Have you ever seen billboards on the highway offering cash for houses? Has a stranger called you offering money for your home sight unseen? In Plot of Land’s second episode, we wade into the world of housing speculation, considering how private equity markets and real estate investment trusts have transformed the places we literally call home. How did housing become such a profitable market? And so volatile that it could lead to the largest financial crisis since the Great Depression?
Episode Contributors


Photo: Phoenix Grey Photography


Nikil Saval
Desiree Fields, Ph.D.
Daniel Aldana Cohen, Ph.D.
Tara Raghuveer
Luke Melonakos-Harrison M.Div.



Jameela Hammond: Hey Anya, have you ever heard this one before?

Robocaller 1: Hi Jameela, we’re giving you a quick call because we wondered if you’d be interested in selling your house…

Anya Groner: I’ve been getting those calls for years.

Robocaller 2: Are you looking to make some cash? We’d like to make an offer on your house…

Hammond: Or what about the “personalized” postcards and letters?

Groner: Where it looks like it’s someone’s actual handwriting…

Hammond: But then you look closer and it’s some standard, computer-generated cursive laser printed in batches of one-to-two bajillion?

Groner: The whole thing seems super sketchy. Like, why do they want to buy your home so immediately? And who even has that kind of cash on hand?

Hammond: Yeah, they feel like scams. I think about how desperate times have been recently with the pandemic and inflation.

Groner: And how people who can work from home have mostly been okay, some are even doing better financially, but they’re the exception. Overall, the income gap has widened recently. And for many low-wage workers, the pandemic has been financially devastating.

Hammond: On this segment of Plot of Land, we explore the increasing financialization of the housing market. As any homeowner can tell you, a house is so much more than just a home. It’s also an investment. It’s a symbol, right? It’s the American Dream…


Over the course of ten episodes, I’m joining our team of five reporters throughout the U.S. as we pull back the curtain to look at how our history with land has shaped every aspect of our lives. How exactly did we get to this moment in time? In Plot of Land we’ll break down how race, class, and power have been used to build and maintain unfair systems that determine how land is used. These systems harm nearly everyone, and create so many inequities that they might seem normal, unavoidable, or even natural. But these are the products of deliberate choices made by real people. It's time to reckon with these decisions. It’s time to understand this history so we can help build a just future for everybody. This is a Monument Lab production with funding from the Ford Foundation and music by Blue Dot Sessions. I'm Jameela Hammond and this is Plot of Land.

[music transition]

In our last episode of Plot of Land we looked closely at how virtual land, and the structures being created around it, are an all-too-clear mirror for looking at our own real systems of land commodification and housing. Later in Plot of Land we’ll spend time with a family in Boley, Oklahoma who may just well be the state’s last Black ranchers. Land displacement stretches back more than 150 years there, and we’ll look at how some legacies are almost impossible to escape.

We’ll also go to New York City to learn about how government investment in housing helped an entire generation make Roosevelt Island an economically diverse and multi-racial neighborhood. And then, what happens when that government disinvests.

We’ll head to Jonesland, where 66 acres of family land is part of a movement—communities fighting for survival in Louisiana’s Cancer Alley.

And in our last episode, we’ll look at how repair, and Land Back efforts are paving new ways of coexisting with past injustices. We’ll look at the strings that get attached, and how systems can be reimagined. But right now, I want to bring back Plot of Land reporter Anya Groner. Together, we’re going to look at how private equity, a lack of tenant rights, and widespread land speculation are contributing to our housing crisis.


Groner: These “We Buy Homes” cash offer calls and letters feel so rife with opportunism, don’t they?

Hammond: It makes me wonder, what would happen if I said yes? Who would I even be selling to? Who’s behind this?

Groner: I brought that question to State Senator Nikil Saval. He represents the First District in Pennsylvania, which is basically a large swath of Philadelphia, and part of his campaign platform was treating housing as a human right, not a commodity. He said his district sees these kinds of cash offers all the time, particularly in under-resourced neighborhoods.

