Check the facts
Recent articles and blogs have totally mischaracterized my investment in Colony American Homes (CAH) 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.
—Richard Blum[in response to ‘Homewrecker,’ July 8].
Editor’s Note
The Pacific Sun stands by the ‘Homewrecker’ story.
Dear Mr. Blum,
Thank you so much for your candid letter in defense of your investment portfolio. How awful of the proletariat classes to put into question the nature of your blind but well-intentioned investments and cast a shadow of a doubt on your good-natured profit motive.
“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.”
Forgive us Mr. Blum for daring to cast a pall over the good name of CAH and the fine works which your “passive” investing makes possible for humanity. Please forgive us for not being thankful enough for what you and your admirable fellow capitalists do to help remove the blight from our neighborhoods! Thank goodness these investments in Colony American Homes (and other schemes like it) focus on helping the hard working families who would otherwise have to contend with a housing market in which prices are “depressed.” Instead we have the immense good fortune, thanks to you and your oligarch friends, of not being able to afford rents or take out mortgages on the artificially pumped-up prices of the speculative Bay Area real estate market!
“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.”
God bless the virtuous Captains of Enterprise and High Priests of Wall St. who, through their benevolence and care for the commoners, invest in good causes — like securities and derivatives and real-estate — which profit not only the tycoons and multi-millionaires but the whole community as well (though obviously not in the same proportions; roughly 99% to 1%, shall we say?)
At the board meetings of “Oligarchs Magnanimous” there’s a good feeling flowing through the hearts of our dear investors, as they experience the serenity and joy of making megabucks. But what truly makes the efforts worthwhile and causes them to feel fuzzy and warm inside is the securities-backed knowledge that their money is rebuilding communities, creating jobs and allowing families who cannot afford to buy homes (because their salaried work pays peanuts and because the astronomical cost of homes due to speculation on the real-estate market by Wall Street investors does not allow it) to be able to stay in the communities they want. Perhaps the ordinary classes “prefer not” to buy homes simply because they can’t pay a million bills for a shack really worth $400,000.
I truly appreciate the kindness and thoughtfulness of people like Mr. Blum, who show such empathy and deep understanding of ordinary individual’s and families’ plights.
“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.”
Finally, Mr. Blum’s statement à la Robert Durst, that investors put up “all-cash investements”, ergo “other buyers” — presumably meaning those of us who have to qualify for a bank mortgage — are not crowded-out, is splendidly impressive reasoning. Moreover, Mr. Blum informs us that most of the homes CAH, and other corporately owned real-estate investment and management firms like Blackstone/Invitation Homes and Waypoint Homes acquire, never even make it to the “open market.” Is there some black market we don’t know about where this is happening? Oh, yes, that would be the Insiders Trading Market conveniently located next to the NYSE there on Wall Street.
So thank you Mr. Blum for your outspoken and guileless explanation of the situation. And, quite frankly, thanks for giving us “non-investors” an insider’s glimpse of how the Oligarch thinks. For it is said in the billionaire’s investment bible somewhere that “Might makes Right” and in the Ten Commandments of Wealth Building: “Thou shalt put thyself before all others.”