VICTORVILLE– Blackstone investment management company is purchasing $1 BN worth of homes nationwide, including homes in approved High Desert communities, to lease to renters looking for a “pathway to homeownership.” Although their subsidiary, Home Partners of America, reported that ⅕ of tenants are successful in purchasing the home, a few local governments say private investors increase home prices and want to keep these homes away from investors in an effort to maintain affordability.
The Choice Lease program allows qualified tenants to work with a realtor to select a home in order for Home Partners to make a cash purchase on their behalf. The tenant is then leased that home with an option to purchase in the future provided they find their own financing. The program states that it helps creditworthy families get into rental properties with rental rate certainty for up to five years with a right to purchase lease.
Critics of private investor rent to own programs say they push up property prices by limiting the number of homes for sale, making it harder for people to become homeowners.
Community nonprofits, like the Oakland Community Land Trust, have sought to protect low-income Americans by acquiring homes and apartment buildings. They purchased houses in recent years from national companies like Invitation Homes Inc. and put the tenants on a path to affordable homeownership through a lease-to-own model.
The land trust plans to expand its holdings through a $500 million fund the state created last year to help nonprofits buy distressed homes, which investors often target. Houston also created a land trust in 2018 to assist low-income home buyers.
The Port of Greater Cincinnati Development Authority agreed last month to pay $14.5 million for rental properties. While continuing to operate them as rentals, the agency said it intends to upgrade and eventually sell the homes to their primarily low-to-middle-income tenants.
Blackstone acquired the rent-to-own company Home Partners in June 2021, paying $6B. At the time, Home Partners owned more than 17,000 houses across the country.
Although the company says it doesn’t charge tenants more for the opportunity to own a home, the Financial Times found that many tenants paid rents that were higher than computer-generated estimates of market rents.
For more information on the Choice Lease program visit https://www.homepartners.com/