The Private Equity Stakeholder Project (PESP) published a report today detailing how Progress Residential and Front Yard Residential, owned by private equity firm Pretium Partners, have filed to evict more than 1,300 residents during the COVID-19 pandemic, with the companies filing most evictions after the Centers for Disease Control and Prevention (CDC) Eviction Moratorium went into effect in September 2020.
The report comes after the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) on March 29 announced they would investigate evictions by “private equity firms” and “major multistate landlords”, amid “reports that major multistate landlords are forcing people out of their homes despite the government prohibitions or before tenants are aware of their rights.”
Pretium Partners is a private equity and debt firm focused on the US single-family rental homes, headed by former Goldman Sachs partner Don Mullen. Mullen made millions betting against the mortgage market during the 2008 Global Financial Crisis.
In January 2021, Pretium Partners and its single family rental management company Progress Residential became the second-largest owner and operator of single-family rental homes in the United States when it acquired Front Yard Residential along with Ares Management and took the company private. Pretium now owns over 55,000 rental homes.
In “PANDEMIC EVICTOR: Don Mullen’s Pretium Partners Files to Evict Black Renters, Collects Billions From Investors,”PESP shows that despite the CDC Eviction Moratorium that took effect on September 4, 2020 and was recently extended, Progress Residential and Front Yard Residential have filed to evict growing numbers of residents. Pretium Partners is the top evictor since the beginning of the year within the seven states that the Private Equity Stakeholder Project has been tracking.
The companies filed over 500 eviction actions in the first ten weeks of 2021. Almost half (246) of these filings were in two Georgia counties – DeKalb and Clayton – which have majority Black populations. Since January 1, 2021, Progress Residential and Front Yard Residential have filed to evict more than 12 percent of the company’s residents in DeKalb County, Georgia, where 55 percent of residents are Black. In Clayton County, Georgia, with a population that is almost 73 percent Black, the landlords have filed to evict 9.5 percent of residents since the beginning of the year.
By comparison, Progress Residential and Front Yard Residential filed to evict a much smaller share of residents in two majority-white counties in Florida, Seminole and Polk. Since January 1, 2021, Progress Residential and Front Yard Residential filed to evict 2.4 percent of their residents in Polk County and 1.1 percent of residents in Seminole County.
The company has also challenged the CDC Eviction Moratorium, calling the moratorium an “unconstitutional overreach” in at least one court filing.
Pretium Partners’ and Ares Management’s Front Yard Residential has also drawn complaints from predominantly Black residents in Minneapolis who say the company is failing to maintain their homes. Similarly, Progress Residential was the subject of a 2018 investigation that uncovered “a pattern of complaints from renters and former employees about the company’s customer service, standards, billing practices, response times and internal culture. The concerns span markets, states and years.”
Despite the racial disparities of their eviction filings and advancing of eviction cases despite the moratorium, Pretium Partners has continued to receive investments from private equity firms (Ares Management, Landmark Partners), pension funds (Canada’s Public Sector Pension, Tennessee Consolidated Retirement System), insurance companies (American Equity Investment Life Insurance), and other institutional investors.
Photo: Columbus Alive