Could a New Equity Empire Spark the Next Housing Crisis?
Posted on Apr 10, 2014
Laura Gottesdiener, author of “A Dream Foreclosed: Black America and the Fight for a Place to Call Home,” talks with “Democracy Now!” on Thursday about her TomDispatch article on the team-up of big banks and private equity firms to bundle rental property mortgages into a new financial product called “rental-backed securities.”
“Democracy Now!” reports:
The Blackstone Group is now the largest owner of single-family rental homes in the country. In one day alone, Blackstone bought up 1,400 houses in Atlanta. And as private equity firms gobble up huge swaths of the housing market, they are partnering with big banks to bundle the mortgages on these rental homes into a new financial product known as “rental-backed securities,” reminiscent of the “mortgage-backed securities” that helped cause the last financial crisis. Could this new private equity rental empire help spark the next housing crisis? We are joined by Laura Gottesdiener, author of “A Dream Foreclosed: Black America and the Fight for a Place to Call Home,” who calls this wave of purchases “a land grab.” Gottesdiener’s latest article focuses on New York City’s rental market, a case study in what critics call “predatory equity.” Large firms have used abusive tactics to oust tenants in a bid to hike up rents — and tenants have been resisting. We are also joined by Benjamin Warren, who, along with nearly 1,600 families in 42 buildings, is a victim of one of the largest single foreclosures in the city’s recent history.
—Posted by Alexander Reed Kelly.