Landlords' profits rise as housing affordability declines

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Lawsuits by tenant groups haven't helped

Sleeping in your car is more and more looking like a better option than putting up with rapidly-rising rent.

A new analysis from Accountable.US, a self-described watchdog organization, shows that amid rent hikes and the new game of apartment rent price fixing, some rental companies are raking in huge profits from their residents.

The Accountable.US analysis calls out Invitation Homes and AMH, the largest and second-largest single-family rental companies, which made a cool, combined $953.1 million in profit in 2023 -- up 37% from 2022 -- largely thanks to rent hikes.

In addition, Equity Residential, the third largest publicly traded apartment owner, reported increased profits while raising rent, spending millions to acquire new properties and fighting lawsuits related to privacy violations in background checks and late fees.

Accountable.US defends its analysis as following the U.S. Labor Department’s latest Consumer Price Index (CPI) report which showed shelter costs were among the biggest causes of inflation in February, with the report stating “The shelter index increased 5.7% over the last year, accounting for roughly two-thirds of the total 12-month increase in the all items less food and energy index.”

“For many corporate landlords, there’s clearly no ceiling on rent increases or housing junk fees despite bragging about hundreds of millions of dollars in profits,” said Accountable.US’ Liz Zelnick.

“If price-gouging property companies had any intention of self-regulating their greed, they would have done it by now instead of inviting a housing affordability crisis. It’s why conservatives in Congress must quickly act on President Biden’s proposals to lower housing costs for everyday families – not obstruct them on behalf of their greedy landlord donors.” 

Key findings

Highlights from the Accountale.US report suggest that Invitation Homes's abuses date back to COVID-19 in July 2022 when the company was found to have "engaged in abusive tactics to remove tenants from their homes" and "shoddy repairs and maintenance" putting tenants at risk, as the company raised rents and engaged in "'fee-stacking'" to maximize profits. 

The company has paid the price, however. “Since January 2023, Invitation Homes has paid at least $10.8 million in civil penalties and redress over allegations the company broke California state tenant protection and price-gouging laws and illegally charged ‘exorbitant’ late fees,” the report said.

“Meanwhile, tenants across Charlotte, N.C., protested outside its Charlotte office over living conditions, with one tenant even being forced to start a GoFundMe to help with moving expenses after a rental unit was deemed ‘uninhabitable’ by code enforcement officials.”

AMH, or American Homes 4 Rent, is the second largest single-family rental company as of February 2024 with over 59,000 homes owned. For 2023, AMH reported that the increase in its rise in a yearly income of $366.2 million “was primarily due to higher net gains on property sales, higher rental rates and a larger number of occupied properties.” For example, AMH's Q4 2023 revenue climbed by 5.5% year-over-year, "driven by a 6.1% increase in average monthly realized rent."

AMH might not be phased by Accountable.US’ analysis or critics' complaints, though. In 2023, the company paid two outside firms $130,000 total to lobby against legislation aimed at addressing the housing affordability crisis, including S. 3402, the End Hedge Fund Control of American Homes Act, and S.2224, the Stop Predatory Investing Act.

Ranking fifth according to the National Multifamily Housing Council, sitting pretty with nearly 80,000 units, Equity Residential is one of the largest apartment owners in the United States. The company appears to be financially successful, with its net income climbing to over $868 million, and its fourth-quarter 2023 results climbing by 95% year-over-year to over $322 million, a good portion of that thanks to recent acquisitions in Atlanta. 

However, their reputation has been tarnished by lawsuits alleging they participated in a price-fixing scheme with other landlords through a third-party company. These lawsuits allege that Equity Residential worked with others to illegally raise rent prices, raising concerns about their business practices.

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