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Thursday, May 20, 2021

The bosses and landlords won the pandemic

I feel like we've been talking about the coming techno-feudal order for a long time now.  And I guess this is just a post for the sake of note taking. But it's important to understand that the pandemic, like every major disaster of the 21st Century, was another accelerating event of the larger human disaster of wealth concentration

But since the COVID-19 pandemic began, Koch Industries has been plowing money into real estate.

In March this year, The Wall Street Journal published a report headlined “Charles Koch Is Betting Big on Distressed Real Estate.” The paper reported that the billionaire’s corporate conglomerate “is emerging as a major real-estate investor during the pandemic, using its robust cash reserves to buy properties at beaten-down prices and betting on a longer-term recovery.”

Last April, a month into the pandemic, Koch Real Estate Investments made a “$200 million preferred-equity investment in Amherst Holdings LLC's single-family rental business,” according to the corporate law firm Jones Day, which said it advised the Koch Industries subsidiary on the deal. Amherst says that since 2012, “its affiliated funds have acquired and operated more than 30,000 homes.”

The same article describes Koch backing for groups that have lobbied against the CDC-imposed evictions ban.  This is a strategy to consolidate housing and finance on a larger scale than previously thought possible. The necessary result is mass displacement and dispossession of middle and working class Americans.

Starting last May, Koch Real Estate Investments began a financial relationship with Ladder Capital Corp., culminating in a $32 million equity investment in December. Ladder finances residential real estate, and The Wall Street Journal recently reported that its subsidiaries’ loans to former President Donald Trump have been scrutinized by prosecutors.

Koch Real Estate Investments was also among a group of investors that last month bought an ownership stake in SmartRent, a landlord technology company.

It's a trend in housing that got its first big bump after the 2008 foreclosure crisis. No doubt you are familiar by now with Jared Kushner's fortune in predatory mega-landlording.   COVID has only caused it to happen faster.  You may have also read this week about Blackstone's billion dollar takeover of rentals in San Diego.  

But it's important to stress that while the descent into feudalism is a national and in fact global phenomenon, it still  has to be confronted on the municipal level. Unfortunately this also happens to be where the politicians are the most clueless and/or wholly owned by real estate. In our city, for example, we have literally turned our land use policy over to a person who specializes in large scale conversion of housing into short therm rentals. This happened in the middle of the pandemic summer of 2020. A summer that is looking like the latest in a long string of wins for the bosses. 

Update: Meanwhile, even when they say they are helping, they aren't really helping

Frustrated tenants and housing advocates pleaded with the New Orleans City Council Thursday to do something to get millions in federal rental aid flowing to applicants faster, saying thousands are in danger of being evicted when a federal moratorium expires on June 30. 

Since February, the city has approved just 700 of more than 10,000 applications for the $11.6 million in rental assistance funds provided thus far under a federal pandemic relief law, said Marjoriana Willman, director of the city's Office of Housing Policy and Community Development.

How does that happen?  Well there is a long answer and a short answer. The long answer is in the details of how the assistance is structured. The city says it can't process applications fast enough because the law limits how much money it can spend on "overhead."  Because the grants process prioritizes getting money to landlords instead of directly to tenants, it gives the landlord too much power to discriminate against tenants or to refuse the help altogether in order to remain under the radar of city housing inspectors. And finally, there is still only enough money to disperse aid to about 3,000 of the (so far) 10,000+ applicants. 

The short answer is, this is how it was designed to happen.

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