MB has repeatedly argued that the ‘build-to-rent’ (BTR) model is a sham rental affordability solution because it will introduce a cabal of profit-driven businesses into the housing “market”, ultimately increasing their already huge lobbying and pricing clout.
We’ve already seen what corporatisation of Australia’s rental sector looks like, with institutions buying up student housing during the pandemic only to raise rents.
“The University of Technology Sydney (UTS) sold three accommodation buildings with 428-bed capacity to private provider Scape for an estimated $95m. The price of accommodation in the building increased 15-20% following the sale”…
“In Melbourne, a large studio apartment at a Scape complex on inner-city Swanston Street would set a student back $759 a week – about $300 more than many equivalent current listings on commercial real estate sites, and 57% higher than the city’s median unit rent of $482 a week”.
According to a survey published in The AFR in November 2022, Australian BTR projects charged a 20% premium above standard leases:
In 2019, the United Nations (UN) accused Blackstone – the world’s largest manager of privately held real estate, with $470 billion on its platform – of “wreaking havoc” in communities and contributing to the global housing crisis by increasing rents and engaging in “aggressive evictions”.
UN rapporteur Leilani Farha said the commercialisation of real estate by private equity firms such as Blackstone has made housing increasingly unaffordable and risky for many people.
“Landlords have become faceless corporations wreaking havoc with tenants’ right to security and contributing to the global housing crisis”, she said.
With this background in mind, it is disturbing to read that Blackstone and other “heavyweight” corporations are seeking to aggressively expand into Australia’s BTR residential market:
“Blackstone Inc. and Brookfield Corp. are among heavyweight investors offering hope to a housing market in crisis on the other side of the world, as they pour money into the nascent multifamily apartment market in Australia, where rental vacancies linger alarmingly around 1%”.
“Global money managers are being lured at a time when tax policy is becoming more favorable and an already tight rental market is expected to support returns”.
“Ontario Municipal Employees Retirement System, UBS Asset Management, PGGM and Greystar Real Estate Partners LLC are among other players in the sector, also known as build-to-rent”.
In last year’s UQPPES Statecraft Autumn Lecture, economist Dr Cameron Murray eloquently described the BTR farce:
“Somehow, if we replace landlords who own just a few properties and have them managed professionally by real estate agents, with large institutional owners who own many properties, and have them managed professionally by real estate agents, then… I don’t know. Something happens”.
“We never seem to ask what exactly. Like the word affordability, build-to-rent is another “long word and exhausted idiom” hiding real policy aims”.
“If the experience so far is anything to go by, this solution will turn out to be a multi-billion-dollar giveaway to existing large property owners with no benefits to housing occupants”.
Rather than addressing Australia’s housing problems at their source, BTR is just another phoney ‘affordability’ policy favoured by rent seekers for rent seekers and geared at extracting more blood from Australia’s catastrophic housing market failure.
Blackstone is just the latest corporate vampire out for the blood of Australian tenants.
