While many are now familiar with the effects of gentrification, Swedish filmmaker Fredrik Gertten asserts that there is something entirely new, and much more sinister, happening to our cities. Financial firms are taking over large swaths of land, displacing long-time residents, and leaving vacant spaces in their wake. 

Gertten’s film, PUSH, singles out the Blackstone Group, Inc. as a primary driver of this change, and a large part of the reason that tenants across the world are paying increasing shares of their income in rent. 

Blackstone, a private equity firm and the world’s largest real estate company, has a portfolio of approximately $325 billion. After the 2007 market crash, Blackstone capitalized on the housing crisis, buying up tens of thousands of homes to become the largest landlord in major cities across the globe. Today, the global real estate market is worth $217 trillion, more than the combined GDP of every country in the world.  

Gertten accuses Blackstone and its subsidiaries of charging exorbitant rents and fees, driving out local competition and aggressively (and often illegally) evicting lower income tenants in order to increase their profit margins.

The film’s premiere comes at a time of economic distress and increasing wealth disparity. The COVID-19 pandemic has exacerbated an already dire housing crisis, and rent payments have increasingly become a source of stress.

At the same time, the financial sector continues to grow, and the wealth of the richest 1% has increased during the pandemic. Last week, billionaire wealth topped $10 trillion for the first time ever. 

I interviewed Fredrik Gertten over Zoom, from his living room in Malmö, Sweden, where he spends most of his time.

For a lot of people, these ideas about the role of financial firms in the housing market are quite new. Can you tell us what led you to choose this subject? 

Well, basically I was just trying to understand what's what's going on. Why are prices shooting up all the time? Why are so many people living in distress? And we are not only talking about the poorest people but also, doctors, architects and journalists, a lot of people with decent jobs are living under the same stress. So there's obviously something wrong.  

Income inequality has been growing in an extreme way all over the world. The people who are rich are so much richer today than before. The rest of us are hardly moving anywhere. The crooks and the rule breakers are the ones who get stronger all the time. And everybody else is weaker.  

We have now a new kind of landlord. A global one, a hedge fund. The distance between the tenant and the landlord has never been larger. 

You focus a lot of your critiques on Blackstone. What is unique about their model?

We were out trying to see this global pattern and quite quickly we could see that Blackstone was one of the drivers of this. But it's a model for the whole financial sector. 

In America, Blackstone owns 80,000 single-family homes, and forces a lot of people to rent the house they previously owned. After the 2008 crisis, people couldn't buy back their homes. You could only buy homes if you had a billion dollars, because they packaged them all together, and sold them as a whole.

Blackstone from nothing became the biggest landlord in the US, became the biggest landlord in Spain, the biggest landlord in Ireland. 

Then they organized these homes in financial products. The people who are buying into this are usually asset managers of pension funds or high net worth individuals who don't really know what they're buying into. They're just buying a product that will give them a return on their investments. 

The distance between the person living in the home and the investor has never been bigger. And that makes something change within our whole society, because well, it's nothing personal. I'm just investing some money. Why are you so angry? Well, I lost my home or I need to have two extra jobs to be able to pay the rent because my rent has doubled or tripled. In San Francisco, the average two bedroom is $4600 a month. Who can pay that? It's totally silly. 

How do you see your role as a filmmaker in pushing this conversation forward? What was your goal in making this movie?

I entered into this with the idea that if you zoom out to a global level, you're more likely to find the pattern. If you're too close to the ground, you will enter into all the local stories, all the local politics. 

 I was happy to find Leilani Farha [former UN Special Rapporteur on Housing], because she has this global perspective. I’ve been trying to find a way to explain for myself what is going on. 

The whole setup, the language that they are playing around with is made to confuse us. It's made to make us dizzy. I think I really wanted to skip the financial lingo, because you can still see the effect of what they're doing. They have found out that our homes are a great place to grow money. Homes all over the world have suddenly become a place to grow money. We haven't seen this before in history. 

You say that the financialization of housing has dramatically accelerated in the last 3-4 decades. What has changed in the world that's allowed this to happen?

It's what some people call neoliberalism, but you can also call deregulation. It's the deregulation of the money markets and the flow of money. Some of that was necessary because we got computers. Everything was quicker, so it was impossible to keep the old model where you actually have to sign a paper whenever you want to export money. 

People around the world have cut public expenses, which has led to not only weaker states but to weaker cities. As Saskia Sassen explains in the film, the balance has shifted, the toolbox of a city or national government is much more empty.  

[Financial firms] have been investing into lobbying and think tanks, so almost everybody's talking their language. And that's part of how they've been winning. By changing the language. The market will solve everything, that's what they've been saying for 40 years.

 These companies talk about market rents. The market should be where people can pay. And being able to pay not doesn't mean paying 90% of the money you have, because that's not fair. It's also bad for the economy. It means that you're eating your porridge, you're eating your noodles and you don't have time. You can't go to a bar and have a glass of wine. You can't take part. That harms the local economy. 

 A private equity fund who owns your home is sending all the money away, that money is not being spent locally. It's fake growth. It has nothing to do with the real world, with growth that affects people's lives. 

You’ve made some controversial films in the past, and have even been sued once before, by Dole Food. Have you seen any backlash from Blackstone?

Yes, so I know how evil they can be. If they thought suing me would be successful, they would have done it. But of course they also have to weigh the possible backlash coming out of a measure like that. 

We had festival premieres earlier in the US. We showed the film in New York and one of the sponsors of that screening got contacted by Blackstone, claiming that there were factual errors in the film. When we showed the film in the Swedish Parliament, Blackstone wrote letters to the Parliament. When broadcasters have been showing the film in Sweden, Germany, France and other countries, Blackstone has been writing to them. 

But the broadcasters have mainly just sent them off, so it's been cool. 

One bank pulled out of Blackstone as a result of your film — could you tell us a little more about how that happened?  

When we released the film in Sweden, a year ago, there was an NGO called Fair Finance Guide who published about investments that Swedish Banks had in Blackstone. One of the bigger banks, Swedebank, is a cooperative bank, so they got internal pressure from their workers and actually pulled out.

That's the way to fight them because you can move pension funds and unions to divest. The whole city of New York divested from oil and gas and fracking, so it's possible.

In the last several months, this subject has become even more relevant with COVID, as we’re seeing increasing distress for renters. Is there a chance that financial firms will capitalize on this crisis the way that they did in 2007/8?

Forty million Americans are one rent payment away from eviction. It's an earthquake coming in. If you look at the history of Blackstone, they've been able to grow whenever there’s been a crisis. While the rest of us are suffering, they grow. 

But we should remember that Blackstone moved in four years after the 2008 crisis. They're waiting with their dry powder, waiting to grab these assets when they can get it for the best price. It's not there yet because there are still government incentives helping homeowners a little bit. 

That gives you and me and all the others some time to fight back.

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You can learn more about PUSH and watch the film virtually at www.pushthefilm.com.

Maansi Shah is an MPA student in social and urban policy at SIPA. She studies land and housing policy in South Asia and the United States, and has previously worked on local and international policy for the UN Habitat-Kosovo, the City of Santa Monica and the Indian Habitat Forum.