-- Some renters of homes owned by the “billion-dollar landlords” highlighted in an ABC News investigation might be surprised to learn that they, as taxpayers, have a stake in their corporate landlord’s business.
Meanwhile, some of the rental homes in the stable of Starwood Waypoint, a company once led by longtime Trump ally Tom Barrack, are still jointly owned with Fannie Mae in an arrangement that dates to the mortgage meltdown. The company mentions the joint venture in a 2017 filing with the Securities and Exchange Commission.
According to Aaron Glantz, a senior reporter for Reveal from the Center for Investigative Reporting who has published a series of reports on the home rental business, the Obama administration encouraged these types of investments in foreclosed homes in order to prevent neighborhoods from becoming blighted.
“The Obama administration encouraged this behavior, and even set up a joint venture between Fannie Mae and Tom Barrack's company. Fannie Mae helped Tom Barrack get started in this business,” Glantz told ABC News. “But we have to ask ourselves could there have been another way.”
Starwood Waypoint and Invitation have announced plans to merge, creating a company that will own about 82,000 rental homes nationwide, and affordable housing advocates have raised concerns with the FHFA, which oversees Fannie Mae and Freddie Mac, arguing that it’s not right for taxpayers to essentially be helping large corporate landlords.
Earlier this month, 136 nonprofit organizations from 20 states signed a letter to the FHFA director, a copy of which can be read below, voicing concern that these government-backed deals run counter to the FHFA’s obligation to foster home ownership and stable communities. While the rental companies argue that the buying up foreclosed homes prevents blight, critics say the companies are taking affordable homes away from prospective buyers – and taxpayers are helping them do it.
Fannie Mae, as a government sponsored entity, “should be focused on trying to help low- and moderate-income people achieve the American Dream of home ownership,” said Kevin Stein, deputy director of the California Reinvestment Coalition, one of the letter’s signatories. “They’re literally converting home-owner opportunities into home-renter opportunities.”