Basics of the Private Equity ModelThe private equity industry is an increasingly powerful part of the U.S. economy. Private equity firms are Wall Street investment companies that pool large amounts of private capital to acquire companies, including real estate firms and individual buildings. While some firms benefit from the capital infusion that private equity provides, the private equity business model is highly predatory and extractive. As Alex Blasdel writes in The Guardian, even when private equity investment helps an enterprise become more valuable, “the logic is still viral: private equity exists to replicate and enlarge itself, not to build anything in particular.” First, taxation: The U.S. federal tax code favors private equity investors who buy housing to extract profit, at the expense of housing affordability and stability.