No Bailouts for Big Real Estate: Trickle-Down Theories Exacerbate Homelessness

Greed Landlord Real Estate

Disclaimer: Here at Invisible People, we understand the dangers of generalization. We know that not all landlords are crooked and not all renters are being violated. What we are against is corporate greed, particularly when it happens at the expense of impoverished Americans. As it stands, many big real estate conglomerates are profiting off of their tenant’s pain.

While 30-40 million Americans teeter on the ledge of a looming eviction crisis, bailing out big real estate, an option that has already been suggested, would only serve to worsen the circumstances. Here are a few reasons why…

1) The Money Never Trickles Down

As many know, Trickle-Down economics has been proven time and again to work against the interests of America’s working class. During the Great Recession, President Roosevelt invested in the people- the laborers, the unions, the retirees. His strategy ultimately brought forth social safety nets that are still in place today.

On the other hand, when we bailed out the banks in 2008, our strained economy did not recover and the recession we face now in the midst of the virus is worse.

2) They’re Illegally Evicting Residents

As it turns out, large investment entities like global leader Greystar Properties, are operating outside the law and attempting to break eviction moratoriums. Either by filing actual evictions or using scare tactics like:

  1. Shutting off utilities
  2. Mailing threatening evacuation letters
  3. Changing the locks on doors and more

these big-time real estate moguls continue to illegally evict residents. It’s important to note that the residents they are most likely to evict during the pandemic possess one or more of the following attributes:

  • Women
  • Children
  • Ethnic Minorities
  • People with disabilities
  • COVID positive patients

Their utter disregard for national emergencies is evident in the fact that in just five states, 241,339 evictions were filed during the pandemic. This is while federal eviction moratoriums were in place.

3) Rig Real Estate Is Turning a Profit

While mom and pop landlords are struggling to make ends meet and pay their own bills, big corporate real estate firms and investment entities are hoarding land and empty luxury rental units. These actions contribute to our national shortage of 7 million affordable homes. Billionaire CEO Stephen Schwarzman, of Blackstone Properties, explained his dishonorable stance in the following Salon.com interview when he said:

“You always have winners and losers — Blackstone was a huge winner coming out of the global financial crisis, and I think something similar is going to happen.”

The “something similar” he’s referring to is the “opportunity” to purchase homes at cheap prices, converting them into sub-standard rental units, and then manipulating the rental market by inflating rental prices and exacerbating the affordable housing crisis.

Schwarzman is hardly a rogue agent when it comes to squeezing profit from the poor to swell the profits of the rich. During the CARES ACT era, big real estate moguls helped themselves to tens of millions of dollars that was supposed to be reserved for small business owners.

This is not even the first time they filled their pockets with loophole riches at the expense of American workers and renters. During the 2008 recession, big real estate was awarded a whopping $1 billion bailout. Did they respond by making rental units more affordable for the working-class? Absolutely not. Instead, they allocated a portion of those proceeds to fund anti-rent control campaigns in California.

4) They Only Care About the COVID-19 Crisis When It Is Convenient for Them

Under the guise of compassion and a desire to flatten the curve, Greystar Properties, which currently houses hundreds of thousands of rental units all across the nation, shut down all amenities for the better part of the COVID crisis. The total savings from shutting down amenities at just one property are estimated to be about:

  • $5,000 per year for the community pool
  • $50,000 for the community gym
  • $60,000 for the internet café

The average rental community has about 200 units, give or take. They’re almost never completely full. But for the sake of argument, let’s pretend they are.

Units range from studio to 3-bedroom so we’ll round the average rent to $1,000. With all amenities put on hold, a large landlord would have to experience a rent default from more than half of the renters within their community simultaneously in order to lose money. Even if that did happen, rent relief would put the vast majority of that money right back into their corporation. Yet rather than apply for rent relief, many huge investment entities move to evict.

What happened to all that compassion and concern they had about keeping people safe and flattening the curve? In the end, we can turn to the owner of Whitaker Properties for his final thoughts. Here’s what he has to say about the matter:

“[My partners and I] are preparing to buy properties at dirt-cheap prices, then hold them until the economy gets back, remodel them, whatever we have to do to get them back on the [rental] market. It may not be nice to say, but this is business.”

Talk to your representatives about canceling rent and follow the hashtag #NoBailouts4BigRealEstate for more information.


Cynthia Griffith

Cynthia Griffith

     

Cynthia Griffith is a freelance writer dedicated to social justice and environmental issues.

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