Private Equity Landlords Aren’t Just a New York City Problem
The New York Times published an article recently that described the rapid and opaque takeover of rental properties in Brooklyn by private equity firms. While the exorbitant apartment prices in NYC naturally make the city a focal point for this problem, the same real estate acquisition crisis seems to be happening everywhere in the United States, according to a report last year by ProPublica. Austin, the city I call home, is one of these places.
From 2021 to 2022, rents went up anywhere from 10-15% in Austin overall. The rent for my two-bedroom unit in North Austin went up by nearly 20%. Even though I ended up signing the lease with this outrageous price inflation, I was very frustrated with the situation, especially since the raise in my rent coincided with an abundance of problems in my complex. This included but was not limited to:
- Restricted access to resident mailboxes during business hours only
- Dirty, seemingly unfiltered pool
- Constant garbage pileups due to the inadequate dumpster pickup schedule
- Broken gates and malfunctioning FOB access
It felt like my landlord was rubbing salt into my wound by raising prices and neglecting the tenant experience, so I wanted to know who was responsible for this callous greed. Now, finding out who owns an apartment complex isn’t always as simple as looking at the property’s website. Most sites are run by a property management company, effectively shielding the real landlord from directly interacting with tenants. My landlord’s management company is Cushman & Wakefield, a large real estate service firm out of Chicago.
Cushman & Wakefield is responsible for the day-to-day operations of my complex, but ultimately, it’s the owner who decides whether their handling of those responsibilities is acceptable. The buck stops with them. Unfortunately, Cushman & Wakefield doesn’t have any interest in telling you who their client is. This is by design. While the property owner can hide as much as they want from their tenants, who they can’t hide from is the government. Find out who pays tax on the property and find out who owns it.
The Wells Branch Municipal Utility District is one of the entities responsible for collecting taxes from property owners in my area. Their record for my address leads to a company called AuraMich, LLC. When you search for this company, you discover that they don’t have a website or any outward-facing business details other than an address in San Diego. Public Utility Commission of Texas, however, did have one important piece of information, an email contact. This led me to Strata Equity Group, which uses AuraMich, LLC as a holding corporation for its real estate assets in Texas. I want to note that I’m kind of exaggerating about how much sleuthing it takes to find this information, especially since you can just make a request with the Secretary of State.
Strata Equity Group is run by the Michan family, which helps explain the name of their holding company in Texas, AuraMich. The patriarch is the founder and chairman of the group, and two of his sons serve as CEO and Executive Director. When you read Strata Equity Group’s website and marketing materials, it’s abundantly clear why I would experience ridiculously high prices and crummy service from my apartment complex. One of the most prominent mottos on the front page is “Maximizing Profits, Minimizing Risks”. There’s also a beautiful picture of a big pool in a luxury apartment complex, showcasing the group’s lucrative holdings. That pool happens to be the one right outside my window. The same one most residents avoid during the summer because of how gross it is.