Watchdog group finds profits soaring for real estate company facing several lawsuits
Equity Residential — a real estate company that has already faced three major lawsuits involving tenant mistreatment in the past five years – has raised rents and touted pricing power as its own income soared, according to watchdog group Accountable.US.
The findings, released June 14 from Accountable.US’s report on the 10 largest publicly traded real estate and property companies across the county, showed that Equity Residential hiked rents even as their 2021 net income jumped by nearly 45% to $1.3 billion. The company boasts some 14,851 units in the Washington, D.C. area.
The jump in income comes as rent prices have increased across D.C. over the past several years, while the COVID-19 pandemic created housing instability across the country. As of 2020, there were nearly 40,000 households in D.C. for whom paying more than $750 a month in rent would create a financial burden greater than a third of their income, the Washington Post reported. At the time, the city had fewer than 800 apartments with rent at that price.
Overall, rent in D.C. is up 1.5% since 2019 — making the average rent price $2,046, according to the Washington Post. Findings showed that during this time, these national property company’s combined profits surged more than 50% to nearly $5 billion.
“When you see the nation’s largest apartment companies leaning into inflation and banking nearly $5 billion while their top executives’ pay soars by over 22% from last year, it’s obvious the punishing rental prices on our most vulnerable populations are driven by corporate greed,” Kyle Herrig, president of Accountable.US, said in a statement about the group’s report.
In Equity Residential’s Feb. 1 earnings report, Mark J. Parrell — the company’s president and CEO — was quoted lauding their low resident turnover rates and rent increases.
“Robust demand in the fourth quarter drove high occupancy and the lowest resident turnover in our history, allowing us to continue to increase rents. We expect operations and cash flows in 2022 to accelerate further as we write new leases at significantly higher current market rent levels and benefit from continuing deep demand,” Parrell said.
Equity Residential Management recently lost a $2 million lawsuit from the D.C. Attorney General’s Office for illegally overcharging residents for rent at a D.C. complex, and the company stands at the fifth largest property ownership group in the country, with over 80,000 apartment units across the U.S.
The company’s net income increase comes as they’ve faced two other West Coast lawsuits: one in 2022, when they were sued for allegedly overcharging prospective tenants for background checks, and one in 2017, when they were sued for “dubious” late fees. Both lawsuits are currently still pending.
In a statement to CBS regarding the Accountability.US report, a spokesperson for Equity Residential said that increasing rents reflected a natural rise after the pandemic originally initiated a decline in housing prices.
“Our portfolio attracts an affluent renter that is not rent stressed. Our residents pay us, on average, approximately 19% of their income in rent,” spokesperson Marty McKenna said in an email to CBS.
Groups like Accountable.US, however, find rising rent prices disingenuous.
“Big apartment companies have joined the long list of industries using inflation as a cover to charge working families far beyond any new cost of doing business,” Herrig’s statement on the report said. “People can choose not to spend money on clothing or a new car, but they have no choice in paying rent and keeping a roof over their heads.”