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WEBVTT PROPERTIES, MEANING THEY HAVE ABIG IMPACT ON WHAT YOU PAY FORRENT.>> I GRABBED THE ANIMALS ANDTOOK OFF.WE HAD NO WARNING, NO NOTHING.>> CHRIS LOST HIS RENTAL HOMEAND JUST ABOUT EVERYTHING IN THESANTA ROSA FIRE.>> MY GIRLFRIEND WAS RENTING THEHOUSE.I HAD JUST RECENTLY MOVED IN TOHELP HER WITH THE REPRESENT,BECAUSE HER ROOMMATE WITH LEFT.>> WITH THE HOUSE IN ASHES,CHRIS AND HIS GIRLFRIEND ROBINDECIDED TO MAKE A NEW STARTWHERE THEY THOUGHT IT WOULD BECHEAPER, SACRAMENTO.>> THE RENTAL RATES ARE STILL ALITTLE CHEAPER HERE THAN INSANTA ROSA, AND NOW BECAUSE OFTHE FIRE SO MANY PEOPLE AREDISPLACED SO THERE'S GOING TO BETHAT MANY MORE PEOPLE LOOKINGFOR PLACES.>> HE ALREADY FACED ISSUES WITHLANDLORDS NOT WANTING PETS.HE HAS FOUR.AND THERE'S ONE OTHER THINGTHAT GREAT BECAUSE WE WEREN'TPLANNING ON MOVING, SO WEWEREN'T CLEANING IT UP.>> HE JOINS THE GLUT OF PEOPLELOOKING FOR RENTALS IN THESACRAMENTO AREA.THE MEDIAN PRICE FOR ATHREE-BEDROOM RENTAL HOME HEREIS NEARLY $1800 A MONTH.FOR A FOUR-BEDROOM IT'S $2100.THAT'S UP NEARLY 10% IN A YEAR.AND ACCORDING TO A REPORT BY THECAPITAL AREA DEVELOPMENTAUTHORITY, SACRAMENTO RENTALOCCUPANCY IS AT AN ALL-TIME HIGHOF 97%.BUT WHILE LOWER SUPPLY AND HIGHDEMAND ACCOUNT FOR SOME OF THEINCREASE, THERE COULD BE ANOTHERFACTOR IN THE MIX.>> THE LAST 20-PLUS YEARS THEREHAVE BEEN A NUMBER OF NATIONALOWNER OPERATORS, BUT THAT HASN'TREALLY EXISTED IN THESINGLE-FAMILY AREA.>> THE BLACKSTONE GROUP ENTEREDTHE SACRAMENTO MARKET IN 2012,AND STARTED BUYING UP HOMES AT AFURIOUS RATE.RYAN LUNDQUIST, A REAL ESTATEAPPRAISER, SAYS BLACKSTONESTARTED BUYING HOUSES ATFORECLOSURE AUCTIONS WITH CASH.>> THEY WENT ON RAMPAGE ANDPURCHASED A FEW THOUSAND HOMESIN NORTHERN CALIFORNIA.SO THAT'S NEW.SO I THINK IT'S UNCHARTEREDTERRITORY IN SOME SENSES.SO WE DON'T REALLY KNOW WHAT THEEND PRODUCT IS, BUT THERE ARECERTAINLY IMPACTS FOR THE MARKETTODAY.>> TO EXPLAIN HOW BLACKSTONE CANAFFECT THE MARKET, LOOK AT ITLIKE PIECES O A MONOPOLY BOARD.BLACKSTONE HAD BEEN A PLAYER INTHE HOTEL AND COMMERCIALINDUSTRY, LIKE THIS BIG REDHOTEL.HOMETOWNS WERE GENERALLY THEPROPERTY OF MOM AND POPINVESTORS, UNTIL BLACKSTONE ANDOTHER COMPANIES REALIZED THEYCOULD MAKE A LOT OF MONEY IN THERENTAL MARKET.>> WHEN THE REAL ESTATE BUBBLEBURST, WE SEE THIS NEWPHENOMENON OF WALL STREETENTERING MAIN STREET EN MASSE.>> SINCE BLACKSTONE WORKED WITHA LOT OF COMMERCIAL PROPERTY,THEY KEPT THEIR HOTELS ANDHIGH-RISES, BUT CREATED ANOTHERCOMPANY, INVITATION HOMES, FORTHE EXPRESS PURPOSE OF BUYING UPFORECLOSED HOMES STRICTLY TORENT THEM OUT.>> I THINK IN CALIFORNIA THEYFOUND THAT AT LEAST A QUARTER OFREPRESENTERS, OF SINGLE-FAMILYHOMES, ARE RENTING FROM ANINSTITUTIONAL INVESTOR.>> TENANTS TOGETHER, A SANFRANCISCO-BASED TENANTS' RIGHTSGROUP, WORRY ABOUT THE NEWINSTITUTIONAL INVESTORS.ACCORDING TO PROPERTY MANAGEMENTCOMPANIES, MORE THAN 25% OFSACRAMENTO COUNTY'SSINGLE-FAMILY HOMES ARE RENTED.THAT WORKS OUT TO ROUGHLY100,000 SINGLE-FAMILY RENTALHOMES IN SACRAMENTO COUNTY.AND BLACKSTONE INVITATION OWNSMORE THAN 1500 OF THEM.THAT'S JUST IN SACRAMENTOCOUNTY.THE COMPANY OWNS THOUSANDS MOREWHEN YOU FACTOR IN OTHERCOUNTIES.