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WASHINGTON, D.C. — Today, Sen. Sherrod Brown (D-OH), Chair of the Senate Committee on Banking, Housing, and Urban Affairs, hosted a news conference call to discuss a letter he wrote to VineBrook Homes Trust, Inc., a real estate company that owns tens of thousands of homes, including nearly 7,900 homes in Ohio. Brown’s letter requests information about the company and its policies after multiple Cincinnati residents reported neglectful ownership practices to Brown’s office. This follows reports that VineBrook has been aggressive in evicting tenants, and has frequently charged residents improper fees. “VineBrook’s rapid expansion and systematic neglect of properties and tenants has severe consequences, not only for the local families living in the properties but also for the entire City of Cincinnati,” wrote Brown. “In light of the many concerns raised by Cincinnati renters, aspiring homeowners, and local officials, I am deeply concerned that VineBrook’s opaque, investor-focused business model is generating outsized profits by exploiting taxpayers and families in Cincinnati and across the 20 states in which VineBrook operates.” Brown was joined by Jordan Cotleur, a staff attorney at the Legal Aid Society of Greater Cincinnati who has represented dozens of VineBrook tenants in eviction cases. |
“Vinebrook’s business practices are incredibly harmful to the Greater Cincinnati community,” said Cotleur. “The private-equity backed landlord relies on an automated online system to extract rising rents and unlawful fees while leading the county in eviction filings and failing to maintain safe and sanitary housing.”
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Brown has long fought to protect renters from bad actors in the housing market and to support access to affordable homeownership. Last month, he sent a letter to the Federal Trade Commission (FTC) asking the agency to review whether RealPage’s rent pricing software violates antitrust laws. In August, he also held a hearing on institutional investors – like banks and insurance companies -- and the current rental market, where the Committee heard testimony from Port of Greater Cincinnati Development Authority President and CEO Laura Brunner about the harm VineBrook has caused. A copy of the letter is available here and below: Dear Mr. Mitts: I am writing regarding VineBrook Homes’ ownership and management of single-family homes, particularly allegations that properties are being neglected throughout Ohio and across the country. Since 2018, VineBrook Homes Trust and its subsidiaries have acquired a significant portfolio of single-family rental homes across Ohio and 19 other states. In just four years, VineBrook has increased its portfolio of homes by 646 percent, to nearly 27,000 homes. As of September 2022, VineBrook reports that it has a “geographic market concentration” in one market, which represents more than 10 percent of the value of its homes – Cincinnati. VineBrook’s rapid expansion and systematic neglect of properties and tenants is having severe consequences for not only the local families living in the properties but also the entire City of Cincinnati. VineBrook, and its practices, first came to my attention when a resident in one of your Cincinnati-area homes contacted my office desperate for help to get their heat repaired. Your company had failed to respond to the tenant’s multiple maintenance requests, leaving them without heat for several weeks in the dead of winter. Another tenant contacted my office reporting that VineBrook was attempting to evict them for nonpayment of rent, even though the rent had been paid. Unfortunately, these tenants’ experiences were not unique. Maintenance issues have been so common at VineBrook properties that, in July 2021, the City of Cincinnati sued VineBrook Homes for unpaid fines, fees, abatement costs, and water bills. In its complaint, the city reported that many of VineBrook’s properties were now “in a state of disrepair due to deferred property maintenance and neglectful ownership practices.” In some cases, properties were “so dangerous that the City’s Building and Inspection Department has ordered them vacated and/or kept vacant.” Yet VineBrook has ignored code enforcement attempts by the city, costing the city and its taxpayers money not just in unpaid fines, but in police, fire, and maintenance costs, and lower property values for neighboring homeowners. On top of neglecting its properties and racking up costs for taxpayers, recent news reports also reveal that VineBrook has a pattern of being quick to evict its tenants and raise their rent. A legal aid attorney with the Legal Aid Society of Southwest Ohio reports that VineBrook is “one of the worst landlords in our service area” because the company frequently charges improper fees, locks tenants out of its online payment portal when they are delinquent, and frequently files to evict. VineBrook’s pattern of mistreating tenants and neglecting its properties is made possible in part by the way VineBrook structures its business. As Port of Greater Cincinnati Development Authority President and CEO Laura Brunner testified before the Senate Committee on Banking, Housing, and Urban Affairs, VineBrook’s business model is “based on maximization of profit by hiding behind a cloak of anonymity.” VineBrook has hidden its property ownership behind an increasingly complex web of limited liability companies, making it difficult for local or federal officials to determine whether VineBrook is ultimately responsible for a home. For example, it took a substantial investment of time and resources for local officials to map VineBrook’s property ownership throughout Cincinnati. When they did, they found VineBrook operated behind a cloak of more than 90 LLCs holding properties. VineBrook has built this widespread and profitable portfolio by outbidding aspiring homeowners. Cincinnati residents looking for an affordable home report that they were beat out time and again by VineBrook for the city’s starter homes, and VineBrook has a growing concentration of ownership in some neighborhoods within the city. For example, VineBrook now owns 29 homes on a single street in Cincinnati’s West Price Hill neighborhood – many of which used to be owned by individual homeowners. Families who are outbid are left with no option but to rent, possibly in the home they hoped to buy. As VineBrook has grown and pushed more families out of homeownership, renters in the Cincinnati area have faced more competition in the rental market and escalating rents. Over the past year, rents have increased more than 17 percent in the Cincinnati area, among the fastest growth in the nation. VineBrook itself reported that its rental income over six months in 2022 was more than double the rental income for the same six month period in 2021 due, in part, to “increases in rental rates.” And while VineBrook’s rate of rent increases was slower than Cincinnati’s average, its average rent increased more than eight percent over the past year alone. VineBrook’s investor materials clearly lay out the company’s objectives: “to maximize the cash flow and value of properties owned, acquire properties with cash flow growth potential, provide quarterly cash distributions and achieve long-term capital appreciation for its stock holders through targeted management and a renovation program for homes acquired.” Notably, these objectives include nothing about the well-being of residents or the communities where VineBrook does business – and that VineBrook relies on to generate profits. In light of the many concerns raised by Cincinnati renters, aspiring homeowners, and local officials, I am deeply concerned that VineBrook’s opaque, investor-focused business model is generating outsized profits by exploiting taxpayers and families in Cincinnati and across the 20 states in which VineBrook operates. To better explain VineBrook’s policies and practices in Cincinnati and across the country, please respond to the following questions by January 6, 2023:
Thank you for your prompt response to this important issue. ### |
