Los Angeles, CA -- Private equity firms are driving toward a second housing bubble, spending more than $20 billion on single family homes since 2012, according to a new report released today by national housing group Right to the City Alliance. The results have already proven disastrous for many low-income communities-- with rents skyrocketing and corporate, absentee landlords proliferating in urban areas across America, but especially in Los Angeles and Riverside.
The report will be released at a community hearing where Blackstone tenants, residents and housing activists will meet with Representative Takano and Representative Maxine Waters to discuss the report.
Top lines from the new report include:
● Private equity firms are buying up foreclosed properties in low-income communities in Riverside and LA and raising rents and security deposits to astronomical levels and passing control of homes from communities to large corporations.
● 80% of the people surveyed in the research, living in homes owned by private equity firms in LA and Riverside, are people of color, and the majority are women.
● The average rent of an equity firm owned residence in South Los Angeles is $1740/month, making them unaffordable to all households earning less than $70,000 a year. The median household income in that area hovers around $30,000.
See REPORT LINKS here:
RENTING FROM WALL STREET: BLACKSTONE’S INVITATION HOMES IN LOS ANGELES AND
LA/ RIVERSIDE FACTSHEET
RISE OF THE CORPORATE LANDLORD EXECUTIVE SUMMARY (DIRECT LINK FOR FOR PRESS ONLY)
Statements from Congressman Takano, report authors, local organizers, and affected residents below.
Statement from Representative Takano (Riverside, CA) on the new report:
“Rental costs are getting further and further out of reach for working families, and Wall Street's purchasing of hundreds of thousands of foreclosed homes for the purpose of converting the properties into rentals and securitizing them into bonds is troubling and must be closely monitored by the federal government. This confirms and expands upon what my office found earlier this year. CLICK HERE FOR TAKANO’S REPORT "Nearly two-thirds of the tenants in these corporate rentals surveyed in my district are burdened with unaffordable rent. If there is anything that we should have learned from the housing crisis, it is that Wall Street's top priority is increasing its bottom line, not improving communities or creating products that provide long term benefits to consumers. The actions by these investors must be monitored to ensure that renters and local communities are treated fairly. I call on the House Financial Services Committee and other government agencies to take a close look at Blackstone and the other corporations following their lead.”
Statement from Rachel Laforest, Executive Director of Right to the City:
“The same kinds of financial institutions that drove the foreclosure crisis and bankrupted many middle class and low-income families across America have a new target: the rental market. The transformation of single-family housing to renting is transforming from a ‘mom and pop’ industry to a global investment opportunity, which needs to be closely studied and regulated. If we don’t act fast, we could be facing another bubble and another crash.”
Statement from Cynthia Strathman, Executive Director of Strategic Actions for A Just Economy:
“Corporations are ill-suited to taking on the disparate upkeep needs of varied housing stock and their long term interest is in generating profits for stockholders, not creating stable, friendly neighborhoods that will house generations of citizens As investor-landlords are sucking equity out of our communities we see the wholesale removal of yet more wealth from neighborhoods already ravaged by the unregulated activities and unethical desires of enormous financial institutions that repeatedly fail to benefit the vast majority of Angelenos in any way. Corporations style themselves as investors in community, but these are investments in community in the same sense that slavery is an investment in people; it is only a means to increased profit by the fortunate owner at the expense of their unhappy prize.
Statement from Carlos Jauregui, Organizer, Strategic Action for a Just Economy:
Corporate landlords like Blackstone are taking advantage of the housing crisis to buy up homes in low-income communities and then charging super high rents. The houses are now unaffordable and a lot of residents aren’t sure they can keep living in their own neighborhoods. These landlords are removing all the equity from communities and displacing the people who live there now. A lot of these neighborhoods used to be mostly African American homeowners and most of the former owners are people of color. Corporate landlords are taking the benefits of homeownership that used to go to ordinary people and keeping them for themselves.
Statement from Kevin Stein, California Reinvestment Coalition:
"The problems created by large investors buying up properties and becoming landlords is a matter of statewide and national concern. We applaud the work of our allies at SAJE, Right to the City and Occupy our Homes. The findings in their reports are consistent with the complaints we hear from California community groups about first time homebuyers being outbid by all cash offers from investors, tenants being displaced, and neighborhoods being changed as a result. The parallels to the mortgage meltdown are scary, including the fact that these activities are being financed by main street banks and by Wall Street investors. Will regulators intervene now, or will they wait until this blows up too?"
Statement from Blackstone Tenant Esperanza Gonzalez
"I have lived in south central Los Angeles for over 20 year and am afraid I will not live here soon. I used to own my home and lost it. Now I have to rent a house from Invitation Homes on a 2 year lease and and am scared that I need to leave once my lease is up, because the rent will increase. You would think that living in south central is cheap, but it is not. I’m paying over $2,000 a month, and I just don’t know how much longer I will be able to afford this.” Esperanza Gonzalez