Single-family rental investment firms need government oversight, finds a report by a national housing group called Right to the City Alliance.
According to the report, investors targeting low-income neighborhoods are raising rents and security deposits to unaffordable levels. The investment management firms, many of them financed by Wall Street via securitization, have bought thousands of single-family properties and converted them into rentals. However, the report complains, families must now contend with absentee landlords that a slow to address needed repairs, pest infestations, and issues with rent. "The same kinds of financial institutions that drove the foreclosure crisis and bankrupted families across America have a new target: the rental market," says Right to the City executive director Rachel Laforest. "If we don't act fast, we could be facing another bubble or another crash."
Rep. Mark Takano (D-Calif.), who says almost two-thirds of tenants in corporate rentals in his district are paying unaffordable rent, has called for hearings.