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Times of San Diego
Tom York on Business: BlackRock-Owned Landlord Settles Lawsuit Over City Permit Violations
By Tom York,
2024-07-23
A home for rent in Carlsbad in 2021. REUTERS/Mike Blake
For the past several years, New York-based private equity giant BlackRock has been accused of snapping up scarce homes in San Diego when they come up for sale.
This activity had the effect of shrinking the supply of homes for individual buyers and driving up prices beyond the reach of many would-be families.
Blackrock was roiling the local real estate market, critics said.
Dallas-based publicly traded corporate landlord Invitation Homes, partially owned by BlackRock, issued a news release this week saying that it had settled a lawsuit filed by La Jolla start-up investor Neil Senturia on behalf of seven cities in the region.
Invitation said it would pay nearly $20 million to end the four-year dispute.
The action was removed to U.S. District Court in 2022, and the complaint was amended to add claims on behalf of 35 cities statewide.
Senturia, the husband of former city council member Barbara Bry, discovered what Invitation was doing through a company that used machine learning to uncover the activity.
In its release, Invitation “maintained that the complaint was without merit since it was filed.”
The statement added, “However, the company believes reaching this settlement is in the best interest of all its stakeholders and allows the company to better focus on its core business operations.”
Senturia alleged that Invitation, which owns 12,000 single-family rental homes in California, made numerous improvements to its properties without the proper permits.
This represented thousands of dollars in permits and related fees normally charged by the cities. And jeopardized the safety of renters because no inspections were conducted to OK the renovations.
In addition, the renovations increased the value of the properties, but since there was no record of the work, added property taxes due to the cities as a result of the renovations went uncollected.
Invitation first came to prominence in the Great Recession with its large-scale purchases of devalued homes, mostly in blue-collar neighborhoods.
The corporate landlord then spent about $25,000 to renovate each of the homes before renting them out.
Invitation is the largest corporate landlord in the country, according to published reports. It owns about 80,000 properties nationwide.
Len Simon, one of Senturia’s San Diego attorneys involved in the lawsuit, said, “none of the cities involved were aware that they had been wronged, but will now benefit financially and also with regard to public safety in these homes.”
Paul Howes, another attorney for Senturia, noted in a statement, “The municipalities were victimized by Invitation Homes, but at ground level, the renters were too.”
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And speaking of high home prices in the region, another report hammers home this trend.
Home prices increased 10% year-over-year from June 2023 to June 2024 in San Diego, according to the most recent monthly report from the statewide industry trade group the California Association of Realtors.
The median price of a home listed for sale a year in June was $1,054,000 compared to the year-ago number of $958,250, the CAR report said.
San Diego, as has been the norm recently, went against the statewide trend with its rising home values.
All five regions of California registered declines from a year ago, with both the Far North (-16.3 percent) and Southern California (-11.5 percent) dropping by double-digits year-over-year.
High mortgage rates continue to hamper California home sales in June, CAR reports.
The number of home sales statewide was down nearly 2% year or year.
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And what’s the situation if you are a renter? Marginally better.
The median asking rent in San Diego and environs in June fell just over 1% compared to the month before. That rent is now $2.911. This is according to a recent Rental Report from residential website Realtor.com.
We followed along with the national trend.
Nationwide, rents fell again in June, with large declines in the South, where there’s been an influx of new construction coming to market, the report found.
The report also found that some metropolitan markets have sustained hikes of up to 40% compared to pre-pandemic rents.
That’s certainly true of Tampa, which posted the largest percentage increase in the nation over the past five years.
Nationwide, the median asking rent is $1,743, down about half a percent.
This number combines the asking rent of studios, one-bedroom and two-bedroom apartments.
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San Diego residential mortgage lender Guild Mortgage says it has incorporated artificial intelligence into its internal operations.
According to a news release its GuildGPT system was built in-house and fine-tuned to help employees do a better job for customers.
“When you consider that Guild partners with more than 25 different investors and offers more than 500 distinct loan programs, you can imagine how long it could take loan officers to find the exact guideline they need,” said Guild executive Gemma Currier in the release. “Our team members can ask plain language questions and have the answer delivered within seconds.”
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Santee-based workforce nonprofit Rise Up Industries, which helps reformed gang members reenter the workforce, will share in a $1 million award announced by New York City philanthropist Tom Iovino and his family foundation.
Iovino’s Impact Prize was given to four agencies “recognizing nonprofit programs with proven outcomes leading to high-value employment for people from diverse backgrounds.”
According to a news release, Rise Up prepares members for careers in Computer Numeric Control, or CNC, machining, “a well-paying trade whose workers are in high demand.”
Rise Up said its program has a 100% placement rate for graduates, “allowing members to successfully reenter society, thereby reducing gang population and recidivism rate while also filling a regional labor market gap for CNC operators in San Diego.”
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TeachMe.To, which helps users find and book private lessons, said it has raised $5 million in seed funding,
The early round was led by Bling Capital and with participation from Marketplace Capital, 20Growth and Gokul Rajaram, as well as existing fund and angel investors.
The company said it will use the money to continue “to enhance its platform with a particular focus on tools that improve the learning experience.
TeachMe, which has grown more than tenfold over the past couple of years said its platform makes it easy to find and book local lessons of all kinds.
TeachMe.To offers lessons in a dozen categories including pickleball, golf, tennis, music and many more activities.
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Eight-year-old San Diego voice-based risk assessment startup Clearspeed said it is now working with Deloitte’s U.S. government and public services practice.
The company is a provider of voice analytics technology to assess risks in the government, insurance, banking and security sectors,
Clearspeed says it uses artificial intelligence “to analyze universal vocal characteristics as an alternative to voice biometrics, stress, emotions or inflection.”
Those services, combined with Deloitte’s industry advantage, “can help federal agencies improve their decision-making speed, detect high-risk behaviors, access more reliable risk data, and prevent risks from escalating,” according to a release.
“Our alliance with Clearspeed will be critical as we work with our federal clients to build a stronger, more resilient society where strengthening trust is at the epicenter,” said Deloitte executive Heather Reilly. “Government organizations need technologies that enable more agility, detect issues before they erupt into crises, and deliver on their missions.”
Tom York is a Carlsbad-based independent journalist who specializes in writing about business and the economy. If you have news tips you’d like to share, send them totom.york@gmail.com.
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