Profits for business owners jumped despite eviction ban fears

Profits for business owners jumped despite eviction ban fears

Landlords who opposed a federal ban on evictions at the start of the COVID-19[feminine] the pandemic claimed the restrictions would leave them on the hook for billions of dollars in losses. For many business owners, however, 2021 has proven to be a year of record profits, according to a watchdog group.

The largest publicly traded real estate groups in the United States saw their combined profits rise more than 50% last year to almost $5 billion, government watchdog group Accountable.US has found in a new analysis. . Meanwhile, their senior managers have seen increases of more than 20%, the group calculated.

Take Mid-America Apartment Communities, the largest owner of multi-family housing in the United States, with 100,000 units under its control. Mid-America’s profits more than doubled in 2021 to $550 million. And Starwood Property Trust, a major real estate investment firm, boasted a “record” year in 2021, in which its net profit rose by a third, to $492 million.

Speaking to investors on a call in February, Starwood’s CEO noted that “tenants seem able and willing to pay these rent increases” and called inflation “an amazing gift that keeps on giving” for the company’s affordable housing in Florida. (Starwood’s parent company, Starwood Capital Group, says it controls 220,000 homes and 380,000 hotel rooms, among other assets.)

“When you see the nation’s largest apartment companies raking in nearly $5 billion and their top executive salaries jumping over 22% from last year, it’s obvious that rental prices punitive measures for our most vulnerable populations are driven by corporate greed,” Kyle Herrig, president of Accountable.US, said in a statement. “Major apartment companies have joined the long list of industries using the pandemic as a cover to charge working families far beyond any new cost of doing business.”

A representative for Starwood did not respond to a request for comment.


Lack of new construction and business owners contributing to skyrocketing rents

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AvalonBay Communities, the No. 4 real estate owner in America, according to the National Multifamily Housing Council, saw its results increase 21% last year. Equity Residential, the fifth-largest real estate owner, saw profits jump 45% to $1.3 billion. Equity’s chief operating officer touted the company’s “pricing power” during an earnings call in February. Camden Property Trust, the No. 12 landlord, saw its revenue more than double, to $183 million, as did UDR, the No. 19 landlord, whose revenue soared to $160 million, according to the analysis .

A spokesperson for Equity Residential said the company’s rents reflected an increase after a “sharp decline” during the pandemic.

“Our portfolio attracts an affluent tenant who is not rent-stressed. Our residents pay us, on average, about 19% of their income in rent,” spokesperson Marty McKenna said in an email.

Price gouging or market demand?

Tenant advocates have accused landlord investors of predatory pricing in the way they saturate certain housing markets, systematically raise rents for tenants and prey on fees to generate profits for their investors.

Landlords defend their rent increases by highlighting their role in providing housing at a time when housing demand is exploding. While many large landlords have also stressed their willingness to accommodate tenants who have fallen behind during the pandemic, they have also opposed laws that would limit their ability to raise rents and evict tenants.

During the pandemic, business groups opposed the extension of the Centers for Disease Control and Prevention’s temporary freeze on certain deportations, which the agency instituted as a public health measure and which studies found later saved lives and reduced the spread of COVID-19.

“The moratorium unfairly shifts economic hardship onto the backs of housing providers who have compromised their own financial futures to provide essential housing to tenants across the country,” representatives from the National Apartment Association, National Multifamily Housing Council, the National Association of Realtors and a dozen other industry groups wrote last year.

The National Apartment Association, along with several property managers, has sued the US government for $26 billion in back rent it claims its members lost during the eviction break. The lawsuit was dismissed. The current plaintiffs, which do not include the NAA, have indicated they plan to appeal.

And it was a lawsuit brought by landlords in Alabama and Georgia that led the Supreme Court to lift the moratorium last August, the court having decided, in an unsigned opinion, that the administration had exceeded its powers.

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