Richard Blum and Dianne Feinstein Make Big Investment in Foreclosure to Rental Housing

I’ve reported for a while now on the phenomenon of the Wall Street landlord. During the depths of the foreclosure crisis private equity firms and real estate investors bought up thousands of single family homes in Florida, Illinois, Arizona, Georgia, and especially California. These investors did quick rehabs on these properties and then rented them out, often to households that lost their homes between 2008 and 2013 due to the global financial crash. These elite investors bet that housing prices would rebound, and thanks to the actions of the US Federal Reserve and Treasury Department they did. They also bet that there would be a shift in America’s housing market toward more renter demand. Households that lost their savings and jobs have been forced into the rental market, creating an opportunity for those with capital to obtain higher returns on real estate.

One of the biggest investors in foreclosed single family homes has been Colony Capital, the private equity firm controlled by Thomas Barrack, Jr. Colony has purchased thousands of foreclosed houses in California and other states. Colony has also sustained recent complaints from tenants who accuse the company and its rental property managers of running slum housing and charging above-market rents. Activists in Los Angeles and other cities are now pressing local and federal officials to take a closer look at the Wall Street landlord business.

But some Washington D.C. insiders have already done due diligence with respect to the new corporate landlords. A recent financial disclosure filing by Richard C. Blum, husband of California Senator Dianne Feinstein, shows that Blum and Feinstein have made a major investment in Barrack’s Colony American Homes. As a member of the University of California Board of Regents Blum is required to disclose his economic interests each year. In his filing for 2014, Blum listed an investment in Colony American Homes Holdings, LP of over $1,000,000, making Blum and Feinstein major owners of one of the largest Wall Street landlord corporations.