The Washington Post

Blackstone plans below-market rentals

-

Blackstone plans to spend $1 billion to acquire rental houses and lease them out at below-market rates, billing the program as a private-sector answer to soaring housing costs.

Home Partners of America, a single-family rental company that Blackstone bought last year, is offering the program, called Choice Lease. It will provide tenants who meet an income threshold a 10 percent discount on monthly rent payments and the option to purchase their homes at belowmarke­t rates.

The move comes as a U.S. housing shortage pushes rents and purchase prices higher. With many first-time buyers struggling to crack the market, politician­s have raised concerns about the role Wall Street investors are playing in the housing market.

Home Partners, which Blackstone acquired last year through BREIT, its nontraded real estate investment trust, has a somewhat different business model than most single-family landlords. It buys a home on behalf of its client, who then rents it back on a series of oneyear leases. At the end of each lease, the tenant can buy the house. The company owned 17,000 houses at the time Blackstone agreed to acquire it for $6 billion.

Households must earn 80 percent or less of the area median income to qualify for the Choice Lease program. That’s similar to government affordable housing programs that cap rents on certain apartments based on how much a household earns. In addition to reduced rent, Choice Lease will cap the annual increase on the purchase price of the home at 3.5 percent.

Newspapers in English

Newspapers from United States