• Wed. Nov 29th, 2023

    VineBrook Homes Trust: The Impact of a Multibillion-Dollar Landlord in Milwaukee

    ByEmma Wolukau-Wanambwa

    Nov 21, 2023
    VineBrook Homes Trust: The Impact of a Multibillion-Dollar Landlord in Milwaukee

    VineBrook Homes Trust, a Texas-based company, quietly arrived in Milwaukee in 2019 and quickly became the city’s largest single-family landlord. With over 1,000 homes in the Milwaukee area, predominantly located in Black neighborhoods on the north and northwest sides, VineBrook’s presence has raised concerns among local and federal officials. However, the company is now facing financial struggles and legal challenges.

    One of the key numbers that tell the story of VineBrook is the $2.6 billion in debt it has accumulated while rapidly expanding its portfolio. Between 2018 and 2022, VineBrook bought approximately 25,000 single-family homes across 18 states, leveraging its acquisitions with significant amounts of borrowed funds. Initially, the company managed to turn a small profit, but as the Federal Reserve started raising interest rates in 2022, VineBrook’s interest expenses skyrocketed, leading to heavy losses. In fact, the company reported losses of $213.7 million in the first nine months of this year alone.

    The growing concerns regarding VineBrook extend beyond its financial troubles. There are worries about the maintenance of the properties it owns. The City of Cincinnati, where VineBrook is a major landlord, filed a lawsuit alleging that the company deliberately neglected necessary maintenance and repairs. Meanwhile, in Milwaukee, where 18% of all rental homes have out-of-state landlords, tenant activists and politicians are troubled by the increasing presence of corporate landlords like VineBrook. They argue that these corporate entities are “killing blocks one by one” and displacing long-time residents.

    To address these concerns, U.S. Senator Tammy Baldwin and her colleagues have proposed the Stop Predatory Investing Act, which aims to remove tax incentives for investors buying homes in bulk. The hope is to prevent companies like VineBrook from dominating rental markets and exacerbating the affordable housing shortage in cities like Milwaukee.

    In recent months, VineBrook has also been selling off some of its properties. This year alone, it has sold over 200 homes in Milwaukee, including one that has been vacant for over 100 days on W. Townsend Street. This trend of buying and selling properties raises concerns about stability and the potential for neglect, further exacerbating affordable housing shortages.

    As the financial challenges and legal battles continue for VineBrook, the impact and consequences of the company’s operations in Milwaukee are becoming increasingly apparent. The need for effective regulation and safeguards to protect tenants and communities from predatory practices is more crucial than ever.

    Frequently Asked Questions (FAQ)

    1. What is VineBrook Homes Trust?

    VineBrook Homes Trust is a multibillion-dollar Texas-based company that specializes in single-family home rentals across multiple states, including Milwaukee.

    2. How many homes does VineBrook own in the Milwaukee area?

    VineBrook owns over 1,000 single-family homes in the Milwaukee area, primarily concentrated in Black neighborhoods on the city’s north and northwest sides.

    3. Why is VineBrook facing financial struggles?

    VineBrook’s financial struggles stem from the company’s substantial debt, which amounts to $2.6 billion. Rising interest rates have significantly increased the company’s interest expenses, leading to heavy losses.

    4. What legal challenges is VineBrook facing?

    VineBrook has faced a lawsuit in Cincinnati accusing the company of neglecting necessary maintenance and repairs. While VineBrook denies the allegations, legal battles continue.

    5. What concerns do tenant activists and politicians have about VineBrook?

    Tenant activists and politicians are concerned that VineBrook’s operations, along with other corporate landlords, are displacing long-time residents and exacerbating affordable housing shortages in cities like Milwaukee. Measures such as the proposed Stop Predatory Investing Act aim to address these concerns.

    6. Is VineBrook selling off its properties?

    Yes, VineBrook has been selling off some of its properties, including over 200 homes in Milwaukee this year. The trend of buying and selling properties raises concerns about stability and potential neglect.