{"id":471085,"date":"2022-01-14T19:54:08","date_gmt":"2022-01-14T19:54:08","guid":{"rendered":"http:\/\/radiofree.asia\/?guid=6818978eaf518398b832ed1c8b8f681c"},"modified":"2022-01-14T19:54:08","modified_gmt":"2022-01-14T19:54:08","slug":"warren-demands-private-equity-backed-firms-answer-for-role-in-rising-rent-prices","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2022\/01\/14\/warren-demands-private-equity-backed-firms-answer-for-role-in-rising-rent-prices\/","title":{"rendered":"Warren Demands Private Equity-Backed Firms Answer for Role in Rising Rent Prices"},"content":{"rendered":"\"Senator<\/a>

Sen. Elizabeth Warren (D-Massachusetts) is demanding answers from housing corporations with backing from private equity, who she says are involved in inflating housing prices for both renters and buyers.<\/span><\/p>\n

Warren sent letters to CEOs <\/span><\/a>of Progress Residential, American Homes 4 Rent and Invitation Homes to condemn rent hikes and rising house prices that she says are a result of corporations’ growing influence on the housing market. Her aim is to determine whether or not these businesses have been taking advantage of <\/span>current housing shortages<\/span><\/a>.<\/span><\/p>\n

\u201cOur country faces an unprecedented affordable housing supply shortage,\u201d she wrote. \u201cDecades of underinvestment, coupled with restrictive zoning and other practices that undermine construction, have allowed the demand for housing to far outpace the availability of homes, resulting in a shortfall of nearly four million homes and rapidly increasing costs for renters and first-time homebuyers.\u201d<\/span><\/p>\n

In her letters, Warren pointed out that the three companies have been acquiring homes and increasing rent at a rapid pace. American Homes 4 Rent is \u201ckeeping affordable housing out of reach for American families,\u201d <\/span>she wrote<\/span><\/a>, by increasing rents by over 10 percent for single family rentals. <\/span><\/p>\n

\u201cConsidering the history of complaints made against you by your tenants for cutting corners on maintenance requests and excessive fees, I fear that these poor business practices have also contributed to your increased revenue,\u201d she said, noting the company\u2019s nearly 66 percent net income growth from single family rentals over the past year.<\/span><\/p>\n

Invitation Homes and Progress Residential are acquiring homes at a rapid pace, the lawmaker noted. Invitation Homes has accelerated its pace for buying homes, <\/span>spending over $700 million <\/span><\/a>and buying approximately 1,700 homes in the third quarter of 2021 alone.<\/span><\/p>\n

Meanwhile, Progress Residential buys up to 2,000 homes every month and has even automated its house acquisition. The company can now assess a home within 15 minutes of its appearance on the Multiple Listing Service real estate database, <\/span>Warren pointed out<\/span><\/a>, and can make an offer within two hours of its listing. Further, the company focuses on buying homes valued at between $70,000 and $190,000 \u2013 homes that are within the price range for low-income families or first-time buyers.<\/span><\/p>\n

Warren said that Progress Residential residents have been reporting rent increases of as much as 30 percent over the past five years. In addition, the company is reportedly charging excessive fees despite not performing maintenance. The company also charges tenants a $200 \u201ceviction administration\u201d fee if it files to evict the tenant.<\/span><\/p>\n

Business practices by private equity and investment firms have contributed to the greatest one-year increase in housing prices for Americans since 2007, Warren wrote. Indeed, the Bureau of Labor Statistics has shown that shelter costs rose by 0.4 percent in December \u2013 the <\/span>largest contributor<\/span><\/a> to the all items index rise of 7 percent last month.<\/span><\/p>\n

Partly because of <\/span>global and Wall Street investors<\/span><\/a>, it has become increasingly difficult for Americans to afford buying entry level homes. House prices began to surge last year, marking huge gains; <\/span>home prices in October rose by 18.4 percent over last year<\/span><\/a>, according to research released in December. Experts have said that the current market <\/span>may be among the worst ever<\/span><\/a> for first-time home buyers; the average home price at the end of September last year was up a whopping 30 percent from the same time in 2019.<\/span><\/p>\n

This has led first-time homebuyer purchases to decrease to 26 percent in November \u2013 down from 33 percent in 2020. It\u2019s also forcing people to take incredible and risky leaps in home buying, as regular home buyers in some areas are having to send in bids for <\/span>a house within hours<\/span><\/a> and <\/span>even waive inspection<\/span><\/a> in order to obtain a house. Because investors can access listings before regular people can, many houses are <\/span>being bought<\/span><\/a> before they\u2019re even publicly listed online. <\/span><\/p>\n

\u201cInvestors have been outcompeting first-time homebuyers because of their ability to make cash offers, which comprised over three-quarters of investor offers,\u201d Warren noted. \u201cThese cash offers provide the additional benefit for investors of allowing them to pay 10% less on average than individual buyers.\u201d<\/span><\/p>\n\n

This post was originally published on Latest \u2013 Truthout<\/a>. <\/p>","protected":false},"excerpt":{"rendered":"

\"Senator<\/a><\/p>\n

\u201cOur country faces an unprecedented affordable housing supply shortage,\u201d Warren wrote. <\/div>\n","protected":false},"author":1459,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5943,905,4,36737,4179],"tags":[],"_links":{"self":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/471085"}],"collection":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/users\/1459"}],"replies":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/comments?post=471085"}],"version-history":[{"count":1,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/471085\/revisions"}],"predecessor-version":[{"id":471086,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/471085\/revisions\/471086"}],"wp:attachment":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/media?parent=471085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/categories?post=471085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/tags?post=471085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}