Hedge Fund Housing Horror Stories in California

ACORN Citizen Wealth Financial Justice Organizing

San Jose       At the University of California at Santa Cruz in the question and answer period after THE ORGANIZER, I got what has become a standard question about the role of social media in organizing.  I’m always kind but clear.  Social media is a fantastic and inexpensive communication tool that is invaluable for organizing, but it is not a substitute for the face-to-face work in the streets and workplaces where people can participate in the dialectic of direct back-and-forth conversation, listen and learn.

Talking to a young man involved in the social documentation program at the university who had been filming lots of tenant organizing work in Sacramento with his help I was finally able to understand why hedge funds, like Blackstone, have built a business model out of various rental schemes for the tranches of houses they acquired by sucking up foreclosed properties from banks, FNMA and others.   Rather than sprucing up and trying to resell these properties as the market has improved, they have either rented them or in many cases used various installment land purchase contracts to keep collecting, evicting, and holding onto the properties.  This is big business in Sacramento.  It turns out that single family homes in California are exempted from rent control restrictions there, allowing hedge funds sums to jack the rent at will taking advantage of the absurdly inflated rents and shortage of affordable properties.  ACCE, the former California ACORN, is helping lead the effort to put a ballot proposition forward in Sacramento to close that loophole, but it’s tough sledding on the signature drive and unclear if they will succeed in getting the measure before the voters this round.

A statewide initiative to repeal the law that blocks cities around the state from imposing rent control seems in better shape to make the ballot, and support may be both wide and deep there.  Talking to my cousins living and going to school in San Jose and Los Angeles they couldn’t believe the price of rentals in Texas, Louisiana, and Florida compared to these areas.  One talked about paying $1000 to share a room in LA for example.  Repealing Hawkins will definitely pull young voters to the polls!

Talking with the leaders of the Everett Program, ACORN’s great partner at UC Santa Cruz, we found ourselves all shaking our head in agreement when we talked about the end of the so-called American Dream of home ownership.  It seems to have already happened in California.  When I speculated that it would be commonplace around the country in ten years, there was no argument.   One of my cousins astutely observed in an early morning conversation that the only way most Californians would ever own homes is if they “were gifted.”  A similar point was made by a Santa Anna, Orange County Everett staffer.

How wide will we allow the housing divide become between the rich and the rest of us?