What they appear to be doing to these houses almost looks like the planned obsolescence apparent in a lot of non-house things people buy; it looks superficially nice but on the inside it's shit and it's ultimately just there to make the seller money.
This is a bit of an unfounded fear of mine (as in, I don't know if legitimate or not), with regards to the widening income gap. How realistic would the following scenario be: A future where a small group of companies/funds/individual own a large fraction of the domestic real-estate. Some unspoken price-fixing, and the result is that it's impossibly expensive for anyone to purchase property and people are slaves to price-gauging on rentals to a point that it just pushes the income gap to the very extremes.
I wouldn't worry about it that much. As far as the newest data show, REO-to-rental pretty much dried up in 2013, because all of the decent available foreclosures are gone now. It was a thing for that time and place. Eventually, a lot of the houses will be resold at market rates. I bought a house in 2011. It was hell getting a mortgage. Credit was almost non-existent. There were a lot of foreclosures, but most of the sales were restricted to cash only. Average home buyers don't tend to have a few hundred thousand liquid. Hence, this weird investment vehicle for large firms. All things considered, as ugly as this looks, it probably helped to bring prices back up in many places, which is a good thing for homeowners. I wouldn't worry about price collusion in housing. It's too big for even big banks to control.