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Wall Street: Your Next Landlord

By 07/29/2014February 11th, 2015Gilda's Posts, Housing

According to a new report by the Homes for All Campaign of  Right to the City, the same destructive speculative forces that produced the U.S. foreclosure crisis has reinvented itself in the form of a new kind of corporate landlord that has purchased thousands of foreclosed properties at bargain prices, rents them out to tenants, and then turns those rentals into investments that can be bought and sold on Wall Street.

The info-graphic below explains how the system works:

corporate landlord infographic
What’s wrong with this picture? In the short-term, at the level of the renter, problems occur when professional landlords are primarily in the equity investment business. For example, in Los Angeles and Riverside, corporate landlord Invitation Homes has been renting out properties with serious maintenance issues, according to research by Strategic Actions for a Just Economy and Homes for All. Invitation Homes is owned by Blackstone, the largest private-equity firm in the world.

In the long-term, a growing concentration of ownership and further commodification of the housing stock is reasonable cause for concern as “the institutionalization of the single-family rental market stands to primarily benefit the same kinds of financial interests that brought down the housing market in the first place,” explains Desiree Fields, author of the report.

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