Citing landlord abuses and property neglect, tenants and homeowners associations are leading the pushback against private equity’s increasing investments in single family rentals. State officials and the Biden administration are also increasing pressure against institutional investors to keep housing affordable, as well as to maintain properties to ensure they are livable.
Pension & Investments (P&I), May 23, 2022: Move into home rentals prompts growing outcry
The Minnesota Attorney General is suing private equity firm Pretium Partners and Front Yard Residential, a real estate company owned by Pretium and Ares Management, for alleged poor property maintenance, lead paint, rodent infestations and tenant evictions during the pandemic, among other issues, according to Pensions & Investments (P&I).
P&I also noted that the White House has released a housing plan that aims to tip the scales in favor of homeowner occupancy over companies buying homes to rent, while members of Congress are pressuring federal housing agencies and the largest single-family rental landlords, attempting to keep housing affordable.
US Senator Elizabeth Warren earlier this year sent a letter to three of the largest investor owners of single-family homes: Progress Residential, the single-family rental management platform of real estate manager Pretium Partners, real estate investment trust Invitation Homes Inc., and American Homes 4 Rent, about increased acquisitions, rent and fee hikes, and evictions, according to P&I.
A budget proposal in California would create a fund to give first-time homeowners capital to successfully compete against real estate companies that have the wherewithal to buy homes for cash, P&I wrote.
Last year, renters of Front Yard Residential homes spoke at a meeting of the $450.7 billion California Public Employees’ Retirement System asking the pension fund to engage Ares Management around poor conditions and eviction filings during a COVID-19 eviction moratorium.
Arianna Anderson told P&I that she has lived in her rented single-family home managed by Pretium’s HavenBrook Homes for seven years, and that the home has a crooked foundation, issues with the heater, door knobs that fall off, peeling lead paint and mold in the bathroom and kitchen walls.
“The foundation was neglected so badly that the home is not able to hold heat … My 5-year-old’s room measured 58 degrees with the heat set at 90 degrees,” Ms. Anderson said.
After years of complaints to HavenBrook Homes, the company relocated Anderson and her family to another home to rehabilitate the property.
PESP Executive Director Jim Baker told P&I that he was “concerned about private equity firms and other large Wall Street firms buying up housing and either not performing maintenance and making housing unlivable or making homes less accessible to first-time home buyers and pushing up people’s rents to levels that are unsustainable.”
Also see PESP’s April 2021 report PANDEMIC EVICTOR: Don Mullen’s Pretium Partners Files to Evict Black Renters, Collects Billions From Investors.