DEDHAM, Mass. — Big money investment groups are buying up Massachusetts properties and pricing homebuyers and renters out of our local communities.
25 Investigates found as this trend continues across the state – investors are hidden in a maze of LLCs.
“It never, ever, even, you know, came into my mind that at this age, I would be in jeopardy of losing the one home that I’ve had for years,” Mattapan resident Annie Gordon said.
Gordon, 73, said she’s being priced out of the Mattapan apartment community she’s called home for nearly 5 decades.
Gordon is retired but works a part-time job overnight to make ends meet.
Each month, she says her rent alone is $1,810.
Now, she says she’s being asked to pay upwards of $500 more.
In 2018, DSF Group purchased the Fairlawn Apartments where Gordon lives and changed its name to Soma at the T.
The community fought to get the Mattapan commuter rail stop – a move that Gordon claims is now being used to justify rent hikes.
25 Investigates reached out to DSF Group for response and visited their Newbury Street office in-person. We haven’t heard back.
It’s not just rent growing out of reach, Alex Pratt, Malden’s deputy director of housing and community development told 25 Investigates.
“Investors are squeezing out everybody,” Pratt said. “They’re squeezing out tenants. They’re squeezing out first-time homebuyers.”
Pratt said when Greater Boston residents are priced out of apartments they’re living in or unable to afford the high cost of homes, they struggle to find any reasonably priced housing nearby – even in towns long known for being affordable, like Malden.
“Malden is one of the most racially and ethnically diverse communities in Massachusetts,” Pratt said. “We’re also one of the last affordable communities in greater Boston. Unless we take bold, urgent action, this housing crisis is going to change that.”
One in five residential real estate sales between 2004 and 2018 in Greater Boston were sold to an investor, according to a 2023 report by the Metropolitan Area Planning Council.
25 Investigates spent weeks trying to identify some of the biggest investment players.
We found when investors use limited liability companies or LLCs to purchase properties – they can be hard to track.
We got ahold of data showing the names of LLCs with the most residential purchases in greater Boston over the past decade – but that data did not reflect purchases by entities who may have created numerous LLCs.
“What we see with investors is they’ll break up into different entities that are owned by each other,” said Rep. Erika Uyterhoeven, a Democrat of Somerville, said. “And so, it turns into this massive maze.”
Rep. Uyterhoeven’s bill to improve LLC transparency is just one of many housing bills on Beacon Hill this session. Her bill would collect data on LLCs that are buying up property to shed light on who owns properties and how many properties owners have.
Other bills on Beacon Hill that some housing advocates say could level the playing field for renters and aspiring homebuyers – and that the real estate industry says would worsen housing costs – include:
* Reestablish rent control: Massachusetts communities could once again decide whether to put caps on rental increases under legislation again introduced on Beacon Hill. A 1994 referendum outlawed rent control in Massachusetts. An effort to get rent control on the ballot failed last year.
* Create the Tenant Opportunity to Purchase Act: Also known as the right of first refusal, this bill would let tenants allow a housing developer to put in an offer against an investor looking to buy property where they live. Buyers would pledge to keep properties affordable.
* Real estate transfer fees: Municipalities could add a transfer fee to high-value, real estate transactions over $1 million under this bill. Funds would go to a local affordable housing fund. Transfers between family members would be exempt from the fee, and the bill also says “county median sales price for a single-family home… shall be exempt in their entirety.” Gov. Maura Healey has included the proposal in her own affordable housing bill.
Housing advocates are also pushing for solutions like more rental vouchers, foreclosure protections and regulations that would make it less appetizing for investors to buy up properties and sell for a profit.
25 Investigates analyzed the state’s lobbying database to reveal how much the real estate and mortgage broker industry has been spending to fight and support housing bills over the past year.
The database does not always include a breakdown for how much groups are spending to fight each bill.
Out of all the groups that oppose the TOPA bill, 25 Investigates finds the top spenders on lobbying in 2023 include Massachusetts Association of Realtors, Greater Boston Real Estate Board and NAIPO (the Commercial Real Estate Development Association’s Massachusetts Chapter).
