Pretium Partners is under investigation. Critics ask (again) why a major Canadian pension fund has formed an $ 870 million partnership with the company

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A major investment partner of one of Canada’s largest public pension plans is under Congressional investigation in the United States over allegations the company has sought to deport more than 1 700 tenants during the pandemic, including a disproportionate number in predominantly black areas of the country.

The investigation, which opened with a hearing last week in Washington, will look into the eviction practices of Pretium Partners, as well as three other major operators of so-called single-family rental housing (SFR) in the United States.

In January, Pretium signed a $ 700 million (US) joint venture with Canada’s Public Sector Pension Investment Board (PSP), which invests the retirement savings of most federal employees, to develop SFR housing in the states. -United.

The deal gave PSP, an independent state-owned company, a major stake in a lucrative and rapidly growing industry, but also an industry that critics say is inherently biased in favor of poor tenant outcomes, in especially those in minority neighborhoods.

“I think it’s sad to see Canadian pension funds being invested in moving black households,” said Nemoy Lewis, an assistant professor at Ryerson University who studies the impact of financialized housing on black tenants. . “I really think this should serve as a warning to the Canadian government, as well as to all levels of government in this country, of the ramifications of continuing to allow financialized homeowners to amass all of these properties.”

Pretium filed more than 1,700 eviction notices between September 2020 and April 2021, according to a recent report from the Private Equity Stakeholder Project. That’s despite a federal moratorium on evictions during the pandemic. The report only counts eviction notices filed in the six states the organization reviewed: Florida, Georgia, Texas, Arizona, Tennessee and Nevada.

With that data in hand, the organization’s researchers compared the eviction request rates in four selected counties, two in Florida and two in Georgia.

They chose these counties because they all had a significant number of Pretium-owned homes and roughly similar average incomes, according to Jim Baker, executive director of the Stakeholder Project.

The only real difference: the two counties in Florida were predominantly white and the two in Georgia were predominantly black.

What the researchers found was striking, Baker said. “Pretium Partners has filed for eviction of residents of predominantly black counties of DeKalb and Clayton in Georgia (at) more than seven times the rate of residents of predominantly white counties in Florida,” he said during the Congressional hearing before the House selection subcommittee on the coronavirus crisis.

Baker thinks the data should serve as a wake-up call for the PSP. “I think PSP, as well as the participants and beneficiaries of PSP, should be significantly concerned about the impact of PSP’s investments given that they made such a significant investment with Pretium Partners earlier this year,” he said. -he declares. “The fund managers and board should ask, ‘Are its investments forcing black tenants out of their homes in droves, and will they continue to do so? “

Pretium did not testify before the committee. But in the statement to The Star, the company accused Baker’s organization of “pursuing a decidedly biased agenda with testimony containing numerous false allegations.”

“We are committed to providing equal rental opportunities and support to all of our residents and categorically do not follow the race, gender or ethnicity of any of our residents,” the statement said. “We also unequivocally confirm that no resident covered by a CDC statement has ever been evicted from Pretium homes for non-payment of rent.

“We are committed to working with residents to keep them in their homes, which is why we are committed to voluntarily honoring the CDC’s moratorium for residents covered by valid CDC statements beyond the stated expiration date. of the moratorium. ”

But a complete eviction for non-payment of rent isn’t the only way a landlord can get someone out of their home. Katrina Chism, a former tenant of a house owned by Pretium in Georgia, testified about her ordeal during the pandemic.

She told the committee that she lost her customer service job in August 2020. She got a new job a month later, but by then she was already behind on rent. Over the next six months, she completed and filed CDC hardship statements, applied for rent assistance, lost a second job due to the pandemic, and did her best to work with her landlord and keep herself and her family, in their house.

On two occasions during this period, its owner, HavenBrook Homes, a division of Front Yard Residential, which Pretium acquired as a joint venture in January, demanded his eviction. And in mid-April, the company told her it wouldn’t renew her lease when it expired in May, forcing her to move to a new, more expensive house in a new county where her 16-year-old son had to find. a new school.

“I feel speechless against such a big company like HavenBrook,” Chism told the committee. “I felt expendable, and they showed me that I was. … There was no concern for my life or that of my son as they focused on their profit margin. I was not profitable for HavenBrook Homes, so I was kicked out with almost no notice, instead of being able to renew my lease or at least have a few months to make another plan.

The Front Yard deal was not part of PSP’s investment with Pretium. Instead, the PSP / Pretium joint venture will focus on new investments in the southern United States.

“At a time when single-family home prices continue to rise across the United States, the single-family rental industry provides a much-needed opportunity for renters (especially millennials or young couples starting families) to have quality accommodation. -family house, with a yard and other amenities, ”PSP spokesperson Maria Constantinescu wrote in an email. “As a result of our due diligence review, we are confident in the direction of Pretium and the processes it has in place to manage our portfolio effectively and efficiently. “

The statement did not address allegations that Pretium’s deportation requests disproportionately affected black residents.

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