6 ms·

When Private Equity Becomes Your Landlord

64 points by jbegley 5y ago

bearjaws 5y ago
Same experience here in Central Florida, a large chunk of independent complexes were bought up by Greystar, and promptly driven into the ground. Of course since the whole area is growing they still run profitably, but the complexes are barely kept up, maintenance is slow and QoL is overall poor. You can even see they rebrand them every 3-4 years to get rid of bad reviews...
- salawat 5y ago
  This seems pathological. I'm wondering if we need to look at doing a better job in terms of requiring/tracking corporate lineage. The "Name on the building", as it were, represents a valuable lever for the public to identify and hold to account the management that makes their lives hell. Whipping up a new legal fiction, changing faces, but keeping the same people at the top needs to not be as trivial as it seems to have become, especially if the Courts are treating these entities as distinct instead of as a wrapper or veneer on the same rotten core.
  - chordalkeyboard 5y ago
    the black pill is that corporations are designed to separate liability from people and profits, and this includes repetitional liability. the only solution is to attach the behavior to the actual individuals responsible.
    - orhmeh09 5y ago
      This would be some real utility of a social credit score.
- herval 5y ago
  Building I live on has clearly fake reviews on their official site and loads of 5 star reviews with no comments on google/yelp/etc, offsetting all the resident reviews (1-2 stars). It's quite difficult to realize that, unless you go through each review carefully. I fell for it, and had that conversation w/ multiple neighbors.
clpm4j 5y ago
I think eventually we'll get to a point in the US where it's illegal for corporations to buy residential housing.
- wcarron 5y ago
  I dearly hope so. Housing is for people, not corporations. I would like to see the introduction of zoning laws that accomplish this.
- namelessoracle 5y ago
  I dont see private ownership of apartment buildings happening anytime soon. I worry we might see the opposite. Someone will be convinced the "solution" to the housing crisis is to just remove citizen ownership of housing to begin with.
  - kylehotchkiss 5y ago
    Nobody is going to be willing to fork over the building maintenance fees (which will continue to increase over the years) after their mortgages are paid off.
    - Ekaros 5y ago
      It is a cultural thing. Some countries have private ownership of apartment buildings to be very common. One way is a LLC where stock grants rights to single apartment. Then LLC charges monthly fee. Or even loans for larger renovations/maintenance to owners.
      - BeetleB 5y ago
        > One way is a LLC where stock grants rights to single apartment. That is literally "corporations buying residential housing." It may be different than the ones in this story, but that's where the challenge in the law will be - how do you forbid/discourage one type of corporate ownership vs another type?
    - 5y ago
elipsey 5y ago
Yep. I recently lived in a Greystar property in San Rafael. The garage gate broke and was tied open with a rope for several months. The front security gate latch broke and my key card didn't work on half of the doors. The mailboxes' latch broke and post office repeatedly notified management and stopped delivering mail for weeks at a time on several separate occasions. Same with the package room. There was no on site security -- you can guess how that turned out in the bay area. When I moved in, the place was riddled with broken stuff. The toilet, sink, dish washer, and washing machine were broken. It took months of email and "support tickets", to get that stuff fixed, I fixed the toilet myself, and let the small stuff slide. Management was almost unreachable and seemed disorganized at the local level. It was totally surreal. All for the bargain price of 3400/mo. Luckily it was a short lease. This was mid 2020, so I was happy not to be downtown for while, and San Rafael was wonderful, but I was out of that place as soon as the short lease was up. It took them six months to figure out how to cash my final check. When looking for my next rental, Greystar managament was an instant deal breaker, and I would recommend avoiding at all cost.
- johnebgd 5y ago
  I lived in a Greystar building starting in 2013 for three years in Chicago and one year in Sacramento before moving into a different rental company building in San Francisco. They were excellent, extremely attentive to problems. The buildings were well maintained. Not saying your experience wasn’t valid just that mine was very different.
  - onphonenow 5y ago
    It can be heavily dependent on area etc. Rent control areas / for-cause eviction areas - you can get some pretty horrific maintenance situations. San Rafael I think is now for cause, required mediation on rent increases and "bad faith" means that the increase is not valid. That said, these guys look like scum - but I've seen nongreystar crap properties as well. One thing - I wish review sites would not let them change names and start fresh on reviews for a property at a given address.
  - mimikatz 5y ago
herval 5y ago
I currently rent in a building from a big Private Equity/rental corporation (Equity Residential). Everything is purposefully low quality, common areas are terribly maintained (except for the areas they take prospect residents for a tour around), and it's clearly organized to squeeze every penny and force people out on regular schedules. It's depressing.
chaorace 5y ago
This happened to me last year. They fired most of the management staff and replaced them with half as many soulless middle managers. Office hours were cut down to the bare minimum and they started cheaping out on maintenance throughout the complex. The "solution" that I found was to move into a highrise with ludicrously high profit margins. At that point, the incentives flip back over, because property managers are afraid of killing the golden goose. Sure... tripling my rent isn't exactly the smartest decision that I've ever made, but it sure as hell solved the problem!
onemoresoop 5y ago
This is so depressing and it is only getting worse.
RcouF1uZ4gsC 5y ago
What’s interesting is the company on the list that is not private equity: Irvine Co. I have been I have been in many of their apartments and know friends who live there. They always seemed very nice, well-maintained, with very helpful staff. I wonder how much their not being a private equity company contributes to that.
- kylehotchkiss 5y ago
  I was told my apartment complex is owned by JP Morgan directly and managed by a California company Sares Regis. They've done a respectable job with upkeep in the 20 year old buildings and grounds. Maintenance, security, cleaning, utilities have worked fine or been taken care of in a reasonable timeframe. The apartments are a little cookie-cutter generic but that's fine with me.
Ekaros 5y ago
I would advocate for more free market as solution to this. Allow more construction, allow more competition. Thus force these companies to provide either better service or cheaper prices. If they or everyone else were allowed oversupply market lot of issues would correct. Maybe some control tools like forcing them to supply market in reasonable time period from lot allotment or face massive taxes.
- ricardobayes 5y ago
  This will eventually regulate itself even without any action. People have already started to move away from these areas.
- manuelabeledo 5y ago
  > Thus force these companies to provide either better service or cheaper prices. Let's be honest here, it will all come down to cheaper costs, which inevitably will impact quality. But because the alternatives are clear - either have a roof over your head or go homeless - there is no incentive to maintain quality at the expense of larger margins. This is essentially what happens with healthcare. You cannot just opt-out of it if, thus terrible but cheap practices will always exist, and people will die as a consequence of this.

