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The United Nations’ housing advisor has accused one of the world’s largest corporate residential landlords, Blackstone Group, along with other private equity firms, of “wreaking havoc” in their tenants’ communities and “helping to fuel a global housing crisis,” according to The Guardian.
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Advisor Leilani Farha and co-author Surya Deva, chairperson of the U.N. Working Group on Business and Human Rights, singled out Blackstone’s business practices in a piercing critique of the role of private equity in the housing market, The Guardian reports. Farha and Deva said Blackstone has been imposing large fees and charges for ordinary repairs and massively inflating rents, with “devastating consequences” for tenants across the globe.
Farha and Deva sent letters to Blackstone and to government officials in the U.S. and five other countries, The Guardian said. The U.N. officials accuse Blackstone and its subsidiaries of attempting to push low- and middle-income tenants out of their homes by decreasing the number of affordable houses and undertaking “aggressive evictions.”
In response to CNBC’s request for comment, a Blackstone representative referred CNBC to a letter it sent to the U.N. on Monday disputing these claims.
Blackstone’s reply to the U.N. said the U.N. advisors’ letter contained “numerous false claims, significant factual errors and inaccurate conclusions.”
Blackstone said it shares the U.N.’s “concern about the chronic undersupply of housing in major metropolitan centers around the world” and that Blackstone “has contributed to the availability of well managed rental housing by bringing significant capital and expertise to the sector.” In recent years, Blackstone Group has acquired hundreds of thousands of homes in the U.S., Asia, Latin America and Europe.
The U.N. advisors sent out letters to the governments of the U.S., Czech Republic, Denmark, Ireland, Spain and Sweden accusing them of failing to regulate corporate landlords, The Guardian said. The U.S. letter focuses on the way landlords bought homes left empty after their owners defaulted on mortgage payments during the 2008 financial crisis.
Correction: This article has been updated to include a response from Blackstone Group.