Senator Nikil Saval: They're trying to lure low- and moderate-income homeowners to sell their properties for far less than they're worth so that they can flip them and rent or sell them for a high profit.

Groner: Saval said in Philadelphia the housing stock is pretty old and often in need of repair. And those maintenance costs can be overwhelming. A common business strategy for housing speculators is to zero in on people who just can’t keep up.

Saval: You know, you might have an elderly resident that not only has difficulty maintaining their home, but adapting their home for changing physical needs; for a disability, let's say. And all of that can compound and add up to a financial burden that that person is unable to accommodate. And they may be inclined to take a call or respond to an ad for someone who will buy houses.

Groner: So on the one hand, there might be some initial relief, right? A struggling homeowner is no longer broke. They don’t have to worry about paying for renovations or repairs. But at what cost? [music] Remember, a house is also an asset. So not only is a family displaced, they also lose their ability to accrue and pass down generational wealth. And quite often a home that used to be affordable gets flipped. And then it’s only affordable for higher-income folks.

Saval: And what usually ends up happening is that home is rehabbed very poorly or demolished altogether and a new home or a new kind of property is added to the market that is much more expensive. And so this creates a sense of community destabilization. It drives gentrification, displacement. I mean, literally, someone has lost their home and inevitably moved to an area that is cheaper or outside the city.

Groner: When houses are being flipped at large scale as is happening in Senator Saval’s district, it affects everyone. The neighborhood changes. And as more families enter the rental market, rents go up.

Hammond: So who is benefitting from these sales? And what’s their business strategy?

Groner: Dr. Desiree Fields is an Associate Professor of Geography and Global Metropolitan Studies at UC - Berkeley. She said it can be difficult to identify the corporate owners of a private equity or housing corporation. They’ll often form Limited Liability Companies, or LLCs, that shield their identity. More often than not, she said, these LLCs, or shell companies, represent bigger financial entities–corporations, private equity groups backed by wealthy investors, even pension funds.

Dr. Desiree Fields: The companies that I have studied the most are all publicly-listed Real Estate Investment Trusts, that means that they are publicly listed on the stock market so like, they got money from other kind of like wealthy individuals and investors, put that money together as equity and then they would approach banks and say, okay, like, we've got, you know, this much money in equity from these players and they would leverage that to raise debt. Right? So then, and then they would use that to acquire homes. So then it's about renovating the homes, getting them listed for rent and so forth.

Hammond: So with the combination of investments and debt, these groups buy property with the intention to make a profit by either renting the house, reselling it, or sitting on the property until land prices go up, which often happens as a community gentrifies. But that’s not the only way speculators make money.

Fields: Anything with the future income stream can be securitized, right? So rent is a future income stream, so they can sell bonds, which are basically like all of the, they can basically sell shares in the future rent income, which gives them an infusion of capital upfront.

Hammond: Oh wow, okay, let’s break that down.

Fields: Sometimes I get, like, a little over-excited about the technical stuff, and people are like, what? [laugh]

Hammond:[laughs]… It’s all good. You’re talking about commodifying a home, beyond just the home. About creating an asset out of the future money that home could bring, is that right?

Fields: Basically it means that instead of having to slowly get the rental income from tenants over time, they can sell a share in the future rental income to investors and get an infusion of liquidity up front. So it's another way of raising debt basically, it's another way of borrowing money. And they can do that because they own the homes as collateral and they're projecting you know, these kind of rental revenues and rent increases over time and then they also can do IPOs and go publicly-listed on the stock market so there's like there's a lot of different ways that they have of kind of like raising debt and raising equity and all of that then gets like funneled back into how can we use this to acquire more properties.

Hammond: So speculators borrow money from investors by promising investors part of whatever rental income they’d make down the road. And Dr. Fields says this model of securities puts a lot of pressure on these companies to turn a significant profit.