64 points by jbegley 5y ago

Same experience here in Central Florida, a large chunk of independent complexes were bought up by Greystar, and promptly driven into the ground. Of course since the whole area is growing they still run profitably, but the complexes are barely kept up, maintenance is slow and QoL is overall poor. You can even see they rebrand them every 3-4 years to get rid of bad reviews...

salawat 5y ago
This seems pathological. I'm wondering if we need to look at doing a better job in terms of requiring/tracking corporate lineage. The "Name on the building", as it were, represents a valuable lever for the public to identify and hold to account the management that makes their lives hell. Whipping up a new legal fiction, changing faces, but keeping the same people at the top needs to not be as trivial as it seems to have become, especially if the Courts are treating these entities as distinct instead of as a wrapper or veneer on the same rotten core.
- chordalkeyboard 5y ago
  the black pill is that corporations are designed to separate liability from people and profits, and this includes repetitional liability. the only solution is to attach the behavior to the actual individuals responsible.
  - orhmeh09 5y ago
    This would be some real utility of a social credit score.
herval 5y ago
Building I live on has clearly fake reviews on their official site and loads of 5 star reviews with no comments on google/yelp/etc, offsetting all the resident reviews (1-2 stars). It's quite difficult to realize that, unless you go through each review carefully. I fell for it, and had that conversation w/ multiple neighbors.

clpm4j 5y ago

I think eventually we'll get to a point in the US where it's illegal for corporations to buy residential housing.

wcarron 5y ago
I dearly hope so. Housing is for people, not corporations. I would like to see the introduction of zoning laws that accomplish this.
namelessoracle 5y ago
I dont see private ownership of apartment buildings happening anytime soon. I worry we might see the opposite. Someone will be convinced the "solution" to the housing crisis is to just remove citizen ownership of housing to begin with.
- kylehotchkiss 5y ago
  Nobody is going to be willing to fork over the building maintenance fees (which will continue to increase over the years) after their mortgages are paid off.
  - Ekaros 5y ago
    It is a cultural thing. Some countries have private ownership of apartment buildings to be very common. One way is a LLC where stock grants rights to single apartment. Then LLC charges monthly fee. Or even loans for larger renovations/maintenance to owners.
    - BeetleB 5y ago
      > One way is a LLC where stock grants rights to single apartment. That is literally "corporations buying residential housing." It may be different than the ones in this story, but that's where the challenge in the law will be - how do you forbid/discourage one type of corporate ownership vs another type?
  - 5y ago

