When José Rivera moved into his house, he thought he was on the path to home ownership. But after several years and more than $90,000 in rent, he can’t even get his landlord to fix the broken pipe that leaked raw sewage into his home.
Rivera’s landlord is Colony Starwood Homes, a rental giant backed by Wall Street investment firms. When he first told the company about his leaky pipe, they cleaned the carpet, but left the sewage issue alone. When the pipe leaked again, Rivera filed another complaint — and five days later, he received a notice to vacate.
Rivera is just one of the many renters highlighted in a just-released report looking at the new face of financialization in the housing market. The report is authored by three consumer advocacy and housing rights groups — the Alliance of Californians for Community Empowerment (ACCE), Americans for Financial Reform, and Public Advocates.
Chief among their concerns are companies like Starwood Waypoint Homes, backed by Wall Street firms Colony Capital and Starwood Capital, and Invitation Homes, backed by The Blackstone Group, a private equity fund. These single family rental giants have become shapeshifters, merging with each other to slowly take over the rental housing market. Starwood Waypoint and Invitation Homes announced their own merger in August of 2017, becoming a single company owning more than 82,000 single family rentals across the country.
These companies are among the beneficiaries of the 2008 housing market collapse. In the wake of the financial crisis, Wall Street firms swooped into neighborhoods to buy up houses, crowding out the families and local landlords who couldn’t compete with their cash payments.
In the decade since the mortgage crisis, the financialization of housing rentals has ballooned. Institutional investors now own a quarter of the country’s single-family rentals, and just nine of these firms are renting out 200,000 houses in 13 states. A large portion of those homes are regionally…