Invitation Homes Invites You to Enjoy Everything
Rent Hikes, Fee Gouging, Disrepair, and Evictions
By Caroline Nagy
Last month’s settlement agreement with Invitation Homes confirms what their tenants have been telling us: our country’s largest landlord of single family homes has a consistent track record of ripping off its tenants. The United States faces an unprecedented housing affordability and homelessness crisis, but corporate landlords like Invitation Homes who dominate our housing supply in too many regions are thriving and profiting richly at their tenants’ expense. Tenants of corporate landlords are organizing around the country, calling out their landlords for steep rent increases, junk fees, skimping on repairs, and aggressive eviction practices.
Defrauding tenants was standard business practice at Invitation Homes.
According to the Federal Trade Commission, Invitation regularly broke the law, harming tenants by charging deceptive junk fees, failing to provide proper maintenance, stealing deposits, and intentionally misleading tenants about the federal eviction moratorium during the pandemic, among other offenses. Under the settlement, Invitation Homes will pay $48 million in refunds to renters (approximately .02 percent of its $20.3 billion market cap) and will agree to stop breaking the law. The FTC complaint alleges that Invitation Homes harmed their tenants in the following illegal ways:
- Deceptive pricing and junk fees: Invitation Homes charged tenants tens of millions of dollars in deceptive junk fees. Their advertised monthly rental rates failed to include mandatory fees that sometimes added up to more than $1,700 yearly per tenant. These undisclosed fees covered “utility management,” air filter delivery, and internet packages. Renters could not opt out of paying these fees, which were part of a deliberate strategy to increase profits: in a 2019 email, Invitation Homes’ CEO urged the senior vice president responsible for the company’s fee program to “juice this hog” by making a new “smart home” fee mandatory for renters.
- Deceptive promises of home inspections and 24/7 emergency maintenance: Invitation guaranteed a “quality assurance inspection” before new tenants moved in, but tens of thousands of residents submitted at least one work order within their first week of tenancy. In some instances, residents reported houses that were unclean and had mold, broken appliances, rodent feces, and exposed wiring. Similarly, tenants complained that Invitation’s advertised guarantee of 24/7 maintenance was not honored.
- Stealing renters deposits: Invitation unfairly withheld security deposits from tenants for unacceptable reasons, including regular wear and tear, pre-existing damage, or damage caused by planned renovations. Between 2020 and 2022, Invitation Homes returned only 39 percent of renters’ total collected security deposit dollars, far below the national average of 64 percent.
- Unfair eviction practices: In 2020, during the pandemic, the Centers for Disease Control and Prevention imposed an emergency eviction moratorium. It allowed renters to avoid eviction for nonpayment of rent, yet Invitation Homes intentionally steered its renters away from the CDC program, instead encouraging renters to complete the company’s own “Hardship Affidavit,” which provided no eviction protection to renters. When tenants asked Invitation for help, employees regularly failed to inform renters about the CDC program. Instead, Invitation falsely told tenants their only options were to pay up, move out, or get evicted.
How Wall Street and the federal government boosted the single-family-rental industry.
Despite its long history of egregious treatment of tenants, Invitation Homes is currently the largest landlord in the United States, owning over 84,000 homes in 19 US metropolitan areas. Created in 2012 as the single-family rental arm of notorious private equity firm Blackstone, Invitation Homes is part of a broader constellation of private equity firms, hedge funds, and other Wall Street-oriented partnerships and corporations that began buying up single-family homes after the 2008 foreclosure crisis and converting them to rentals.
As the first corporate entity to securitize the revenues from single family rentals, Invitation Homes was a pioneer in the financialization of the emerging single-family-rental industry. In 2013, Invitation Homes bundled anticipated rent payments together into a single-family-rental-backed security for $500 million, turning their tenants’ anticipated rent payments into a tradable commodity that investors purchase, betting on rents staying high. This move prompted a wave of securitizations throughout the single-family-rental industry: by the end of 2016, ten more companies had entered the market, generating 39 securitizations totaling $19.2 billion.
The single-family rental industry did not rise to dominance on its own. Rather, the federal government set up Wall Street landlords like Invitation Homes for success by providing extensive support and financial subsidies, allowing the industry to flourish and expand into the multifamily housing and manufactured home sectors as well. Beginning in 2012, the Department of Housing and Urban Development, followed by Fannie Mae and Freddie Mac, began selling large pools of delinquent mortgages to the highest bidder through their note sale programs.
These note sales have almost exclusively gone to private equity firms and other institutional investors: between 2015 and 2024, approximately $29.8 billion of loans sold by Fannie Mae and Freddie Mac have been purchased by institutional investors. Of the 170,000 loans sold through these note sales, all but 1,400 went to private equity firms and other corporate investors. For private equity firms like Blackstone (which created Invitation Homes before divesting in 2019), these sales presented opportunities to buy mortgages at steeply discounted prices and, in the absence of effective protections for impacted homeowners, move quickly to foreclose on the homes.
Invitation Homes also received direct financial support from Fannie Mae, which in 2017 guaranteed the refinancing of Invitation’s $1 billion rental-backed bond. This was the first time a government-sponsored entity had agreed to guarantee the debt of an institutional owner of single-family houses. It was also the last time: following an outcry from housing advocates and realtors, the Federal Housing Finance Agency, which oversees Fannie and Freddie, announced it would no longer allow them to guarantee financing for single-family rental home bonds.
This recent FTC settlement with Invitation Homes is a welcome development, both because it will put money back into the hands of defrauded renters and it demonstrates that the federal government can hold bad landlords accountable for their wrongdoing. The FTC action follows the Department of Justice’s antitrust action against RealPage, a private equity-owned data platform that the DOJ alleges helped corporate landlords collude to drive up rents.
Yet, even while Fannie Mae and Freddie Mac have retreated from financing the single-family-rental industry, they continue to guarantee $150 billion to multifamily landlords each year, relieving their lenders of default risk and ensuring more lucrative loan terms for corporate landlords. These loans are often overvalued and fueled by unrealistic rent projections, which mean that the only way landlords can pay them back is by hiking rents, imposing junk fees, cutting back on maintenance, or evicting tenants — the same behavior contained in the FTC Invitation Homes settlement.
There is no good reason for the federal government to continue to finance overvalued loans to predatory landlords. In light of increasingly high rents and unacceptable living conditions, tenant unions in federally-financed housing are organizing to demand that the FHFA impose rent caps as a condition for any future multifamily financing. If we want to stop supporting bad actors like Invitation Homes, we need to listen to tenants and impose more limits and requirements on what landlords can do with federal subsidies.
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