Surprise! Your New Landlord Is a Private Equity Firm

Photo by Marla Prusik on Unsplash

Are you searching for an apartment? Average rent for a 1-bdr is around $1,625 in the U.S. Of course, it’s a lot higher in major cities.

Before moving into the apartment where I live now, I spent a long time searching for affordable housing through apps like Zillow, Street Easy, and Trulia. In New York City, where I work, the median price for a one-bedroom apartment is $4,500 a month. Yes, you read that right. No, washer and dryer are not guaranteed.

I’m an architect and super picky about where I choose to live. So, in my search for the clean, well-constructed, sustainable, and affordable apartment of my dreams I would routinely come across buildings owned by Greystar, BlackRock, or RockRose Capital Partners (“Rockrose).

What do those companies have in common? Well, they’re all “private equity firms.”

Let’s talk about it.

An example of new 5-over-1 construction from a rapidly gentrifying city near you! Photo courtesy of iStock.

How Did This All Start?

As we currently watch tariffs destabilize the stock market while talk of recession dominates headlines, it is important to know that billionaires and large corporate firms take advantage of these moments. Recessions, especially in the housing market, act like a fire sale for the ultra-wealthy.

Private equity firms buying up real estate is nothing new — in fact, it first made headlines during the 2008 recession and accompanying foreclosure crisis. According to an article referenced by Vice, as part of a pandemic buying spree, private equity giant Blackstone alone spent $5.1 billion on 80,000 units of government-supported affordable housing in 2021. In the first three months of 2024 alone investors bought roughly 14.8 percent of homes owned according to Realtor.com.

Then and now, private equity companies lower inventory and drive up prices by purchasing single- and multi-family homes to rent out, convert to short-term rentals or sit vacant. They can pay in cash and you can’t. But don’t worry!—you can always rent from a private equity firm. Because their goal is to maximize short-term profits, they can be terrible landlords. Many raise rents, skip maintenance and avoid long-term upgrades or improvements.

When 5-over-1 architecture begins to replace historic brownstones in your city, expect rent to rise and maintenance to go down. Photo courtesy: iStock.

Why Does It Matter?

In our economic system, massive demand and a decrease in supply leads to higher prices and increased competition. It also means that the commodity becomes scarcer.

Private equity firms in the housing market have had a significant impact on not only the cost of living but also on everyday quality of life. Research from the office of Congressman Pat Ryan (D- NY) found that due to the influence of private equity firms in the housing market, single-family home prices have risen by 47.1% since 2020, and the average cost to rent a single family home increased by 30%.

On a fundamental level, housing prices reflect supply and demand. You might find cheaper housing in less densely populated areas because there is less demand (fewer renters and buyers) and more inventory.

On the flip side, cities tend to have higher demand which leads to higher prices — especially in desirable areas with access to transportation, downtown areas, walkable neighborhoods and high-density, mixed used zoning.

All of this gets way more complicated when private equity firms do things like buy up rental properties and let them sit vacant. Less inventory in a high-demand market means higher prices and higher profits for investors. Sometimes their ultimate goal is to buy low and sell high — and generate profit from the market vs. from renters. All of this is bad news for the affordable housing crisis and bad news for ordinary people like us.

Also, because your new apartment is basically an asset in their portfolio, it means you are basically holding space for some billionaire’s money—until they decide to sell. It’s no wonder, tenants of these apartment buildings routinely complain about overflowing garbage chutes, overdue maintenance and cleanliness issues. They care about profit, not people. They care about short-term ROI, not being better neighbors or community members.

What Can I Do About It?

As a picky renter, I decided to hard pass on corporate housing. I currently rent with someone who really cares about the quality of my experience and I strongly believe that should be the norm rather than the exception.

So what can you do about this disturbing trend of private equity firms buying up rental properties? The biggest thing that you can do is to get involved with your local council to actively support efforts to change the culture around affordable housing!

The Federal government is having a little bit of a moment right now and we won’t be able to expect guidance on affordable housing or any kind of antitrust legislation from the Department of Housing and Urban Development or any of the other departments (if they still exist by the time this administration is over. As such, going forward, it is going to be super important to stay plugged into what’s happening at the state and local level. Get to know your local council member or get involved with your town’s zoning board. We also wanted to leave you with a few tips should you actively be dealing with housing issues ranging from landlords neglecting property to eviction and emergency shelter. 

• Vote for progressive politicians at the state and local level who have a proven track record of standing up to corporate landlords and advocating for affordable housing

• Rent from families or landlords who own just one or a few units. They are less likely to use dynamic pricing software to price gouge. They’re also less likely to raise the rent every year. Many prefer to keep units occupied and often form long-term bonds with their tenants.

• Learn about tenant protections - check the website of your state’s Attorney General, the local housing authority and/or a local fair housing organization. This is also a great place to get to know your rights when it comes to evictions. Some cities and states have limits on how often rent can be raised in a given period and by how much and how far in advance you should be notified. Some offer relocation assistance as well. Know your rights!

• Find and share housing assistance resources. 211 is a nonemergency hotline that can connect you to local organizations in your area that offer support, including financial assistance for past-due rent and utility bills. It’s basically an information referral service, available in every state. So, if you need help with housing and don’t know where to turn, start here.

Good luck and thanks for reading!