In the midst of rising Covid-19 cases, and an explosion of evictions, the CEO of Blackstone is crowing about jacking up rents across the country.
Getting Wall Street and hedge funds out of real estate should to be a priority of the Biden and the Democratic Party.
It won’t be a priority, but it should be:
The world’s largest private equity firm has bankrolled campaigns against rent control and been accused by the United Nations of fueling a global housing crisis. Now, as millions are threatened with eviction during the pandemic, Blackstone’s top executive is openly bragging that the firm is making huge profits off of rent increases.
At the Goldman Sachs’ Financial Services Conference on December 9, Blackstone’s billionaire CEO Stephen Schwartzman boasted that after the 2008 financial crisis, his firm was able to cash in on the mortgage crisis. At the time, the company was able to buy up foreclosed homes and convert them into rental properties subsequently plagued by accusations of dilapidation and excessive fees — all while it received a big financial boost from the government.
Schwartzman, a top Republican donor and close ally of President Trump, indicated his firm is positioning itself for a similar jackpot.
“You always have winners and losers — Blackstone was a huge winner coming out of the global financial crisis and I think something similar is going to happen,” he said.
Noting that about half of his private equity firm’s revenues are now from real estate, Schwarzman added: “We’re the largest owner of real estate in the private world. And that asset class has boomed with huge increases in rents, almost no occupancies, [and] rent collections from almost everyone.”
Blackstone has also been evicting residents during the pandemic, according to court filings compiled by the Private Equity Stakeholder Project. And Blackstone has faced a legal showdown with New York tenants at one of the city’s largest rental complexes, which it owns. There, the company has been trying to exempt thousands of units from rent regulation laws. The company has reportedly even kept Manhattan units empty rather than face rent control regulations.
During the Goldman Sachs conference, Schwarzman seemed to insinuate that his firm may buy up even more residential real estate to try to squeeze even more revenue out of renters in the pandemic-ravaged economy.
Wall Street is the enemy of a good and just society, and it should be treated as such.