Protecting Distressed Real Estate From Private Equity

Elizabeth Warren and Carroll Fife warn about the potential for the worst housing market outcomes of the real estate and financial crisis of 2008 to repeat without action from federal and state lawmakers.

2 minute read

August 11, 2020, 10:00 AM PDT

By James Brasuell @CasualBrasuell


Foreclosure Sign

taberandrew / Flickr

Elizabeth Warren and Carroll Fife (the former is the Democratic Senate representative of Massachusetts and a former candidate for president, and the latter is the director of the Oakland office of the Alliance of Californians for Community Empowerment) write an opinion piece for The Washington Post calling on lawmakers to prevent private equity firms and other monied Wall Street interests from buying up distressed properties during the coming economic shocks, in a repeat of the Great Recession and financial crisis of 2008.

The Wall Street Journal recently reported that investors are “preparing for what they believe could be a once-in-a generation opportunity to buy distressed real-estate assets at bargain prices.” This profiteering is far from “once-in-a-generation” though: It’s straight out of private equity’s playbook during the 2008 financial crisis. We all know what happened then: Homeowners targeted by predatory mortgages lost their homes to foreclosure, and private equity swept in to buy those homes at depressed prices. Communities of color were hit fastest and hardest. Just a handful of years after Black homeownership hit its highest point, the devastating waves of foreclosures wiped out nearly all of the growth in Black homeownership since the Fair Housing Act repealed Jim Crow redlining in 1968.

To avoid a repeat of the same process in 2020 and the coming years, Warren and Fife provide two clear prescriptions, which could be considered economic emergency actions of top priority in a world, and a year, full of emergency necessities.

"First, pass strong federal legislation to guard against the coming wave of evictions and foreclosures, including emergency rental assistance." According to the opinion piece, Warren has authored federal legislation toward that end. The Protecting Renters from Evictions and Fees Act would establish a federal eviction moratorium for all renters until March 2021 and protect renters from fees or penalties. 

"Second, to prevent predatory companies from further destabilizing neighborhoods and profiting off the displacement of families, Congress needs to pass legislation creating new restrictions on the sale of delinquent mortgages." Warren is, again, the author of federal legislation to achieve just such an end. "Sen. Warren’s American Housing and Economic Mobility Act would stop the pipeline of these mortgages being sold to private equity firms, and make sure that communities and homeowners are put ahead of private investors." The opinion piece recommends states follow suit. A law proposed in California, SB 1079, by Nancy Skinner (D-Berkeley) would "bar the bulk sale of auctioned foreclosed properties, give occupants and nonprofits the right of first refusal to buy foreclosed homes, and raise penalties for vacant properties."

Thursday, August 6, 2020 in The Washington Post

Green rapid transit bus pulled into station in dedicated lane.

Indiana Once Again Considering Ban on Dedicated Transit Lanes

The proposed legislation would impact the construction of planned IndyGo Blue Line, the third phase of the city’s bus rapid transit system.

February 25, 2024 - Fox 59

Aerial view of New York City architecture with augmented reality visualization, blue digital holograms over buildings and skyscrapers

4 Ways to Use AI in Urban Planning and City Design

With the ability to predict trends, engage citizens, enhance resource allocation, and guide decision-making, artificial intelligence has the potential to serve as planners’ very own multi-tool.

February 20, 2024 - ArchDaily

View from shore of Sepulveda Basin water catchment basin with marsh plants along shore.

LA’s ‘Spongy’ Infrastructure Captured Almost 9 Billion Gallons of Water

The city is turning away from stormwater management practices that shuttle water to the ocean, building infrastructure that collects and directs it underground instead.

February 25, 2024 - Wired

Aerial view of downtown San Antonio, Texas.

Commentary: San Antonio Needs ‘Thoughtful Reforms’ to Improve Affordability

The growing Texas city needs a new approach to meet its residents’ housing and mobility needs.

1 minute ago - San Antonio Report

Aerial view of glass high-rise buildings on waterfront in Vancouver, British Columbia.

Video: How Tall Should Buildings Be?

Is there an ideal height — or should buildings be as tall as they need to be to fulfill housing needs?

1 hour ago - Next City

Silver train at station on elevated track with city high-rises in the background.

How Federal Policy Can Encourage TOD

Tying transit and land acquisition funding together could help produce more housing near transit hubs.

2 hours ago - Urban Institute

Senior Planner

Heyer Gruel Associates

Regional Transportation Planner

Crater Planning District Commission

Senior Planner- Long range

Prince William County Planning Office

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.