>> AND SO THAT'S ONE OF THEDRIVING FORCES BEHIND THE RENTINCREASES HERE SEEING INSACRAMENTO.>> THE SACRAMENTO HOUSINGALLIANCE WORKS TO HELP PEOPLEGET MORE LOW-INCOME HOUSING.THEY'RE WORRIED ABOUT THE EFFECTOF WALL STREET OWNERSHIP OFHOMES.WHILE 1500 OUT OF 100,000 MAYSEEM SMALL, THEY OWN MORESINGLE-FAMILY HOMES THAN ANYOTHER ENTITY, WHICH MEANS THEYCAN AFFECT THE MARKET.>> OWNING THAT MUCH OF THEMARKET WHEN ALL THE OTHER OWNERSHAVE MAYBE ONE OR TWOPROPERTIES, I MEAN IT CAN MAKE ASUBSTANTIAL DIFFERENCE.WE SEE BLACKSTONE AND COMPANIESLIKE IT CHARGING RATES ABOVEMARKET.THAT LEADS OTHER FOLKS TO FOLLOWSUIT.>> WITH BLACKSTONE INVITATIONPOISED TO MERGE WITH ANOTHERCOMPANY, THEY WILL EFFECTIVELYDOUBLE THE NUMBER OF HOMES THEYOWN IN THIS MARKET, MAKING THEIRINFLUENCE THAT MUCH STRONGER.>> THEY WERE CHARGING HIGHERTHAN MARKET RATE FOR AN AREA.>> WHEN INVITATION BLACKSTONERAISES THEIR RENTS, LIKE THEYHAVE OVER THE LAST FOUR YEARS,THE MOM AND POP HOMES RAISETHEIR RENTS TOO.>> IT WAS A CYCLE, WHERE WE KEPTGETTING, YOU KNOW, FEED AND RENTINCREASES, AND WE JUST GOTSTUCK.>> BILLY RENTED AN INVITATIONHOME IN 2013 WHEN SHE MOVED HEREFROM OHIO.THE COMPANY PAID FOR UTILITIESAND THEY ALLOWED HER TO HAVE HERDOG.THEY STARTED OUT PAYING $1300 AMONTH.AFTER RENEWING HER LEASE, THECOMPANY STOPPED PAYING UTILITIESAND HIT THEM WITH A BIG RENTINCREASE.>> I THINK IT WAS $1700, $1800AT THAT POINT.>> WE REACHED OUT TO INVITATIONHOMES TO GET THEIR SIDE ON THIS.THEY WOULD NOT COMMENT ONCAMERA, BUT TOLD KCRA 3INVESTIGATES THAT CORPORATEOWNERSHIP IS DOING A LOT TOPROFESSIONALIZE THE EXPERIENCEFOR RESIDENTS, AND IT'S VERYPOSITIVE FOR THE COMMUNITY, VERYPOSITIVE FOR THE PEOPLE WHO LIVEIN THESE HOMES, AND ADDED OURRENTAL PRICES ARE CONSISTENTWITH WHAT THE MARKET IS.>> THAT SCOPE GIVES THEM AGREATER AMOUNT OF POWER.IT'S SOMETHING WE'RE CONCERNEDABOUT.>> AMY SAYS THAT IF THOSE RENTSCONTINUE TO RISE SO WILL THERATE OF HOMELESSNESS AND THENUMBER OF PEOPLE FLEEINGCALIFORNIA FOR CHEAPER STATES.CORPORATE OWNERSHIP OF THESEHOMES AND MAJOR RENT INCREASESARE NOT ILLEGAL, BUT WHEN ITCOMES TO RENT 1995 STATE LAWPROHIBITS RENT CONTROL.SOMETHING RENTERS LIKE CHRISHAVE SEEN FIRSTHAND.LIVING IN AN AN EXTENDED STAYHOTEL, HE'S CONSTANTLY ON THELOOKOUT FOR A HOME WITH A YARDFOR HIS PETS, BUT HE'S SEENLET'S RISE JUST AFTER HE MOVEDHERE AFTER THE FIRE.>> THE RATES HAVE GONE UP,PLACES LIKE ELK GROVE, ANDANTELOPE.THE RATES STARTED AT $1800,$1900 WHEN WE GOT HERE, NOT THESAME HOUSES, BUT IN THE SAMENEIGHBORHOODS, HAVE GONE UP TO$2,000, $2100 IN THE LAST WEEK.>> UNLESS THE LEGISLATUREOVERTURNS THE LAW THERE'S LITTLE

