Wall Street Is Spending Big to Protect Its Ability to Jack Up Rents in California
by David Dayen
Posted November 09, 2018
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. Now, the biggest practitioner of this gambit is spending heavily to make sure it stays lucrative.
Blackstone Group, a private equity giant that is also now the world’s largest real estate management firm, has pumped in $6,859,747 so far to battle a ballot measure in California that would allow cities to re-establish rent control laws, including on single-family homes. That figure constitutes $1 out of every $7 supporting the “No on Prop 10″ campaign and is part of a $45.5 million assault, mostly from corporate landlords and property developers, on the right of cities to determine their own rental laws. More…