New report finds that corporate landlord Blackstone has raised rents in San Diego nearly double the market average

The Private Equity Stakeholder Project (PESP) and the Alliance of Californians for Community Empowerment (ACCE) have published an analysis of private equity giant Blackstone’s profit-seeking practices in California as residents suffer amidst one of the nation’s worst housing crises. “Helter Shelter: How Blackstone Contributes to and Profits from California’s Broken Housing System,” examines how Blackstone has profited from rent hikes and ramped up evictions, and even depends on the continuation of the affordable housing crisis for sustained profits. According to the report, Blackstone has touted to investors multiple times how the firm’s real estate investments benefit from declining new supply of housing, a key driver of the affordable housing crisis. 

In 2021, Blackstone acquired 5,800 rental units in the San Diego area. Since then, the report shows, Blackstone has increased the rent at these properties 38% — almost double the 20% average rent increase for all apartments in the San Diego market during this period. The increase at some Blackstone-owned buildings has been especially high – up to 79%.

The report also outlines how Blackstone used over $14 million of investor capital – including from California public employee pension funds and the University of California – to lobby against regulation to limit rent increases in California.

“For me as a single mother I’ve been heavily affected by high rents,” said Iraides Gonzalez Soto, a Blackstone tenant living in El Cajon and a member of ACCE. “It’s forcing me to get a second job because I either have to pay rent or pay to put food on the table, and with high rents you can’t have both. I am facing having to limit my groceries now to pay for my rent. We must organize and protest for Blackstone and other corporate landlords to notice our pain. We cannot give up until we see results and they stop jacking up rents and stop funding campaigns against strong tenant protections.”

“Blackstone is expanding its grip over our housing market amid a housing crisis of massive proportions,” said Senator Bernie Sanders (I-VT). “Today, one in five Americans—over 12 million people—spend over half of their incomes on rent and utilities. Homelessness is at a record high, with over 650,000 Americans experiencing homelessness. We must do everything we can to stop private equity vultures like Blackstone from exploiting and exacerbating this crisis.”

Notably, the report analyzes evidence pointing to Blackstone’s use of RealPage’s YieldStar, a controversial real estate software that allegedly enables landlords to inflate rents in a cartel-like manner. RealPage has been the target of multiple lawsuits and a criminal investigation by the Department of Justice. According to the report, ads for revenue management positions with Blackstone require experience with the software, and the Vice-President of Revenue Management at Blackstone’s multi-family properties has been featured as a RealPage expert on at least three RealPage webcasts about revenue management. Additionally, FPI Management, which Blackstone contracts with to manage its San Diego properties, is a named defendant in several of the lawsuits involving YieldStar.

“Californians and tenants across the United States deserve far better from Blackstone,” said Jordan Ash, Director of Housing at PESP and lead author of “Helter Shelter.” “Housing is a human right, not an abstract commodity. No corporation should depend on or profit from a housing crisis that has left hundreds of thousands unhoused or struggling to choose between food and rent. Blackstone must clean up its act and do better as the largest landlord in the U.S.”

In June, Blackstone expanded its housing footprint with the finalization of its acquisition of AIR Communities, adding nearly 30,000 units to its portfolio. The AIR Communities inventory includes 6,000 units in Southern California.

Note: A previous version of this post erroneously listed Iraides Gonzalez as a resident of Pacific Beach. Iraides Gonzalez is a resident of El Cajon.