Leveraging the collective: Contesting California’s corporate landlords through multibuilding organising

Abstract

The financialisation of US rental real estate has accelerated since 2008, facilitated by state intervention at multiple levels. The corporate consolidation of rental housing and the profit-maximising practices pursued by corporate landlords have exacerbated pressures on tenants in the already hypercommodified housing sector. In response, some tenants have launched ‘multibuilding campaigns’ that exploit emerging oligopolies by harnessing collective power across buildings owned by the same corporate entity to force concessions and legislative change. Drawing on fieldwork carried out over 2022 and 2023, this article explores the potential of multibuilding organising through the Veritas Tenants Association’s rent debt strike against San Francisco’s largest landlord Veritas Investments, Inc., and the K3 Tenant Council’s campaign against K3 Holdings in Los Angeles. These struggles illustrate how the corporate landlord structure enables multibuilding organising – an ‘upward scale shift’ in both organising and tactics that shows potential to increase tenant leverage in the context of rental housing and state financialisation. They also demonstrate that, given the increasing entanglements between the state and financial markets, tenants are more likely to transform the terms and conditions of their housing through multibuilding organising than through reliance on the state as an intermediary. The article sheds light on how different levels of government simultaneously facilitate and internalise financialisation while introducing tactical and organising interventions to the burgeoning literature on corporate landlord contestation that suggest transformative potential.

Introduction

The wake of the 2008 subprime mortgage crisis saw the acceleration of global finance’s colonisation of residential real estate in the US (Madden and Marcuse, 2016). Facilitated by a combination of legislative interventions and initiatives such as the Federal Housing Administration’s Distressed Asset Sales Program, private equity-backed investors exploited the depressed home values, restrictive mortgage conditions, and growing rental demand of the post-crisis years and began amassing foreclosed properties and converting them to rental units at unprecedented rates (Christophers, 2021a; Immergluck, 2022). Between 2011 and 2017, institutional investors purchased more than 200,000 single-family homes, and, by the first quarter of 2022, such investors accounted for 28% of single-family home purchases nationwide (Joint Center for Housing Studies of Harvard University, 2022). While the corporate consolidation of rental real estate focused initially on single-family homes, it expanded eventually to multifamily rentals. Since 2013, private equity was behind 85% of Freddie Mac’s 20 largest apartment complex deals, becoming the primary financing model for the nation’s 35 largest apartment owners (Vogell, 2022). This development has impacted the real estate sector substantially, resulting in higher home prices, higher rents, and less available housing stock (August, 2020; Fields and Vergerio, 2022; Fuller, 2021). But it has also profoundly affected the increasingly large share of tenants who now find themselves with corporate landlords.

The Sun Belt region was both the epicentre of the US housing market’s 2008 collapse and a primary target of rental housing financialisation in its wake, in part due to a widespread lack of rent control regulation and relatively lenient tenant protections (Fuller, 2021; Immergluck, 2022). Over the last decade especially, corporate landlords have been buying up properties across California, with an increasing focus on rent-stabilised multifamily buildings. In LA, more than 43% of rental units are now owned by corporate vehicles (Ferrer, 2021), and over a six-month period encompassing the end of 2020 and the beginning of 2021, institutional investors spent more than $77 billion on rental properties in San Francisco (SF) alone (Landes, 2022). The targeting of rent-stabilised properties responds to a legislative loophole provided by California’s 1995 Costa-Hawkins Rental Housing Act, which allows landlords to reset rents to market rate when tenants vacate their rent-stabilised units (Graziani et al., 2020). This effectively incentivises the displacement of long-term tenants through practices such as tenant harassment, evictions, intimidation, or cash-for-keys offers, facilitating a form of ‘accumulation by displacement’ (Araghi, 2009) central to the corporate landlord model. Meanwhile, increased fines and fees for parking, utilities, pets, or late payments, which have become common across corporate landlord holdings (August, 2020), exacerbate the pressure on tenants already being squeezed in California’s hypercommodified housing market. To fight these practices, and secure their right to stay put, many tenants are organising against their corporate landlords and, increasingly, across buildings owned by the same corporate entity.

Multibuilding organising is a relatively new phenomenon practised by a growing number of tenant associations that leverage collective power approximating the scale of corporate consolidation to carry out rent and debt strikes, file lawsuits, coordinate code violation and harassment complaints, bargain collectively, and force concessions and legislative change. This article explores multibuilding organising’s potential through two examples: the Veritas Tenants Association’s (VTA) rent debt strike in 2022 against SF’s largest landlord, Veritas Investments, Inc., and the K3 Tenant Council’s coordinated code and harassment complaints campaign over 2021–2022 against K3 Holdings, which owns more than 60 buildings across Los Angeles. These struggles indicate how the corporate landlord structure enables multibuilding organising – an ‘upward scale shift’ in both organising and tactics that shows potential to increase tenant leverage in the financialised housing sector. They also demonstrate that, given the increasing entanglements between the state and financial markets, tenants are more likely to transform the terms and conditions of their housing through organising and direct action than through reliance on the state as an intermediary. This article explores the triangular relationship between tenant, corporate landlord, and state, shedding light on how different levels of government facilitate and internalise financialisation and simultaneously suppress emerging tenant power. Considering the implications of this for tenant organising, it also provides an empirical contribution to the emerging literature on the contestation of rental housing financialisation, in the form of a novel strategy for building and leveraging power that exploits vulnerabilities inherent to the corporate landlord structure.