The Massachusetts Association of Realtors reported spending nearly $247,500 on lobbying and expenses in 2023, compared with $274,143 for NAIPO and nearly $230,000 for the Greater Boston Real Board.
The Massachusetts Association of Realtors and Greater Boston Real Estate Board declined to speak with us.
25 Investigates also reached out to another group fighting bills like TOPA: the Massachusetts Mortgage Bankers Association.
The MMBA did not respond to requests for comment.
On its website, the group says allowing individual cities to impose real estate transfer fees would cause too much confusion and put too much of the burden on affordable housing on a “small percentage of consumers that are purchasing or selling properties”
The MMBA said it instead supports bills allowing new tax deductions for savings accounts for single-family homes, and legislation for zoning relief.
TIGHT HOUSING MARKET
Experts from real estate groups to affordable housing nonprofits agree that Massachusetts’ housing market is very tight.
Massachusetts saw roughly 17,700 new housing units get building permits in 2022, according to 25 Investigates’ analysis of Census data.
That’s far fewer than nearly 20,000 in 2021.
And the ninth lowest rate of any state.
Real estate groups have argued that the lack of housing is a key factor driving up costs.
Meanwhile, 25 Investigates found that Massachusetts had the fifth highest median home value in the U.S. in 2022—only behind Hawaii, California, Washington state and D.C.
Home values have skyrocketed in Suffolk and Middlesex counties since 2010, according to 25 Investigates’ analysis.
But Jessie Partridge Guerrero, Research Manager at the Metropolitan Area Planning Council said Massachusetts can’t afford to do nothing while waiting for more housing.
She said Massachusetts needs to take drastic action to help people who are hurting now.
“Building housing takes so long, it’s been really hard to build at the rate that we need,” she said. “At the same time, we need to protect tenants now… we’re in a housing crisis and tenants are really feeling it.”
Partridge Guerrero said MAPC’s recent report found residential real estate purchases shot up after the Great Recession and have continued since.
She said low-income communities and communities of color are hit particularly hard and see higher rates of purchases by investors.
“When we look at, sort of denser urban communities with large shares of renters, communities of color, it’s closer to 30%,” she said.
‘WE DESERVE A HOME’
D-Amber Houl says she pays $900 a month for her rental home at Devenscrest Village in Ayer.
“Every day I’m like: ‘Am I going to have somewhere to live next month, next year?’” she said. “It’s just really hard.”
The single, working mom says “Brady Sullivan Properties” is pushing people out to rent-renovated units for about $2,400 a month.
Brady Sullivan Properties told 25 Investigates that it has “invested millions of dollars” in the property.
“Well beyond cosmetic enhancements, the renovated apartment homes have received new upgraded electrical systems, all new kitchens and bathrooms, new appliances, new heat and added central air conditioning and other major upgrades to make them more energy efficient and sustainable,” reads the statement from Devenscrest Management LLC.
“In fact, over 2/3 of the residents of Devenscrest Village have successfully relocated, renewed their lease to remain in their home at below-market rates or upgraded to renovated units at Devencrest Village at a discounted rate,” the statement reads.
Meantime, Houl and others in Ayer are taking collective action to stay in their homes by forming tenants’ associations.”
“We think that this could be a model for how other places could be as well,” Houl said.
Gabrielle Rene, a community organizer with affordable housing advocacy group Urbana Vida/City Life, is working with residents who are organizing from Ayer to Mattapan.
“We encourage them to stand and not pay or agree to pay anything that they cannot afford,” Rene said.
Annie Gordon helped start her tenants’ association.
Gordon said she applied for senior housing but faces a seven-year waitlist.
She said she believes her vocal opposition to rent hikes landed her with an eviction notice – which she is also fighting.
“We deserve a home,” she said. “We are being priced out of our community and with nowhere to go.”
This is a developing story. Check back for updates as more information becomes available.
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