to Mars to JAB Holdings (ph), which is the parent company of Krispy Kreme, has been pouring into the vet industry.” Of the approximately "6,000 small- to medium-sized vet practices and hospitals in the U.S., the kind that have at least two or three full-time vets on staff ... 5,000 of them are now owned by big corporations. You might not know it because a lot of them like to keep that small business look and feel. But many are consolidating or even buying and flipping them, and that is having an impact on independent vets” and pet owners.