How did Schwarzman afford to fete himself in this way, welcoming celebrities to his home and building literal temples to celebrate himself? In part, the answer lies in housing. Over the past fifteen years, private equity firms like Schwarzman’s have helped to lead what one commentator called “the biggest land grab since the Manifest Destiny.”8 In 2011, no landlord in America owned more than a thousand single-family home rental properties.9 By 2013, Schwarzman’s firm, Blackstone, bought more than that in a single day, at a cost of over $100 million. One of Blackstone’s companies, Invitation Homes, became the largest renter of single-family homes in America.10 More generally, in just two years, private equity firms and hedge funds bought about 350,000 bank-owned homes11 and, with the industry’s help, between 2006 and 2017, 5.4 million single-family homes transitioned from owner occupied to rentals.12 Now, nearly a third of all rentals in the United States are single-family homes.13 These statistics help to explain how Schwarzman was able to celebrate himself as he did. And they help to explain how the very nature of homeownership in America is changing, and how private equity has helped to lead the way.

In 2012, the FHFA launched a series of auctions of foreclosed homes, with the intention that the purchased houses be converted into rental properties.34 Investors developed new software that estimated the best purchases based on a neighborhood’s schools, crime, and nearness to transit, as well as possible maintenance costs. Such software allowed investors to participate in thousands of auctions and identify those properties likely to make the most money.

Many of these were legal, but some may not have been: class action lawsuits in Texas and California alleged that Blackstone’s Invitation charged illegal, excessive late fees to its residents.53 As of December 2022, the Texas case remains ongoing, but the court in California declined to certify the class of plaintiffs and dismissed the action. It did so in part because the lead plaintiff had signed his lease with Invitation’s predecessor companies, which Invitation absorbed through various acquisitions.54 In other words, the companies’ various mergers with one another had the incidental effect of insulating them from liability for their alleged past wrongdoing.

It is also important to understand where this is happening. Cities hit hardest by the Great Recession saw the largest increase in rentals.86 In fact, private equity firms concentrated their acquisitions not just on specific cities but on specific neighborhoods or what one executive called “strike zones.”87 In one Atlanta zip code, for instance, Blackstone’s Invitation Homes bought 90 percent of the homes sold over a year and a half.88 This should be no surprise: these were the places where Fannie Mae owned foreclosed homes, which Fannie auctioned off to investors in the process that started the entire rental boom. But it meant that the people who lost the most during the Recession were the ones who regained the least in the years that followed. In fact, according to one credit rating agency, Colony’s tenants were typically former homeowners themselves, people who could no longer afford a home but who often retained some ties to the neighborhood.89 By concentrating their purchases—by exercising control over local markets—private equity firms made it difficult for people to leave. Or as Jennifer St. Denis, a single mother and renter in Atlanta, told the Mercury News, “At this point I’m stuck in a renting pattern because rent increases keep going up and moving out is expensive.”90 She noted that Invitation owned most of the homes in the area that she would want to live in anyway.

Considering all this, it is helpful to see how private equity ownership worked in one specific mobile home community: Plaza Del Rey, in Sunnyvale, California. Sunnyvale sits in the center of Silicon Valley, and its largest employers include Google, Apple, Lockheed Martin, and Amazon. In 2015—the year that the Carlyle Group bought Plaza Del Rey—a typical home in the city cost well over $1 million.137 In such an environment, the mobile home park offered a pocket of affordability in a community of extraordinary expense, a place where middle- and working-class people could live and get to nearby jobs. For four decades, the park was owned by a single family, until 2015, when the granddaughter sold it to Carlyle for over $150 million.138 Residents already covered the utilities, property taxes, and cost of upkeep. But within its first year as owner, Carlyle raised rents 7.5 percent, the largest increase in the park’s forty-seven-year history. For new residents, Carlyle raised lot rents to $1,600, nearly 40 percent more than the park average.139 This didn’t just hurt people who moved in: it made it harder for existing owners to sell, eviscerating the equity in their homes that they might have built up.