Fields: So if I were buying into a bond that was secured by rental income, I would be doing that with the expectation that I'm going to be getting paid back, of course, but paid back plus interest.

Hammond: And so to ensure that investors are paid back, speculators have to find “innovative” ways to squeeze out profit. And that innovation can look all kinds of different ways. All-cash offers to buy a home, for example…

Groner: Zillow algorithms that allow companies to make super-fast purchases…

Hammond: Annual rent hikes…

Groner: Pet fees and parking fees…

Hammond: Penalties for arbitrary rental violations…

Groner: Skimping on basic building maintenance…

Hammond: And rent-to-own leases, which are basically set up to fail.

Groner: So that cash-for-house offer we’ve been imagining isn’t actually a windfall for the homeowner. It’s a windfall for housing speculators. All over the United States, speculators are buying up homes below market value, mining whole communities of the equity attached to those homes.


Hammond: The federal government has promoted homeownership since Herbert Hoover’s Own Your Own Home campaign in 1917, which he began as Secretary of State, in part, to get Americans to buy into capitalism.

Groner: A combination of labor strikes, pro-labor unions, and the hyper-nationalism sparked by World War I created this widespread fear that American citizens were being radicalized. Politicians argued that the nation faced a very real threat of Bolshevik-inspired communist revolution. Here’s Dr. Desiree Fields again.

Fields: So we saw, like, really early campaigns for homeownership coming up, promoted by Herbert Hoover, as a way to kind of like push back against enthusiasm for communism and socialism.

Hammond: But now it sounds like that very same capitalist system, that prized the individual so much, is actually gobbling up homeowners and their equity. How did that happen?

[music crescendo takes us to transition]


Hammond: Remember the Great Recession, when the housing market collapsed?

[montage of radio clips about the recession that lay out the scope of the crisis]

Hammond: In just three years, between 2007 and 2010, the U.S. experienced around 3.8 million foreclosures. That’s 3-million-eight-hundred-thousand displaced households, 3-million-eight-hundred-thousand houses and apartments that suddenly became available on the housing market. Dr. Fields said that as prime and subprime mortgage holders began to default on their payment, investors saw an opportunity.

Fields: Of course in the post-2008 era, particularly from 2008 to 2012 or so, property values dropped a lot in some markets by, you know, 20, 30%, from what they were at the height of the pre-2008 boom.

Hammond: And it wasn’t just a few houses that were discounted. Because subprime mortgage credits had been so accessible in the run-up to the crisis, a lot of cities and small towns had seen these huge building booms.

Fields: As subprime mortgage credit got kind of looser and looser and like more and more available, and we saw all these wild mortgage products, we saw home builders, like really throwing up homes as quickly as they could in places like Phoenix, Atlanta and so forth, right? So that there was this kind of subprime mortgage credit was kind of priming the pump of development in places like this.

Hammond: And that combination of new homes becoming available through building booms, and having the value of homes plummet, this created opportunities for investors to scoop up huge numbers of foreclosed homes.

Fields: These are Sunbelt markets located in the southeast and southwest and western United States. Those places had been growing economically, had been growing in terms of population since the late 1970s, early 1980s. So these places had discounted homes, but the homes were pretty new. And they looked primed for recovery.

Hammond: Blackstone is the largest commercial real estate owner in the world, with a real estate portfolio now valued at $577 billion. In 2007 and 2008 they jumped at the opportunity to buy up foreclosed homes, often getting them through online auctions and courthouse sales, with the aim of institutionalizing the rental market. And very quickly others followed.

Fields: And so that signals to investors like Blackstone, among others, that these places would be kind of smart investment, investment markets, right? It looks like the property values will recover here.

Hammond: And then along came the post-crisis regulatory changes, like the Dodd-Frank Act. That made it harder for folks to qualify for a mortgage. And with so many foreclosures rental demand soared.

