US Firms Buy Housing In Spain, Raise Rents And Evict Tenants

11 February 2015 – NY Daily News

Major U.S. firms like Blackstone Group, Goldman Sachs, Apollo Management and Cerberus have been quietly buying tens of thousands of residential properties in Madrid and Barcelona at low prices. In New York, advocates for tenants in Spain plan to protest at the headquarters of Blackstone Group.

It’s not just inner city neighborhoods like Harlem and the South Bronx where giant hedge funds have amassed breath-taking numbers of housing units in recent years, then sent rents soaring and sought to evict tens of thousands of longtime tenants.

Major U.S. firms like Blackstone Group, Goldman Sachs, Apollo Management and Cerberus are on a mission to conquer the housing markets of other countries as well, hoping to reap huge profits in the process.

In Spain, for instance, these firms have been vying quietly for two years to gobble up tens of thousands of residential properties in Madrid and Barcelona at fire sale prices.

None has moved more quickly than Blackstone, which is why a group of Spanish emigres in this country has joined with local housing advocates for a planned protest Wednesday outside Blackstone’s Park Ave. headquarters.

Even as unemployment has eased in our own country, Spain remains mired in deep depression — with a 25% unemployment rate, the collapse of several major banks and astronomical budget deficits. Spanish real estate prices remain 40% below their level in 2007. More than 700,000 citizens have fled the country since 2008 and some 3 million housing units sit empty.

Municipal and regional governments have resorted to selling off their small stock of public housing, along with residential mortgages previously issued by the failed banks.

Nearly 42,000 rental and mortgaged units, most of them in Barcelona, were gobbled up by Blackstone, which is already the largest owner of single-family residential housing in the U.S. Goldman Sachs bought another 3,900 units in Madrid.

Meanwhile, a conservative Spanish government made it easier for landlords and mortgage holders to evict residents who fall behind on their payments.

Between 2008 and 2013, more than 327,000 Spaniards were evicted from their homes. The public outcry became so great that a grassroots anti-eviction movement erupted, known as PAH. Thousands of people began squatting in empty apartments. The movement gained so much support that it forced the government to institute a temporary moratorium on evictions.

But just as in gentrifying neighborhoods in this city, new owners still drive up rents and harass tenants or delinquent mortgage holders into leaving, no matter what the law says.

And that’s what Blackstone has done, housing advocates claim.

“It is simply untrue to say that we are driving up rents and seeking to evict residents,” Blackstone spokesman Peter Rose said in an email response.

“We have an extensive series of programs to work with tenants to keep them in their apartments,” Rose added. “So far, only 11 tenants have been asked to leave out of more than 5,000 managed, and only then after a lengthy period of negotiation.”

“They can say what they want, but it’s not true,” said Carlos Macias, a spokesman for PAH.

The tactic of Blackstone and other private equity owners is to raise the rents on unemployed or impoverished Spaniards once their old leases expire. They then allow overdue bills to mount, and pressure tenants to leave, while they wait for the temporary moratorium on evictions to end.

“Those mortgages belonged to the Spanish people,” Macias claims, since Blackstone purchased many at low prices after the Spanish government had already nationalized the bank that issued them. “We’re not going to allow them to take our homes.”

The tenants in Harlem and Bed-Stuy and the South Bronx confronting new age private equity vultures are not alone, is the message coming from Spain

Original story: NY Daily News (by Juan González)

Edited by: Carmel Drake