Wall Street landlords are slumlords

Wall Street landlords are slumlords

Slum lords go Wall Street. "Blackstone is the largest private equity fund in the world; when the 2008 crash hit and banks used the trillions in taxpayer bailouts to fund mass evictions of working people who'd been tricked into taking out predatory mortgages, Blackstone started bulk-buying them, creating rent-backed bonds (called Single-Family Rental Securities or SERS) that are the even-shittier successors to the mortgage-backed securities that detonated the world economy in 2008. In many towns, Blackstone has cornered the market on rental properties, meaning that once you've settled somewhere for work or your kids' school, you are going to be renting from Blackstone. They are shitty, shitty landlords. Reuters spoke with dozens of tenants of Blackstone's "Invitation Homes" (Blackstone's business unit that rents out these properties) and the litany of complaints is amazing, and familiar to anyone who's ever rented from a slumlord: floods of raw sewage, rising toxic mold, leaks, problems with heat and AC and everything else. And, of course, tenants face massive, unbearable rent-hikes year after year, as Blackstone squeezes them to ensure that the bonds they've floated continue to generate big returns for investors. But the modern twist here is that Invitation Homes has an all-digital system for reporting maintenance issues, a website that is part of the company's "worry free" environment. According to Blackstone's tenants, you can list as many maintenance issues as you'd like with this portal, and Blackstone's property managers will wait a brief interval, then mark the issues as resolved, without ever visiting your house or dealing with the knee-deep raw sewage. The one part of Blackstone's digital infrastructure that works superbly is a system for assessing fines against tenants -- if you are one minute late with your rent (even if the delay is caused by their payment portal repeatedly crashing), they assess huge fines against you. There are fines for everything, and the company boasts to its bondholders and to analysts about how much money it's making from fining its tenants. Another important difference between Blackstone and a traditional slumlord is that slumlords were relatively petty grifters, milking tenants in a handful of buildings. Blackstone is giant, and able to coordinate massive lobbying campaigns to relax limits on rent increases and to chip away at tenants' rights. Blackstone disputes all of this and told Reuters it had lots of happy tenants. Reuters asked the company to name five tenants, out of all the tens of thousands the company has, who were happy with the company as a landlord. Three of the tenants Blackstone named wouldn't even return Reuters' phonecalls."