Fields: This really I think crystallized an idea that had been brewing in the investment class for some time and it was really a kind of like, perfect opportunity.

Hammond: And part of what made this moment so unique was that housing speculators had never bought at this scale before. The apartment market consolidated in the 1990s, but Fields says that was an easier market to manage. Every unit in an apartment building ages at the same rate. And that really differs from single-family houses which each have unique maintenance needs and challenges.

Fields: I think the questions of like, how could we possibly manage a portfolio of thousands of homes in a way that would be efficient? That was like a really big question.


Hammond: To even conceptualize managing this many homes was a logistical challenge. The economy was crashing and people were losing their houses. Meanwhile, Dr. Fields says investors began using technology in new ways.

Fields: One of the things that happened was that companies like Realty Trac and CoreLogic began to produce heat maps of foreclosures nationwide. That had never existed before, right? And all they were doing is getting the public data from the courts and so forth, cleaning it up, mapping it out and doing that for metro areas across the country.

Hammond: For housing speculators, that technology was a game-changer. Suddenly they’re able to track foreclosures in both global and granular ways. And this means institutional investors who didn’t know much about specific local markets could locate hot spots where lots of foreclosures were happening and scoop up those properties.

Fields: A really important linchpin was this kind of change in technologies that made it possible to change this market in a way that would be both efficient and profitable.

Hammond: The strategy was pretty simple. The recession caused a national housing crisis. Investors came in offering a solution. They could buy up foreclosed homes at depressed prices, while arguing that they were saving the economy from a depression.

Groner: But it wasn’t entirely benevolent, right? These are businesses. Their goal is to make money. And, you know, many of those same properties were later turned around and rented to former homeowners.

Hammond: If you think of it from a homeowners perspective, that kind of adds insult to injury. First, a poorly-regulated vendor offers you a subprime loan that isn’t subject to any meaningful oversight. Taking that loan more or less sets you up to fail. And then, when you default on your mortgage, you lose your house, which is both emotional and expensive. And now, you’re supposed to rent from one of the very companies profiting off a wave of foreclosures like yours?

Groner: It’s a lot to swallow.

Hammond: Where was the government in all of this?

Groner: I asked Daniel Aldana Cohen about that. Cohen teaches at Berkeley and co-authored the book, A Planet to Win: Why We Need a Green New Deal. He said the 2008 recession was a big missed opportunity for the government to invest in affordable housing.

Daniel Aldana Cohen: And they lacked ambition. When Barack Obama got elected in 2008, some of his advisers said, you know what, we can, Fannie Mae, Freddie Mac, they can just buy up the homes that are being foreclosed then just rent them to the people living in there. So there will be no evictions and no real foreclosures.

Groner: So instead of corporations buying up homes, the federal government would’ve bought them and rented them back to the owners at affordable rates. People could’ve stayed put.

Cohen: And the Obama Administration thought that would sound like socialism.

Groner: Another idea that was floated was to invest in community land trusts, which are basically property arrangements where a nonprofit owns the land. Homeowners can lease the land and then buy their house on that land. Ideally, this keeps housing affordable and accessible to more people. But instead of bailing out homeowners or refinancing mortgages the way FDR did during the New Deal, the Obama Administration bailed out the banks.

Hammond: And for marginalized families who had been targets of irresponsible banking practices and subprime loans, this meant a devastating loss of wealth.

Cohen: What you didn’t really see in the aftermath of 2008 was a meaningful rise in kind of progressive housing politics. On the contrary, the Obama Administration, which came in during this crisis promising progressive change in the United States, actually let about 10 million households be foreclosed upon, one of the great disasters of the 21st century in the United States.

[ominous music]

[radio clip] From NPR News, this is All Things Considered; I'm Michele Norris. The U.S. is in the middle of a housing crisis of historic proportions. And this week, the government's foreclosure prevention efforts were blasted by a federal auditor. The report says the Obama Administration's program is reaching too few people.

