In reporting on the housing crisis, I often hear some version of a simple story purporting to explain why so many Americans struggle to afford a place to live. The story goes like this: Housing costs are unaffordable because [INSERT BAD COMPANY HERE] is greedy and jacking up prices. The villain can be Airbnb or developers; it can be deep-pocketed foreigners or iBuyers. The story is compelling because it does not directly implicate regular people, sympathetic institutions, or elected officials.

To state the obvious, stories can be compelling without being true. Especially suspect are stories that scapegoat a group or an entity that is impossible or at least very difficult to defend: banks or oil companies or criminals, say. The scapegoat takes the blame for a complex problem. The trick is to cast a villain such that the surrounding facts become irrelevant. Who cares whether criminals have actually destroyed American cities? Attempting to stress-test theories like this just makes you look pro-crime and puts you on the same side as people who have committed terrible acts. But false narratives are dangerous because they distract attention from real problems, and plausible solutions.

The latest version of the housing-villain story targets private-equity firms and hedge funds, broadly “institutional investors” that have supposedly been outcompeting regular homebuyers and are therefore responsible for the skyrocketing rents and home prices of 2020 and 2021. “One of the largest hedge funds, the largest Wall Street firms in the world, is going around and buying up every single-family home in this country,” J. D. Vance argued at the start of his senatorial campaign in 2021, noting that first-time homebuyers, disproportionately Black Americans, were unable to become homeowners as a result.

I don’t want to be hyperbolic, but the idea that these firms are ultimately responsible for our housing-affordability crisis is absolutely ridiculous, and no one who knows anything about housing markets believes it. Yet this story has gained so much traction that it has spawned hearings and bills on Capitol Hill. One recent effort by Senator Jeff Merkley of Oregon seeks to levy high taxes on any company owning more than 100 single-family homes, in order to push it to sell those homes to owner-occupants or smaller investors. I asked Merkley what drew his attention to hedge-fund activity in the housing market, and he told me that he had “started to hear from people in the neighborhood saying, ‘Here’s the problem: We’re competing when we’re looking for a home; we’re competing against all-cash offers from businesses’ … It brought me back to thinking about whether we should have American families having to compete against billionaires to have a place to rent or to buy.”

[Jerusalem Demsas: Housing breaks people’s brains]

In order to have the type of pricing power that would allow any entity to push up rents and home prices, it would need to own significant shares if not an outright majority of homes in a particular market. At the national level, this is obviously not happening. According to one report, institutional investors purchased just 3 percent of homes sold in 2021. At the state level, the story seems unlikely as well. Georgia, a state with a relatively high amount of investor activity, saw some 8.5 percent of 2021 home sales go to the largest investors, according to CoreLogic data. In Merkley’s home state, just 2 percent of sales went to “mega-investors,” who own 1,001 or more properties. But 8 or 2 percent of home sales doesn’t mean 8 or 2 percent of the total housing stock—far from it. After all, most homes aren’t up for sale; from year to year, a great majority of homes remain in the same hands. Further, a purchase does not mean a permanent holding. Investors in both states quite likely went on to sell some of these homes.

At any rate: Home prices and rents increased quickly across the country, in communities large and small. When trying to determine what is responsible for this phenomenon, you have to find an explanation that is common to all of these places, not one that is particular to this market or that one. From August 2020 to August 2021, Nevada, Arizona, Utah, Montana, and Idaho, saw the most significant home-price increases, but of those states, just the first two saw relatively high rates of mega-investors, again according to CoreLogic data. (2021 data shows that Arizona saw the highest at roughly 8.9 percent of homes on the market going to mega-investors.)

Additionally, some proponents of the scapegoat story argue that even if institutional investors are not dominant at the state level, they could still be distorting local real estate. Someone looking for a three-bedroom single-family home in the suburbs of Atlanta is not equally satisfied with one in the Savannah suburbs, so what matters to that person is the local context. But just because something is theoretically possible doesn’t mean it’s actually happening. And these theories imbue investors with a mastermind quality that they frankly haven’t earned. For instance, fearmongering about Zillow buying up real estate fell flat when the company exited the market after off-loading many homes at a loss.   

