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Matteo Colombo
A $60 Billion Housing Grab by Wall Street
“Hundreds of thousands of single-family homes are now in the hands of giant companies - squeezing renters for revenue and putting the American dream even further out of reach”
Please follow the below links to read two recommended articles.
The first is a New York Times Magazine piece by Francesca Mari entitled; "A $60 Billion Housing Grab by Wall Street", which reveals the large numbers of single-family homes snatched up by Wall Street Firms during the Great Recession.
Click HERE to read the entire article entitled; "A $60 Billion Housing Grab by Wall Street".
The second article is a CalMatters commentary by Senator Nancy Skinner entitled; "Let's stop another Wall Street takeover of single-family homes", which warns of another corporate takeover of housing during the current recession.
Click HERE to read the entire article entitled; "Let's Stop Another Wall Street Takeover Of Single-Family Homes".
Both articles illustrate the appetite that Wall Street and Big Real Estate have for investing in single-family homes. They bring home the real possibility that the proposed 2020 housing legislation, which directly up-zones (or encourages up-zoning) single-family neighborhoods, could entice real estate developers, real estate investment firms, and real estate rental corporations to buy up single-family homes, convert them to multifamily complexes (duplexes, fourplexes, and larger) and turn them into rental properties.
During the current COVID-19-induced recession, many vulnerable households are falling behind on their mortgage payments. This could lead to numerous single-family homes being put on the market or being foreclosed on and then being snatched up by Big Real Estate (a repeat of the Great Recession), resulting in another Wall Street windfall at the expense of homeowner's loss of wealth equity.
Excerpt from the commentary entitled; "Let's stop another Wall Street takeover of single-family homes":
"The Great Recession sparked a massive transfer of wealth in California and the rest of the nation. It happened on courthouse steps around the country when an estimated 5 million U.S. families lost their homes due to foreclosure. Many of those foreclosed homes were sold in bulk at auctions, and for the first time, large numbers of single-family homes were snatched up by Wall Street firms.
"This corporate scheme led to Wall Street establishing a new and wildly profitable asset class, “single-family home rentals.” Today, big corporations own an estimated $60 billion worth of single-family housing in the United States."
Excerpt from the article entitled "A $60 Billion Housing Grab by Wall Street":
“Neighborhoods that were formerly ownership neighborhoods that were one of the few ways that working-class families and communities of color could build wealth and gain stability are being slowly, or not so slowly, turned into renter communities, and not renter communities owned by mom-and-pop landlords but by some of the biggest private-equity firms in the world,” says Peter Kuhns, the former Los Angeles director of the activist group Alliance of Californians for Community Empowerment."