elipsey 5y ago

Yep. I recently lived in a Greystar property in San Rafael. The garage gate broke and was tied open with a rope for several months. The front security gate latch broke and my key card didn't work on half of the doors. The mailboxes' latch broke and post office repeatedly notified management and stopped delivering mail for weeks at a time on several separate occasions. Same with the package room. There was no on site security -- you can guess how that turned out in the bay area. When I moved in, the place was riddled with broken stuff. The toilet, sink, dish washer, and washing machine were broken. It took months of email and "support tickets", to get that stuff fixed, I fixed the toilet myself, and let the small stuff slide. Management was almost unreachable and seemed disorganized at the local level. It was totally surreal. All for the bargain price of 3400/mo. Luckily it was a short lease. This was mid 2020, so I was happy not to be downtown for while, and San Rafael was wonderful, but I was out of that place as soon as the short lease was up. It took them six months to figure out how to cash my final check. When looking for my next rental, Greystar managament was an instant deal breaker, and I would recommend avoiding at all cost.

johnebgd 5y ago
I lived in a Greystar building starting in 2013 for three years in Chicago and one year in Sacramento before moving into a different rental company building in San Francisco. They were excellent, extremely attentive to problems. The buildings were well maintained. Not saying your experience wasn’t valid just that mine was very different.
- onphonenow 5y ago
  It can be heavily dependent on area etc. Rent control areas / for-cause eviction areas - you can get some pretty horrific maintenance situations. San Rafael I think is now for cause, required mediation on rent increases and "bad faith" means that the increase is not valid. That said, these guys look like scum - but I've seen nongreystar crap properties as well. One thing - I wish review sites would not let them change names and start fresh on reviews for a property at a given address.
- mimikatz 5y ago

herval 5y ago

I currently rent in a building from a big Private Equity/rental corporation (Equity Residential). Everything is purposefully low quality, common areas are terribly maintained (except for the areas they take prospect residents for a tour around), and it's clearly organized to squeeze every penny and force people out on regular schedules. It's depressing.

chaorace 5y ago

This happened to me last year. They fired most of the management staff and replaced them with half as many soulless middle managers. Office hours were cut down to the bare minimum and they started cheaping out on maintenance throughout the complex. The "solution" that I found was to move into a highrise with ludicrously high profit margins. At that point, the incentives flip back over, because property managers are afraid of killing the golden goose. Sure... tripling my rent isn't exactly the smartest decision that I've ever made, but it sure as hell solved the problem!

onemoresoop 5y ago

This is so depressing and it is only getting worse.

RcouF1uZ4gsC 5y ago

What’s interesting is the company on the list that is not private equity: Irvine Co. I have been I have been in many of their apartments and know friends who live there. They always seemed very nice, well-maintained, with very helpful staff. I wonder how much their not being a private equity company contributes to that.

kylehotchkiss 5y ago
I was told my apartment complex is owned by JP Morgan directly and managed by a California company Sares Regis. They've done a respectable job with upkeep in the 20 year old buildings and grounds. Maintenance, security, cleaning, utilities have worked fine or been taken care of in a reasonable timeframe. The apartments are a little cookie-cutter generic but that's fine with me.

Ekaros 5y ago

I would advocate for more free market as solution to this. Allow more construction, allow more competition. Thus force these companies to provide either better service or cheaper prices. If they or everyone else were allowed oversupply market lot of issues would correct. Maybe some control tools like forcing them to supply market in reasonable time period from lot allotment or face massive taxes.

ricardobayes 5y ago
This will eventually regulate itself even without any action. People have already started to move away from these areas.
manuelabeledo 5y ago
> Thus force these companies to provide either better service or cheaper prices. Let's be honest here, it will all come down to cheaper costs, which inevitably will impact quality. But because the alternatives are clear - either have a roof over your head or go homeless - there is no incentive to maintain quality at the expense of larger margins. This is essentially what happens with healthcare. You cannot just opt-out of it if, thus terrible but cheap practices will always exist, and people will die as a consequence of this.