In February, Jenike Allen went to housing court in Cincinnati to try to stop her being evicted from her three-bedroom rental home. Allen wanted to assure the judge that she had never received a price increase notice.
Allen, a single mother caring for an Alzheimer’s patient at a nearby nursing home, had no lawyer and was nervously waiting for her case to begin in court. As she did, the woman, whom Allen did not know, explained her own eviction to the court. Not only was her claim the same as Allen’s, but so was the female landlord.
“We had the exact same story and the exact same company, VineBrook Homes,” Allen told NBC News.
Allen’s experience in court that day was not unusual, local legal aid attorneys say. They say it’s one of the most aggressive landlords to bring in. VineBrook Homes is a large institutional owner of over 24,000 single-family homes, mostly in low-income neighborhoods, and a real estate investment trust (REIT) with properties in 18 states, including Alabama, Indiana, Missouri and Mississippi. .
“They are one of the worst landlords in our service area,” said Nick Dinardo, managing attorney for the Southwest Ohio Legal Aid Association, whose office has seen hundreds of cases over the past two years. “They charge inappropriate and sometimes illegal fees and keep people out of the facility. [online] If a tenant does not pay these improper charges, they will give the tenant no way to dispute the charges and will immediately apply for eviction. ”
VineBrook Homes was founded in 2007 by Massachusetts real estate developer and Harvard Business School graduate Dana Sprong and his partner Ryan McGarry. The company is one of a growing number of institutional investors nationwide buying single-family homes and converting them into rentals. The company is backed by wealthy investors and has partnered with a large Dallas-based real estate and private equity firm called NexPoint Capital, according to regulatory filings.
Sprong declined to respond to criticism of DiNardo or to specific questions about controversies and difficulties faced by Allen and other VineBrook tenants in connection with NBC News. Our mission is to provide affordable, safe, functional and clean rental housing on a budget. (more than 4 out of 5 residents renew each year) and the average length of stay in our homes is approaching 5 years.”
Research shows that purchases of residential stocks by institutional investors like Vinebrook have an impact far beyond tenants. Ownership by these investors also raises housing costs across the region, according to a 2020 study by the St. Louis Federal Reserve Bank. Rising housing costs could lead to more homelessness, according to his 2020 study by the Government Accountability Office. They concluded that a $100 increase in median rent in a region would increase the estimated homeless rate by 9%.
Laura Brunner, president of The Port of Greater Cincinnati Development Authority, an economic development agency, has characterized VineBrook’s business model as predatory, criticizing VineBrook and other absentee landlords for causing significant distress to Cincinnati tenants. said that
“For decades real estate investment trusts and investment funds have been looking for office buildings, apartments and retail space, but after the foreclosure crisis they started getting single-family homes cheap,” Brunner said. “They found the leverage very different if they were talking about needy families and if Walmart was the tenant. They didn’t want to bully them, cater to their needs, If you don’t like it, it’s easy to evict or raise the rent.”
VineBrook declined to respond for record to Brunner’s views.
In July 2021, the City of Cincinnati sued VineBrook to recover more than $600,000 in unpaid water bills and fines imposed for building code violations, littering and trash citations. The lawsuit accused VineBrook of “negligent, reckless and willful acts” that “interfere with the public health, welfare and safety of Cincinnati.” We also identified approximately 50 properties with code violations, including unsafe wiring, yards with grass over 10 inches high, unrepaired roofs and fire damage, and missing smoke alarms.
Weinbrook declined to comment on the record for the lawsuit, but settled in August 2021 and paid almost everything the city claimed it owed.
Compared to other states, Ohio has more favorable eviction laws for landlords, making it an attractive location for large real estate investors, according to legal aid attorneys. A tenant accused of non-payment of rent usually receives a so-called three-day notice telling him that he must move out or face eviction proceedings within that period. Legal aid lawyers say the eviction takes about a month from start to finish.
Back in February, a judge hearing of Allen’s lawsuit stayed her eviction and demanded that a notice be produced that VineBrook had sent her about a rent increase. and VineBrook failed to submit the documents three times. Throughout the process, Allen tried to reach Vinebrook both by phone and through online portals, but she was unsuccessful.
