Why Wall Street is Putting Millions Into Beating California Rent Control


Why Wall Street is Putting Millions Into Beating California Rent Control

2018-10-16T09:27:35+00:00October 16th, 2018|Advocacy, Local Updates|

“On Friday, a profile in the Intercept discussed the prominent role of Wall Street investment in the fight over rent control in California, including the part played by the private equity firm Blackstone, which has poured millions into defeating Proposition 10.

Proposition 10, if passed on November 6, will undo the state’s 1995 Costa Hawkins Act and allow cities to expand rent control in the state for the first time (if they so choose).

As reporter David Dayen points out, some of the state’s biggest landlords turn out to be East Coast investment firms:

For some on Wall Street, the financial crash of 2008 represented a once-in-a-lifetime opportunity. Homeowners who’d been walloped by the very crisis Wall Street had created were struggling to pay their mortgages, so financiers swooped in and bought up foreclosed homes, knowing the assets would eventually rise in price again.

But with so many people foreclosed on and out of work, selling the homes was difficult, so Wall Street hit on a different approach: renting them out.

According to figures from the California Secretary of State, New York-based Blackstone Partners has poured millions into several No On 10 campaigns: Two payments totaling more than $575,000 to one campaign in both May and August, and at least 15 separate donationsranging from $52,000 to $417,000 to a second one all on the same day.

Dayen also points out that Blackstone, which invests in built-for-rent housing, has made additional contributions under names of related organizations. Altogether the total adds up to more than $12 million, roughly 15 percent of the total No On 10 campaign.

For comparison, also in August some of California’s biggest property companies made contributions ranging from $2 million to $4 million. Chicago-based Equity Residential contributed a comparably small $1.7 million.

Presumably, this is because Blackstone has spent millions buying residential properties across California. In 2017, the tenant group Alliance of Californians for Community Empowerment (ACCE) estimated that Blackstone owned 14,389 homes across the state. The LA Daily News puts the figure closer to 13,000.”

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