If there are no solid data supporting the institutional-investor-scapegoat story, there are certainly plenty of misleading statistics. Here’s one egregious example: A report from the House Financial Services Committee reads that “in the third quarter of 2021 alone, institutional investors bought 42.8% of homes for sale in the Atlanta metro area and 38.8% of homes in the Phoenix-Glendale-Scottsdale area.” These are unbelievably big numbers, and they are—literally unbelievable, that is. The citation provided in the document was not correct, but I was able to find the relevant report and, wouldn’t you know it, that’s not what it says. The report shows only the share of purchases made by investors, not institutional investors. Why does this matter? Because investors include people or entities who own fewer than 10 properties, midsize investors who own 10 to 99 homes, iBuyers—which buy properties and then immediately resell them—and even people who purchase vacation homes through an LLC. Relatedly, a New America report last year of investor activity in North Carolina suggests that investor growth in that market is actually being driven by smaller players.

I’ve seen this type of bait and switch more times than I can count. Instead of being clear that institutional investors make up just a small fraction of total investor purchases, politicians conflate statistics, tangling up true facts with a predetermined story. At an event on the rise of institutional investors, Marcia Fudge, the secretary of the U.S. Department of Housing and Urban Development, noted that in Cleveland’s eastern inner-ring suburbs, “investors have purchased nearly ⅓ of homes every year since 2015.” This is not as blatant as the House committee report, because Fudge was careful to say merely “investors.” But in the context of her remarks, given at an event titled “Institutional Investors in Housing,” the implication was that private-equity firms or hedge funds were taking over Cleveland.

[Annie Lowrey: The U.S. needs more housing than almost anyone can imagine]

This bait and switch matters. First, because it reveals a lack of rigor when people find data to fit a preordained narrative instead of looking to determine what is actually happening. Second, because if these homes are being bought by a wide range of investors, this reduces even further the likelihood that any single investor has significant enough market share to mess with prices.

The other deceptive part of the latest scapegoat story is that these institutional investors are regularly outbidding homebuyers with all-cash offers. Although all-cash offers are certainly on the rise, many of these bids are from wealthy people, house flippers, or smaller landlords. And one survey of realtors found an average “0% difference in offer price of institutional buyers compared to other buyers.” In 2021, according to a recent report, the “median purchase price of institutional buyers [was] typically 26% lower than the states’ median purchase prices,” suggesting that they are not typically competing with ordinary individual buyers, anyway. Institutional investors tend to specialize in distressed communities. In these markets, they can take advantage of economies of scale in making repairs.  

There are real problems with corporate landlords. For instance, large corporate investors are significantly more likely to file eviction notices “even after controlling for past foreclosure status, property characteristics, tenant characteristics, and neighborhood,” according to a study of Fulton County, Georgia.  As the sociologist Esther Sullivan has argued, corporate investors may also take advantage of mobile-home owners, who tend not to own the land beneath their unit, by escalating fees for the maintenance of park properties.

These problems are worth solving by, say, increasing resources for code enforcement so that landlords of all stripes are held accountable for not keeping their properties habitable. Local governments should also  create rental registries that can track important information about properties and landlords to allow for both careful study and accountability of bad actors. The urban-policy expert Bruce Katz and his co-authors have also recommended that states require LLCs to disclose beneficial owners—anyone who owns more than 25 percent of the entity.

But if some institutional investors make bad landlords, that doesn’t mean they’re behind the housing-affordability crisis. They are not why rents are so high or why homeownership is out of reach for so many. Investors are not driving the unaffordability; they are responding to it. Many different investors are all flocking into the housing market; what is most relevant is the fundamental reason  they are all being drawn there.

Housing is primarily unaffordable in this country because of persistent undersupply. In fact, institutional investors are entering the single-family-home market precisely because supply constraints have led to skyrocketing prices. One institutional investor’s SEC filing admitted just that, celebrating a “decline” in supply that has “driven strong rental rate growth and home price appreciation.” The filing also lamented the possibility that “continuing development … will increase the supply of housing and exacerbate competition for residents.”  

A lack of supply is caused by a complex web of rules and regulations that prevent developers—profit and nonprofit alike—from building enough housing to meet demand. A recent report from Freddie Mac estimates a shortage of 3.8 million housing units. For decades the United States has been underbuilding in employment hubs (such as San Francisco, New York, and Boston) and the surrounding suburbs, pushing prices up. Elected officials have allowed the home-building process to become hijacked by unrepresentative opposition and gummed up in legal challenges, many under the guise of bogus environmental concerns.

