In what is only the latest nightmare of late stage capitalism,
Wall Street investors are now dumping money into housing that is
restricted specifically for elderly individuals.
Now this is housing for
elderly individuals who do not wanna live in nursing homes.
And considering they're retired, considering they're elderly, they're on
fixed income, so their ability to afford housing is limited to say the least.
Now, what we're seeing is that these Wall Street investors are going in and
snatching up this real estate, which again,
is really, really important to maintain for these individuals.
Now, age targeted rental housing is an alternative again,
for seniors who don't wanna live in nursing homes.
A series of high profile horror stories about Wall Street owned nursing homes has
led to increased scrutiny from regulators,
including an ongoing probe by the government accountability office and
a mention in President Joe Biden's 2022 state of the Union address.
Where he said that nursing home profiteering ends on my watch.
And by the way, the nursing homes were destroyed by Wall Street investors,
which is part of the reason why retired folks, elderly individuals are looking for
housing elsewhere, including the age restricted housing.
Now, Wall Street is gobbling up that housing, those rental units as well.
Here's Rebecca Burns of the lever, of course, because they're doing such
a great reporting here, explaining how a company known as, Welltower,
the world's largest healthcare real estate investment trust or REIT,
is buying up all of these apartments with their own retirement money.
So Americans' retirement savings are a major source of the capital that Welltower
deploys to acquire and wring profits from senior housing and healthcare properties.
As a publicly traded real estate investment trust, the company's
shareholders include major mutual funds, and more than a dozen state pension funds.
So Cenk, some of these investing instruments and
all of that can be a little complicated and complex to understand,
can you break it down for us a little more?
>> Yeah, so what they'll do a lot of times is they'll, and
every situation is different,
but they'll basically borrow money because that gives them more leverage.
So if you only have 100 bucks to deal with, obviously hypothetical here with
much lower numbers, you can only buy 100 worth of property, but
a lot of times they'll leverage and they'll go, okay,
I'll use $100 to borrow $1000 or $10,000 and I'll go buy these properties.
But then at that point, when you leverage, you have interest costs, right?
You have to pay interest for the money that you borrowed.
Well, how are you gonna make up for that?
Well, you're gonna take the properties that you bought at a certain price and
you're gonna increase the prices, whether it's rent or you're selling later, right?
And then you have to add a massive profit margin on top to make it worthwhile.
So when the private equity buys these homes, it is inevitable in the rental
case that they will drive up your rent significantly,
they must do it to maximize profit.
In fact, there's an executive in the story that admits it, okay?
To give you a sense of scale, one of the people that bought one of these, or sorry,
rented in one of these places said that they were assured that they would get
about a 2 to 5% rent increase, and they thought, well, okay,
that sounds somewhat reasonable.
We're on a limited budget.
And remember you're supposed to spend only a third of your income,
whatever it is on, on housing, right?
So they budget for them.
They're like, okay, and they're very careful with his wife, etcetera and
then they come in and go 39% increase.
>> Yeah, that's right, to elderly people.
So they get evicted, they can't afford the rent and they're out on the streets.
What are they supposed to do exactly?
>> Yeah, and well, Calamari executive,
Calamari is one of the companies that does this, okay?
Said this, this is a devastating quote, to operate, we need to cover those expenses,
unfortunately, we're passing them on to you.
>> No, but what expenses, what expenses?
Because the age restricted housing is, the private equity firms,
the investors love it because it doesn't come along with the labor costs
that nursing homes have, right?
So they can really maximize their profits.
So what exactly are they referring to when they say that, what costs?
>> Well, the funny thing is they admitted the cost.
They said it was, in this case they're like inflation has driven up costs,
our costs could be up to 9%.
Now first of all, they might still be referring to interest in this financial
scheme that they set up in the first place.
But even if it's 9%, you didn't raise their rents 9%, you raise them 39%.
They're just brutal.
And they're saying, they told it to the residents because they're like,
is the government gonna protect?
You know we bought off all the politicians.
There's not a goddamn thing you could do.
That guy added at the end,
this is an executive talking to the people that live there.
We have to show that revenue, we have no option.
And that's what I tell you.
That's what we both tell you guys all the time.
Even today Bernie in another story said, we gotta fight corporate greed, and
he did a great job.
We'll explain that later.
But it isn't greed, they all have to be as greedy as possible.
That's called maximizing profit.
>> It's how the system works.
>> That's literally their mission.
So here's an executive saying, well, of course we crushed you and
took as much of your money as possible.
We had to, we don't have an option.
We had to maximize profits.
So sad day for you guys.
We screwed you.
>> They have a fiduciary responsibility Cenk?
>> Yeah. >> Right?
Now, I should also note that not only is the federal government
failing us when they refuse to regulate industry or
these private equity firms, it's even worse than that.
Because sometimes they provide the money for these investments, which then
victimize people like these elderly people who are being evicted from their homes.
So while paying little in corporate taxes, Welltower has received more
than $65 million in federal COVID-19 relief funds earmarked for
health care providers according to quarterly earnings reports.
After spending at least $300,000 lobbying the federal government on issues
including allocation of the funds because guys, that's their investment, okay?
And they got a sweet return, invest $300,000 in lobbying, and
the federal government will write you a check for $65 million in COVID relief.
>> Again, to be fair to these companies bribery is now legal.
So you're kind of nuts not to give a $300,000 bribe if you're gonna get 65
million back, wouldn't you do it?
That's why we have to fix the system.
Wolf.pac.com, get the money out, otherwise this is gonna happen to everybody.
All right, so the last one here, because that same company, Welltower, this is so
brazen now where I live under such corporate rule,
corporations are rubbing it in your face.
They wrote business update last June saying that they expect quote,
significant future growth in the wellness housing platform.
Now, one of the reasons they said was because it quote,
operates with low to no staffing.
So first of all, they're, just bring them in, bring them,
don't give them anything, okay?
Especially compared to nursing homes.
I know nursing homes have a lot more stuff by nature, right?
But here, they're basically bragging about how they're not gonna give you anything.
But wait, that's the least problematic part.
Then they go on to say, this is amazing quote, seniors housing,
and this is in all caps, is not income dependent,
meaning, we got these seniors where we want them.
They don't have a choice.
And they explain in the paper, most of these folks have already sold their homes.
They can't go back.
So if they're renting from us, moving out,
especially cuz they're seniors is going to be prohibitive for them.
And the move out costs alone might break them.
So we have them trapped.
So it is not income dependent, just charge them more, and
they know their unlimited income, but they're, so what, they'll eat less.
This is late stage capitalism.
So this isn't capitalism, this is corporate capture of a government.
We are run not by democracy, not by politicians,
we're run by their donors, which are corporations, and
now they're rubbing it in our face saying they don't have a choice at all.
Let's just rob them.
Let's say it out in public and then get the government officials,
both democrats and republicans to protect us instead of them.
>> In a lot of ways, this country is one of the most terrifying places to live.
Just thinking about what your future is gonna look like.
And also keep in mind.
I mean, if they privatize social security right, right now there's
a retirement crisis, where most people are not able to save anything for
their retirement, what are we gonna do?
It's incredibly scary.