The sad state of Black people in Baltimore was brought to light with the killing of Freddie Gray while he was in police custody. While poor communities have been subjected to police violence for years, this system of physical oppression has been undergirded by a system of economic exploitation, where the wealthy exploit the misfortunes of the poor. This economic manipulation of the vulnerable has fueled the anger of Baltimore’s Black communities, with their chronically high poverty and unemployment rates.
As was reported in Think Progress, amid the economic devastation faced by struggling families in Baltimore, powerful hedge funds are buying up liens as small as $250 and $500, charging high interest, and taking their homes when they cannot pay. The liens are related to debts on things such as unpaid property taxes and delinquent water bills, and millions of dollars of property is being seized from the poor and placed in the hands of billionaires who support prominent politicians of both parties including Democratic presidential candidate Hillary Clinton.
A report from the advocacy group HedgeClippers, revealed Baltimore is one of the few cities where homes are auctioned off due to a failure to pay water bills, and allows residents to have their debts sold to speculators when they accumulate to only a few hundred dollars. In other cities, the threshold debt amount for a property to be subjected to a tax lien sale is much higher, including $1,000 for New York City, and $2,500 for Washington. Baltimore also stands alone in the exorbitant interest rates these speculators can charge poor homeowners—as much as 18 percent. If these homeowners cannot pay within two years, they lose their homes.
According to the Abell Foundation, these families, the majority of them African-American, had lived in their homes for an average of 21 years. Half were elderly, and over a third were disabled. Further, tax sale foreclosures are a $15 billion national problem that destabilizes communities, and unduly enriches wealthy investors while confusing vulnerable homeowners. For a city such as Baltimore, the Abell Foundation notes, “counselors, lawyers and advocates of low income homeowners say the tax sale can lead to evictions, homelessness and property abandonment in a city already plagued with all three.”
The problem is particularly pressing when one considers that, as the Washington Post reported in May 2015, Baltimore has over 16,000 vacant houses according to the city. It’s 46,800, according to the U.S. Census definition, which amounts to 16 percent of the city’s housing stock. These buildings are concentrated in the neighborhoods with the lowest life expectancy. And while these houses sit vacant, many people in the city cannot access affordable housing. For every 100 low-income households in Baltimore, there are 29 affordable units of housing, according to the Urban Institute. This, in a city where 3,000 people are homeless on any given night, and 30,000 are homeless over the course of a year.
Two of the hedge funds profiled by HedgeClippers who benefit from the misfortune of Black homeowners in Baltimore are Los Angeles-based Imperial Capital, and “DBW TL HoldCo 2015 LLC” — an anonymous company apparently related to the New York-based Fortress Investment Group.
“Fortress Investment Group describes itself as a ‘garbage collector,’ purchasing distressed assets across the world and trying to squeeze profits from struggling debtors,” said the report. “A publicly traded behemoth boasting $67.5 billion in ‘fee paying’ regulatory assets under management, Fortress executives are some of the wealthiest human beings on Planet Earth.”
Michael Novogratz, a principal and director of the company, has an estimated networth of $1 billion and owns a $12.5 million, 4,600 square foot loft in Tribeca, Manhattan, formerly owned by Robert De Niro. Novogratz has donated hundreds of thousands of dollars to prominent democrats such as Senators Charles Schumer and Bob Menedez. The company is a lender to the distressed A&P supermarket chain, forcing it to close stores and eliminate thousands of union jobs.
Meanwhile, Imperial Capital, whose top executive, Jason Reese, lives in a $9 million mansion in Pacific Palisades, Calif., contributed to the campaigns of George W. Bush, Mitt Romney and other Republican politicians. Two former attorneys for Woods Cove, an affiliated company, allege that the company was charging debtors in the Cleveland areas as much as 450 percent interest.
Given that Clinton, who recently spoke in favor of #BlackLivesMatter and against the racial inequities in society, has received contributions from hedge funds who are exploiting Black people, it’s certain that more will be heard about this issue.