If elected officials want to fix the problem, they should eliminate those constraints, such as regulations that require large structures on large lots of land or bans on duplexes, triplexes, and multifamily buildings. And they should curtail the various legal pathways that are used to obstruct new housing. As the Brookings Institution expert Jenny Schuetz explained to the House Financial Services Committee last summer: “Targeting a small subset of landlords without addressing underlying market conditions and policy gaps will not meaningfully improve the well-being of renters and prospective homebuyers.”  

[M. Nolan Gray: How California exported its worst problem to Texas]

As I’ve followed the scapegoat story, I’ve also been struck by the implicit suggestion that renters are less worthy of single-family homes than owner-occupants are. After all, corporate landlords rent to real people. In his announcement speech, Vance made the implicit explicit, arguing, “If you can’t own a home in your community, you’re not a real citizen.” And Merkley’s bill, which hopes to transfer single-family-rental homes to owner-occupants, skates past what its success would mean for renters. One report indicates that 85 percent of single-family-rental residents would not qualify for a mortgage.

I asked Merkley’s office what would happen to the families renting these properties if his bill were to pass and large investors were forced to sell them off. His office pointed me to a provision that would create down-payment assistance for potential homebuyers, and argued that pushing investors out of the market would reduce rents. But down-payment assistance doesn’t change the fact that most of these renters don’t have the credit score to qualify for a mortgage, nor would the assistance necessarily go to the families settled in these homes now. And I hope by this point it’s clear that even if institutional investors exited these markets, that would not make a dent in home prices or rents. Notably, a similar policy in Hong Kong led to a reduction in short-term speculation but did “not effectively cool down housing prices.”

Private equity isn’t the first villain, and it likely won’t be the last, to be cast in the role of the housing scapegoat. Airbnb, foreign buyers, greedy developers—all of these groups have taken center stage and probably will again. Nobody needs to defend these entities, but playing whack-a-mole with the villain of the moment won’t increase the amount of affordable housing we build, it won’t untangle the uncomfortable matrix of interests that opposes change and growth and opportunities for first-time homebuyers, and it won’t satisfy the growing anger of the tens of millions of Americans spending more than 30 percent of their income on housing.

The political project of building enough affordable housing and enacting necessary tenant protections is a hard one. Don’t let make-believe villains distract you from the real solutions to the housing crisis. We have to build.

Tomorrow will mark 50 years since Roe v. Wade was decided, but the landmark ruling did not make it to its semicentennial, having been overturned by Dobbs v. Jackson Women’s Health Organization last summer. Many people viewed this as the end of abortion rights in America. But that’s not what it was. Both practically and theoretically, Roe was never the guarantor of those rights that people believed it to be.

The “Roe” that has occupied the center of the abortion debate for decades bears only a passing resemblance to anything the Supreme Court said in 1973. Roe has become much more than a legal text; it’s a cultural symbol created not only by judges but by voters, politicians, and grassroots movements. And the history of America’s fixation on Roe is a story not just about the power of the Supreme Court, but about how the Court alone does not—and should not—dictate what the Constitution says.

[Mary Ziegler: If the Supreme Court can reverse Roe, it can reverse anything]

In 1973, a Supreme Court stacked with Republican nominees handed down a 7–2 decision holding that the constitutional right to privacy was broad enough to protect an abortion choice made by a “woman and her responsible physician.” The text of Roe would be deeply foreign to almost anyone who reads it today. Justice Harry Blackmun’s majority opinion spoke mostly about the prerogatives of doctors, not women, and breezily dismissed the idea that “one has an unlimited right to do with one’s body as one pleases.” Ultimately, the Court’s ruling did not so much embrace a sweeping notion of women’s rights as it made regulating abortion harder, at least during the first trimester.

From the beginning, many people celebrated Roe as a feminist triumph, especially for women of color, who generally suffered most when abortion was a crime. But life under Roe was in some ways disappointing for those who believed in abortion rights—or, in many cases, for those who sought an abortion. In 1976, Congress passed the Hyde Amendment, which banned Medicaid reimbursement for abortion, and in 1980, the Supreme Court upheld it. Already, less than a decade after the Court’s decision, the right to choose abortion was functionally out of reach for some of the nation’s poorest women.

