On December 16, 2021, tenants from the Veritas Tenants Association (VTA) held a hybrid meeting in San Francisco to
Corporate landlords are taking over—But tenants can use their monopolies against them
BY MATHILDE LIND Gustavussen
Since the 2008 housing crisis, huge corporate landlords have taken over an alarmingly large share of the rental market. But the more tenants share the same landlord, the greater the number of potential organized tenants that landlord has to face.
discuss their landlord’s response to their four-month-long debt strike. Fi
Many tenants had lost their job due to COVID-19, and many had borrowed money from family and friends, maxed out their credit cards, or taken out payday loans to continue paying rent — accruing a form of debt known as “shadow debt” not addressed by California’s rent-relief program. Yet in spite of the global public health crisis and the related unemployment crisis, as well as the fact that the state’s program provided only partial relief, Veritas refused to negotiate with tenants. So seeing that their corporate landlord, a $4.5 billion company, was receiving public funds —
By December, Veritas had partially caved, or with the Housing Rights Committee of San Francisco who assisted the tenants, said, “Part of what made that meeting so challenging was that people had to really listen and see other members who were dealing with something that the concessions on the table were not going to do anything about.”
Maria Toriche, a VTA member who lost her job in the beginning of the pandemic and was risking eviction to participate in the strike, was determined to carry on:
I knew a lot of tenants had lost work, and I was learning more about how big of a company Veritas is and seeing that they have the money to forgive debt and make concessions from their
own wealth, and not just rely on public money through the rent-relief program.
At that December meeting, in a show of solidarity, the VTA tenants voted unanimously to continue their debt strike.
The Veritas Tenants Association, which represents 1,200 tenants from over one hundred buildings across California, has been organizing since 2017, supported by the Housing Rights Committee of San Francisco. Their corporate landlord, Veritas Investments, considered San Francisco’s largest landlord, is a real estate investment g smaller rent-stabilized properties and maximizing pro the displacement of long-term tenants.
Founder and CEO Yat-Pang Au has publicly explained that Veritas’s target demographic in the Bay Area is millennial “techie” transplants — not the tenants actually living in the buildings his company purchases, most of whom are working- class people paying signiercent of tenants had vacated their homes. Describing the displacement of nearly a third of all their tenants as an “achievement” speaks volumes to the kind of landlord Veritas is.
Veritas’s growing dominance in the Bay Area housing market redge funds, college endowments, insurance companies, and pension funds. The foreclosure crisis entrenched global
single-family homes but expanding eventually into multifamily rentals.
This process has been aided by the development of “PropTech”: digital products and platforms that automate real-estate transactions and management and use algorithms to determine the proestment rental properties, using a “neighborhood rating algorithm” to calculate risks. Further, companies like TenantCloud and Avail optimize the management of rental properties through online portals that automate tenant screening, property listing, maintenance requests, and rent collection. As Big Tech and real estate prices skyrocketed during COVID-19 and many struggling smaller landlords sold their properties to institutional investors, private equity’s monopolies in housing markets only grew.
According to a recent report by Desiree Fields and Manon Vergerio, the four largest single-family rental operators alone now own more than 200,000 units nationwide, and the sector
has seen more than $50 billion in investor and capital transactions since the start of the pandemic. A ProPublica investigation showed that private equity he vast majority of these apartment owners are real estate investment trusts (REITs) whose combined
While the US housing market has always been exploitative, favoring landlords’ property rights over tenants’ protections, the
Creating Corporate Landlords
ways, exacerbating inequalities within capitalist housing systems. These processes have been fueled by decades of interventions at various scales that include the systematic dismantling of rental protections, the privatization of public housing, the deregulation of ed the political economy of housing, turning homes — a basic human need — into
The transformation of housing is closely associated with the global rise of tiable drive to resolve its inherent crisis tendencies by geographical expansion and geographical restructuring.” First, the mortgage market was
mortgage crisis. Then, in the wake of the resulting collapse, private equity
Financialization has occurred with varying intensity across dile, 43 percent of all rental units in Los Angeles are owned by corporate vehicles. Prior to 2008,
The term “corporate landlord” covers an array of disparate institutional frameworks and sizes — from LLCs and Limited Liability Partnerships (LLPs) to REITs and corporations owning a few dozen or several thousand rental units in one or
multiple markets. One owner may also use several LLCs or LLPs to manage their holdings, further obfuscating ownership structures and decreasing the transparency of rental markets writ large.
While the institutional frameworks and property types dirent increases — for instance through minor upgrades or “passthroughs” that transfer repair costs onto renters, which are legal in some states, like California — corporate landlords will try to squeeze pro
Corporate landlords typically view their property holdings as long-term income-generating assets that provide continuous
promental change in the tenant-landlord relationship; the corporate landlord’s client is not the tenant but the shareholder.
