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Sen. Elizabeth Warren of Massachusetts is demanding answers from corporate landlords about their influence over the U.S. housing market amid a worsening nationwide shortage of affordable homes.
Warren sent letters Thursday to Progress Residential, Invitation Homes and American Homes 4 Rent, companies that have acquired tens of thousands of suburban homes across the United States. Warren blamed the companies and other large investors for pricing out first-time homebuyers, contributing to skyrocketing rents and pursuing needless evictions.
“Big investors have helped drive housing prices further upward over the last year, straining families’ budgets as they grapple with the pandemic,” Warren’s letters said. “When potential homebuyers are unable to compete with large investors and their seemingly limitless cash on hand, they are forced to rent.”
The letters come as a relatively new real estate phenomenon is spreading across suburban neighborhoods across the United States: large companies buying up thousands of single family homes every month and putting them up for rent.
The letters demand information about the firms’ profits, rent hikes, evictions and the various fees they impose on renters, citing recent critical coverage of the industry by the Washington Post and the International Consortium of Investigative Journalists.
A Dec. 15 joint investigation detailed the creation of Progress Residential by an investment firm. Attracting investors from around the world, the firm, Pretium Partners created a billion-dollar investment venture that buys up single family homes predominantly in Sun Belt neighborhoods.
The investigation drew from investment records contained in the Pandora Papers, a cache of 11.9 million previously undisclosed documents from tax havens around the world, as well as dozens of interviews with renters and former employees. The reporting showed that Progress Residential has been ringing up substantial profits for wealthy investors around the world while outbidding middle-class home buyers and subjecting tenants to what they allege are unfair rent hikes, shoddy maintenance and excessive fees.
The financiers sought to exploit the 2008 U.S. housing crash, which forced millions of homeowners into foreclosure and left a glut of cheap houses for sale. Their plan called for buying tens of thousands of properties and renting them to families who had lost their homes or, because of tightened lending practices, could no longer qualify for a mortgage
In response, Progress Residential defended its operations, including the treatment of tenants, saying that its rents and fees are in line with industry standards and market rates. Pretium officials said they adhered to the federal eviction moratorium.
Asked for comment Thursday, a Progress spokesperson responded with a statement that said “we are dedicated to being a part of the solution to our nation’s housing crisis. For households across the country that choose to rent, Progress has long been committed to providing high-quality housing experience through consistent, dependable and attentive service at our well-maintained and affordable homes.”
American Homes 4 Rent said “we acknowledge and appreciate the recognition that our country faces an unprecedented housing supply shortage, decades of underinvestment and restrictive zoning that undermines construction. As the 45th largest homebuilder in the U.S., we are looking to help improve the situation and arrive at solutions.”
Invitation Homes did not respond to a request for comment Thursday afternoon.
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