Across Europe, as eviction bans lift, tidal waves of homelessness threaten to devastate cities. While leaders in the UK, Ireland and elsewhere have appealed to private landlord’s compassion to find common ground with tenants during the pandemic, many are already ensuring that the “new normal” doesn’t threaten their bottom line.
In the UK – where the government last week offered last minute a stay of execution, extending an eviction moratorium until 20 September – only 7% of renters who turned to their landlord for a reduction in rents during the crisis managed to agree on a lasting deal, according to tenants group Generation Rent. Even among billionaire landlords who spent lockdown performing well-publicised charitable deeds, the return to form has been startling.
In the five months since pandemic-related restrictions began, 75,000 care packages have been hand-delivered to homeless and struggling families across England by local sporting legends including Manchester-born boxing champion Ricky Hatton and Liverpool FC’s Jamie Carragher. On social media and in videos, many of the celebrity gift-givers personally thanked John Christodoulou, the British property entrepreneur who funded the parcels through his personal foundation. In a post on 3 June, Christodoulou, who selected handout locations in the neighbourhoods of his hotels and property developments, expressed “the need to stand together for the greater good” with the hashtag #InThisTogether.
The same day, the tenants of 170 privately rented apartments in a former factory building on Somerford Grove in Hackney, east London, began being served eviction notices on behalf of their landlord, a nondescript corporate entity titled Simpson House 3 Limited. From online sleuthing, curious tenants identified the man behind the entity as a Monaco-based billionaire named Yiannakis Theophani Christodoulou – John’s birth name – whose Yianis Group lists the building among its portfolio.
Under UK law, “no-fault” evictions allow private landlords to turf-out tenants with no justification, but Philip Glanville, the mayor of Hackney, suspects another motive. He called them “revenge evictions”, targeting tenants who had the audacity to organise a joint letter, signed by over 100 residents of the block in April, requesting meetings to discuss rent decreases for people hard hit by pandemic-related job losses and lost earnings. (The eviction notices – which would only be enforceable after the moratorium has ended – called it a “business decision”. The Yianis Group and letting agents Tower Quay were contacted by email and phone calls but did not respond to questions related to this article.)
The situation at Somerford Grove, whose owner is at the same moment handing out care packages and eviction notices, spotlights the double-lives of some billionaire landlords.
Back in April, Stephen Schwarzman, the CEO of Blackstone, by many counts the world’s biggest private landlord, concluded a call with investors by touting the private equity giant’s $15 million in donations to New York’s first-responders and the city’s homeless population. But Blackstone, which has around 20,000 homes under management in Spain, has also used lockdown to push ahead with rate hikes at previously rent-controlled housing in Torrejón de Ardoz, a suburb to the north of Madrid, to bring payments abruptly up to market levels. In some cases, that meant nearly doubling the rent.
Similarly, in Berlin, the multinational Akelius announced its intention to begin gradually selling off rental housing in booming city centre locations, as it has done over years in Hamburg. It’s also continued its programme of churning home renovations, even as families are trapped in homes with children. These home improvements allow the landlord, which rents more than 40,000 properties worldwide, to exploit a legal loophole by raising rents despite restrictions.
These renovations were criticised by then-UN Special Rapporteur on the Right to Housing, Leilani Farha, for creating “a hostile environment”. In an arrangement that is unusual even among the often-opaque legal structures employed by corporate landlords, Akelius Residential is majority-owned by the Akelius Foundation, a Bahamas-based charitable foundation that bankrolls SOS Children’s Villages, an NGO best known for building homes for orphaned children.
Farha, now global director of The Shift, an NGO aiming to secure the human right to housing, says lawmakers need to understand the challenges posed by this rising form of faceless corporate landlord, and not be blinded by charitable giving.
An increasing share of the rental market
Large-scale, corporate landlords have boomed worldwide since the 2008 financial crash. In Spain, financial giants such as Blackstone and Goldman Sachs snapped up tens of thousands of apartments and homes after the cash-strapped government launched a fire sale of social housing and properties mortgaged by collapsed banks. Big corporate landlords have long held a large portion of Berlin’s rental properties, and three giants – Deutsche Wohnen, Vonovia and Akelius – combined now own more than 200,000 homes in the city. Across Britain, more than one-in-ten privately rented homes are now let by corporate landlords, according to estate agents Hamptons International.
“The fact that some of these institutional investors in residential real estate engage in charitable acts that even touch on aspects of housing – like supporting people in homelessness or building homes for children in the Global South – it highlights their failure to understand that housing is actually a human right,” says Farha.
