United Nations housing experts Leilani Farha and Surya Deva recently delivered a strong critique of Blackstone Group’s harmful role in the global housing affordability crisis. In a March 2019 letter to Blackstone CEO Stephen Schwarzman, Farha and Deva wrote that the corporate landlord’s business practices involving the “financialization of housing” is “having devastating consequences for people.”
Farha and Deva noted: “The financialization of housing is having a grave impact on the enjoyment of the right to adequate housing for millions of people across the world. As one of the largest real estate private equity firms in the world, with $136 billion of assets under management, operating in North America, Europe, Asia, and Latin America, your practices are significantly contributing to this.”
The UN experts also sent letters to government officials in Czech Republic, Denmark, Ireland, Spain, Sweden, and the United States, noting that private equity firms like Blackstone and its subsidiaries engage in “aggressive evictions” and “constant escalation of housing costs for tenants” in order to maximize profits.
Farha and Deva were also alarmed by Blackstone’s outsized political influence.
“We are equally concerned that Blackstone has used its considerable resources and political leverage to influence housing policy in a manner that is inconsistent with the right to housing,” the UN experts wrote to Schwarzman.
Farha and Deva cited Blackstone’s major campaign contributions to stop California’s Proposition 10, which sought to repeal statewide rent control restrictions in 2018. Blackstone and its subsidiary, Invitation Homes, shelled out $7.4 million to No on 10 committees.
“Rent control is a measure that generally serves the interests of tenants, assisting in maintaining affordable rent levels despite market fluctuations,” the UN experts wrote.
Prop 10 lost statewide after Blackstone and the real estate industry spent $77.3 million to trick and confuse California voters. Housing justice advocates have recently launched a new statewide ballot measure, the Rental Affordability Act. The grassroots effort seeks to bring rent control to California.
All in all, Farha and Deva wrote, “Blackstone’s and its subsidiaries’ business model is pushing low-income, and increasingly middle-income, people from their homes.”
The experts explained to Schwarzman that “under international human rights law, governments have an obligation to ensure access to affordable housing for the most vulnerable populations. When a private actor performs a social function that falls within human rights protections, that actor assumes the human rights obligations of the State.”
Farha and Deva noted that a number of Blackstone’s policies and measures are “inconsistent with international human rights law and norms,” including its evictions practices that result in homelessness.
“Business entities also have direct human rights responsibilities to respect and facilitate human rights, including the right to housing,” the UN experts wrote. “This means Blackstone should refrain from taking any actions that will cause harm to tenants as well as taking positive steps to ensure the realization of the right to housing.”