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Groups call on NC Treasurer Folwell to adopt principles for responsible housing investments

September 24, 2023

Tenant organizations and advocacy groups called on the North Carolina state treasurer Dale Folwell to adopt a set of principles to ensure that any future investments in housing do not negatively impact North Carolina residents, such as by driving up rents, displacing tenants or squeezing out homebuyers. 

The Private Equity Stakeholder Project (PESP), Action NC, and Renters Rising/Center for Popular Democracy say that Folwell should require that the owner of any rental property in which the North Carolina Retirement System (NCRS) will invest, should commit to a set of standards, including:  

  • Adopting Just Cause Eviction Protections
  • Capping annual rent increases at a maximum of 3%.
  • Eliminating excess charges and fees
  • Meeting habitability standards for every property
  • Recognizing tenant associations and tenant unions,
  • Negotiating a grievance procedure with tenants to address issues of health and safety.

The groups presented these principles to the Treasurer at a meeting of the NCRS Investment Advisory Committee on August 23 in Raleigh. 

In aletter to Folwell, the groups detailed the need for such a policy, citing examples of past NCRS investments in private equity companies, such as Landmark Partners, Blackstone, Meadow Partners, and Brookfield. For instance, NCRS has invested almost $4 billion since 2012 in the private equity firm the Blackstone Group, which previously owned the single family rental company Invitation Homes and which currently owns the single family rent-to-own company Home Partners of America (HPA). HPA tenants have complained of maintenance problems and unclear billing practices, and just one-fifth of its tenants end up buying their homes. 

Last fall, when asked about NCRS’s outsized investments in Landmark Partners, which is a major investor in the single family rental company Progress Residential, Folwell said, “If there’s a person who is spending their money on shelter where the toilet won’t flush, the water is not clean, or there’s an insect problem, it doesn’t matter how many millions or how many thousands of apartments this may be. If that’s happening to one person, that’s one too many.”

“We agree with Treasurer Folwell,” said Madeline Bankson of the Private Equity Stakeholder Project, “and this is a chance for him to put his money where his mouth is.”

“I speak with tenants across North Carolina every day,” said Jessica Maria Moreno, a community organizer with Action NC. “Every year their rent is going up, it’s hard to reach the management company, and the routine maintenance and minor repairs are the tenants’ responsibility. We ask Treasurer Folwell to stop investing money into these corporate landlords, and instead investigate the negative impact these companies are having on the people of North Carolina and hold them accountable to treating renters like humans.” 

“Due to life changes, I had to move homes. Moving is already bad, but it was made awful due to North Carolina’’s housing situation. Homes that I could afford last year were doubled and if not tripled the price they were even just a year ago,” said Karina Soni, a librarian at UNC Chapel Hill. “I am a state employee and not being able to afford a place to live in the community that I serve every day feels like a sick joke. I am disgusted that the state is using my retirement savings to worsen this situation for me and thousands of other public workers.”

The NCRS has invested over $450 million in the private equity firm Meadow Partners, which acquired two apartment buildings in the East Village of New York City last year and subjected long-time tenants to 25% rent increases and forced out other tenants by refusing to renew their leases with no explanation.

“For years our buildings were home to a wide cross section of New Yorkers. Many chose to raise families there. But Meadow Partners changed all that. After it bought our buildings, it slapped longtime tenants with rent increases in the thousands. Many more tenants, like me, were forced out of their homes as Meadow refused to renew our leases,” said Rebecca Rothbaum, a former tenant. “Private equity firms like Meadow Partners are destroying our cities by driving out all but the wealthiest residents.”

“As a recipient of a pension from the state of North Carolina, I am pleased that the health of the fund is strong. If the goal of the fund is to invest in funds that maximize returns for the benefit of state employees, I believe that benefit should include looking at the costs associated with those investments,” said Suzy Winter, a retired community college employee. “I humbly ask that with the power and strength that you exhibited to build a healthy retirement fund, you use this strength to pressure corporate funds to require these landlords to cap future rent increases to no more than 3% and to maintain local resources in each community for property management that is responsive to their tenants.”

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