And now let us pause to contemplate Richard Blum’s participation in the destruction of the American dream at the hands of a new phenomenon known as the “Wall Street landlord.”

Blum’s wife is U.S. Sen. Dianne Feinstein. The California legislator’s latest financial disclosure report, filed with the U.S. Secretary of State on May 15, includes a 2014 Blum Family Partners investment of at least $1 million in Colony American Homes Holdings.

Blum is the billionaire founder of the private-equity firm Blum Capital Partners. Colony homes are owned under the umbrella of Colony Capital, one of the largest investment firms in the world. The senator’s disclosure describes Colony American Homes as a “leading owner and provider of high-quality single-family residences for rental across the United States.”

What it doesn’t say is that the rental stock is made up of foreclosed homes purchased by a handful of investor groups and hedge funds in the aftermath of the 2007–08 financial crisis and real estate crash.

Blum is often identified as a quintessential Democratic Party insider, with ties that run the gamut from Jimmy Carter to the Dalai Lama. His private-equity firm manages about $500 million in assets, and the bulk of the fund’s portfolio is dominated by holdings in CBRE, the world’s largest commercial real estate services firm.

Though Blum has taken pains to deny it, reports say he’s worth at least $1 billion. According to a recent Roll Call survey, Feinstein’s net worth is $45.3 million, which puts her in the top tier of wealthy Washington lawmakers.

Colony American Homes was one of several investor-owned landlords highlighted in a June report from the anti-poverty advocates at the California Reinvestment Coalition (CRC). That study focused on the rise of the Wall Street landlord and its impact on California renters and would-be homeowners.

The verdict from the CRC is that Colony American Homes has not been an especially good landlord: rents are above average, utilities generally aren’t included, and maintenance is poor, at best. Moreover, would-be first-time homeowners in California often find themselves squeezed out by cash-rich corporate buyers like Colony American Homes. Rents are going up, and the landlord is nowhere to be seen.

“Neighborhoods are changing, income diversity is changing, the tenure of residents is changing,” says CRC associate director Kevin Stein, an author of the report. The investor grab of housing stock, he says, “is destabilizing neighborhoods and creating a lot of displacement.”

The CRC survey found that real estate investment trusts, private equity firms and hedge funds have spent $25 billion buying over 150,000 distressed homes around the country since 2012.

“This whole situation is only possible because of a financial crisis that was engineered by Wall Street,” says Stein. “This is investors profiting off of foreclosure.”

Stein says Gov. Jerry Brown could “use his bully pulpit to talk about the importance of neighborhood stability, and to acknowledge that there’s extreme gentrification and displacement going on.” Or Brown could pay back the $331 million he diverted from foreclosure relief for homeowners in 2012 to solve the state budget crisis. The AP reported last week that lawmakers and community groups have called on Brown to repay the money, after a Sacramento judge ruled that he had illegally funneled the foreclosure monies into the state’s general fund.

A May report from the California advocacy group Tenants Together also weighed in on so-called Wall Street landlords. The organization reported that Colony has, to date, purchased more than 2,000 formerly foreclosed properties in California and flipped them into rentals. Banks help investors do this by converting future rental income on properties into securities, which are then turned back to the investors as loans. “Wall Street has also issued over $8 billion in securities tied to almost 60,000 homes,” some owned by Colony, reports the CRC.

The loans are then used to purchase additional distressed properties, notes CRC. This has conspired to fuel a growing market in investor-purchased single-family homes.

The investor-led push to buy distressed single-family homes, says Stein, means individual buyers often get pushed out of the market. Nonprofits and developers who want to build affordable housing are often outbid, and local businesspeople, many of them from communities of color, “feel that they are being circumvented. These deals are going around local businesspeople,” says Stein. “There is an issue of the amount that [investors] are bidding and that their offers are in cash.”

Neighborhood Housing Services of Silicon Valley and the Law Foundation of Silicon Valley were two of 70 signatories to the CRC report.

Just days before Feinstein put the finishing touches on her May 15 financial disclosure report, Tenants Together released its study, “The New Single-Family Home Renters of California.”

The statewide tenants-rights organization found that renters of single-family homes from the three biggest corporate landlords in the state—Blackstone/Invitation Homes, Waypoint Homes and Colony American Homes—“pay higher rents than their neighbors and face challenges getting repairs.”

Those companies together own about 9,500 properties in California, according to Tenants Together.

Doug Henwood, an economics journalist and author of Wall Street: How It Works and for Whom, says investor-driven home purchases follow the general model of private-equity deals. “They are in it for the short-term, the medium-term,” says Henwood. “They are not in it for the long haul. The incentive is to screw the tenants over completely, minimize repairs and maximize rents.”

The senator’s disclosure report lists the Colony American Homes investment in the section of Feinstein’s “non-publicly traded assets and unearned income sources,” which also includes another Colony distressed-asset fund, Colony American Homes War I, LLC.

According to the report, Blum Family Partners has a $50,000–$100,000 investment in Colony American Homes War I and no reported 2014 income from that investment.

The disclosure form exempts Feinstein from having to provide any further detail on Colony American Homes, since the investment is held independently by Blum. As such, Feinstein didn’t have to indicate anything beyond that the investment eclipsed $1 million.

No surprise there, says Henwood.

“This is entirely consistent with the Democrats,” he said. “Real estate, and especially urban real estate, is one of the lifebloods of Democratic party financing.”

The investment in Colony American Homes earned Feinstein and Blum between $50,000 and $100,000 in capital gains and interest in 2014, according to the disclosure report.

In response to questions about the investment, Feinstein communication director Tom Mentzer says that “Sen. Feinstein has no involvement in her husband’s business decisions. Her assets are in a blind trust, which has been the case since she arrived in the Senate, and I have no information on her husband’s assets.”

A phone call to Blum Capital Partners was not returned.

UPDATE: Richard Blum provided the following statement through a public relations firm:

“Recent articles and blogs have totally mischaracterized my investment in Colony American Homes and the role the single family rental industry has on housing today.

“To be clear, I am a small limited partner in one CAH fund and, as such, I am a passive investor with no control over any of CAH’s business decisions.

“That said, the comments made about Colony American Homes and other investors in single family homes for rent are totally false and inflammatory. The investments are removing distressed inventory from the market, which has been depressing home prices. Many of these homes being purchased were foreclosed years ago, and had become a blight on neighborhoods. Instead, the investors rebuild communities and provide jobs. And they allow families who cannot buy or prefer not to, to stay in the communities they want. The average renter stays for five years.

“Finally, the homes being purchased by CAH and other investors are typically all-cash investments so they are not crowding out other buyers; most homes purchased are not even on the open market.

“Readers would be better served if the authors had bothered to check the facts about my investment and the positive role institutional investors are having on the housing market.”