Substantial local coverage of PESP, ACCE report on Blackstone’s sky-high rent hikes

In August, the Private Equity Stakeholder Project (PESP) and the Alliance of Californians for Community Empowerment (ACCE) published a report detailing how private equity giant Blackstone is profiting from California’s dire affordable housing crisis. “Helter Shelter: How Blackstone Contributes to and Profits from California’s Broken Housing System,” zeroes in on the practices of Blackstone as a corporate landlord and its impact in San Diego particularly. 

Key takeaways from the report include: 

• Since acquiring 5,800 total units in the San Diego area in 2021, Blackstone has increased the rent at these properties 38%, almost double the average rent increase for all apartments in the San Diego market, which was 20% during this period.The increase at some Blackstone-owned buildings has been especially high – up to 79%.
• Until August 2022, Blackstone had a voluntary eviction moratorium for tenants who were behind on rent. After that, Blackstone initiated a wave of evictions across the U.S. In California, Blackstone has a financial incentive to evict existing tenants because although state law limits how much a landlord can increase rents for current tenants, the law does not apply to how much a landlord can charge a new tenant. In some cases, Blackstone filed to evict tenants who reportedly owed just one month’s rent.
• Blackstone regularly touts to investors how it profits from the ongoing affordable housing crisis and the lack of new construction. In a 2023 letter to stockholders, Blackstone asserted that a “structural shortage of housing has resulted in pricing power for rental housing assets.” 
• Blackstone has spent millions of dollars to oppose efforts to limit rent increases in California. Blackstone gave over $7 million in both 2018 and 2020 to defeat rent control ballot initiatives. Blackstone’s contributions didn’t come from the company’s executives or corporate PAC, but rather from pools of capital from investors, including California public employee pension funds and the University of California.
• There is significant evidence that Blackstone uses RealPage’s controversial YieldStar software program to set rents at its properties. For instance, a 2021 prospectus for a trust securitized by Blackstone-owned multifamily properties cited the use at specific properties.  

Since its release in August, local San Diego outlets have covered the report extensively. 

• • The San Diego Voice and Viewpoint, September 17, 2024: “Rent Hikes, Neglect, and Evictions Grip Blackstone Tenants”
  • FOX 5 KUSI News, August 2, 2024: “‘Almost a crime’: Report finds Blackstone hiked rent nearly double market rate”
  • CBS 8, August 2, 2024: “Blackstone raised rents double the market average in San Diego, report says”
  • Voice of San Diego, August 2, 2024: “How Many of San Diego’s Landlords Are Mega Corps?”

In an interview with FOX 5 San Diego, PESP Housing Director Jordan Ash commented on the rent hikes at Blackstone-owned properties in the area: 

“‘Given that there already is such a crisis of affordable housing and that there were such a large number of affordable units, it’s really almost a crime that they are now no longer affordable…They’re kind of disappearing, there’s not very many of them,’ Ash said of these below-market priced units, noting that this is in part due to corporations acquiring them often with the goal of renovating to attract higher-income renters to turn a greater profit.”

The San Diego Voice and Viewpoint used PESP’s report in an investigation into the experiences of tenants in Blackstone-owned apartments in the San Diego region, highlighting their allegations of neglected maintenance and pest infestations. 

For more on Blackstone’s role in California’s affordable housing crisis, read the full report here.