FOR IMMEDIATE RELEASE
CONTACT: Anya Svanoe, asvanoe@calorganize.org, 510-423-2452
Carter Dougherty, carter@ourfinancialsecurity.org or 202-251-6700
Wall Street Landlords Turn
American Dream Into a Nightmare
Sen. Elizabeth Warren Endorses Need For Action
Wall Street landlords are fundamentally changing homeownership across the United States with its new and massive purchases of single-family dwellings, squeezing tenants and prospective homeowners, particularly in communities of color, according to a new report authored by Alliance of Californians for Community Empowerment (ACCE), Americans for Financial Reform (AFR) and Public Advocates.
The report, “Wall Street Landlords Turns American Dream Into a Nightmare: Wall Street’s big bet on the home rental market, and the bad surprises in store for tenants, communities, and the dream of homeownership”, documents in detail Wall Street’s growing influence, and abuses, in the single family rental (SFR) industry in geographies where it has focused its efforts.
“This important report highlights the way Wall Street landlords have driven up rental prices and provided terrible living conditions – particularly in low-income and minority communities,” said Sen. Elizabeth Warren. “We need to do much more to provide clean, safe, and affordable housing for working families – and we can start by taking control away from Wall Street and returning it our communities.”
The report, released last week, highlights the federal government’s explicit role in propping up the industry and the industries’ leaders’ direct connections to the Trump administration. It documents in detail the terrible impact on tenants and communities including: denied opportunities for homeownership, dramatic rent increases, rising rates of eviction, fee-gouging akin to those for payday loans, and living conditions that some tenants describe as “life-threatening.” The report also highlights the growing movement to counter the Wall Street landlord’s influence with local and state initiatives that expand rent control and tenant protections to cover families living in single family homes.
“Wall Street is transforming the single-family home into a commodity that it can trade in pursuit of greater wealth for a small group of wealthy investors,” Maya Abood, MCP, co-author of the report. Allowing hedge funds and private equity firms to speculate on housing with no public oversight or regulation puts families at greater risk of unfair rent increases and evictions, and threatens the right to housing itself. The federal government and state lawmakers need to step in before these abuses become systemic.”
In the past 10 years, nine big Wall Street firms have fundamentally altered the rental landscape in their targeted cities across 13 states by eliminating the human aspects of the relationship between tenants and their landlord. In some areas, the largest SFR companies own a large percentage of all single family rentals in a given zip code – up to 12.5 percent in some areas. In Sacramento County, Invitation Homes is the single largest private landowner in the county, and the second largest landowner in the county itself. In 2017, the two largest SFR companies merged – making them the largest landlord in the nation and are continuing to grow.
Offered in the report are a series of local, state and federal policy recommendations to mitigate harms of the industry’s impact on tenants and communities. To address growing abuses, local, state and federal lawmakers are recommended to:
- Pass rent control and just cause eviction protections for tenants of single family homes
- Advance homeownership and community control of housing by establishing a “right of first refusal” policy giving tenants first chance to purchase the home when it is being sold.
- Monitor the industry extensively – tracking their growth and their performance as landlords, and any potential fair housing violations
“With rents this high, for me to work 12-14 hour days and barely have enough to pay increasing rents to a billion dollar Wall Street giant, it’s like sharecropping all over again.” – Merika Reagan, Oakland Waypoint tenant and a member of ACCE.
“The stress is killing us. We were hit again recently with another $400 per month rent increase and we just can’t afford it. It’s impossible to find any comparable housing that is affordable around here – leaving us facing the possibility of becoming homeless this year.” – Cecilia Reyna, Los Angeles Invitation Homes tenant and member of ACCE.
“Living in a Waypoint property has been an actual nightmare. While my family suffered through a broken stove for over a year, rotting ventilation, a backyard so hazardous my kids can’t play in it and a carpet installed so badly we couldn’t walk barefoot in the house – our rent has also increased by $350 in less than three years. No family should have to live like this.” – Maricella Castillo, former Waypoint tenant, Sacramento California.
This report draws upon data collected from corporate disclosure documents, quarterly earnings calls, geospatial data, and tenant and expert interviews in order to examine the four largest single-family rental companies in the nation, their connections to Trump, the growing harms on community.
Tenants are available for interview upon request, as remaps of cities and counties with concentrated single family investor ownership.
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