As the U.S. struggles with a housing shortage, investors continue to exploit a gap in an affordable housing law to raise rents on 115,000 apartments. Congress has repeatedly failed to act.
Four and a half years ago, a newly formed corporate entity purchased a low-income housing complex with 264 apartments in Phoenix. The property had received more than $4 million in federal tax credits and, in exchange, was supposed to remain affordable for decades.
The company then used a legal loophole that stripped the affordability protections from the apartments. The maneuver appears to have been lucrative for the company, which bought the property for under $20 million and flipped it two years later for $63 million. Today, advertised rents there have gone up by around 50%.
Similar stories have been playing out across the country for years, as developers and real estate investors take advantage of an obscure section of the tax code known as the “qualified contract” provision. It allows owners of low-income rental properties that have received generous tax credits to raise […]
According to Robert Reich at their current rate of buying, by 2030 Wall Street investment firms will own 40% of all rental houses in the US… Wrap your head around that one.
Clearly, to protect renters, either state legislators or the US Congress needs to pass a law that rental rates cannot rise higher than the country’s inflation rate. That should help and not displace people who cannot afford a rent increase of 25%! Do it! It’s the right thing to do to combat these hungry and selfish corporations that are just plain greedy.