One of President Donald Trump’s closest friends and confidants took advantage of the Great Recession to build an unprecedented real-estate business that makes him tantamount to a modern-day slumlord—buying up homes, hiking rents, and allowing the properties to fall into disrepair. Southern California billionaire Thomas J. Barrack is the mastermind behind the scheme. Five years ago, Barrack founded a company now called Colony Starwood Homes. The company has subsequently removed 31,000 single-family homes from the US housing market and transformed them into high-cost rentals. Barrack calls it “the greatest thing I’ve ever done.” Like other Trump associates, he now stands to profit further from looser financial regulations, which he is in a position to shape through his influence with the president.
“We’re just little people in his world,” Makita Edwards, 25, says of Barrack, whose company owns the split-level neocolonial she rents in Atlanta’s eastern suburbs. Since Edwards and her family moved in last August, she says her life has been a nightmare. They went without heat in the winter and dealt with persistent water leaks. Two weeks after moving in, Edwards was lying in bed with her 3-month-old son, Mason, when the ceiling caved in and the ceiling fan collapsed on top of them. Luckily, no one was hurt.
“It’s kind of insane,” said Edwards’s mother, Marina Pope, who found the rental house on the Internet following her own divorce and a foreclosure. “I was in a rushed situation. I would never recommend this company to anyone.”
Tenants in dozens of homes in two of the company’s largest markets, Atlanta and Los Angeles, told Reveal from the Center for Investigative Reporting similar stories. Most of the homes were former foreclosures, bought between 2012 and 2015. In many cases, the house’s former owner and occupant had been wiped out by the housing bust.
Viewed from the outside, most of these houses look nice—set back from the street, with manicured lawns. Most are in the suburbs, in good school districts. But inside, many of the properties visited by Reveal look like they’ve been severely neglected. Like Edwards, other renters were struggling without heat and coping with leaky roofs. Some faced peeling tiles, collapsing counters, even a snake infestation.
“safety hazard!!!” a county code inspector near Atlanta wrote in his report of a ceiling leak that channeled water through a light fixture when it rained. A month later, the leak continued.
Tom Barrack, 70, is among the winners of the US housing crisis, which washed away the wealth of millions of people. Today, his rental empire spans at least 10 states, from California to Florida. In a speech to a University of Chicago real-estate conference in 2012, Barrack—tall, fit, pacing the room like a motivational speaker—likened managing thousands of homes across the country to running a chain of Kinko’s copy shops. His secret? “Acquisition [and] retrofit” a property and then rent it out, he told the audience. “I can’t get a plumber to come to my house for $1,500 an hour,” he added. “We retrofit many of these houses for $1,500 total.”