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Chris Raudenbusch lost his rental home and just about everything he owned when a wildfire swept through his Santa Rosa neighborhood in October."My girlfriend was renting the house. I had just recently moved in to help her with the rent because her roommate had left," Raudenbusch said. "We grabbed, grabbed the animals and took off. We had no warning -- no nothing."With the house in ashes, Raudenbusch and his girlfriend, Robin, decided to make a new start in a place they thought would be cheaper -- Sacramento. As someone with four pets, Raudenbusch already faced issues with landlords not wanting pets. But he also has issues with credit -- not terrible credit, but it’s not perfect credit, either."Our credit scores weren't that great," Raudenbusch said, "because we weren't planning on moving so we weren't cleaning that up."So, Raudenbusch joined the glut of people looking for rentals in the Sacramento area, which turned out to be a tough challenge.A LOOK AT SACRAMENTO’S RENTAL MARKETThe median price for a three-bedroom rental home in Sacramento is nearly $1,800. For a four-bedroom, it is $2,100. That's up nearly 10 percent in the last year.According to a report by the Capitol Area Development Authority, rental occupancy is at an all-time high of 97 percent. While low supply and high demand account for some of the rent increase, there could be another factor in the mix.After the housing crash in 2007, investment funds started snapping up single-family homes. These funds are often financed by the very banks that foreclosed on these homes in the first place.One company in particular, the Blackstone Group, started buying houses at foreclosure auctions in cash."They went on a rampage and purchased a few thousand homes in Northern California, so that's new," real estate appraiser Ryan Lundquist said. "So, I think it's uncharted territory in some sense. So, we don't really know what the end product is -- but there are certainly impacts for the market today."Since Blackstone worked with a lot of commercial property, they kept their hotels and commercial buildings. They created a different company, Invitation Homes, for the express purpose of buying up foreclosed homes in order to strictly rent them out.WHO IS BLACKSTONE?Blackstone Group, an investment firm, owns the most single-family rental homes in Sacramento County. The homes are owned by a subsidiary company called Invitation Homes, which owns nearly 50,000 homes in 13 cities across the U.S. Sacramento County homes by the numbers: 397,869 single-family homes are in Sacramento County, according to 2015 U.S. Census data.101,854 of those single-family homes in Sacramento County are rented.1.54 percent of rented homes in Sacramento County are owned by Invitation Homes, a company owned by Blackstone.Looking at the top 10 property owners in Sacramento County, including all types of properties, Blackstone/Invitation Homes owns the second most property in the county.In Sacramento County, Invitation Homes owns 1,566 single-family rental homes under the names of 13 different subsidiary companies. About 1/3 of those properties are owned by a subsidiary company named "2014 1 IH Borrower LP." Here's a look at the subsidiary companies and the number of properties they own on the the county:2014 1 IH Borrower