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.
On Thursday, the Democrat sent letters 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,” the 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 inquiries come as a relatively new real estate phenomenon is spreading in 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 story by the organizations detailed the creation of Progress Residential by a private-equity 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.
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.