Tenants Together, California’s statewide organization for renters’ rights, released a report on May 12 finding that California tenants renting single-family homes from the three biggest Wall Street landlords in the state, Blackstone/Invitation Homes, Waypoint Homes, and Colony American Homes, pay higher rents than their neighbors and face challenges getting repairs. To date, the phenomenon of Wall Street landlords renting single family homes has been widely covered, but the impacts on tenants and communities have been under-studied.
The report titled The New Single-Family Home Renters of California, finds that tenants pay a premium to rent from Wall Street Landlords. Wall Street landlords charge higher than area median rents. Tenants are charged illegal and unfair deposits and fees. Many tenants are performing their own maintenance and repairs, with 40% of tenants reporting that they made repairs to the home themselves, and 80% reporting that they pay for yard maintenance. They also bear the burden of utility costs with 96% reporting they pay for water and 50% reporting they pay for garbage costs, all of which are typically paid by landlords in other rentals in California.
Last month, major landlords in the single-family home rental industry said they plan to raise rents even higher. In a Bloomberg article from April 21 2015, David Singelyn, CEO of American Homes4Rent, nationally the largest publicly traded single-family landlord said, “In the 2015 rental season, we’re really seeing the ability to move rents.” A representative of Blackstone/Invitation Homes is also quoted about plans to raise rents in some of their markets. Many American renters are already extremely burdened when it comes to housing costs, with about 25% nationally paying more than half their monthly income toward housing.
The report also contains policy recommendations. Aimee Inglis, Member Services Coordinator at Tenants Together and author of the report says, “Since the business model of Wall Street landlords is to maximize rents and minimize repairs, we recommend strong code enforcement and protections against unchecked rent increases. Tenants should not feel required to make their own repairs, and communities should be able to protect residents from rent gouging and displacement.”
Isabel Chong, a tenant renting from Waypoint Homes for over two years says, “My family lost our home in 2009 during the recession. Now we rent from Waypoint Homes and feel we are being taken advantage of. In 2013 my family of 5 moved into our new home in Vacaville, under Waypoints rent-to-own program. We pay above the median rent in our area ($2249.00/month) for our home, and have a very difficult time getting things repaired. The first problem I noticed was that Waypoint Homes did a really cheap job of remodeling the house. The flower beds were full of shards of glass, screws, knives, forks, and nails. After asking Waypoint multiple times to clean this up, they never did. To keep my home safe for the kids, I had to pay someone to clean it up. If they do come out to make repairs, they charge us a $50.00 service fee.”
UC Davis sociologist Jesus Hernandez, email@example.com, who has been researching the long-term effects of subprime loan securitization on local housing markets, says, “This report by Tenants Together helps connect the dots between global housing market manipulation and the financial profit extraction that is now taking place in our neighborhoods. Corporate landlords now own an increasing amount of our local rental housing stock. This concentrated ownership creates a very real economic vulnerability for neighborhoods and municipalities. The push by Tenants Together for rent controls on properties owned by “mega-landlords” can go a long way towards stabilizing rental markets and reducing the serious financial exposure for renters, neighborhoods and municipalities when (not if) the next Wall Street-driven housing crisis hits.”
Desiree Fields, @FieldsDesiree, an urban geographer and Right to the City alliance research committee member who studies corporate landlords and the post-crisis geography of financialization notes,”Tenants Together provides important evidence of the direct impacts corporate landlords have on renters. This work documents that tenants of Wall Street landlords are paying more in rent than other renters in their communities and that they are taking on homeowner-like responsibilities that add to their housing costs. The painstaking work Tenants Together has done in locating the data needed to carry out this survey also points to important issues of data accessibility. Researchers and housing advocates need improved access to data on often opaque Wall St. landlords in order to track the implications they have for tenants, communities, and the housing market.”
The Anti-Eviction Mapping Project, @antievictionmap, which has been documenting and mapping the impacts of real estate speculation in San Francisco, finds recent trends in the Bay Area indicative of a larger statewide phenomenon. Director Erin McElroy explains, “In San Francisco, we are witnessing a frightening number of evictions performed by speculators utilizing statewide legal loopholes to displace tenants due to no fault of their own. Increasingly investment companies parading under numerous LLCs are buying up large amounts of buildings to profit by either evicting tenants, raising rents, or other means. Stronger statewide renter protections are crucial in these times, to protect renters from eviction and exploitation from corporate landlords.”
Marcia Rosen of National Housing Law Project (NHLP) says, “We congratulate Tenants Together on this timely and important report, which confirms trends that have been reported anecdotally nationwide. The report paints a bleak picture of yet another dimension of our nation’s multifaceted housing crisis, especially as it affects low-income tenants. Tenants, the hidden victims of the foreclosure crisis, are now being victimized again by corporate greed, and former homeowners who lost their homes through foreclosure are now facing housing insecurity, common to tenants, but previously unknown to them. NHLP echoes Tenants Together’s call for robust government measures to address this situation.”
Aimee Inglis, Tenants Together. Tenants Together (TT) has been at the forefront of efforts to protect tenants after foreclosure since 2008 and since 2012 has worked as part of the Homeowner Bill of Rights collaborative with the CA Attorney General to adopt and to enforce protections for tenants after foreclosure. Thanks to support from the San Francisco Foundation, Tenants Together has been able to continue its work on this issue as Wall Street has moved from speculation after foreclosure into the landlord
____________________________________________________________Filed under: Bay Area / California