Fidere, Blackstone’s Spanish rental company, emphasises that it is acting within the law in Madrid, where tenants’ rent-controlled contracts expired in August 2019. In Torrejon, at the height of lockdown, the landlord surprised residents by refunding months of rent paid at the rate on their previous contracts. While the Madrid Tenants Union has claimed this was an attempt to “create a false situation of non-payment, and thus be able to file lawsuits to evict us”, a spokesperson for Fidere said the refund was made in order to comply with the law, which does not allow them to accept payments for homes that lack a tenancy contract.
Fidere says it has negotiated new rents closer to market rates with the majority of tenants, while also allowing them to delay rent payments during the pandemic. But José Moreno, a tenant who lives in an apartment in Torrejon de Ardoz, says he will be unable to stay under the terms offered to him. “Fidere don’t want to negotiate with me. They only want me to pay their new rate. That, in my case, is 80% more. I am now paying €700 a month and Fidere would increase it to €1200 a month. That’s crazy,” he says.
Back in Berlin, Akelius rejected Farha’s report, which detailed a severe degradation of housing conditions, higher rents and mounting threat of eviction, as hearsay. Jordan Milewicz, CEO of Akelius Germany, says the company buys homes in need of renovations and addressing backlogs of maintenance results in noise, dust, and dirt – “that is simply a fact”.
“We fundamentally try to keep disturbances to our tenants as a result of construction to a minimum,” he says. “We would also like to point out that Akelius is generally careful and cautious regarding modernisation. We implement rental price increases following modernisations very scrupulously,” says Milewicz.
Conny, an Akelius tenant (who declined to share his full name for fear of reprisal from their landlord), acknowledges the charitable giving. But he asks for the firm to engage with the tenants’ concerns detailed in Farha’s report, of “living in unsafe, construction sites for months and sometimes without running water and central heating,” as well as their new fears about the future of their tenure.
Tenants view Akelius’ charity elsewhere as arch hypocrisy, which did not begin with the pandemic, says Conny. “You can’t hand out money for a good cause with both hands and, at the same time, trample on human rights with your business that makes that money in the first place.”
The UK has so far refused to offer funding for Covid-19-related housing debts or deliver the government’s pre-election promise to end the practice of “no-fault” evictions, of the sort used against Somerford Grove residents.
The mayor of London, Sadiq Khan, posted : “This is a prime example of how unrealistic it is to expect landlords & tenants to sort difficulties out amongst themselves.” Khan has set himself at odds with the UK government, twice calling on UK housing secretary Robert Jenrick to fund shortfalls in rent due to the pandemic and ban evictions caused by Covid-related arrears.
Farha argues that governments must guarantee the rights of tenants in conflict with powerful corporate landlords specifically. But many measures proposed to protect them are actually policies that would protect all renters.
In Berlin, devolved powers allow the city government to intervene more – including a rent cap which went into force in February, and froze or lowered rents on 1.5 million apartments for five years. Conny hopes the cap – if upheld after legal challenges – will do much to undermine the profit-maximising business model of firms like Akelius. But local governments should be given more powers to counteract corporate landlords’ tactics, he says.
“For example, there is right now a proposal for legislation regarding the transformation of rental houses into condominiums”, which would safeguard more affordable homes from being turned into luxury apartments, he says. “This is the legislation that needs to be introduced on a national level.”
Spain, under Socialist Prime Minister Pedro Sánchez, is moving to introduce rent controls on a national scale. A ban on evictions from 1 April will remain until six months after the crisis ends.
Yet tenants have demanded more. A nationwide rent strike currently claims more than 15,000 participants, demanding no rent or mortgage payments for anyone for the duration of the crisis. That’s just one of a list of demands designed to shift the perception of housing, from an asset for wealthy landlords to govern as they please, to a right guaranteed for all.
Ultimately, such bold rethinking will be necessary, says Farha, to address problems that did not begin with Covid-19, but far earlier, when governments began treating housing as a responsibility of markets and charities, rather than the duty of the state.
“Charitable acts are nice. But once you engage in the area of housing, you’ve entered a human rights domain, and there’s actually accountability that attaches to you, to your actions,” says Farha. “You can’t get out of that accountability.”
Matthew Ponsford is a London-based journalist specialising in cities, housing and environments. Follow him on Twitter.This article is from the CityMetric archive: some formatting and images may not be present.