A group of Democratic senators are looking into the effect of a multi-billion dollar real estate purchase that puts more than 5,200 rental units under the control of private equity firm KKR.
In a letter to KKR, U.S. Sens Elizabeth Warren (D-MA), Rev. Raphael Warnock (D-GA), Ron Wyden (D-OR), and Peter Welch (D-VT) asked how a $2.1 billion real estate acquisition could impact renters across the country. The 5,200 apartment unit purchase is KKR’s “largest-ever” apartment buildings purchase and could negatively impact renters by driving up rent costs.
“We have long raised alarm bells regarding private equity’s encroachment into the housing market,” wrote the lawmakers. “We are deeply concerned that KKR’s multi-billion dollar real estate purchase could result in even higher rents, exacerbating America’s housing crisis.”
The Congress members pointed out private equity firms’ history of using the housing crisis to rake in profits by driving up rent costs. In an April 2024 Market Report, a KKR executive seemingly described a plan to buy up distressed properties and increase rental rates, saying that KKR is “optimistic about rent growth given the structural shortage of housing and unfavorable cost dynamics for new construction in the United States.”
Three months later, KKR announced it had acquired 18 multifamily assets in the Coastal and Sunbelt markets. The deal comes after Blackstone and Brookfield also made billion dollar real estate purchases, signaling a “growing confidence” among large investors that rents and apartment values will begin to rise. The law makers said the purchases expose a pattern of private equity’s encroachment into the housing market
“Private equity firms have disproportionately pushed people of color out of affordable single-family homes and their communities through gentrification and negligent landlord practices…Whether the property is a mobile home park, single-family rental, or multi-family building, the private equity purchase playbook remains the same,” the lawmakers wrote.
The senators asked the firm to identify the methods it will use to determine rent and fee levels, ensure tenant safety and to help long-term tenants, including older tenants and tenants of color, stay in their units.