Cohen: So in the United States, there's nobody who's not touched by the financialization of land and housing.


Hammond: And today, that housing speculation that began during the Great Recession? It’s still happening. In fact, housing speculation surged again during the pandemic. Here’s Nikil Saval again in Philadelphia.

Saval: Based from roughly around the period of the pandemic from 2020 to 2021, investors bought nearly a quarter, 24% of homes sold in Philadelphia. You had about 15% of homeowners selling to investors and the rest of the cases, you know, 9%, are investors selling to fellow investors. So that's a huge proportion or a huge increase in the kind of housing market in terms of how much financial interests are moving into the housing market here.

Hammond: And it’s not just homeowners being squeezed out.

Saval: We also have just a decreasing number of small landlords, small landlords, you know, who own a few units. We actually have quite, there's certainly quite a lot of them, but we see more large regional and national companies coming in and turning kind of owner-occupied homes into rentals and that can sometimes squeeze out homeowners and put renters at risk.

Hammond: And it’s not just in Philly.

Saval: Across the country we have a lot of restrictions on land use that don't allow people to build more densely. So we don't, in areas where there's high demand, we don't build, frankly, enough apartments, and very few of the apartments that do get built are affordable. I mean, there's just overall a supply crisis that is common, endemic, I would say, across many communities in the United States. And that makes it harder for people to move to places or to stay in places, because overall there's just like a contraction of the amount of available housing.

Hammond: And that supply crisis Senator Saval mentioned isn’t exactly small. Here’s Dr. Cohen.

Cohen: As more and more money flows into finance, then that money's got to be parked somewhere in some kind of asset that feels reasonably stable and that can accrue value. And so you have this phenomenon of homes that are treated as investment properties, as, in a way, a kind of like physical form of a stock, as opposed to homes being primarily a place where people would live. And that has had a devastating impact on the affordability of housing for tens of millions of people in the United States and all over the world.

Hammond: The National Multifamily Housing Council says that the nation needs to build 328,000 new homes a year to keep up with demand, which would require the U.S. to double or even triple the rate we’re currently creating new housing. And yet, because investment is driving up land prices, the homes that are getting built are often only affordable for people with higher incomes.

Cohen: And so as land values have gone up and up and up, you see a kind of overproduction of housing for middle-, upper-middle-class people, for very wealthy people, and a kind of abandonment of housing for working-class people and for poor people.

Groner: This model more or less ensures that resources keep flowing towards those who are already wealthy. Here’s Dr. Desiree Fields.

Fields: It's about like pulling whatever resources are in already under-resourced areas and pulling those into wealthier communities.

Groner: What happens is that pressure builds at the lower end of the housing market. Take starter homes for example. Those are usually no-frills houses with relatively small footprints. But because land costs are so high, very few of these houses are getting built. And the ones that already exist are in high demand.

Fields: The homes that investors are buying are usually starter homes, right? So that's usually like the same kind of home that a family buying their first home would be trying to get.

Groner: Because of technological advances, speculators can now make offers on a house sometimes within 45 minutes of that house going on the market. Those offers can be hard to turn down.

Fields: If you're a homeowner who's selling your home, and you have an all-cash offer that comes in, you know, the day the property is listed, versus a family, who obviously in most cases will be relying on a mortgage, might have questions about the maintenance of the property, or like might want you to do some repairs, or might want you to knock a few grand off the price so that they can do the repairs. The calculus is simple if you're the owner, right? You're gonna want to sell all-cash to the buyer who's not asking you for any contingencies on the sale. And so I think one of the biggest concerns is really dampening opportunities for homeownership.

Groner: As many of those starter homes are turned into rentals, fewer places are available for people who want to buy, which jacks up prices all across the market.

Hammond: Add that to high inflation, which caused the federal reserve to raise mortgage rates, and home ownership gets even more unaffordable.

