First, Wall Street and private equity came for mobile home parks, squeezing every last cent they can out of low-income mobile home owners and renters. Now they are coming for single-family homes all across the country, leading to housing shortages, rising mortgage rates and skyrocketing rents.
In one city alone — Omaha — a private equity behemoth has targeted that city in a short amount of time with a blizzard of purchases, according to the Flatwater Free Press:
The Blacketers knew their longtime local landlord had sold this house just southwest of Miller Park. They didn’t know that their rental home had been bought by an Ohio-based private company that’s buying up lower-priced homes at an eye-widening rate across the Great Plains, Midwest, the South – and now in Omaha.
Today, Vinebrook Homes, a company with $2.4 billion in assets that didn’t own a single home in Omaha 30 months ago, has become one of the largest landlords in the city.
Vinebrook bought its first Omaha area properties October 2019. Since then, it has bought enough homes to become one of the largest landlords in the city, by number of properties listed. Data from the City of Omaha landlord registry as of May 4, 2022. Graphic by Hanscom Park Studio.
The flurry of purchases is helping to superheat the housing market in poor neighborhoods. It’s raising rents in North Omaha. And it’s concerning experts, tenants, local landlords and real estate agents who worry that giant out-of-state real estate investment groups like Vinebrook are making it harder for Omahans to buy their own homes.
The same thing is happening across the country. Large real estate firms tied to private equity are buying up homes in low-to-middle income neighborhoods and then renting them back to local residents at sky high prices, all while leaving a trail of complaints about shoddy maintenance and strongarm rent collection practices.
Wall Street continues to discover the many different ways it can make money off poor people:
Business is good for Vinebrook and companies like it, said John Johnson, a Marquette University professor who studies the changing housing market.
The expert watched as Vinebrook burst onto the scene in Milwaukee. The company identifies cities where the rent-to-own value ratio is skewed, making it lucrative to buy up many homes and rent them out, he said.
“The profit margins can just be wild,” Johnson said. “You can see why this is a really attractive business model for people who have figured it out.”
In Milwaukee, as in Omaha, Vinebrook focused on the city’s poorest neighborhoods, homes often occupied by families of color. They evict Milwaukee residents at higher rates than local landlords, he said. Vinebrook now owns massive amounts of real estate in that city, while having almost no local employees and virtually no civic presence in Milwaukee.
“It is literally removing money from the city’s economy, often money that’s coming out of the pockets of some of the poorest citizens of that town,” Johnson said.
Wall Street owns America and the rest of us just live here.