How’s that vein in your forehead? Poppin’ fresh? No? You’re happy?! Well that won’t do at all! Here, read this story about how Wall Street firms are furiously buying up cheap homes, renting them out, refusing to treat infestations of vermin, threatening legal action against renters for things that aren’t their fault, and (of course) bundling monthly rent payments to sell as can’t-miss securities.
It’s fine, though, they’re just leveraging the disastrous glut of foreclosures and the ensuing drop in home prices — you know, the key elements of the global recession that they caused in the first place — to make a quick buck, just like you would do if you were an utterly remorseless sociopathic malignancy with near-total immunity from the legal, moral, and economic consequences of your actions, so quit being such a sore loser, loser.
Trigger warning for they’re not even trying anymore:
“It’s just like a residential mortgage-backed security,” said one hedge-fund investor whose company does business with Blackstone. When asked why the public should expect these securities to be safe, given the fact that risky mortgage-backed securities caused the 2008 collapse, he responded, “Trust me.”
Come on breakfast, you can do it, just stay down there a little longer.
The cash flow analysis in the documents sent to investors assumes that 95% of these homes will be rented at all times, at an average monthly rent of $1,312. It’s an occupancy rate that real estate professionals describe as ambitious.
Of course it’s ambitious! You don’t make money by being the opposite of ambitious which is… liberal, we guess? Canadian?
The cockroaches and fat water bugs were the first problem in the Invitation Homes rental that [CaDonna Porter] and her children moved into in September. Porter repeatedly filed online maintenance requests that were canceled without anyone coming to investigate the infestation. She called the company’s repairs hotline. No one answered.
The second problem arrived in an email with the subject line marked “URGENT.” Invitation Homes had failed to withdraw part of Porter’s November payment from her bank account, prompting the company to demand that she deliver the remaining payment in person, via certified funds, by five p.m. the following day or incur “the additional legal fee of $200 and dispossessory,” according to email correspondences reviewed by TomDispatch.
After a lot more Kafkaesque mind-torture, she finally said “Hey what if I sued you?” and suddenly Invitation Homes was very eager to extend her the “one-time courtesy” of taking her money “late.”
Wall Street firms are buying so many homes in distressed markets that housing prices are rising fast — “up 20% between October 2012 and the same month this year” in Los Angeles, so if you were thinking you might be able to take advantage of low prices to buy back the home you lost in the recession, that ship has probably crashed into an iceberg called Blackstone Group, a celebrated cabal of wealth monsters.
The article also hints that maybe it’s a bad idea to have all this housing stock concentrated in so few bloody claws, but it is mostly left to You The Reader to imagine all the nightmare scenarios that may unfold (apart from the obvious one where less than 95% of people pay their rent on time because oh we don’t know THERE IS ANOTHER RECESSION, perhaps?)
Like, what happens when Blackstone Group decides they don’t want to be in the rental business anymore? And what happens if this kind of concentration of assets enables Wall Street to price-fix the entire housing market? And what happens if Washington decides all this is fine, and does nothing to help average people live safe, rewarding lives? Oh, right.
Really, what is next? A collateralized debt obligation backed by running over puppies with a lawn mower?
By Alex Ruthrauff