Spotlight on Investor Ownership of Housing
Institutional investor ownership of housing is a major driver of rising housing costs and deteriorating housing quality across a wide range of contexts and housing types, from rural manufactured housing to single family homes in the Midwest and Sun Belt to multifamily apartment buildings in hot markets like the Bay Area and New York City. This LISC Institute for Community Power Spotlight gives an overview of the rise of investor ownership and its impacts on communities, and strategies tenants and their community partners are using to reclaim their homes.
Institutional investor ownership of housing is a major driver of rising housing costs and deteriorating housing quality across a wide range of market contexts and housing types, from rural manufactured housing to single family homes in the Midwest and Sun Belt to multifamily apartment buildings in hot markets like the Bay Area and New York City. Despite industry trade group attempts to downplay their impact on housing markets, investors have purchased roughly 1/4 all single family homes for sale in recent years and as much as 1/3 of single-family homes in some states, and some analyses suggest that corporations may control 40% of single-family rental homes by 2030.
While predatory investors aggressively capitalized on tenant and small landlord distress to increase their market share through the pandemic, their entry into the housing market was facilitated by financial and regulatory reforms from the 1980’s-90’s, and dramatically increased in the wake of the 2008 foreclosure crisis, when investors scooped up distressed homes in hard-hit communities through bulk sales. These acquisitions are part of a long history of displacement and wealth extraction targeting low-income and BIPOC communities—particularly Black and Latinx households, who suffered higher rates of foreclosure than white homeowners and lost nearly $400 billion in collective wealth during the Great Recession—who now find themselves excluded from homeownership and paying more in rent to corporate landlords for worse quality housing.
In response, and drawing from powerful legacies of housing justice and community reinvestment organizing, tenants and advocates throughout the country are taking on institutional investors to reclaim their homes. This work includes identifying owners and their financial backers, documenting the impacts of investor ownership on tenants, pushing for local and state measures to curb speculation and strengthen tenant protections, and organizing to buy their buildings together. At the federal level, this bold organizing has put investor ownership at the center of debates about rising housing costs. For example, the Biden Administration’s recent release of a Blueprint for Renters Bill of Rights exploring administrative actions that can improve conditions for tenants puts special focus on the positive actions that the government-sponsored enterprises (GSEs), major players in the housing finance system, can play in protecting tenants from egregious rent increases. Meanwhile, rising interest rates and mid-size bank failures have put thousands of distressed loans up for sale and may lead some owners to sell their buildings and some lenders to sell distressed loans or foreclose. These dynamics present a critical window of opportunity to move buildings into responsible ownership, rather than losing them to an even more predatory buyer.
Given the urgency and scope of these challenges, this Spotlight highlights resources on investor ownership of housing for community development practitioners. A feature by the LISC Institute for Community Power highlights how LISC Cincinnati, LISC Toledo, and their partners are combating institutional investors in Ohio, including an update on the Cincinnati Port Authority’s purchase of 194 homes from a predatory investor and efforts to transition them to affordable homeownership. You’ll also find research documenting the impacts of investor ownership on communities and reporting on recent tenant and community victories.
Feature
The LISC Institute for Community Power shares how LISC Cincinnati, LISC Toledo, and their local partners are combating the surge of investor ownership in Ohio, improving housing quality, and preserving affordable homeownership and rental opportunities.
In Practice
The Private Equity Stakeholder Project reports on Blackstone's aggressive housing buying spree and efforts to ramp up evictions in the wake of the pandemic.
A report from the Center for Popular Democracy details tenant experiences and organizing efforts in homes owned by Progress Residential/Pretium Partners, which is increasingly targeting communities in the U.S. South for acquisitions.
The Lincoln Institute of Land Policy follows up with the Port Authority of Cincinnati a year after it successfully outbid investors to purchase a portfolio of 194 homes, and shares lessons from their efforts to transition the homes into affordable homeownership.
Researchers at the University of California, Berkeley traces the rise of corporate ownership of single family rental properties and gives an overview of how key industry players are carving out distinct market niches throughout the country.
A report from ACRE examines the National Rental Home Council, which is led by the largest single family rental companies in the country, and its efforts to undermine stronger tenant protections nationwide.
Research from LISC and UNHP offers rigorous evidence that large landlords have reaped the greatest profits in communities of color, and that this speculation drives evictions and poor housing maintenance quality. On the other hand, affordable housing investments create better-maintained homes and remove buildings from the speculative market.
What We're Reading
Vice reports on how tenants nationwide are organizing across private equity portfolios, taking their complaints to regulators and retirement funds invested in these firms, and winning improved conditions and rollbacks of predatory fees.
KC Tenants reflect on the importance of building tenant power and imagining alternatives to evictions and corporate ownership of housing in Kansas City, grounded in their successful campaigns to stop evictions, win right to counsel legislation, and win a new housing trust fund during the pandemic.
A LISC webinar explores how tenants are pushing for solutions to rising rents and evictions, and to address private equity’s role in exacerbating the nation’s housing crisis.
LISC President Denise Scott pens an op-ed on how private equity is destroying housing opportunities for low-income and BIPOC communities, and the importance of comprehensive preservation strategies that helps current residents stay in their homes and protects opportunities for new residents.
MHAction shares stories of manufactured housing residents who have seen affordability and livability of their homes deteriorate after being acquired by investor firms, and how residents are organizing to save their homes.
A Shelterforce series traces how housing become integrated with international financial markets and treated as an asset for financial gain, and explores the research, organizing, and policy strategies housing advocates are using to fight back.
ProPublica investigates how giant private equity firms have been buying up multi-family apartment buildings with the help of Fannie Mae and Freddie Mac, and the consequences for tenants.
The New York Times details the rise of the single family rental industry in the wake of the foreclosure crisis.