Is Billionaire Landlord Sam Zell the Quintessential Corporate Vulture?
Sam Zell, chairman of Equity Residential and Equity LifeStyle Properties, is worth $4.8 billion. He has more money than he knows what to do with. Yet as Californians struggle through the COVID-19 pandemic and housing affordability crisis, he wants to keep charging sky-high, unfair rents. Zell wants to maintain a rigged and broken system that’s turned him into one of the richest people on the planet.
Sam Zell is one of the powerful forces behind Big Real Estate’s multi-million-dollar push to stop the Rental Affordability Act, the November ballot measure that expands rent control in California. Equity Residential has so far shelled out a whopping $2,922,002 to campaign committees that oppose the Rental Affordability Act — the California Apartment Association, led by CEO Tom Bannon, sponsors the lead committee. In the coming months, Equity Residential and Zell, nicknamed the “Grave Dancer” because he specializes in buying distressed properties and getting rich off the bad fortunes of others, will deliver even more big checks to the anti-rent control effort.
In 2018, Equity Residential was the fourth largest political contributor to stop Proposition 10, which also attempted to expand rent control in California. More than 525 housing and social injustice organizations, civic groups, and elected leaders endorsed Prop 10, but Big Real Estate funded a massive, and deceitful, TV ad campaign that confused and tricked voters. The initiative, which was largely funded by AIDS Healthcare Foundation, lost at the polls. Zell and other corporate landlords kept charging unfair rents.
Equity Residential, a Chicago-based real estate investment trust (REIT), is the second largest apartment owner in the nation — with 79,200 units and a worth of $30.1 billion. It operates in San Francisco, Southern California, New York, Seattle, and other cities — and Zell, through Equity LifeStyle Properties, is a major landlord of mobile-home communities. He’s raking in the dough by squeezing hard-working people — and he’s enjoying his out-sized riches.
Sam Zell lives in posh homes in Chicago, Sun Valley, and New York. He owns a spectacular mansion worth $10.5 million in Malibu with unfettered views of the Pacific Ocean. He spends big bucks playing poker, flying around the world in a private jet, and riding one of his 13 motorcycles. While seniors, teachers, single-mothers, and college students struggle to pay excessive rents for modest apartments, Zell lives a globe-trotting lifestyle of extravagance and luxury — made on the backs of working people.
But Sam Zell doesn’t just charge excessive rents. Equity Residential and Equity LifeStyle Properties are known for their predatory practices. Equity Residential aggressively pushes tenants out of rent-controlled apartments in order to dramatically raise rents once they move out. Equity Residential also has a reputation of forcing tenants to live in substandard living conditions.
Equity LifeStyle Properties uses similar tactics at its mobile-home communities, where many seniors on fixed incomes live during their retirement. In 2013, Manufactured Housing Action, a national advocacy organization for mobile-home owners, charged that Equity LifeStyle Properties and Sam Zell practiced “vulture” capitalism.
“ELS has been able to push its share value to an all-time high by gouging manufactured homeowners, combining rent increases with decreased community services,” said Pam Bournival, a resident at an Equity LifeStyle Properties mobile-home community in Sarasota, Florida, in a statement released by Manufactured Housing Action. “This is the real Sam Zell: a vulture capitalist unconcerned about actual people.”
Bobbie Hemmerich, a resident at an Equity LifeStyle Properties community in Lewes, Delaware, added: “Under his guidance, ELS seems intent on robbing seniors — mostly women — of a secure retirement. To add salt to the wound, he gives big political contributions to politicians who want to gut Social Security and Medicare.”
Activists, in fact, have charged that Sam Zell and Equity LifeStyle Properties are “gouging Grandma.”
It’s not surprising — Zell has never been praised as the ultimate humanitarian. In January 2008, the billionaire bought the Tribune Company, which owned the Los Angeles Times, for $8.2 billion. Zell expected big profits, but within less than a year, the Tribune Company filed for bankruptcy — the largest bankruptcy in the history of the American media industry. Zell kept his billions, but under his failed leadership, more than 4,200 people lost their jobs.
Often described as “vulgar” and “crass” in the media, Zell wildly disrespected women at a 2018 REITweek investor conference in New York City. When the billionaire was asked about gender diversity in the workplace, he glibly replied, “I never promoted a woman because she was a woman. I never demoted a woman because she was a woman. My issue is what do you do, what do you produce, how do you interrelate to the rest of the business.”
Zell then stunned the audience by a vulgarity to describe his female employees: “I don’t think there’s ever been a, ‘We gotta get more pussy on the block, okay?’”
Sam Zell’s insult was not a one-time thing. Politico reported that Zell made another derisive remark about women during a 2018 panel discussion at the University of Pennsylvania. When asked what he thought about investing in South America, Zell replied, “Argentina is like a beautiful woman — her greatest asset is a man’s imagination.”
This is the man who’s shelling out millions to stop rent control in California. In the meantime, U.S. Senator Bernie Sanders, labor and civil rights icon Dolores Huerta, Congresswoman Maxine Waters, and numerous others have endorsed the Rental Affordability Act. It’s Sam Zell and the California Apartment Association versus longtime fighters for justice, fairness, and equality.
On top of that, California Apartment Association CEO Tom Bannon and the campaign to stop the Rental Affordability Act are more than willing to associate themselves with Zell, a predatory landlord who insults women, costs thousands of hard-working people their jobs, and forces seniors and others out of their homes. What does that say about Bannon and his anti-rent control campaign? How does that reflect their values?
The fact is, billionaire corporate landlords like Sam Zell and California Apartment Association CEO Tom Bannon have been used to doing whatever they want, whenever they want. They’ve been fueling California’s housing affordability and gentrification crises, which have been especially slamming people of color. And Zell, Bannon, and their buddies will stoop as low as they have to stop rent control in California, even though millions struggle with lost wages and unemployment due to the COVID-19 pandemic.
It’s why rent control is needed — the greed and lack of scruples by Zell, Bannon, and the California Apartment Association must finally be reined in. In fact, top experts at USC, UCLA, and UC Berkeley agree that rent control will stabilize California’s housing affordability crisis. The Rental Affordability Act will help fix a broken and rigged rental housing market. It will keep middle- and working-class Californians in their homes.