The gap between the fantasy and the reality of Roe grew wider after 1992, when the Supreme Court functionally overruled key parts of its 1973 decision and made a new precedent, Planned Parenthood of Southeastern Pennsylvania v. Casey, the law of the land. Under Casey, states could regulate abortion as long as a law did not have the purpose or effect of creating a substantial obstacle for those seeking abortion—a standard that seemed relatively easy to satisfy (the Court struck down only one of the many restrictions before it in Casey). After Casey, states passed an ever-growing number of restrictions, some of which the Court upheld. And yet even after the Court had wiped part of Roe away, Americans kept believing that Roe ruled everything, and they kept arguing over it—promising to undo its legacy or codify it.

Grassroots movements developed new ideas about what Roe ought to stand for. The leader of one reproductive-justice group formed by women of color argued that Roe had “never fully protected Black women—or poor women.” Anti-abortion activists made Roe a symbol of “judicial activism” and jump-started conversations about the legitimacy of the federal courts. Roe may have been on the books, but it never settled debates about abortion—or even its own meaning—in any significant way.

[Jerusalem Demsas: The fate of states’ rights after Roe]

The Dobbs decision echoed common anti-abortion-rights talking points about Roe being an undemocratic decision, and even repeated the argument that Roe resembled Plessy v. Ferguson, the notorious case that upheld racial segregation. In the Court’s opinion, Justice Samuel Alito also seemed interested in ending constitutional conversations about abortion once and for all, rejecting not only the arguments raised in Roe and Casey but also a rationale for abortion rights based on sex equality that was neither briefed by the petitioner or respondent nor a part of either Roe or Casey.

Since Dobbs came down, constitutional conflicts about abortion have only multiplied. Abortion-rights supporters have pursued what reporters call “mini Roes” in state supreme courts, asking for the recognition of state constitutional rights. Six ballot initiatives have put the question directly to voters, and many more will likely follow. State lawmakers will have their say on what reproductive rights ought to mean—and whether it’s constitutional to apply one state’s laws to what happens in another, or to criminalize information about abortion. Maybe (though it’s unlikely) Congress will pass a federal bill recognizing either an abortion right or fetal protections. All of these efforts make explicit something that had been clear to anyone looking closely enough while Roe was good law: Americans’ rights don’t come just from the Supreme Court. Even when the Court intervenes, it often—as in Dobbs—responds to political pressures and decades of fighting between grassroots groups and political parties. And sometimes our rights have nothing to do with the federal courts—they are also the result of state or federal legislation, state constitutional rulings, and ballot-initiative decisions passed by ordinary voters.  

Roe’s legacy is complex, and its aftereffects—on partisan politics, on fights about the separation of powers, and on battles about gender—will be felt for years to come. Those who support abortion rights may experience this anniversary as a loss. But they should look to history for the lesson Samuel Alito, the author of Dobbs, will soon learn—the lesson that Harry Blackmun had to learn years ago: The Court does not get the final word, even on the meaning of its own most important decisions.

*Lead image: Illustration by Joanne Imperio. Sources: Bettmann / Getty; Bill Peters / Getty; Cheriss May / Getty; Erin Schaff-Pool / Getty; Ferrell, Scott J. / Library of Congress; Keystone / Getty; Kyle Rivas / Getty; Mark Reinstein / Getty; Ron Sachs / Getty; Yvonne Hemsey / Getty

The bad news you probably already know. Mortgage costs are brutal at the moment, putting homeownership out of reach for millions of Americans. The pace of inflation is coming down but remains high, meaning consumer goods keep getting more expensive. Businesses are bracing for a recession. The economy is just weird right now, suffused with uncertainty and crossed with mixed signals.

Nevertheless, Americans have some positive short-term trends to celebrate, among them falling gas prices. Better still are three long-term trends that, despite their economy-transforming magnitude, have gone largely uncelebrated or even unnoticed. These trends promise a more dynamic economy not only in 2023 but also in the coming decades:

Inequality is easing

A decade ago, President Barack Obama called economic inequality “the defining challenge of our time,” arguing that “the next few years will determine whether or not our children will grow up in an America where opportunity is real.” At the time, data showed the middle class shrinking, average wages stagnating, and the wealthy eating up all the gains from economic growth. Rising inequality was paralyzing Washington and fraying the country’s politics. Yet around the time of Obama’s speech, inequality stopped rising. In the past three years, the country has become more equal, at least by some measures.

I don’t want to overstate things: Income and wealth are still distributed very unequally in the United States, much as they were in the Gilded Age. The haves are still trouncing the have-nots. The country’s level of inequality remains a threat to its political stability and long-term growth trajectory. Still, wage growth of late has been fastest for the poorest workers, David Autor of MIT and Arindrajit Dube and Annie McGrew of the University of Massachusetts at Amherst recently found—so much so that, the pandemic notwithstanding, the past few years have erased one-third of the growth in the wage gap between the highest- and lowest-paid workers over the past four decades.