To explore these tactics and strategies, the article draws on qualitative research that includes 15 semi-structured interviews with tenants and organisers from the VTA and the K3 Tenant Council as well as participant observation at several meetings and protests during two fieldwork stays in 2022 and 2023. It also uses policy analysis, publicly available reports and documents, personal communication with public officials and documents received from tenants directly, including strike letters and email communications with landlords and the housing department. Additionally, I have collaborated with tenants on multiple public writing and podcast projects focusing on tactics, strategy, and ongoing strikes/campaigns. Combining these different approaches, this article seeks to consolidate the insights into a contribution on the potential of multibuilding organising in the context of increasing rental housing and state financialisation.

It is structured around five sections. The first section reviews the literature on the relationship between housing financialisation and the state, arguing that financialisation has effectuated a repositioning of the state with critical implications for corporate landlord tenants. The next section explores how tenants globally have contested corporate landlords, arguing that multibuilding organising represents a novel intervention demonstrating transformative potential in the context of rental housing and state financialisation. The third section examines the VTA’s multibuilding organising and debt strike as well as the potential of multibuilding strikes in the corporate landlord structure. The fourth section considers the relationship between tenant, landlord, and state at the municipal level through the K3 Tenant Council’s campaign to compel the City of LA to enforce existing tenant protections, shedding light on the implications of state financialisation for housing policy while illustrating the importance of building and operationalising collective power in the face of financialised governance. The article concludes by considering future perspectives for multibuilding organising at various scales.

The financialising and financialised state

While the US housing market has always been unequal, with legislation favouring landlords’ property rights over tenants’ protections (Madden and Marcuse, 2016), the financialisation of housing has tethered global capital to local households in unprecedented ways, further skewing inequalities and exacerbating power disparities within the capitalist housing system. Housing financialisation has required decades of government interventions, beginning with the liberalisation and restructuring of international markets and capital flows in the 1970s, which facilitated a rapid growth of finance capital as well as its increased influence on distinct economic sectors and economic growth writ large (Aalbers, 2016; Karwowski, 2019; Krippner, 2012). As different markets became saturated and capital sought new avenues in its pursuit of profits, the built environment provided a ‘spatial fix’ for what Harvey designates ‘capitalism’s insatiable drive to resolve its inherent crisis tendencies by geographical expansion and geographical restructuring’, facilitating accumulation in new sectors and spaces (Harvey, 2001: 24; Fields, 2017a). Real estate, including housing, was a particularly advantageous object of financialisation because it offers, beyond its relatively secure fixed value, potential long-term revenue streams through mortgage debt and rent securitisation – revenue that can be subject to scale, discipline, and standardisation (Aalbers, 2017; Kockelkorn, 2022; Sassen, 2014). As such, Gotham (2009) writes, the financialisation of housing transforms ‘illiquid commodities into liquid resources’, effectively strapping local housing markets to global capital markets and turning homes into financial assets for speculative ends. But this process has not happened in a vacuum. Aalbers and Christophers (2014) have demonstrated how the state plays an active role in enabling financialisation, for instance by sanctioning the expansion of mortgage securitisation through the adoption of legal housing finance frameworks that promote the interests of investment banks and lenders, facilitating the invention of financial instruments that catalyse extreme and predatory speculation (Christophers, 2021a; Gil and Martínez, 2023; Sassen, 2014). Fields and Uffer (2016) and August and Walks (2018), meanwhile, have documented how governments in different geographic and political contexts have systematically rolled back tenant protections, deregulated rent control, and privatised public housing, optimising conditions for capital accumulation and precipitating the transformation of rental housing into a ‘novel asset class’.

While rental housing financialisation accelerated after 2008, its existence preceded the financial crisis. Securitisation originated with single-family residential mortgages in the 1970s, when the government-sponsored enterprises ‘Ginnie Mae’ and ‘Fannie Mae’ issued the first iteration of a mortgage-backed security alongside federal policies implemented to encourage homeownership, and proceeded to grow rapidly in the income-producing multifamily mortgage market in the 1990s alongside considerable consolidation of ownership. This shift was fuelled by the growth of real estate investment trusts (REITs), favourable interest rates, regulatory interventions by Fannie Mae and Freddie Mac – which included standardising loans, unifying instruments across states, and limiting risk factors for lenders – and a surge of commercial mortgage-backed securities (CMBS) containing a significant share of multifamily debt (DiPasquale and Cummings, 1992; Nothaft and Freund, 2003). In the early 2000s in New York City, meanwhile, private equity investors alongside local banks and landlords utilised the real estate boom and recently dismantled tenant protections to turn rent-stabilised housing into a novel asset class, pursuing a new strategy of aggressively displacing and replacing long-term tenants with market-rate tenants, termed ‘predatory equity’ by local housing advocates (Fields, 2017b). This strategy expanded beyond New York City after 2008, catalysing more extensive consolidation of residential rental real estate and eventually positioning rent-stabilized multifamily housing, previously a ‘security against unfettered market forces’ (Fields, 2017b: 590), as an investment object for finance capital.

