According to an April 9th, 2014, interview Gray gave on the Fox News network "... distressed asset pricing is attractive," with single family homes selling for less than half their pre-recession values in parts of Europe and the U.S. Blackstone has already purchased 47,000 foreclosure homes in 14 US cities, spending $8 billion dollars, or an average of $190,000 per home. Blackstone is betting on rising housing prices in part because depressed new home construction is a third of what it was before the recession.
What Blackstone doesn't say can be found in the OOAH research report on how this nation's biggest landlord has affected renters in Atlanta. Families who rent from Invitation Homes in the Atlanta area face higher rents, higher rental fees, less responsive property management service and some even face automatic rent increases as high as 20% per year. The OOAH report caught the attention of Congressman Mark Takano, who sent out a disturbing press release highlighting some of the findings ( appended below).
And there are other potentially negative consequences yet to follow. Tenancy laws and regulations are diverse across the states and local municipalities to reflect local and regional values. What impact might the power of national corporate landlords have in influencing those laws to suit their business interests?
The shame of it all is that most of the former home owners now renting from private equity landlords would still be in their own homes if it hadn't been more profitable for banks to foreclose than to participate in the federal government's HAMP, HARP, PRA or 2MP mortgage assistance programs. But then, if that happened, this private equity investment opportunity wouldn't exist today, would it?
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