Fields: The pandemic is this really big hinge point where people who were able to buy homes in early 2021 at a two-and-a-half, 3% interest rate generated a huge, like, a historic amount of equity, just over the past year or so, at the same time as investors were also scooping up homes.

Groner: And this makes it harder for would-be homeowners to buy a first house, which has huge implications for economic inequality. Homeownership is becoming more inaccessible to more and more people. And that makes poverty more entrenched than ever.

Fields: You know, it's questionable whether they will ever be able to kind of save enough of a down payment in the current interest rate context to be able to purchase a home.

[long pause, sad music gets louder]

I think this moment in time will be looked back on as a really important moment where those inequalities widened even more.

Groner: And that economic hardship doesn’t affect everyone equally.

Fields: The 2008 crisis was deeply racialized in all of the ways that we've learned about, and now we're seeing this wave of investors coming in, and again, kind of like stacking the decks against, against Black residents.

[music break]


Tara Raghuveer: The rent is too damn high, the market is too damn precarious. I mean, that's, that's the impact of every type of speculation that has been enabled in the real estate sector.

Hammond: That’s Tara Raghuveer, the founder and director of KC Tenants, a city-wide tenant union in Kansas City, Missouri.

Raghuveer: And I also run the Homes Guarantee campaign, which is a national campaign organizing with tenant unions across the country to win protections for tenants at the federal level and ultimately, a homes guarantee.

Groner: So, we’ve mostly been talking about single-family housing, but speculators are also buying up multi-family housing, including large apartment buildings.

Hammond: We wanted to talk with Tara Raghuveer about this. What does speculation look like in the rental market?

Raghuveer: So some of these business models are extremely exploitative, and frankly, just illegal. There's a whole other category of speculators that are doing business by the letter of the law, but that doesn't make their behavior much better.

Hammond: For renters, the most obvious consequence of corporate ownership is high rent.

Raghuveer: Currently there is no federal regulation on what landlords can do related to the rent so they can increase it to whatever they want. And their rent increase isn't based on the quality or condition of the home, but rather on what the market allows. And that puts tenants in an incredibly precarious situation.

Groner: Luke Melonakos-Harrison is a 28-year-old renter, and, like Tara, he’s a tenant organizer. He says where he lives in New Haven, Connecticut, it can be nearly impossible to find rental property that isn’t corporate-owned. In fact, just three companies–Ocean Management, Pike International, and Mandy Management–have bought up most of the low-income rentals.

Luke Melonakos-Harrison: So you've just got thousands of people moving between Mandy, Ocean, and Pike Apartments, all of whom are pretty equally terrible. And then Northpoint Management owns the complex in the next town over where we have our largest tenant union and that company owns the most properties that I'm aware of, of the companies that we've confronted. They're just a huge landlord company.

Groner: Luke said landlords will raise rents in their buildings to try and get more of a profit out of them. And because they own so much property, they essentially control local markets. Renters don’t really have other options. Where are you going to go?

Groner (interviewing Melonakos-Harrison): You also mentioned that rents are just going up. How much have they gone up and what time period are you talking about?

Melonakos-Harrison: The most extreme case was a family paying two grand and - large family - and the landlord wanted to raise it to $3,500. So it was going to be a 75% rent increase. A lot of other cases have been $800, $600, $3-400 and then tons and tons of, you know, $150, $200 rent increases.

Groner: The impact of those increases can be devastating. An additional $400 a month is almost $5,000 a year. People aren’t getting those types of raises at their jobs. And for people on fixed incomes, Luke said something as small as a $50 rent increase can mean skimping or going without food, medication, or transportation.

Melonakos-Harrison: We have people collecting cans so that they can pay their utilities bills.

Groner: And for some people, raised rent means no home at all. [music] In 2019, nearly half of renters paid rents that were equal to 30% or more of their wages. That’s dangerously high. Studies show that when rent is higher than 32% of a person’s income, the risk of homelessness greatly accelerates.