Moreover, after 2008, the federal government largely abandoned homeowners saddled with massive debts, instead bailing out financial institutions, enabling a massive value transfer from homeowners to institutional investors (Fields, 2017a; Christophers, 2021a). Federal programmes that incentivised conversion of foreclosed homes to rental properties, alongside post-crisis conditions – growing rental demand, depressed home values, stricter mortgage regulations, and digital advances facilitating the automation of acquisition and management (Mills et al., 2017) – combined to fuel the private equity-backed takeover of residential rental real estate, beginning with single-family homes. In early 2012, in order to stabilise distressed housing markets and create rental opportunities in areas with high foreclosure rates, Fannie Mae and Freddie Mac, both of which had amassed large quantities of foreclosures during the crash, held pilot sales wherein investors could buy foreclosed properties in bulk at further reduced prices, while the FHA expanded its Distressed Asset Sales Program to stimulate the rental market (Immergluck, 2022). Many of these properties were purchased through REITs or real estate operating companies, which also began acquiring large quantities of distressed apartment portfolios from hedge funds and private equity firms who had pursued a speculative strategy of ‘flipping’ highly leveraged assets before the 2008 collapse (August and Walks, 2018; Fields and Uffer, 2016). Then, in 2013, Blackstone’s rental subsidiary Invitation Homes pioneered a novel security backed by rental streams from recently acquired properties, securing new capital sources to finance future purchases, thus facilitating further consolidation of rental housing (Mills et al., 2017). The financial instrument was promoted to investors as resilient against housing bubbles or economic downturns, emphasising low turnover, premium locations, high occupancy, and reliable tenant income streams (Fuller, 2021). It was endorsed by Fannie Mae, most notably in 2017 when the government-sponsored enterprise guaranteed up to $1 billion of Blackstone’s single-family rental bonds (Dezember and Timiraos, 2017).

The government’s role in facilitating financialisation before 2008, and the moves undertaken after the 2008 crisis to legitimise rental housing as a novel asset class rather than bailing out underwater mortgage holders, indicate the increasing entanglements of financial markets and states as well as the state’s dependence on market liquidity and stability (Fields, 2017a; Gil and Martínez, 2023; Sassen, 2014). This entanglement results, Christophers (2021a: 133) writes, ‘in policies that consistently prioritize market “de-risking”. Such de-risking occurs through both the guaranteeing of systemic liabilities in times of crisis and the enabling of the creation of new asset classes as markets emerge from crisis’. Adisson and Halbert (2022) argue that this inevitably results in financialisation of the state itself, as ‘its policy priorities and calculative practices evolve in line with those of financial market institutions. Financialization by the state’, they write, ‘goes hand in hand with financialization of the state’ (Adisson and Halbert, 2022: 491, emphasis in original). As such, state financialisation also transforms the state–citizen relationship. When market robustness and liquidity take priority, Karwowski (2019: 1019) argues, ‘the changed relationship between the state and financial markets … diminish[es] the sovereign’s duties and accountability towards its citizens’.

Moreover, as real estate values have grown exponentially, real estate capital and interests have become increasingly intertwined with state interests, exercising outsized influence over policy and planning practices, especially at the municipal level, precipitating a political formation Stein (2019) terms the ‘real estate state’. The alignment of state and real estate interests is indicative of a wider transformation of urban governance in the age of financialisation, wherein policy and policy enforcement are conditioned on their generative potential. While urban space, alongside the housing sector, has absorbed surplus value, cities are increasingly realising entrepreneurial strategies, as Peck and Whiteside (2016: 2039, emphasis in original) argue, ‘through financially mediated means and in conjunction with credit market actors, agencies, and intermediaries’. Although entrepreneurial norms and practices remain ubiquitous, the authors argue, cities have become increasingly dependent on the municipal bond market as a result of federal retreat, which, in turn, has conscripted urban governance to bond market logics and discipline, though to varying degrees (see also Jenkins, 2021). Beswick and Penny (2018: 614) suggest that we are witnessing ‘a form of financialized municipal entrepreneurialism, predicated on speculative residential real-estate development and enhanced engagement with capital markets’. As municipal budgets become financialised and urban debt proliferates, creditors effectively become a ‘second constituency’ (Peck and Whiteside, 2016) whose interests municipal governments seek to protect through interventions that include marketisation of public assets, austerity measures, and securitisation of revenue streams through programmes such as tax-increment financing or payment-in-lieu-of-taxes, and through inflating real estate markets. Yet the underlying growth imperative and financialised entrepreneurial logic motivating this form of urban governance are frequently at odds with the interests of citizens who experience dispossession or displacement as a result; as Karwowski (2019) writes, the state’s accountability to financial markets diminishes its accountability to citizens.

Through this lens of multi-scalar state financialisation we can view the bailouts of lenders and institutional investors over underwater homeowners and the failure to meaningfully regulate landlords, who are increasingly tied to global capital, as expressions of a mode of governance where the primary constituency has been supplanted by a secondary constituency; the financialised state’s primary constituency is not the citizen but financial markets and institutions. The resulting governance paradigm has produced ‘a landscape of crisis for tenants and of new opportunities for diverse investors’ (August and Walks, 2018: 125), positioning tenants as the ‘unwilling subjects of financialization’ (Fields, 2017b) and the state as both facilitator and beneficiary of that dynamic, disinclined to shift the power imbalance in tenants’ favour. Consequently, this article argues, tenants are more likely to secure victories and structural change through organising rather than through legislative protections, which situate the municipal government as an intermediary between tenants and landlords. The following section reviews the literature on corporate landlord contestation before introducing the novel multibuilding approach pursued by the VTA and the K3 Tenant Council.

