Corporate Landlords Are Taking Over Housing. The Consequences Are Horrifying

Our investigation found serious problems in how the company was maintaining its properties. Mold, rat feces, exposed wire. There was dripping water in the garage right in front of the door to the house. We had a water pipe that was about to burst. If you rent a single family home, there's an increasingly larger chance that your landlord is a new breed of homeowner. Wall Street. Giant institutional investors are grabbing up thousands of homes in Atlanta, Las Vegas, Phoenix, and so many communities around the country, making housing both more unaffordable and lower quality. And one of the biggest culprits is a publicly traded company called Invitation Homes, which owns, believe it or not, 80,000 properties across the country. Dallas-based Invitation Homes is the largest operator of rental homes in the country. Invitation Homes, which has some 2,500 properties here in the Denver Metro. They have more than 9,000 properties in the Phoenix Metro alone. Invitation Homes has been deceiving consumers, violating tenant laws, and failing to keep their properties habitable. But the Federal Trade Commission has been paying attention. They've heard from renters across America, and for the first time ever, they have brought a case against a major corporate landlord, fining the housing giant $48 million in a historic settlement. We get millions of complaints every year from people reporting all sorts of abuses they are facing in their everyday life. And one of the things we've heard in the housing sector is that renters are facing a lot of abuses today. During its investigation, the FTC uncovered that Invitation Homes has engaged in deceptive and exploitative business practices for years. We alleged, I think, four really serious law violations in particular. And what we alleged is that the company saddled renters with junk fees, hidden fees that they didn't know would be included in their rent. We alleged that the company skimmed off people's security deposits systematically, withholding millions of dollars from renters. We alleged that the company failed to maintain their properties and often ignored maintenance requests from renters. And we alleged that during the height of the COVID pandemic, the company steered people away from federal eviction protections and initiated eviction actions in spite of those protections. First on the list, the FTC found that Invitation Homes used a predatory fee structure that it concealed from renters until the last possible moment. Basically, they lied about the cost of rent. The company would advertise one rent but then saddle renters with hundreds of dollars in junk fees that could jack up their rent more than $1,700 per year. Johnson says she's been about $200 in unexpected fees each month. So we have the smart home fees, the home filter fees. We also have the fee again because they don't allow you to change the water over it to your name. So you pay an additional fee for that. Sheryl writes, she's forced to pay for extras that I did not sign up for and do not want such as air filter subscriptions. In the course of its investigation, the FTC wanted to better understand the motivations of the company as engaged in these unscrupulous business practices. So it looked into what the CEO was specifically telling his employees to do. And they found this startling admission. It was the CEO of Invitation Homes who said we need to juice this hog. We need to squeeze renters for all of these fees. This was not a low-level employee. This was a deliberate corporate strategy that started at the top. And that wasn't the only corporate strategy to juice earnings. And we work with you to schedule routine maintenance visits twice a year. And 24-7 emergency maintenance telephone support is available as well. Invitation Homes promised quality inspections and constant support. In reality, the company practiced what the FTC found to be a deliberate pattern of ignoring maintenance requests, putting the health and safety of their renters at risk. I had reported this and you can see like it's cracking across the ceiling. Water damage in here. You can actually see how bad it is here. This is so wet it started to peel up. The microwave didn't work. We had to repair that. Had to get a new stove. There were folks at the company who called their maintenance procedures a train wreck. They said it was the worst they had ever seen. What our investigation found is that more than 30,000 renters had complaints about maintenance within one week of moving in. To boost their bottom line and meet investor targets, Invitation Homes prioritized profits over renters' rights. Every renter knows that if they take care of their home, they're entitled to get their security deposit back when their lease ends. But that's not the way it worked at Invitation Homes. They said themselves when it comes to security deposits, they knew they were upsetting tenants by withholding so much in security deposits, but they had to hit the numbers investors needed to see. And that's why Invitation Homes withheld 60% of the security deposits people made compared to a national average of 36%. That's millions of dollars stolen from renters just because Invitation Homes thought they could get away with it. And during the pandemic, while Invitation Homes publicly touted their support for struggling tenants, they were actually finding ways to bypass the national eviction moratorium. The way it worked is that people would fill out a declaration that the CDC circulated, and that declaration would essentially give them the ability to stay in their homes through the duration of the moratorium. What Invitation Homes did is create their own separate form called a hardship affidavit, but it didn't have any effect. And then it went on to initiate evictions against many of these folks. For those who are wronged or exploited by Invitation Homes, an urgent question remains. When will the FTC settlement reach their bank accounts? We are not keeping that $48 million. That money is going back to consumers. We administer redress ourselves. We're not using a third-party contractor. And the reason we do that is we want to make sure every dime that we can get out the door back to renters, we will get out the door to renters. As corporate landlords increasingly control more of the housing market, renters have been saddled with higher rents and worsening conditions. 20, 30 years ago, your landlord might have lived upstairs. They might have lived in a store. You probably knew them. In 2022, almost a third of single-family homes weren't sold to, you know, John and Nancy down the street. They were sold to institutional investors. This is big business. They have investors they need to answer to. They have numbers they need to meet. So many of the problems we see today are a direct result of that trend. Corporate landlords have reshaped housing, but the government is pushing back. The FTC's $48 million case against Invitation Homes marks an important start to reshaping a housing market that puts people first. Thanks for watching. Don't forget to like and subscribe to see more videos like this one, and if you ever have any ideas for what more Perfect Union should cover next, please drop them in the comments. Thanks.