Description

Large corporate investors viewed the COVID19 pandemic as an opportunity for investment in housing. Past research associates links large corporate investors in single family rentals to frequent rent hikes, hidden fees, poor maintenance, and high eviction rates. This research examines large corporate investors’ pandemic purchases in Southeastern cities. The investment patterns of rent-to-own firms, single-family landlords, and iBuyers/trading platforms show distinct profit strategies. By summer of 2021, large corporate landlords increased the number of homes they bought, until they comprised 25% of all single family homes. Prices rose too; large corporate single family landlords operators increased the median purchase prices by 28% each quarter and rent-to-own firms by 18%, far higher than the market average. The orientation of SFR and RTO firms towards price appreciation, as opposed to iBuyers, who profit off transaction costs, leads them to seek profits in different neighborhood contexts. Large corporate buyers of single-family rentals and rent-to-own firms increased purchases in non-white neighborhoods by 2.5 percent while non-corporate buyers of single-family rentals decreased purchases in non-white neighborhoods. These firms’ access to cheap debt, and increasing market power poses broad challenges to homeownership, while raising concerns about gentrification, equity stripping of Black, nonwhite Hispanic, and other marginalized communities, declining affordability and a widening racial wealth gap.

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