Rent in California now continues to surge by Blackstone, according to a local report that tracked contributing factors to the housing crisis.
A new report released last week accused the company Blackstone of contributing to the affordable housing crisis in San Diego, CA.
The Private Equity Stakeholder Project and Alliance of Californians for Community Empowerment put together the report titled “Helter Shelter: How Blackstone Contributes To and Profits from California’s Broken Housing System.”
According to the report, Blackstone owns more than 60 apartment buildings in San Diego County and it raised rents nearly double the market average since purchasing the properties three years ago.
The report states that rents surged 13% to 79%.
The average increase was 38%.
Rents increased from an average of $1,700 to more than $2,300.
“These were properties that were some of the last affordable housing properties available in a city that’s already suffering from an affordable housing crisis,” said Jordan Ash, the report’s author.
“Blackstone bought them and immediately raised the rents.”
The report comes just weeks after the San Diego County Board of Supervisors agreed to take steps to study exactly how much corporate landlords are having an effect on the housing crisis in San Diego, and to see if there are any laws that can be passed preventing large Wall Street firms from buying up lots of properties.
Blackstone is operating within the state law, but Ash said because the law only allows rent to go up by so much for existing tents, it gives the company an incentive to evict people, which he claimed is happening.
“There definitely needs to be more regulation,” he said.
“The bottom line is people need a place to live. We believe people have a right to housing.
And while companies have a right also to make money, it shouldn’t be in a way that prevents people from having a place to live.”
A spokesperson for Blackstone sent CBS 8 the following statement:
“The reality is that average rents at these San Diego communities are 20% below the San Diego market average.
Resident review scores have increased ~40% under our ownership and resident retention rates are significantly higher than the national average.
We have invested approximately $100 million to improve living conditions for thousands of San Diego residents who live in our communities; we have already completed over 44,000 repairs, including those that were previously unaddressed.
Below are some key points from the report regarding Blackstone’s aggressive rent raises:
- Blackstone is by far the nation’s largest landlord,1
owning almost 350,000 units of rental housing in the U.S., and many more around the world. - Blackstone has been on an aggressive buying spree since 2021, expanding its residential real estate empire, adding over 256,000 units to its portfolio.
- In 2021, Blackstone acquired 66 rental properties with 5,800 total units in the San Diego, California area. Since then, Blackstone has increased the rent at these properties 38% from an average of $1,696/mo. to $2,339/mo. — almost double the average rent increase for all apartments in the San Diego market, which was 20% during this period. The increase at some Blackstone-owned buildings has been especially high – up to 79%.
- Until August 2022, Blackstone had a voluntary eviction moratorium for tenants who were behind on rent. After that, Blackstone initiated a wave of evictions across the U.S. In California, Blackstone has a financial incentive to evict existing tenants because although state law limits how much a landlord can increase rents for current tenants, the law does not apply to how much a landlord can charge a new tenant. In some cases, Blackstone filed to evict tenants who reportedly owed just one month’s rent.
- Blackstone regularly touts to investors how it profits from the ongoing affordable housing crisis and the lack of new construction. In a 2023 letter to stockholders, Blackstone asserted that a “structural shortage of housing has resulted in pricing power for rental housing assets”. On a quarterly earnings call last year, Blackstone President Jon Gray stated, “The good news is multifamily construction is now down about a third.”
- Blackstone has spent millions of dollars to oppose efforts to limit rent increases in California. Blackstone gave over $7 million in both 2018 and 2020 to defeat rent control ballot initiatives. Blackstone’s contributions didn’t come from the company’s executives or corporate PAC, but rather from pools of capital from investors, including California public employee pension funds and the University of California.
- As shown in this report, there is significant evidence that Blackstone uses RealPage’s YieldStar software program to set rents at its properties. For instance, a 2021 prospectus for a trust securitized by Blackstone-owned multifamily properties cited the use at specific properties,14 such as, “the property uses the revenue management system YieldStar.” The Arizona and Washington, DC Attorneys General have filed lawsuits against RealPage for alleged illegal price-fixing, and the North Carolina Attorney General announced an investigation into RealPage’s anti-competitive practices.
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Also Read: 40% of Americans Now Worry They Can’t Pay Their Bills
Nearly 40% of Americans now worry they can’t pay their bills, which is higher than during the Financial Crisis when it was 37%.
Nearly four in ten of US adults say they worry most or all of the time that their family’s income won’t be enough to meet expenses, according to a new CNN poll.
That’s up from 28% who expressed those concerns in December 2021, and it’s similar to the numbers seen during the Great Recession (37%).
American are taking on side jobs, cutting back on driving, and putting even more expenses on credit cards to make up for it.
The poll data reveals that a disproportionately high percentage of Latino (52%) and Black (46%) Americans report feeling worried most or all of the time about making ends meet.
Additionally, over half (55%) of those earning less than $50,000 per year express similar concerns about having sufficient funds to cover their expenses.
These findings underscore how the impacts of rising prices and the cost of living are being felt acutely by many Americans, despite broader national economic indicators like low unemployment and moderating inflation.
For example, an Ohio resident named Angela Russell, who works at the CDC and has a family to support, recently had to relocate to a more affordable rural area due to the high cost of living in her previous rental home in Cincinnati.
The survey data also shows that two-thirds of Americans (65%) now cite expenses and the cost of living as the biggest economic problem facing their households, down from 75% last summer but still significantly higher than the 43% who mentioned such issues in the summer of 2021.
“The pressure is real.
Everything is so much more expensive than it was four years ago. It’s astronomical what you’re paying,” said Russell.
“We can talk all day about how inflation is moderating but the cumulative impact of several years’ worth of inflation has done a number on household budgets,” said Greg McBride, chief financial analyst at Bankrate.
“The view from 35,000 feet is unemployment is low, the economy is growing and people are spending money.
The reality on the ground is moderating inflation doesn’t mean prices are coming down, just that they aren’t going up as fast.”
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Also Read: The US Treasury Direct is Now Freezing Customer Accounts
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