Contesting global corporate landlords

The financialisation process and ramifications for tenants vary depending on local legislative and market conditions. In California, the state’s 1995 Costa-Hawkins Rental Housing Act – which restricts municipal rent-control ordinances and allows landlords to reset rents to market rate when a tenant vacates their rent-controlled home, effectively incentivising the displacement of long-term tenants – has motivated a focus on rent-stabilised properties (Ferrer, 2021; Graziani et al., 2020). In a similar manner to the ‘predatory equity’ identified in Fields’ (2017a) study of New York City, this has intensified tenant harassment and accelerated eviction filings as profit accumulation becomes contingent on tenant displacement (Ferrer, 2021). My interviews with tenants and organisers from the VTA attest to this dynamic. They describe their landlord pursuing a set of diverse tactics aimed at forcing tenants to ‘self-evict’, including cash-for-keys offers, invasive construction work, and maintenance neglect – ranging from elevators not working for months and defunct smoke detectors to the failure to carry out mould remediation or pest control. Tenants from the K3 Tenant Council, meanwhile, described additional punitive and disturbing measures, including one property manager leaving a dead rat in a bag with a tenant’s name written on it outside their building after the tenant complained about conditions in their unit, as well as other property managers threatening to call Immigration and Customs Enforcement on undocumented tenants. K3 has also denied a tenant suffering from severe asthma access to an inspection report detailing black mould in their apartment, required by the tenant’s health insurance to cover further tests and treatment, and retaliated against tenants who organised with the K3 Tenant Council. In one case, K3 filed evictions against two tenant leaders for ‘nuisance’, as well as criminal burglary charges against one of them, after the pair led an action to block construction work in their building. While tenant harassment and the pursuit of extractive rents are not uncommon characteristics among smaller so-called ‘mom-and-pop’ landlords, it occurs systematically in the corporate landlord structure as a deliberate and methodical tactic to expedite profit maximisation via displacement (see also Ferrer, 2021). Relatedly, larger landlords have been found to file evictions and ‘serial evictions’ at increased rates compared to smaller landlords, underscoring how tenant turnover is instrumental to optimising revenue streams (Gomory, 2022; Immergluck et al., 2020). As such, these practices reflect a fundamental transformation of the tenant–landlord relationship. Under financialisation, not only does the relationship between the state and its citizens change, but a landlord’s primary client, as Kusiak (2021) writes, is no longer the tenant, but the investor.

In response, tenants globally have organised and adapted existing repertoires of contention (Tilly, 1986) against financialisation and corporate landlord practices. Examples range from the Deutsche Wohnen & Co. referendum to expropriate corporate landlords in Berlin (Kusiak, 2021) and the Platform for People Affected by Mortgages’ campaign against Spanish bank Bankia – which used eviction blockades, legal assistance, and occupation of the bank’s offices and buildings, among other tactics, to prevent evictions and secure debt cancellations (Martínez and Gil, 2024) – to community organisations’ use of ‘action research’ in New York City in the wake of the 2008 crash to expose private equity owners of overleveraged buildings, attempting to get financial supervisors to lower their ratings (Fields, 2017b). Meanwhile, Habita in Lisbon has employed strategies targeting different phases of financialisation, including direct negotiation with public authorities, media campaigns, and legal tactics (Saaristo and Silva, 2024), and in Copenhagen, Blackstone tenants, alongside the tenant union, politicised the company’s takeover of rental housing and its tactics through a media campaign that culminated in national legislation restricting Blackstone’s operations (Christophers, 2021b). In 2018, the Tenants Union of Barcelona launched a ‘Stay Put campaign’ in response to a sharp increase in ‘invisible evictions’– corporate and non-corporate landlords refusing to renew existing leases and imposing large rent increases – under which tenants remain in their homes paying their ‘old’ rent (Guzmán, 2024). The Stay Put Campaign combines this tactic with collective actions, attempting to force landlords to negotiate with individual tenants and bargain collectively with the tenant union. In shifting contention from the individual to the collective, Guzmán argues, the Stay Put campaign follows an ‘upward scale shift’ (Tilly and Tarrow, 2015) approach, organising at a higher scale to increase leverage. This resembles the VTA and K3 Tenant Council’s multibuilding approach, which, although structured around individual corporate landlords, seeks to build power across units and buildings owned by the same corporate entity to increase tenant leverage. This novel form of organising responds specifically to conditions of financialisation by harnessing the scale of the collective produced by corporate consolidation. The upward scale shift from individual units or buildings to the portfolio level has the capacity to increase tenant leverage precisely because it mirrors the scale of ownership and thus the potential impact of the tactics deployed, such as rent strikes. As such, unlike many tenant unions, which typically organise across buildings within a specific geographic location against multiple landlords, multibuilding organising more closely resembles some labour union structures wherein workers organise across individual sites, building power, pursuing collective bargaining, and striking together against one single target.

Meanwhile, withholding rent – in Barcelona the difference between the original and imposed higher rent, and for the VTA rent itself – draws on a long tradition of strikes as a ‘modular repertoire of contention’ (Tarrow, 1993), originating within the labour movement but modified and utilised across social movements. While rent strikes have long been a powerful tool of tenant movements to contest rent increases or habitability issues, in some cases even with legal protection (Guzmán and Ill-Raga, 2022), multibuilding strikes against the same landlord present a novel adaptation of the modular tactic in response to financialisation, merging an ‘upward scale shift’ in organising with a corresponding scale shift in tactic, exploiting the inherent potential of organising against increasingly concentrated targets. As the following section on the VTA indicates, the tactic’s effectiveness could be amplified by corporate landlords’ reliance on debt financing – including rent securitisation – to facilitate their portfolio expansions, since withholding rent could potentially jeopardise the landlord–investor relationship and the ability to pay debt obligations, especially if the strike is carried out across multiple buildings or portfolio-wide to maximise leverage. As such, this article contributes an organisational and tactical intervention to the literature on corporate landlord contestation, showing potential for transformative results in the context of rental housing and state financialisation.