LP: 5202013 1 IH Borrower LP: 2222014 3 IH Borrower LP: 1292014 2 IH Borrower LP: 1252015 3 IH2 Borrower LP: 2182015 2 IH2 Borrower LP: 1092015 1 IH2 Borrower LP: 76IH3 Property West LP: 69IH6 Property West LP: 41IH2 Property TRS 2 LP: 21IH5 Property West LP: 20IH2 Property West LP: 13IH4 Property West LP: 3The San Francisco tenant rights group Tenants Together said it worries about these so-called "institutional investors.""I think in California they found that at least a quarter of renters of single-family homes are renting from an institutional investor," Tenants Together spokesperson Aimee Inglis said."That's one of the driving forces we're seeing behind the rent increases we're seeing in Sacramento," Sacramento Housing Alliance spokesperson Veronica Beaty said.She said the alliance is very worried about the effect of Wall Street ownership in Sacramento.While the number of homes Invitation Homes owns and rents seems low, according to Beaty, it's not. The company owns more homes than most other investors, which means it can affect the market.IMPACT ON THE HOME RENTAL MARKET"Owning that much of the market when all the other owners have maybe one or two properties, I mean, it can make a substantial difference," Beaty said. "We see Blackstone and companies like it charging rates above market -- and that leads other folks to follow suit."That means if Blackstone/Invitation Homes raises the rent it is charging, everyone else in the market will raise their rents, too.Blackstone/Invitation Homes is also poised to merge with another investment company, Starwood/Sharepoint. That merger will effectively double the number of homes that Blackstone owns in Northern California.Map of Rental Homes Owned by Invitation Homes in Sacramento County:(Can't see the map below, tap here)KCRA 3 reached out to Blackstone/Invitation Homes to get its side of the story. The company said in a statement, "corporate ownership is doing a lot to professionalize the experience for residents" and that "it's very positive for the community, very positive for the people who live in these homes."Invitation Homes spokesperson Claire Parker added, "our rental prices are consistent with what the market is."Tenants Together said that while rents continue to rise, so will the rate of homelessness and the number of people fleeing for other, cheaper states.Corporate ownership of these homes and the rent increases are not illegal. And, the 1995 Costa-Hawkins law prevents rent control of single-family homes in particular.Renters such as Raudenbusch have seen the rising rents firsthand.Living in an extended-stay hotel, Raudenbusch is constantly on the lookout for a home with a yard for his pets. He has seen rents rise since he moved to the Sacramento area after the wildfire."Since we've been up here, the rates have gone up on a couple homes," he said. "Especially in places like Elk Grove and Antelope is another one of the very low rates, started at $1,800 when we got here. And they have gone up to $2,000 and $2,100 in the last week."