Americans should worry about the full-scale acquisition of their lives by private equity giants. The last time a Blackstone subsidiary laid claim to entire neighborhoods in the aftermath of the 2008 foreclosure crisis, the United Nations itself was forced to step in when their profit-generating (read: tenant-squeezing) techniques proved too rapacious even for the cut-throat real estate industry. However, with the renewed housing boom driven by rock-bottom interest rates, the private equity buy-ups are going on again with a vengeance, so much so that Bloomberg has published multiple articles suggesting Americans give up on the idea of homeownership entirely and become a nation of renters.
“Collateral damage” Their management style hasn’t improved, either. When New York resident “Carla ” (name changed pending potential litigation) visited her Life Storage (a BlackRock “buy ”) unit earlier this year to retrieve some belongings, she found her possessions contaminated with black mold, the product of what appeared to be a trail of vomit in the hallway leading to her unit. Exposure to the mold, a potent neurotoxin, has “ruined my life, my health, my mental balance, my savings ,” she told RT, adding that her condition is likely permanent and that even her emotional support cat fled her old car in an attempt to escape the mold poisoning, which has since contaminated her new vehicle as well. All of this, she said, “could have been prevented had the facility simply put an overlock on my unit to prevent collateral damage to their customer .”
While management eventually responded to her complaint, their failure to notice and clean up the mess while it festered is emblematic of the chronic neglect that occurs when private equity takes over an industry. Such massive faceless corporations – BlackRock has over $10 trillion in assets directly under management and controls trillions more indirectly – are unable to adequately service customers even when their actions are not deliberately malicious. Capping off the open-top units on the naturally-damp basement level of the storage facility might seem like common sense to a customer, or even a worker who spends time at the facility, but that would have cost a few extra dollars Life Storage’s controlling interests, loyal only to their shareholders, had no reason to spend. Lives are ruined as a result, and this trend toward centralization is only accelerating with the pandemic of small-business die-offs that occurred because of economically suicidal government responses to the coronavirus.
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Further down the spiral With so few Americans able to afford the middle-class dream they’re told everyone else is basking in, the desperate become pragmatic, willing to settle for less. But while home-ownership remains paramount, and renting a grin-and-bear-it second-best, long-stay hotels have also surged in popularity. This is not because people like them – they’re accompanied by the same stigma as trailer parks, if not worse – but because they are not subject to the unregulated swamp of tenant blacklists that keep a growing number of Americans locked out of the rental market even with satisfactory credit ratings and flush bank accounts.
“Jane ,” who has lived in New York City for 25 years, has been unable to legally rent an apartment for the last eight of those thanks to a vindictive building management company she says went to great lengths to evict her, including refusing to cash rent checks in order to claim she was delinquent. In her quest to clear her name, she has discovered that tenants can end up on one of dozens of lists kept by tenant-screening companies merely for suing or being sued in housing court, with landlords assuming they’re “trouble ” even if they win their case; she declined to be named in the hope that she will be able to find housing elsewhere in the country, having given up on the city where she lived most of her life. A New York Times piece on the tenant-blacklist phenomenon concurs – “Once tenants end up on the list, renting an apartment can be impossible ” – and while some reforms have been made, as smaller landlords are pushed out of the business, unable to pay their mortgages thanks to the economic depression that shows no signs of ending, larger ones – like private equity firms – step in, with more money to wait out activist tenants and win the day in housing court.
As the blacklisted seek refuge in extended-stay hotels, as Jane has been forced to do, they become increasingly likely to run into the same problem that rendered them homeless in the first place – unaccountable faceless financial cartels who see these hotels (or these cheap apartment blocks, or these trailer parks, or these storage units) as a good, recession-proof investment. As the consolidation of these industries continues, the presence of a de facto social credit score becomes impossible to ignore – and increasingly impossible to escape.
The message seems clear: reality will only get harsher under the whip of the private equity firms Americans have allowed to swallow their country whole unless something is done to reverse the centralization of financial power. “Americans’ biggest failing is that they confuse confidence with competence ,” Carla said, summing up what she believes to be “a brutal mistake that is the source of capitalism’s most tragic consequences today .” As millions of Americans slide down the ladder of dispossession greased by the saliva of hungry banks, sold a bill of goods only to find the American Dream ends when they wake up, many of them would no doubt agree.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.
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