Saturday, August 12, 2017

WSJ -- Blackstone, Starwood to Merge Rental-Home Businesses in Bet to be America’s Biggest Home Landlord

Combination of Invitation Homes and Starwood Waypoint Homes is a wager that home ownership will continue to wane
Except for the very wealthy, capitalism attacks every American. Free market capitalism’s economic system creates only winners or losers. And the winners punish the losers.

Businesses make decisions that promote their own self-interest by making as much money as they can by exploiting the trials and tribulations of the losers.

In serving his own self-interest, President Trump punishes the losers by proposing to cut funding to HUD, which administers federal housing subsidies. Mergers in the rental housing market, who are in the business of getting as much rent as they can, are punishing the losers with higher rents.

That process has made real estate the third-busiest industry for mergers and acquisitions.

Robert Reich has an opinion on one such merger:

Two of the nation's biggest Wall Street landlords are merging to increase their power over the rental housing market.

The deal between Invitation Homes and Starwood Waypoint includes 82,000 properties in 17 major cities across the country.

With wages stagnant and housing costs rising, they're counting on more renters.

Control of the rental-home industry by Wall Street began during the Great Recession, when many families lost their homes and had to move into rentals. As the foreclosure crisis deepened, Wall Street began snatching up homes for pennies on the dollar (Invitation is owned by investment bank Blackstone).

It's a win-win for the Street: cheap homes and plenty of renters. But it's a loss for millions of Americans. Many of the people who got shafted in the Great Recession voted for Trump. But he was -- and still is -- an enabler of what's happening.

Invitation Homes is majority owned by the Blackstone Group, 
one of the first private equity firms to begin buying foreclosed homes 
in the aftermath of the 2008 financial crisis,
then fixing them up and renting them out

Credit Lance Rothstein

 By Ryan Dezember