Multibuilding organising and debt as power

The VTA was founded in 2017 after a tenant brought an eviction lawsuit to a counselling clinic hosted by the Housing Rights Committee of SF (HRC), a city- and donation-funded organisation that has supported tenants since 1979. Brad Hirn, an HRC organiser, began ‘door-knocking’ buildings owned by the tenant’s landlord, inquiring about issues and informing tenants of their rights. A tenant from the first building Hirn approached informed him that she had noticed ‘Rent SF Now’ signs popping up beside buildings in her neighbourhood – signs used by Veritas to attract new tenants after purchasing a property – and began volunteering alongside Hirn to ‘door-knock’ recently acquired Veritas buildings. Subsequently, they organised meetings for tenants at those properties, and, in the fall of 2017, the first city-wide VTA meeting took place with representatives from 15 buildings. Over the next few years, the VTA continued to expand, eventually organising tenants in over 100 Veritas-owned buildings, including in LA, Alameda, and Oakland as Veritas expanded into those markets, transforming the VTA into a state-wide tenants association.

While the VTA built power, Veritas continued growing its portfolio. CEO Yat-Pang Au founded Veritas in 2007 with fewer than 100 units. Then, in 2011, Veritas purchased Skyline Realty’s portfolio of overleveraged assets, which had collapsed during the recession, instantaneously ballooning Veritas’s holdings to more than 200 buildings with over 5000 units, primarily in SF (Alexander and Maloney, 2019). As of 2022, partnering with Baupost Group, one of the world’s largest hedge funds, and Ivanhoe Cambridge, the real estate wing of Canada’s largest pension fund, Veritas had purchased more than 320 buildings across the Bay Area and LA, financed primarily through single-asset, single-borrower commercial mortgage backed security (CMBS) loans collateralised by portfolios of dozens of buildings, such as the Veritas Multifamily Portfolio Pool, a $688 million CMBS loan secured by 61 buildings (Rogers, 2023). Veritas describes itself as a ‘technology-enabled’ real estate management company that is ‘realizing the potential of an overlooked asset class’, referring to rent-controlled buildings with fewer than 50 units (Veritas, n.d.). In practice, the company specialises in acquiring smaller rent-stabilised properties and maximising profitability by automating and optimising management, increasing fines and fees, and using harassment tactics to force out existing tenants; in 2023, the Anti-Eviction Mapping Project named Veritas the Bay Area’s ‘worst evictor’ (see also Alexander and Maloney, 2019; Hepler et al., 2022). Au has described the company’s target demographic as millennial ‘techie’ transplants (PREA, 2019), rather than the predominantly working-class tenants inhabiting the buildings Veritas purchases. Moreover, in a structural and collateral term sheet filed with the Securities and Exchange Commission in 2013, Veritas described rent-controlled apartments as ‘potential cash flow upsides’ while boasting of having ‘achieved an annual turnover of 30.7% of total units’, meaning that over a 12-month period, nearly a third of tenants had vacated their homes (JPMBB, 2013). Characterising the ‘turnover’ of more than 30% of tenants as an ‘achievement’ provides a trenchant summary of Veritas’s business model.

For nearly all of their buildings, Veritas has set up individual Limited Liability Companies (LLCs) with undisclosed ranks of investors, a structure that serves to maximise financial benefits, shield investors from litigation and debts, and obscure ownership structures while also decreasing the transparency of the rental market writ large. In 2022, Veritas COO Jeff Jerden encapsulated the obfuscation of this arrangement to the San Francisco Chronicle: ‘We don’t own the land, we don’t own the building. We manage the property on behalf of investors’ (Hepler et al., 2022). While the opaque network of LLCs poses considerable challenges for individual tenants experiencing illegal rent increases, habitability issues, or harassment, the VTA, through multibuilding organising, has managed to document patterns and connect tenants, who in turn have forced concessions by leveraging collective power that mirrors the scale of Veritas’s growth. In 2018, more than 100 tenants from 39 buildings filed a lawsuit against Veritas for using harassment tactics to displace rent-stabilised residents, which was settled in the tenants’ favour with financial compensation in 2022. And after SF passed city-wide legislation limiting future ‘passthrough’ of maintenance and operations costs, including debt services and property taxes, onto tenants via rent increases in 2018, the VTA used public actions to force the rollback of previously instituted ‘passthrough’ rent increases at 34 Veritas buildings, securing refunds for tenants in the form of credits (CBS News, 2019). These victories, which resulted from multibuilding organising, illustrate a core paradox of the corporate landlord structure exploitable by tenants associations: as corporate landlords increase their market share, they simultaneously expand the tenant body capable of leveraging its power against them, provided those tenants organise across buildings.

