ICYMI: A big week in the fight to kick Wall Street out of Housing
by Samantha Kattan — Senior Research Analyst, and Sofia Lopez — Deputy Campaign Director, Housing
Last week, Wall Street’s role in our housing crisis was in the spotlight. Here’s why it matters and where we go from here!
Across the country tenants share similar struggles against their landlords, but housing is still considered a local issue, receiving way too little attention at the national level. In recent years though, Wall Street backed landlords have increasingly consolidated ownership of rental housing, which has resulted in powerful tenant organizing targeting national and global corporations. As a result, the business model of large-scale, private-equity backed landlords is starting to receive the scrutiny it deserves. We believe this scrutiny will make it clear: we can’t solve our housing crisis without making housing less profitable for Wall Street speculators.
If you aren’t sure why we should be concerned about Wall Street’s presence in rental housing, take it from two of the seven tenants who testified during a Senate Banking Committee listening session last week:
- Rachel Jones, a tenant organizing with Inquilinxs Unidxs, lives in a single family home in Minneapolis owned by HavenBrook Homes, a subsidiary of the Private Equity group Pretium Partners. She has experienced repeated flooding combined with unsafe electrical wiring, a garage so dilapidated that it was demolished by the City, and rent hikes in the hundreds of dollars. When she asked HavenBrook for justification for the rent increase despite the state of her rental, she was told, “We have to please the investors.”
- Juan, a tenant organizing with CASA, lives in an apartment complex in Maryland owned by Arbor Realty Trust, a publicly-traded investment company. He shared stories of pest and mold infestations, and rent increases, all while Arbor received more than a million dollars in rental assistance during the pandemic.
Tenants from MHAction, Greenbrook Tenants, BASTA, Housing Rights Committee of San Francisco, and Make the Road Nevada all gave powerful testimony on what happens when we prioritize investor profits over safe, quality, truly affordable homes.
All of the tenants who spoke at the listening session acknowledged that their issues are not unique to them. In fact, just a day before tenants spoke, ProPublica published an in-depth investigation titled “When Private Equity Becomes Your Landlord,” corroborating their stories. According to the article, the largest private equity firms are able to influence housing prices and they routinely lobby against tenant protections that would negatively impact their bottom line. And their influence is growing; in recent years, private equity has become “the dominant form of financial backing among [the country’s] 35 largest owners of multifamily buildings.”
On February 10, in a hearing on the role of Wall Street investors in housing, Senators on the Senate Banking Committee echoed what tenants said earlier in the week. Many of the senators expressed that we cannot allow corporate profit and return to investors to come before safe, dignified and truly affordable housing, calling the industry a cash-cow, and calling for more transparency and better data. And, right on cue, just this week GlobeSt published an article citing a “backlash” against institutional investors, quoting Senate Banking Committee Chair Sherrod Brown’s comments at length. The industry is feeling the pressure and they don’t like it!
Adding even more scrutiny to Wall Street’s housing playbook, on Friday Keith Ellison’s office announced a lawsuit against HavenBrook Homes and their parent company Pretium Partners. This lawsuit is the culmination of an investigation based on years of organizing by Minneapolis-based Inquilinxs Unidxs.
Ellison’s suit alleges Pretium/Haven Brook has misrepresented their repair practices, leaving homes uninhabitable, and violating COVID-19 emergency orders to extract maximum profit from the 600 rental homes it owns in the state. The suit backs up what tenants have been saying: the consequences of prioritizing profits over tenants are so bad they should be illegal.
Where do we go from here?
Make no mistake, the wins and visibility of the past week are because of tenant organizing, but we need more people to join the fight! Wall Street landlords are constantly cutting deals and apartments continue to change hands like poker chips. In the same week that tenants took their stories to the Senate and AG Ellison filed a lawsuit, Pretium continued to expand its holdings, amid a backdrop of Wall Street-backed landlords continuing to break revenue and rent growth records, and investors purchasing an increasing shares of housing, especially in majority Black communities.
Fortunately the housing justice movement is pointing us towards the solutions! Tenants across the country are waging fights against predatory corporate landlords while pushing for good cause eviction, right to counsel, transparency in property ownership, rent control, a right to organize, and huge investments in social housing. The only way we solve our nation’s housing crisis is to follow tenants’ lead and cut profit out of housing and prioritize housing that is high quality and permanently affordable for everyone.