[Annie Lowrey: The economy’s fundamental problem has changed]

The country’s wealth inequality has eased a little too, although the explanation isn’t entirely salutary. The value of assets held by the top 0.1 percent of the wealth distribution has dropped from $18.4 trillion to $16.9 trillion in the past three quarters; the holdings of the top 10 percent have fallen from $98.6 trillion to $92 trillion. (The bottom 50 percent, by the way, accounts for less than $5 trillion.) Rich people still own the bulk of the assets; those assets are just trading for less, thanks to the downturn in the stock market and in high-end real estate. A more encouraging sign in 2023 would be if wealth inequality declines because more middle-class and low-income families also get to own homes, stocks, and businesses.

We bent the cost curve in health care

Fourteen years ago, analysts at the Centers for Medicare and Medicaid Services thought that health spending would be roughly 22 percent of GDP in 2022. The real share was 18.3 percent. Government actuaries spent years overestimating the number of dollars Americans would spend in hospitals and doctor’s offices—a decade-plus ago, they thought we would be spending about $700 billion more on an annual basis than we are today—and the share of the economy devoted to health care. That is because the “cost curve” bent.

Nothing scared the green-eyeshade set like the cost curve projected in the aughts—a swoop showing Medicare spending, national health expenditures, or both growing faster than the economy itself did. Their projections, and thus their worries, were rooted in reality: The country’s health expenditures were swelling by tens of billions of dollars a year, and the country’s population was aging, meaning demand for health care would go up.

[Read: What does a good health-care system look like?]

But for the past 15 years, health-care spending growth has been subdued, leaving aside the catastrophic early years of the pandemic. As a result, CMS anticipates that health spending as a share of GDP should be stable over the next decade at roughly 20 percent. And the CBO sees Medicare spending rising from 5.8 percent of GDP to just 6.8 percent of GDP 10 years from now—a reasonable amount, given the rising share of older Americans.

What happened? Any number of things. The Great Recession and slow recovery that followed dampened health spending for years. More employers started offering and more people signed up for high-deductible health plans, which come with significant out-of-pocket costs and discourage people from seeking care. The Affordable Care Act implemented a series of cost controls in Medicare. And pharmaceutical companies have conjured up fewer new, expensive drugs.

Of course, the country still spends an extraordinary amount on health care while having significantly lower life expectancies and worse health outcomes than its peers. And families are still struggling with crushing out-of-pocket costs. But in the long term, the bending of the cost curve promises higher wages for families and more room in the federal budget for other priorities.

We bounced back after the COVID recession

It took 76 months for the economy to recover every single job it shed in the Great Recession. It took 30 months for it to recover every job it lost during the pandemic. And in this most recent recession, the labor market gained back the majority of jobs it lost in less than a year—far faster than after the housing crash.

This is an extraordinary policy triumph. An unprecedented downturn hit, and the government—with loose monetary policy and trillions of dollars of stimulus spending—buoyed millions of families through it, unlike during the Great Recession. The economy has not lost any potential output due to the COVID recession, economists think. Long-term unemployment has barely grown. The government’s income supports made low-income families more than whole: Earnings among the poorest workers actually increased by 66 percent in 2020 because of boosted unemployment-insurance payments and stimulus checks; during each of the prior two recessions, the same group of Americans lost a quarter of its earnings.  

[Jerusalem Demsas: Why so many COVID predictions were wrong]

Prior recessions left grievous scars. Many laid-off workers experienced worse health and permanently lower earnings trajectories; in some cases, their children’s educational and employment prospects were diminished too. Economists are now hopeful that the COVID downturn might not cause such permanent damage.

Each of these overlooked but hugely consequential trends means a more vibrant, productive economy today and in the future. The COVID stimulus program saved jobs, lives, and livelihoods while protecting the economy’s productive capacity. The moderation in inequality means less food insecurity and healthier kids growing up in low-income households. The bending of the cost curve frees up money for wage increases and gives the government space in the budget for investments in child care, social insurance, infrastructure, and everything else.

Yet each feels like just a beginning. An efficient and effective health system, the end of poverty, and lower inequality—these are things worth fighting for in the new year.