Then, tenants coupled this upward scale shift in organising with a novel adaptation of the ‘modular’ strike tactic. ‘Tenants are the center of power because tenants pay rent’, Hirn explained in an interview, articulating the theory behind rent as power – a key source of tenant leverage. ‘If you become strike ready, and you figure out how to unite with your neighbors, and put a strategy together that hits the landlord’s income – hits the revenue for that company – who knows what kind of leverage you will create?’ The VTA posited that by withholding rent – eliminating the income streams through which Veritas financed their portfolios and generated profits for their investors – tenants could create a crisis of capital, especially if the strike was carried out across multiple buildings or portfolio-wide to maximise leverage, and force concessions from the landlord.

The VTA first used this tactic during the COVID-19 pandemic, when they carried out a five-month ‘rent debt strike’, the first of its kind in the US. At the beginning of the pandemic, many tenants lost their jobs and were unable to pay rent. As a result, their ‘rent debt’ accumulated each month, in many cases reaching thousands of dollars. Some tenants also accrued ‘shadow debt’, a term describing the practice of borrowing money from family and friends, maxing out credit cards, or taking out payday loans to cover other debts including rent. To keep tenants housed and limit coronavirus transmission, policymakers implemented ‘eviction moratoria’ that (temporarily) significantly reduced eviction filings (Hepburn et al., 2023). Nevertheless, tenants’ rent debt continued to mount. In response, states rolled out federally funded rent-relief programmes through which eligible tenants could apply for rental assistance (Hepburn et al., 2023). Although many VTA members applied, it quickly became apparent that the programme covered only a portion of the rent debt, while shadow debt was not addressed at all. (A survey of 30% of California rental assistance applicants showed that the average respondent had incurred over $3050 in shadow debt [Reina and Goldstein, 2021: 2]) Meanwhile, Veritas refused to forgive tenants’ remaining balances or negotiate with the VTA. At this point, tenants grew infuriated, a sentiment only compounded by the realisation that their landlord had received nearly $6 million in public assistance through the Paycheck Protection Program, a federal pandemic programme intended for small businesses (Eskenazi, 2020). Seeing that Veritas was receiving public assistance first through the Paycheck Protection Program, then through California’s rent-relief programme in the form of tenants’ rent debt subsidies, while refusing to offer any form of debt relief, 50 tenants across several buildings decided to withhold their applications for rental assistance, transforming their individual debt into collective leverage, in September 2021, right before the city’s eviction moratorium was set to expire.

The transformation echoes a reframing outlined by the Debt Collective, the debtor’s union founded after the 2008 financial crash with ties to the Occupy movement. Rather than framing indebtedness as an individualised, isolating experience rooted in personal moral failing, the Debt Collective argues that debt can be a source of collective power through organising. Under conditions of finance capitalism, ‘debtors exercising power over concentrated creditors provides leverage over a wide swath of important institutions, not just an opportunity to reduce individuals’ indebtedness’ (Appel et al., 2019: 4–5). As such, debt strikes carry potential across financialised sectors, including medical debt, bail debt, or mortgage debt, as long as those debtors are organised so they can seize opportunities when they arise – as was the case with student debtors who have secured over $2 billion in debt cancellation through Debt Collective campaigns (Debt Collective, n.d.). This was also the case for the VTA whose unprecedented rent debt strike was made possible by the solidarity built over prior years of organising. Because the VTA had already transitioned from atomised to collective action, rather than experiencing their debt as an individual burden and applying separately for relief, they understood it as a source of power.

In December 2021, four months into the strike and six weeks before the state’s deadline to apply for rent relief, Veritas partially caved, offering to waive a scheduled annual rent increase for 2022 and forgive residual debt held by tenants who applied for rent relief by 31 January 2022 – although still ignoring the issue of shadow debt. Having won significant concessions, the strikers needed to decide how to proceed. While some would see their entire debt forgiven by Veritas’s offer, others would be left with significant shadow debt. The tenants held a meeting to decide whether to proceed with the strike. One of the strikers, Maria Toriche, who lost her job at the beginning of the pandemic, was determined to carry on:

I knew a lot of tenants had lost work, and I was learning more about how big of a company Veritas is, and seeing that they have the money to forgive debt and make concessions from their own wealth, and not just rely on public money through the rent-relief programme.

At that December meeting, the VTA tenants voted unanimously to continue their debt strike. One month later, in January 2022, the VTA ended the strike when Veritas, in addition to waiving the 2022 rent increase, agreed to cancel residual rent debt not covered by the government programme for all tenants while committing to discuss the issue of shadow debt.

The VTA, alongside SF’s tenant movement, celebrated the concessions as a historic win. Veritas, however, later partially reneged on their promises. Having not signed a legally binding agreement – the negotiations were largely carried out via email and press releases – Veritas refused to negotiate on shadow debt and tried to redefine the terms of their offer, claiming they had created an internal debt relief backstop programme to be enforced only in the event the state programme ran out of money. More recently, Veritas has filed evictions against tenants over residual Covid-related rent debt – the debt Veritas had agreed to waive – in what the VTA views a retaliatory attempt at union busting. As of this writing, several of the affected tenants have gone to trial, where they have secured their right to stay put alongside the agreed-to debt relief by demonstrating that they have exhausted all options for government relief but still face significant rent debt, which, so far, the courts have ordered Veritas to forgive. Rather than a mass cancellation of debt, cancellation is being effectuated on a case-by-case basis through this eviction defence strategy.

