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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWall Street’s Frightening New Plan To Become America’s Landlord
http://thinkprogress.org/economy/2014/01/24/3203471/wall-street-landlord/Anyone who has ever struggled to get her landlord to fix a broken appliance can imagine how much worse it could have been if she were paying rent to a faceless hedge fund based thousands of miles away. That tenants nightmare may be on its way to reality for hundreds of thousands of Americans, as Wall Street firms have snapped up 200,000 family houses with the intention of renting them out.
Banks, hedge funds, and private equity firms have been amassing those real estate holdings for a few years now, but their plan for wringing profit out of the rental market is just starting to draw real scrutiny. The New York-based hedge fund Blackstone Group is now the nations largest landlord after purchasing over 40,000 foreclosed family homes for the purpose of renting them out.
While firms like Blackstone often farm out the day-to-day management of the rental properties to third-party companies, those intermediaries are often also based in faraway states. Some have a track record of being unresponsive to basic things like broken sewer pipes, as the Huffington Post has reported. The banks and their intermediaries may neglect basic upkeep of these properties. In that worst-case scenario for renters, local and attentive property managers and building supers will get replaced with Wall Street-based absentee slumlords, in David Dayens phrase.
On-the-ground concerns for communities and renters go beyond neglect, however. The rising influence of financial titans turned local landlords could threaten all sorts of public services. In the case of Huber Heights, OH, the hedge fund Magnetar Capital has become the largest landlord in the whole town and is using that influence to try to extract lower property tax charges from the town a change that would undermine funding for schools and other public services for locals, but boost the bottom line of the Illinois-based financial giant. (Magnetars dodgy past dealings from the subprime era also underscore an unsettling dynamic to Wall Streets entry into the rental market: the same companies that helped turn homeowners into renters through mass foreclosures are now preparing to make even more money off of the same rental demand they helped create.)
CrispyQ
(36,461 posts)I don't think so.
KoKo
(84,711 posts)don't decide to go into Organ Donation.
Because then they'd want our bodies, too.
CrispyQ
(36,461 posts)a man I knew at the time said to me, "If we ever encounter other intelligent species, I have no fear that man will be one of the most ruthless & savage." I completely disagreed with him at the time, but here, several decades later, I think he was spot on. We have some good, too, but as a collective, I don't have much hope for us.
valerief
(53,235 posts)stillwaiting
(3,795 posts)they have subjugated, depressed, and divided the masses so bitterly and so completely that there is no threat to their position.
Expect them to continue to treat us like trash more and more openly.
CFLDem
(2,083 posts)No promises, though
vanlassie
(5,670 posts)I have heard that banks are selling in bulk, so to speak, many foreclosed homes rather than go to the bother of fixing and showing them one at a time. If so, it's another case of overlord behavior.
jwirr
(39,215 posts)our own government. Some of it is already owned jointly between the private sector and government. I lived in one that was. I must say that it was well run and followed Section 8 income guidelines. But I fear today's business community. Privatization is a license to make a profit on what should be government run.
SoapBox
(18,791 posts)Rent increases drove us out of business in two different locations.
"LandLORDs"...I hate these filthy fucks.
KoKo
(84,711 posts)Financial sites have been exposing this for a few months now. Blackstone Group..the Slum Landlord whose objective is to by stealth change local and state laws to their advantage. They've jacked up prices of houses that ordinary folks could have bought and renovated by buying in bulk and those numbers make the "housing recovery" look good for the Media Whores to go on about. But, digging into the details its just more collusion by Wall Street Hedge Funds and Banks to pull another fast one on the 99%.
magical thyme
(14,881 posts)"But firms like Blackstone arent just renting the homes, of course. The real money for the firm is in turning the rent payments it will receive from those 40,000 units into financial products called securities that it can sell to other investors. The practice could prove to be a broadly beneficial way to allocate scarce housing resources or it could mirror the casino culture that turned the subprime bubble into an economy-wrecking conflagration."
Another gambling scheme.
secondwind
(16,903 posts)KoKo
(84,711 posts)I was shocked when I saw it had been renamed. Did an internet search and sure enough Berkshire-Hathaway had gone into the Real Estate business all over the US. The emphasis seems to be with buying RE Agencies who had high volume in areas they felt had potential for future growth. Supposedly they don't fire people when they take over...but the move into Real Estate seemed very odd for Buffet.
The articles I found were titled: "Buffet Bets big on Housing Recovery."
Sen. Walter Sobchak
(8,692 posts)Real Estate Income Trusts aren't new. Just traditionally they favored multi-family housing.
TiberiusB
(487 posts)And more than a little disturbing (from the linked article):
the real money... is in turning the rent payments...into financial products called securities that it can sell to other investors...it could mirror the casino culture that turned the subprime bubble into an economy-wrecking conflagration.
Yeah, that.
TiberiusB
(487 posts)http://www.democraticunderground.com/10163581
Is anyone here shocked that the .01% would rush in to snap up foreclosures on the backs of the American people whose finances they ruined and whose taxes they happily lapped up to pay for Wall Street's freewheeling gambling?
truedelphi
(32,324 posts)The House and in the Senate, from Jan 2007 to Jan 2011, with a Democratic President from Jan 2009.
While some of us bloggers knew that the "new uptick in housing"
would be coming around due to Big Banks and Big Financial Firms with their collusion and unsound business practices in buying up homes, did anyone other than Grayson, Waters, or Warren act concerned about this?
bvar22
(39,909 posts)Pay Attention.
Half-Century Man
(5,279 posts)that was built to burst.
A new toxic security to rape countries with.
KoKo
(84,711 posts)last scraps to spin straw into gold.
LiberalEsto
(22,845 posts)They want to gouge Americans every which way they can.
packman
(16,296 posts)One of the things a hard-working middle class person can leave to their children is the house they worked so hard to obtain. Then those children are forced out because they can't meet the house taxes, upkeep, or the myriad other things that come with home ownership with their minimum wage jobs. Then they take out a mortgage or two on the home in desperation to keep it or borrow on credit cards in an attempt to stem the tide. Eventually finances are drowning them. At that point the dominoes all fall and the last one falls on them abandoning their home or the bank foreclosing on it. The sharks have rigged the game from the beginning by making sure working class wages are surpressed to the point where the average person cannot afford home ownership.
Nye Bevan
(25,406 posts)And it is good if the supply of available rental accommodation is increased. But landlords do need to be forced to do necessary maintenance and repairs, and when they are non-responsive the tenants need to be allowed to withhold rent to pay for the work.
Glitterati
(3,182 posts)Try being a renter in a state like Georgia where the laws haven't been changed since sharecropping.
Tenants literally have no rights. Period.
TiberiusB
(487 posts)One third of all renters in Takanos district spend more than half of their income on rent, a far higher rate than what financial professionals say is sustainable. The national rate is similar, the report says, with about 12 million of the nearly 41 million renter households nationwide paying more than half their income in rent./blockquote]
An exploding rental market inflated at least partially by the very people driven out of their homes by foreclosure is simply blood in the water to Wall Street.
frwrfpos
(517 posts)nt