Melonakos-Harrison: I've seen people displaced into couchsurfing and homeless shelters and sleeping in their car for a little while, and all of which are certainly classified as homelessness.

Hammond: People move in with family members, or take on roommates they don’t know or trust. They stay in bad relationships, just for the place to live. In fact, rents are so high they’re actually causing a nation-wide eviction crisis.

Raghuveer: There's a very formal and kind of academic way of understanding eviction as the thing that happens to someone when they're taken to court by their landlord, because they're behind on rent, or they have a lease violation or something like that. And then they're formally removed from their home by the state. Our understanding of eviction and I think most tenant organizers and tenant leaders’ understanding of eviction is much more nuanced than that. In the current moment, for example, I think it's important that we recognize that an unreasonable rent hike constitutes an eviction. You just don't get your day in court, right.

Hammond: Landlords have a lot of different ways of putting pressure on tenants, and it can be intense. More often than not, tenants leave before the court ever gets involved.

Raghuveer: And so we've seen landlords remove appliances, shut utilities off, change the locks, harass a tenant. A landlord will just threaten and harass a tenant until the tenant believes that they have to move and they have no other choice. And they know how difficult it will be to find housing again. So they just get up and go.

Hammond: Leaving before an eviction is issued is a strategic choice. A formal eviction with a court order has long-term consequences.

Raghuveer: Because with a formal eviction on your record, no decent landlord will rent to you, right? You have that kind of scarlet letter. So tenants under threat of a formal eviction will often up and move. So you're displaced in the same way, or in a similar way to the way that you would be displaced if you were formally evicted by the courts.

Groner: High rents aren’t the only downside of corporate landlords. As a tenant organizer, Luke said he’s able to recognize almost immediately when a landlord is negligent.

Melonakos-Harrison: It's a telltale sign when you walk in and you hear the sound of beeping smoke alarms because those are not being attended to. You walk in and it's like the front door of the apartment building is unlocked and can't lock.

Groner: But often the most dangerous problems are less visible.

Melonakos-Harrison: Some things are very serious health risks, like the amount of black mold that people are breathing in, kids are breathing in. I mean, we've met so many people who have developed respiratory issues that they never had before because of living in apartments with serious mold issues. We've met kids with lead poisoning, you know, ‘cause older buildings that haven't been properly maintained. Little kids eating chips of paint.

Groner: Those poor conditions are often a byproduct of corporate cost-cutting measures that maximize profits with little or no concern for quality of life.

Melonakos-Harrison: ‘Cause they'll buy it, but they won't invest in it. So it's just raising rents on people without doing anything to invest in the property itself.

Groner: And in a market controlled by large-scale corporations, tenants have little recourse.

Melonakos-Harrison: The reality is that the reasons people have for not filing a complaint with the health department or taking their landlord to court are so numerous and everything from the basic thing of your landlord can evict you just by not renewing your lease.

Hammond: Tara Raghuveer believes those miserable conditions are a consequence of a severe imbalance in the landlord-tenant relationship.

Raghuveer: And we had tenants who would tell us, I walked into the leasing office, and they could smell my desperation, right? We call these “landlords of last resort” because they're the landlords who are very aware that their role in the market is to rent to people who have no other options. And that puts them in a position of extreme power over their tenants.

Melonakos-Harrison: People tolerate all kinds of abuse from their landlords and other powerful people in their lives because they're very rationally weighing the costs. And a lot of people who are not from those kind of backgrounds or have not seen those kind of situations up-close, have a hard time grappling with just how rational those risk calculations are.

Hammond: Daniel Cohen attributes this imbalance, or even abuse, to the failure to regulate housing or provide meaningful protections for tenants.

Cohen: We've also seen that because of the appalling lack of regulations for housing in the United States, it's often been quite profitable for landlords to just cycle through tenants, constantly evicting them and then replacing them with new tenants rather than provide sort of more stable, slightly lower-cost housing for the long term.

