Biden State of the Union Raised Key MHC Resident Concern-Important to Millions of Affordable Housing Seekers ‘Cracking Down on Big Landlords Who Break Antitrust Laws-Price-Fixing Drive Up Rents’

“For millions of renters, we’re cracking down on big landlords who break antitrust laws by price-fixing and driving up rents.” – Joe Biden, State of the Union (SOTU) address 3.7.2024, per transcript on right-leaning Breitbart. That isn’t just rents that are being driven up, it is other housing costs – purchase prices, interest rates – that are part of the problem too. “Too many corporations raise their prices to pad their profits charging you more and more for less and less.” “That’s why we’re cracking down on corporations that engage in price gouging or deceptive pricing from food to health care to housing.” According to Bing Copilot on 3.9.2024 at about 3:25 PM ET: “While MHProNews  reported on the topic of antitrust cases in the manufactured housing industry, I could not find any other specific sources or blogs that directly mention how President Biden’s State of the Union remarks align with these cases.” Restated, our sister site – and now MHLivingNews – appear to be the only sources in manufactured housing connected trade media that are bringing you a report like this one. And this report is of critical importance to millions of Americans who desire an affordable home and/or who may already live in a manufactured home, but they are living in a ‘land lease’ community – what some errantly may call a ‘mobile home park’ – that is owned by a ‘predatory’ corporate consolidator.

Instead of doing a report that is thousands of words long that walks someone step-by-step through numbers of important points in the process, this post will cut to the chase.

Price fixing is precisely what is alleged in the national class action antitrust suit that has been filed on behalf of manufactured home residents. And that price fixing is crafted as an antitrust violation. Furthermore, that price fixing is purported to a scheme involving private equity backed consolidators of the manufactured home industry community sector. Some may argue that limiting new construction is occurring in mainstream conventional housing too, which has ripple effects.

Consolidators are arguably involved near the root of several problems in American society, including the affordable housing crisis.

Let’s define some terms and link to more in depth reports that will paint a more complete picture. Because regardless of whether Biden’s leadership of the federal government will in fact do what he claimed in the State of the Union (SOTU), regardless of whether you are a conservative, a leftist, independent or whatever, Biden’s speech made this key point. There SHOULD be robust antitrust action in the U.S.

Let’s rephrase that so it will sink in.

• There is a critical need for serious antitrust action by state and federal officials.
• There is a need for state and federal officials to crack down on deceptive trade practices.
• Politicians on both sides of the two major party system aisle in the U.S. recognize the growing push among voters for antitrust efforts.
• According to the YouGov survey cited below, the majority of Americans now believe that monopoly power is a serious issue in the U.S.

That is progress. Because understanding the issues is the first step toward problem solving.

 

 

Let’s be clear. Editorially, MHLivingNews would celebrate an authentic effort by the Biden-led federal government’s various antitrust Department of Justice (DOJ) and anti-deceptive trade practices (Federal Trade Commission, or FTC, which can also handle certain antitrust cases).  We have demonstrably been calling for this for several years in various reports on MHLivingNews. That doesn’t mean that we think Biden’s DOJ, FTC, and other consumer-protection agencies are in fact going to do something. Time will tell. But by raising the subject during his SOTU address, Biden has done both major parties, independents, and others a favor. This should be headline news for every serious advocate for more affordable housing.

 

 

But this consolidation could not have occurred had federal officials slowed, stopped, or broken up consolidation processes. Just because a politician is making a truthful statement doesn’t mean that they want to actually solve the problem they happen to have spoken about.

Let’s discuss some terminology. Keep in mind that as MHLivingNews uses Bing’s AI powered Copilot, that is not necessarily an endorsement of AI in general. Bing itself says that response from AI should be double checked for accuracy. But in fairness, Google and all other search engines should have a similar disclaimer.

> “Copilot, define consolidation in business and how consolidation of an industry can lead to oligopoly style monopolization. Then explain how increased consolidation can be a threat and costly long term for smaller businesses, employees.”

Certainly! Let’s break down the concepts related to business consolidation and its implications:

1. Consolidation in Business:
   • Business consolidation refers to the legal process of combining two or more organizations into a single, larger entity.
   • Upon consolidation, the original organizations cease to exist, and a new entity takes their place.
   • This strategic move is often initiated to improve operational efficiency by reducing redundant personnel and processes¹.
2. How Consolidation Can Lead to Oligopoly-Style Monopolization:
   • Oligopoly: An oligopoly occurs when a small number of large firms dominate an industry. These firms have significant market power and can influence prices and output.
   • Monopolization: Consolidation can lead to monopolization if a few large players control most of the market share.
   • When several smaller businesses consolidate into a single, larger organization, they may collectively gain substantial market power.
   • This concentration of market share can resemble an oligopoly, where a few dominant firms dictate industry dynamics.
3. Threats and Costs of Increased Consolidation:
   • Threats to Smaller Businesses:
     • Smaller businesses face challenges when competing against consolidated giants.
     • Reduced competition can limit opportunities for smaller players, leading to decreased innovation and fewer choices for consumers.
     • Smaller businesses may struggle to negotiate favorable terms with larger suppliers or customers.
   • Costs for Employees:
     • Consolidation often results in workforce redundancies.
     • Layoffs and job losses can impact employees’ livelihoods and job security.
     • Reduced competition may also lead to stagnant wages and limited career growth.
   • Long-Term Costs:
     • While consolidation may offer short-term benefits (such as cost savings), long-term costs can be significant.
     • Cultural clashes between merged entities can disrupt operations.
     • Integration costs, rebranding, and restructuring expenses can add up.
     • Over time, reduced competition may harm overall economic health.

