The Blackstone Group, a private
equity firm, is now the largest owner of single-family rental homes in the
country. In one day alone, Blackstone bought up 1,400 houses in Atlanta. And as
private equity firms gobble up huge swaths of the housing market, they are
partnering with big banks to bundle the mortgages on these rental homes into a
new financial product known as “rental-backed securities,”
reminiscent of the “mortgage-backed securities” that helped cause the
last financial crisis. Could this new private equity rental empire help spark
the next housing crisis? We are joined by Laura Gottesdiener, author of “A
Dream Foreclosed: Black America and the Fight for a Place to Call Home,”
who calls this wave of purchases “a land grab.” Gottesdiener’s latest
article focuses on New York City’s rental market, a case study in what critics
call “predatory equity.” Large firms have used abusive tactics to
oust tenants in a bid to hike up rents — and tenants have been resisting. We
are also joined by Benjamin Warren, who, along with nearly 1,600 families in 42
buildings, is a victim of one of the largest single foreclosures in the city’s
recent history.
TRANSCRIPT
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not be in its final form.
JUAN GONZÁLEZ: You may not have heard of the
Blackstone Group, but it’s the largest private equity firm in the world. And
now it’s become the largest owner of single-family rental homes in the country.
Over the last few years, Blackstone and other Wall Street firms have been
quietly grabbing up huge swaths of the rental housing market, purchasing more
than 200,000 cheap homes, hoping to turn a profit. At one auction in Atlanta,
Blackstone swept up 1,400 houses in a single day. A new report released
Wednesday by Right to the City Alliance found like Blackstone tenants in
Atlanta had reported a range of issues, from burst pipes and exposed plumbing
to bed bugs, which their Wall Street landlord has been slow to fix. In
addition, private equity firms are partnering with big banks to bundle the
mortgages on these rental homes into a new financial product known as
“rental-backed securities,” reminiscent of the mortgage-backed
securities that crashed the economy in 2007 and 2008.
AMY GOODMAN: Now a new article turns the spotlight
on New York City, a case study on what critics call “predatory
equity.” Here in New York, private equity firms have bought up
rent-regulated properties, hoping tenants will leave so they can hike up the
rent. When tenants fought to stay, the firms resorted to predatory tactics,
from sending out fake eviction notices to shutting off heat or water. Right now
in New York City, 1,600 families in 42 buildings are falling victim to one of
the largest single foreclosures in the city’s recent history, after a
conglomerate of private equity firms failed to pay its mortgage.
For more, we’re joined now by two
guests. Ben Warren is with us. He’s a housing advocate who has been part of his
building’s tenant committee in the South Bronx since the 1980s. He’s a tenant
in one of those 42 buildings now being hit by the massive foreclosure, member
of Community Action for Safe Apartments, or CASA. And
Laura Gottesdiener is with us, the author of A
Dream Foreclosed: Black America and the Fight for a Place to Call Home. It
was published by Zuccotti Park Press. She’s an editor atWaging Nonviolence.
Her most recent piece for
Tom Dispatch is called “When Predatory Equity Hit the Big Apple: How
Private Equity Came to New York’s Rental Market—and What That Tells Us About
the Future.”
We welcome you both to Democracy Now! Laura, tell us about this particular
case.
LAURA GOTTESDIENER: Sure. Thanks for having me. It’s—you
know, as we’ve been looking at the growth of this single-family rental empire
across the country, what we hear over and over again is that this is an utterly
unprecedented phenomenon, that nothing like this has ever happened in the
history of the United States. In many ways, that’s true. But in other ways, in
New York City, we have this case study of what it’s looked like over the last
decade when private equity firms have gone in and seen what they consider to be
opportunities in the housing market to make a lot of money really quickly. I
know this is something, Juan, that you’ve covered extensively for the Daily News. And what’s important to
see, both in this case right now that Benjamin is living through and that 1,600
other families are living through and in a slew of other past very high-profile
deals, is that this has been something of a disaster not just for tenants, but
also from a financial perspective. These are deals that they were betting
big—these private equity firms were betting big that they could turn these
buildings around by pushing out hundreds of thousands of families. They weren’t
able to push out families, because families organized. And as a result of that
organizing, these deals failed, and it made a situation where the broader
housing market in New York City got hit and these tenants had to live in
completely inhumane conditions.
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