Hammond: In the meantime, without a legal imperative, landlords have little incentive to do better.

Raghuveer: Are they going to fix the broken window? Absolutely not. Do they give a damn about the mold? No way. Will they evict you on a dime, if you're behind one day, or if you do something to piss off the manager in the office? You bet your bottom dollar.

Groner: Another profit-making tactic landlords use is to create new fees and fines.

Fields: They'll charge you fees for landscaping. They'll charge you fees for late fees. If you get to the point where you missed your rent and you get taken to court for eviction, they're gonna charge you legal fees, there's pet rent. Any kind of crazy fee that you can think of, they're charging that fee, and it becomes a way of squeezing more income out of the house on top of the rent.

Hammond: Or like the landlord company Luke told us about where they hired a towing company to tow people’s cars, only they didn’t tell any of the tenants that they needed a parking permit to park outside their homes.

Melonakos-Harrison: And people were losing cars, you know, because they would get towed 45 minutes away, charged by the mile. So you need 500 bucks to get your car back and if you don't have it within a couple weeks like they auction off your car. It's really cruel.

Groner: And for some landlords, evictions are actually the goal. While homelessness is at a record high, some corporate owners are sitting on empty apartments.

Melonakos-Harrison: Well, something else that we’re noticing is that alot of these places just have vacant apartments that sit unoccupied for months and months. I mean, at this property in Hamden, the manager told us on-record it's 50 vacant apartments out of 450. And at the Ocean Management properties we've been knocking doors on in New Haven, the one complex that already has a tenant union is 50% vacant right now. And the other buildings that we’re knocking on are, I don't know, I don't have the number exactly, but I would say 30, 40% vacant.

Hammond: For these landlords, their aim has never been to provide housing. Housing isn’t even where they look to make most of their money. Their strategy, Tara said, has always been to bet on the value of the land. The property itself just depreciates. But the land…

Raghuveer: Oftentimes, landlords will sit on properties, and leave them vacant, because the investment strategy really isn't about rental income. Or it's not primarily about rental income, it's about the increase in land value of that property over time. And so if they've figured out in their spreadsheet that they can actually keep it vacant, and still make their bottom line, they'll do that.

Groner: And if you look at where the most predatory speculation is happening, it’s in communities that have experienced long-term disinvestment; neighborhoods that were redlined. This means the real estate there is undervalued. And if the neighborhood gentrifies, there’s a potential for a dramatic increase in value.

Hammond: If you ask Senator Saval, the system isn’t broken. It’s working exactly the way it was designed. And it wasn’t designed to provide housing.

Saval: The way the system is designed it's not meant to deliver enough housing for all of us. You know, it doesn't take it for granted that people have a right to be securely housed. It takes for granted the notion that people have a right to invest in and make money off of housing. And those two things are not congruent, and they don't cohere.

[music transition]

Hammond: Home is a place, absolutely. But it’s so much more than that, isn’t it? It’s our provider of safety and security. It’s the embodiment of family and history. It’s part of who we are. Or at least it can be. But it’s also treated as a commodity. And like any commodity, it can be lost–or taken. It can be quantified, and it can put all of these other, deeply personal aspects of home into jeopardy. And while a few corporations and investors make money and gain wealth from this commodification, poverty becomes more and more entrenched and precarity expands, threatening generations of Americans. And that will affect all of us. We all know what wealth is, but sometimes it’s harder to see what wealth costs us.

[music break]

Next time on Plot of Land we head to Long Beach to look at what happens when what’s beneath your feet is the number one threat to your life.


Plot of Land is a Monument Lab production with funding from the Ford Foundation and music by Blue Dot Sessions. And please—share these stories—and rate and review us wherever you get your podcasts. I’m Jameela Hammond and thank you for listening to Plot of Land.