In summary, while consolidation can yield efficiencies, it also poses risks to smaller businesses, employees, and overall market dynamics. Striking a balance between consolidation and healthy competition is essential for sustainable growth¹². …”

 

Ironically or paradoxically, the Biden White House issued a fact sheet on the importance of competition in July 2021. In essence, Biden’s SOTU address is a continuation of that theme. But that begs the question, how serious were they in doing what they intelligently said was a real issue? Consider the following quotes from the Biden White House Fact Sheet on Competition. Keep in mind, you can agree or disagree with other parts of what this Fact Sheet said, but the following claims can be supported by evidence.

…For decades, corporate consolidation has been accelerating. In over 75% of U.S. industries, a smaller number of large companies now control more of the business than they did twenty years ago. This is true across healthcare, financial services, agriculture and more.

That lack of competition drives up prices for consumers. As fewer large players have controlled more of the market, mark-ups (charges over cost) have tripled.  Families are paying higher prices for necessities—things like prescription drugs, hearing aids, and internet service.

Barriers to competition are also driving down wages for workers. When there are only a few employers in town, workers have less opportunity to bargain for a higher wage and to demand dignity and respect in the workplace. In fact, research shows that industry consolidation is decreasing advertised wages by as much as 17%. Tens of millions of Americans—including those working in construction and retail—are required to sign non-compete agreements as a condition of getting a job, which makes it harder for them to switch to better-paying options.

In total, higher prices and lower wages caused by lack of competition are now estimated to cost the median American household $5,000 per year.

Inadequate competition holds back economic growth and innovation. The rate of new business formation has fallen by almost 50% since the 1970s as large businesses make it harder for Americans with good ideas to break into markets. There are fewer opportunities for existing small and independent businesses to access markets and earn a fair return.  Economists find that as competition declines, productivity growth slows, business investment and innovation decline, and income, wealth, and racial inequality widen.

When past presidents faced similar threats from growing corporate power, they took bold action. In the early 1900s, Teddy Roosevelt’s Administration broke up the trusts controlling the economy—Standard Oil, J.P. Morgan’s railroads, and others—giving the little guy a fighting chance. In the late 1930s, FDR’s Administration supercharged antitrust enforcement, increasing more than eightfold the number of cases brought in just two years—enforcement actions that saved consumers billions in today’s dollars and helped unleash decades of sustained, inclusive economic growth. …”

There is a need to break up monopoly power. And MHLivingNews and our MHProNews sister site have been hitting that theme for years.

Keep in mind that many who talk about this topic may be paltering, posturing, or otherwise behaving in a less than honest fashion. By quoting the Biden White House on the above that is NOT an endorsement of Biden or his policies. It should be apparent that they UNDERSTAND the economics of this, from the quoted remarks above. But it should also be clear that the very people who supported Biden and his allies in the Democratic Party have not made progress on the very things that they correctly claimed needed to be done.

 

 

It isn’t just that Americans have been lied to or manipulated by politicians for years, decades actually. It is rather HOW they have been manipulated. The consolidation that has occurred in various parts of the economy have been going on for years. It was entirely predictable what was going to start happening. Those in charge of ever larger and more powerful corporations would become more politically powerful too. MHLivingNews has done years of reports on the issue of antitrust, monopoly, and monopolization related issues. Because like him or not, trust him or not, Biden’s remarks on the need for antitrust efforts in housing are part of the solution. Click on those and follow the links to learn more. ##

 

 

 

 

 

 

 

 

PS: No one can properly report on an issue that they don’t clearly understand. The first few years of reports on MHLivingNews would have had very little or no mention of topics like antitrust, monopolization, and the like. But circa 2017-2018, as we began to see how these issues impacted manufactured home living, we began to periodically and then routinely report on the issues linked to these topics.

 

CLASS ACTION Case No. 23-cv-6715 v Datacomp-Equity LifeStyle Properties-Hometown America-Lakeshore Communities-Sun Communities-RHP Properties-YES! Communities-Inspire Communities-Kingsley Mgt-Cal-Am Properties

 

That said, in response to another inquiry to Copilot, it said the following.

 

Other than our MHProNews sister site, and MHLivingNews, there are no other known bloggers or trade media focused on manufactured housing that have invested the time and effort to expose the importance of these problems to affordable housing seekers. None.

There are entire websites dedicated to the issues of antitrust, oligopoly style monopolization, RICO, deceptive trade practices, and the like.

So, why is there so little discussion beyond MHLivingNews and MHProNews of these issues? The answer is often found in following the money trail. Often those other publications are funded by those who are doing the consolidating and the oligopoly style of monopolization. They are not about to expose those who are paying their bills. Read and read-read those definitions, this report, and the linked ones, and the light bulb will come on. Aha! It is a key issue to understanding how life really works in America today.

 

 

 

 

 

PPS: Minneapolis Federal Reserve senior researcher James A. “Jim” Schmitz, Jr., solo or in conjunction with collogues, has said that to have more affordable housing, there is a need to fight monopolies and monopoly power. That was true when he first said it, and it is true now.

 

 

 

 

 

 

 

That’s a wrap on this installment of “News through the lens of manufactured homes and factory-built housing” © where “We Provide, You Decide.” © ### (Affordable housing, manufactured homes, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)

By L.A. “Tony” Kovach – for MHLivingNews.com.

Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing. For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.

http://latonykovach.com

Connect on LinkedIn: http://www.linkedin.com/in/latonykovach

Recent and Related Reports:

The text/image boxes below are linked to other reports, which can be accessed by clicking on them.