The events after the strike have demonstrated the importance of securing legally binding agreements through direct negotiations, which has become a cornerstone of how the VTA approaches bargaining with Veritas. Nevertheless, the strike served as a confidence-building experience, proving that tenants can secure movement from Veritas by withholding revenue without getting evicted – even if, as in this case, there were only 50 strikers. The fact that Veritas budged on their demands also confirmed the VTA’s analysis that the federally funded rental assistance programme, ostensibly designed as an intervention into the nation’s mounting debt crisis, in reality served as a carefully disguised bailout of the real estate industry with publicly funded assistance subsidising often highly inflated rents set by corporate or ‘mom-and-pop’ landlords seeking to extract maximum profits. When the tenants withheld their applications for rent relief, the actual intended beneficiary of those subsidies – the landlord – risked missing out on substantial revenue, forcing them to negotiate.

Moreover, according to Toriche, the strike confirmed to VTA members that ‘when tenants pay their rent, or in the case of the strike, fill out these applications, and the money goes to Veritas, tenants lose leverage. But when tenants withhold rent, or those applications, then it becomes leverage’. Although rent strikes have long been a powerful tactic for tenant movements (see for instance Gray, 2018; Guzmán and Ill-Raga, 2022), the sheer volume of tenants in corporate landlord portfolios amplifies their potential, positioning rent, and rent debt, as significant leverage points that can be scaled up to match the rate of corporate consolidation. However, even a small number of tenants relative to a corporate landlord’s portfolio size can potentially wield significant leverage, provided they organise. A 2023 dataset from the Debt Collective’s Tenant Power Toolkit, a legal mutual-aid tool for tenants facing eviction in California, showed that just 87 toolkit users owed over $2 million in combined rent debt to a corporate landlord that owns approximately 80,000 units nationwide, suggesting a substantial opportunity to organise around debt, particularly in the post-pandemic landscape (Gustavussen, 2023). Especially when coupling an ‘upward scale shift’ in organising across portfolios with a corresponding scale shift in tactics, withholding rent or rent debt shows potential to force concessions from landlords, as evidenced by the VTA’s debt strike, which served as something of a test case for this tactic. These concessions can extend from forcing maintenance and repairs to debt cancellation, rent refunds, collective contracts, and rent control, circumventing legislation like Costa-Hawkins that limits rent restriction and consequently rebalancing power dynamics within the rental market, imposing much-needed regulation through direct action.

The potential of withholding rent or rent debt might be further strengthened by the corporate landlord’s specific debt financing and debt status. Because corporate landlords typically take on significant debt to expand their portfolios, often securitising rental streams or interest on the underlying loans to facilitate that expansion, while relying on rental income to pay investors and creditors, multibuilding strikes enable tenants to shift the site of struggle to the global capital market in which rental housing is increasingly enmeshed, and potentially leverage landlord debt against them, exercising rent as power (Gustavussen, 2023). The VTA is currently exploring the potential of identifying debt that has recently been restructured or refinanced, as well as loan maturity dates for specific portfolios, and targeting rent strikes accordingly to amplify tenant leverage, capitalising on the risk of a debt default. While this is preliminary and as yet untested, it suggests a potential additional adaptation of the rent strike tactic in response to financialisation capable of exploiting the reliance on rental streams to cover debt service payments, pay bondholders, and generate profits for investors.

Due to the increasing entanglements between finance and the state, building and operationalising collective power through interventions such as multibuilding strikes has become imperative to changing the terms and conditions of housing and exercising power over a sector dominated by corporate finance. The following section further explores this context and the triangular relationship between tenant, landlord, and state through the example of the K3 Tenant Council’s campaign to force the City of LA to enforce its Tenant Anti-Harassment Ordinance (TAHO). This campaign exposes the municipal government’s self-imposed ineffectualness in housing struggles while suggesting implications for tenants fighting for expanded protections.

Tenant protection enforcement under financialised urban governance

The K3 Tenant Council, supported by the LA Tenant Union, has organised over 40 buildings owned by K3 Holdings since 2020. The real estate investment firm has bought more than 60 rent-stabilised multifamily properties across LA while using harassment, rent increases, cash-for-keys offers – between October 2019 and January 2021, K3 paid $4.3 million in ‘move-out incentives’ (Urevich, 2021) – and intimidation to force out long-term tenants. In response, the tenants association has assembled harassment complaints across K3’s portfolio and coordinated filings with the city – totalling more than 400 individual complaints that detail a pervasive pattern of tenant abuse – in an attempt to invoke TAHO, which ostensibly renders such harassment illegal. TAHO, which was passed by LA City Council in August 2021 after persistent pressure from tenant advocates, prohibits landlords from harassing or retaliating against tenants, and violations are classified as civil violations or criminal misdemeanours punishable by fines or prison time. Harassment is defined broadly under the ordinance and includes withholding services or maintenance, imposing illegal rent increases, coercing tenants to vacate through cash-for-keys, threatening to reveal a tenant’s immigration status, or retaliating against tenant organising (City of Los Angeles, 2021). However, over the ordinance’s first 30 months in effect, the LA Housing Department (LAHD), which is tasked with enforcing TAHO, referred only 24 cases to the city attorney for investigation, none of which have resulted in prosecution, despite receiving over 10,000 harassment complaints from tenants (personal communication with LAHD in 2024), including coordinated complaints from tenants associations like the K3 Tenant Council. Rather than investigating those landlords, LAHD has reclassified harassment complaints as code violations or rent stabilisation ordinance infractions, or sent advisory letters to landlords informing them of the regulations stipulated under TAHO before closing the case. This systematic reclassification of individual complaints obfuscates harassment patterns intrinsic to corporate landlordism, effectively legitimising a housing model premised on accumulation by displacement and limiting tenant power by failing to enforce the provision of TAHO meant to protect tenants from retaliation against organising.