After trying to defend the eviction, Allen, a VineBrook tenant since January 2021, sought legal assistance from Greater Cincinnati Legal Aid Society staff attorney Jordan Cotrua. Allen began paying rent in court and settled with Vinebrook in June, revoking both the rent increase and the eviction. The settlement was filed in court and reviewed by NBC News.
But that wasn’t the end of Allen’s struggles with Vinebrook. This time, Beinbrook owed almost double what Allen agreed to in the June settlement, she claimed.
In late August, Cotleur filed a complaint and temporary injunction against VineBrook for repeatedly mishandling Allen’s rental accounts and harassing him with threats of eviction.
Allen’s case “is a prime example of how automation and lack of communication with private equity firms like VineBrook lead to housing insecurity,” Cotleur told NBC News. “We currently have multiple clients who have been locked out of the VineBrook portal for rent increases and charged without notice. These tenants will not know what is going on until they go to eviction court. .”
A Vinebrook spokesman declined to comment on Cotleur’s complaints and criticisms.
In October, after NBC News contacted the company about her case, VineBrook reached a second settlement with Allen to reverse the fees it had claimed, dismiss the new eviction, and pay all her legal costs. Agreed. Under her second settlement, Allen agreed to pay an additional $95 in monthly rent on her new lease. Cotleur said Allen was still having trouble communicating with her VineBrook via her portal online, and she eventually signed her new lease manually.
Former Vinebrook resident Denisha Vokes told NBC News that her work included powering up the furnace, fixing the broken front door lock, and kicking out the squatters who lived in the basement. She said she has always struggled with the company’s response to maintenance requests. She moved out of the property as soon as possible, she said.
“Maintenance requests went unanswered for weeks,” says Vaulx. “At some point, the bugs were rampant and I had to fix them myself because they weren’t fixed. The shower was broken and the heating was a mess. Only when I withheld my rent from court was it , they came and rectified what was wrong.”
Vaulx provided NBC News with photos of the broken fixtures, photos of the leak, and screenshots of text messages showing her repair request was not answered. VineBrook declined to comment on her Vaulx criticism, stating in her statement:
In addition to swift evictions and code violations, VineBrook’s massive purchase of starter homes is hurting the Cincinnati area in other ways, DiNardo said. “They are certainly buying affordable homes for first-time homebuyers, taking much of that supply out of the market,” he told NBC News.
Zenova Jenkins can prove this. Jenkins, a resident of a rental home in northern Cincinnati, said she told her former landlord that she wanted to buy the property if she wanted to sell it. He said he used the money to install his kitchen cabinets, flooring and other improvements.
One day, when she comes home, she finds a letter taped to her door saying that VineBrook has purchased the property and has become the new landlord. At first, the rent didn’t change, but VineBrook started adding fees, Jenkins said. She left as soon as possible.
“I left in December 2021,” Jenkins told NBC News. She said, “I ended up buying my own house because I felt like I was being kicked out.” She says she now considers herself lucky to be a homeowner. “Once her fortune is mine,” she said of Vinebrook.
Sprong and McGarry started small when they launched VineBrook in 2007, but now their operations are part of the VineBrook Homes Trust, founded in 2018. The REIT’s rental income more than doubled last year, rising from $75 million to $153 million in 2020. Net cash from operations reflects this performance, increasing from $30 million to $64 million in 2021.
Sophisticated investors can buy shares in privately traded REITs. The stock’s value increased from $25 per share in 2018 to $54 per share by the end of 2021, securities reports show.
Sprong and McGarry run a REIT management company that buys, renovates, operates, maintains and leases single-family homes. This entity receives a commission of 1% of the purchase price of the home acquired and a sliding property management fee that starts at 8% of the rental income collected and gradually decreases as the income increases.
VineBrook REIT has prominent directors. Among them is Arthur Raffer, an economist in the Reagan administration who was awarded the Presidential Medal of Freedom, America’s highest civilian honor, by President Donald Trump in 2019. A group of exchange traded funds that surged during Covid and then cratered. Neither Raffer nor Wood responded to requests for comment on Vinebrook’s eviction practices and code violations.
NexPoint Real Estate Advisors advises the REIT and manages “business operations subject to the authority of the board of directors,” the securities report states. Wood and Laffer also serve on the board of NexPoint entities. A NexPoint spokesperson didn’t respond to an email requesting comment.