Taken together, these changes to the rental housing sector have had extraordinary consequences for tenants, as displacement is integrated into business models (a recent study showed that, over a
When housing transitions from its primary use value of home to a
by dispossession that subjects tenants to extractive, predatory economic practices, and tenants can appear to be vulnerable and helpless, the inevitable victims of that process.
Yet groups like the VTA are increasingly mobilizing against their corporate landlords. Recognizing the potential of building collective power across Veritas-owned buildings, VTA tenants were able to leverage their debt as power and use Veritas’s emerging housing monopoly against them. Lenea Maibaum, a VTA member and organizer with the Housing Rights Committee, explained:
I’ve always said that the more buildings Veritas buys, the smaller they actually become, because the more tenants will choose to
The Potential of Multibuilding Campaigns
In January 2022, the VTA ended its debt strike, winning historic concessions from Veritas. In addition to waiving the scheduled rent increases for 2022 and canceling residual debt not covered by the state for all tenants, Veritas committed to addressing the issue of “shadow debt.” But VTA tenants also harnessed their experiences to secure tenants’ rights at the legislative level.
The VTA, along with the Housing Rights Committee, helped formulate an unprecedented right-to-organize ordinance for the city of San Francisco that went into e
The attempted negotiating in 2020 and 2021 and then the strike, everything Veritas was doing and not doing, served as material for how the legislation should be cra
Contrary to how Veritas stonewalled its tenants for years, only responding when a debt strike threatened its ability to generate pro
These historic victories demonstrated for VTA tenants the power they hold as renters, particularly in the corporate landlord structure. Maria Toriche explained how the strike illustrated that
when tenants pay their rent, or in the case of the strike,
While rent strikes have always been a powerful tool of tenant movements, the corporate landlord structure ampli
rental streams to facilitate that expansion, and rely on rental income to pay shareholders and bondholders, tenants can fundamentally imperil the business model by withholding that revenue — a form of leverage that is multiplied by the size of the mobilizable tenant body. And if tenants are able to identify investors linked to speci
then the investors could potentially pull out, and then Veritas is forced to sell the buildings. That’s when the tenants’ association can intervene and say, these need to be taken o
The VTA has provided a blueprint for how tenants can build collective power across buildings and use that power to make demands of corporate landlords, to force legislative change, and potentially to decommodify their homes.
Another group carrying out a multibuilding campaign is the K3 Tenant Council in Los Angeles. Over the last couple of years, their corporate landlord, K3 Holdings, has bought up more than forty properties across LA, focusing on rent- stabilized buildings in rapidly gentrifying areas like Highland Park and Koreatown and utilizing cash-for keys o loophole provided by Costa-Hawkins to displace long-term tenants and convert their units to market rate. Between October 2019 and January 2021, K3 Holdings — owned by millionaire heirs Nathan and Michael Kadisha — paid tenants more than $4.3 million in move-out incentives.
In response, the K3 Tenant Council has organized twenty K3- owned buildings, with support from the Los Angeles Tenants Union, beginning in late 2020. Having mapped out their landlord’s predatory practices, the tenant council has been able to mobilize new K3 tenants, inform them of their right to stay put before K3’s tactics clear out the buildings, and help
Targeting Vulnerabilities in the Corporate Landlord Structure
tenants coordinate code violation complaints to the city, while creating greater public awareness of the issues associated with rental housing consolidation and corporate landlord practices, for instance through a recent protest at K3’s headquarters in Beverly Hills. Sixteen tenants have also
Since K3 Holdings depend upon these exploitative practices to turn a pro
The types of multibuilding campaigns carried out by the VTA and the K3 Tenant Council expose vulnerabilities in the corporate landlord structure exploitable by tenants’ associations, as well as the legislative loopholes and hypercommodi
Scholars like Fields and Vergerio recommend limiting corporate-landlord ownership in local markets, ensuring greater transparency of ownership and practices, and passing universal, broad-based renters’ protections. These measures would signit US cities but cities across the world.
With private equity expanding its market share during the pandemic and eviction moratoriums and renters’ protections expiring, the need for action has only grown more urgent. VTA tenant Maria Toriche argues, “As much as the owners of the apartments need our money to continue growing, we need a place to live.”
Mathilde Lind Gustavussen is a PhD candidate in sociology at the Free University of Berlin.
UNDER FILED
UNITED STATES / Commodification Cities
CONTRIBUTORS
Housing / Finance Capitalism / Rent Control