In the face of this government inaction, multibuilding organising carried out by groups like the K3 Tenant Council – which proactively target and organise tenants in recently acquired buildings – is crucial for building power and limiting ‘self-eviction’, for example, accepting cash-for-keys offers or capitulating to illegal harassment tactics. While keeping long-term tenants in their homes is paramount, staying put also disrupts the landlord’s business model by eliminating a potential ‘cash flow upside’, thus preserving affordability. However, remaining in one’s home often means enduring hazardous and precarious living conditions due to the city’s failure to enforce TAHO or preexisting building codes and standards. In 2023, 16 tenants from multiple K3-owned buildings won a lawsuit against the company for violating the Fair Housing Act by systematically targeting Latinx tenants for eviction, and tenants at one building are more than two years into a rent strike, demanding an end to systematic harassment, addressing of habitability issues, and a reversal of coerced contracts – issues that technically fall under the purview of TAHO. A tenant leader argued in an interview:

Tenants need the city attorney to bring criminal charges, to prosecute this criminal company. And until that happens, the business practices that companies like K3 rely on will continue. There are many more companies like K3 that see that you can in fact manage residential real estate by retaliating against tenants who try to enforce the building code and the rent stabilisation ordinance and protect the habitability and affordability of their homes. Right now, landlords can enter tenants’ units unilaterally, without permission and without scheduling. They can order their staff to turn off tenants’ water. They can cancel all sorts of service contracts. They can make your home uninhabitable, and there’s no penalty.

This criticism encapsulates the triangular dynamic between tenant, landlord, and state at the municipal level. Even when ostensibly expanding tenant protections, as in the case of TAHO, the city neglects to intervene on behalf of tenants, instead aligning its practices and priorities with those that serve corporate landlord, and thus private equity, interests, reflective of an adaptive and dynamically financialised ‘real estate state’ (Stein, 2019) simultaneously facilitating and sanctioning accumulation by displacement. As tenants’ homes and tenancy conditions are reconfigured as globally traded financial assets, they are relegated to being unwilling subjects of financialisation and secondary constituents with little recourse to redress their position through the financialised municipal state, which aims to stimulate value extraction from urban sites to enhance economic growth (Savini and Aalbers, 2016).

The implication is not that tenants should not demand that cities enforce existing protections and implement further regulation – including, as Fields and Vergerio (2022) have proposed, by limiting local market shares for corporate landlords, ensuring greater transparency, and passing broad-based tenant protections. It is instead that such protections, considering the paradigm undergirding financialised municipal governance, must have strong enforcement mechanisms that, unlike TAHO, do not rely exclusively on state action but place agency with tenants themselves. One example of such an approach is SF’s Union at Home ordinance, authored by Supervisor Aaron Peskin with input from the VTA in 2022. Union at Home formalises the right to form tenants associations and bargain collectively, renders ‘organising’ an official ‘housing service’, on par with electricity or trash removal, and obligates landlords to bargain with tenants associations in good faith. If landlords interfere with organising or refuse to negotiate, tenants can petition the independent Rent Board for rent reductions due to a decrease in housing services. As opposed to TAHO, Union at Home makes the penalty financial and grants tenants – not the city – agency. As such, Union at Home imposes the obligation to negotiate on landlords while fortifying existing organising efforts to leverage collective power to overcome the subordinate position imposed by the triangular relationship. Union at Home’s impact was recently demonstrated when VTA tenants leveraged it alongside multibuilding rent strikes to force negotiations and win rent reductions, rent refunds, renovations, and repairs (see Gustavussen, 2024), underscoring the potential of changing the terms and conditions of housing through a multibuilding approach that confront corporate landlords directly as opposed to through state intervention.

Conclusion

This paper has introduced empirical examples of a novel organising approach designed specifically to target global corporate landlords in the context of rental housing and, increasingly, state financialisation. The growing corporate consolidation of rental real estate alongside the state’s role as both financialising and financialised actor has created a predatory landscape in which tenants are neither the state’s primary constituency nor the landlord’s primary client. Nevertheless, in this triangular constellation, multibuilding organising and multibuilding strikes – both of which employ an upward scale shift that attempts to approximate the scale of corporate consolidation to build and operationalise collective power – show potential to secure transformative results by creating a crisis of capital and forcing concessions, circumventing the state. This paper has presented preliminary results indicating the effectiveness of this approach, while also suggesting further potential of amplifying tenant leverage by targeting strikes to buildings at risk of debt defaults, a possible additional adaptation of the strike tactic tailored to the financialised rental housing sector’s reliance on debt financing.

Recently, the Debt Collective released a Rent Debt Tool through which tenants can supply information about their landlord and rent debt with the intention of creating a strategic map, which will support a further ‘upward scale shift’ in organising and leveraging of rent debt at a regional or national – and potentially eventually transnational – level against corporate landlords (Gustavussen, 2023). Such organising efforts could focus on both current and evicted indebted tenants, potentially exercising leverage unprecedented in its scale in the fight for concessions and debt cancellation, which has become even more urgent after the pandemic left millions indebted to corporate landlords. These spatial and scalar dimensions represent important areas for further study among both activists and academics, especially since, as this research suggests, organising and operationalising collective power through strikes at a scale commensurate with corporate consolidation carries transformative potential in the context of state financialisation – potential derived from the conditions created by financialisation itself.