California is in the midst of a housing crisis that threatens the health and well-being of millions of people. The crisis is particularly acute in low-income communities, who overwhelmingly pay a large portion of their already-small income on housing, and communities of color, who have faced decades of legal and extra-legal residential segregation, housing discrimination, predatory lending, and exclusionary lending practices, such as redlining. While hundreds of thousands of Californians experience housing instability or have to make the choice between paying rent and buying basic necessities like food and medicine, corporate landlords are profiting from this crisis.
Equity Residential is one of the largest corporate landlords in California and the third largest apartment owner in the U.S., with 36,805 apartments across 150 properties in Southern California and San Francisco and nearly 80,000 apartments nationwide. Equity Residential is a Real Estate Investment Trust (REIT), which is an investment company that owns and often operates income-producing real estate assets. REITs get extremely favorable tax treatment, often paying little to no corporate taxes as they pass at least 90%, if not all, of their profits to their investors, who often receive tax breaks on the dividends they receive.
Invitation Homes is another one of the largest corporate landlords in California, with 12,822 primarily single family rentals in the state and nearly $16.7 billion in properties nationwide at the end of 2018. Also set up as a REIT, it is a single-family rental company controlled by The Blackstone Group, one of the largest private equity and asset management firms in the world. During the Great Recession, Blackstone bought up tens of thousands of foreclosed homes and turned them into rentals. Blackstone is one of a number of Wall Street firms that have profited from the foreclosure crisis, increasingly concentrating rentals among large corporate owners and crowding out “mom and pop” landlords.
Wall Street landlords, including private equity firms and REITs, are primarily accountable to their investors who demand returns that increase each year, resulting, in many cases, in large annual rent increases, frequent fees and high utility costs, high rates of evictions, and maintenance and habitability problems.
Moreover, the federal tax code allows these corporate landlords to avoid paying their fair share in taxes. Meanwhile, many have poured millions of dollars into California, as they do in other states, to elect politicians friendly to their interests, support legislation that furthers their interests, and defeat tenant protection legislation at the expense of millions of Californians.
Over 3 million California renter households are “rent burdened,” or paying over 30% of their income on rent, while nearly 1.6 million of those 3 million renter households are “severely rent burdened” (paying over 50% of their income on rent). In other words, over half of California tenant households are rent burdened, and one in four are severely rent burdened.
Based on research from MIT graduate Maya Abood and in partnership with Americans for Financial Reform (AFR) and Public Advocates we are excited to announce the release of our new report! The report, “Wall Street Landlords Turns American Dream Into American 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.
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
No matter which way we look at it, 2016 was a big year that marked a turning point for our nation and for ACCE Institute. We spent the year fighting and winning major victories for California’s low wage workers, tenants, homeowners, and undocumented residents.
Reflecting on our 2016 victories and challenges gives us both hope and a renewed fire to fight hatred and divisions that we will carry into our 2017 work. We invite you to reflect with us on our 2016 victories to start building the vision for what is achievable in 2017. Read the full report!
This report shows how aggressive, and often predatory, lending is doing particular harm to the economic (and physical and emotional) well-being of women of color.
The report is the culmination of a survey and story collection project carried out by ACCE Institute and two other statewide community groups, New Jersey Communities United (NJCU) and ISAIAH in Minnesota. This project was funded by the Women’s Equality Center.
2015 was a year to both go deeper on our traditional issue fights as well take on issues we hadn’t engaged in before. The pages of this report give a snap shot of what that commitment to racial and economic justice has produced just one year after we rolled out our new framework. We are thrilled to share with you organizing efforts and wins from San Diego to Sacramento and everywhere in between. We have seen victories in the areas of tenant protections, increased worker pay and protections, community infrastructure improvements, and more. None of those wins would have been possible were it not for the unceasing drive of the community members we serve. Their brave faces are proudly displayed throughout the proceeding pages. To those community members and the thousands of others we worked with in 2015, these victories are for you.
Throughout this report you will read about exciting leadership development programs, broad coalitions, impactful policy innovations, new messaging strategies that reframe the public debate on everything from budget battles to the housing crisis to the intersection of racial and economic injustices, and community mobilizations into the streets as well as to the ballot box!