Will the Corporate Greed of Essex Property Trust CEO Mike Schall Destroy California?
For Essex Property Trust CEO Mike Schall, it’s all about the money — no matter who gets hurt. Slamming seniors with huge rent increases and forcing them out of their homes is a standard way of operating for Schall and Essex Property Trust. It’s no wonder Schall is now leading the charge to stop the rent control movement in California: he could no longer make massive profits off the backs of hard-working people and the vulnerable.
Essex Property Trust, a real estate investment trust (REIT) based in San Mateo, California, and led by CEO Mike Schall, is the tenth largest apartment owner in the U.S. — with more than 60,000 units and a worth of $25 billion. The vast majority of those apartments are located in the Bay Area and Southern California. Like billionaire landlord Sam Zell of Equity Residential, Essex Property Trust and Mike Schall have been ruthless in their pursuit for king-sized profits.
In San Mateo, Essex Property Trust and Mike Schall bought one of the city’s largest apartment complexes — the 697-unit Hillsdale Garden Apartments. The corporate landlord moved quickly to squeeze tenants in order to make more billions. Seniors were especially hit hard.
“Since buying the property in 2006,” the East Bay Times reported, “Essex had raised rents aggressively, prompting an exodus that included fixed-income senior citizens who lived there for decades.”
In many cases, the San Francisco Examiner reported, Essex Property Trust raised rents at Hillsdale by $400 per month in a single year — that’s an astounding annual hike of $4,800.
The scandalous treatment of tenants at Hillsdale Garden Apartments prompted the Beresford Hillsdale Neighborhood Association to send a sternly worded letter to Essex Property Trust and Mike Schall.
“This property is the largest rental complex in San Mateo and one of the largest on the Peninsula,” the association wrote. “The problems we have seen at [Hillsdale Garden Apartments] are by no means typical of other properties in the city. The issues are far-reaching and significant… exorbitant rent increases have forced out many elderly residents.”
In Fremont, Essex Property Trust was sued by tenants, charging that the corporate landlord improperly increased rents and allowed bad living conditions — all in an effort to beef up the company’s bottom line. The tenants’ case was so strong, Essex Property Trust agreed to a settlement in 2016.
In San Diego, Essex Property Trust is one of the city’s largest landlords with more than 5,800 units. Unsurprisingly, Essex has played a major role in skyrocketing rents in the San Diego region.
“Imagine how much control they have over how fast rents go up, when they go up, and the terms of the agreement,” San Diego Tenants United member Rafael Bautista told the San Diego Union-Tribune.
Essex Property Trust and CEO Mike Schall aren’t concerned about what’s fair and just. In addition to jacking up rents at unreasonable rates, the corporate landlord has an awful track record of gender inequity on its board of directors. According to a 2018 Wells Fargo study, Essex Property Trust had “below peer average representation of women on the board” at a shocking 11 percent. Top-rated REITs have female representation of 40 percent.
Among 165 REITs studied by Wells Fargo, Essex Property Trust was ranked the 17th worst. Bill Ferguson, chief executive of Ferguson Partners, who also researched gender equity on REIT boards, told the Wall Street Journal: “To be frank, the REIT industry is not the most enlightened group when it comes to diversity around the table.”
In 2018, Essex Property Trust and Mike Schall were among the top contributors to oppose Proposition 10, which sought to expand rent control in California. More than 525 social and housing justice organizations and civic and elected leaders endorsed Prop 10 as a key way to bring urgent relief to middle- and working-class Californians. But Essex Property Trust shelled out $6.6 million to help pay for a deceitful TV ad campaign to stop the initiative. It worked, and Prop 10 lost at the polls.
In 2020, Essex Property Trust and Mike Schall, along with the California Apartment Association, are now leading the effort to stop a statewide rent control movement in California. Through the Rental Affordability Act, activists and residents again seek to expand rent control as the housing affordability and homelessness crises have only worsened over the past two years.
U.S. Senator Bernie Sanders, labor and civil rights icon Dolores Huerta, and Congresswoman Maxine Waters, among many others, have endorsed the Rental Affordability Act.
“I strongly support the Rental Affordability Act,” said Bernie Sanders. “This initiative will allow California cities to pass sensible limits on rent increases and protect families, seniors, and veterans from skyrocketing rents.”
Yet Essex Property Trust has shelled out millions to stop the November ballot measure.
It’s an increasingly contentious battle between two distinct groups: corporate landlords worth billions versus struggling middle- and working-class Californians and longtime fighters for social justice. The fight to expand rent control has taken on added urgency due to mass unemployment and lost wages triggered by the COVID-19 pandemic.
California’s rent control movement is backed up by top experts at USC, UCLA, and UC Berkeley, who say that rent control is a key tool to stabilize the housing affordability crisis.
“The housing crisis requires a range of strategies,” explained University of Southern California Professor Manuel Pastor, co-author of the USC Dornsife’s Rent Matters report, “[and] moderate rent regulation is a useful tool to be nested in broader strategy. It has fewer damaging effects than are often imagined, it can address economic pain, and it can promote housing stability. And housing stability matters because it is associated with physical, social, and psychological well-being; higher educational achievement by the young; and benefits for people of color.”
Judging from their track record, it appears that housing stability doesn’t matter to Essex Property Trust and CEO Mike Schall. For years, they’ve pursued a greed-driven agenda that’s devastated millions of lives in California, and they’ve shown a willingness to destroy anything that gets in their way. Activists and residents believe it’s time to finally rein them in.