Invitation homes blkstn

see homeless social housing vienna

4. What about in California?

Lists of top single-family rental markets vary, but Atlanta, Georgia; Charlotte, North Carolina; and Jacksonville, Florida regularly come out on top. California does not appear to be a destination of choice for the nation’s largest investors. Less than 2% of single-family homes are owned by investors with 10 properties or more, statewide, according to the California Research Bureau.

What institutional investor-friendly markets have in common: Rapidly growing populations and relatively low real estate prices compared to rents.

“That does not describe California at all,” said Laurie Goodman, an economist at the Urban Institute.

When big investors do show up in California it’s disproportionately in the state’s quickly growing, still relatively affordable regions: the Inland Empire, the southern half of the San Joaquin Valley and the Sacramento suburbs. The county with the highest share of single-family homes owned by big investors is Fresno at 5.9%, according to the California Research Bureau.

Fresno is a bit of an unusual case, in that the largest single owner there, JD Home Rentals, is a local outfit whose portfolio of some 2,000 homes are clustered in that region.

Statewide, the largest single corporate owner is also the country’s biggest. Invitation Homes kicked off the corporate single-family rental rental trend when it started buying up distressed houses, rehabbing them and putting them on the rental market in 2012. Originally funded by theprivate equity giant Blackstone, the company has since become its own publicly traded company. The company owns 84,567 homes, of which 11,862 are in California, according to its most recent filing with the Securities and Exchange Commission.

5. Do corporate landlords cause rents to go up?

There are plenty of anecdotes of big investors sweeping into a neighborhood, only for rent hikes to follow. Do big investors cause rents to rise or do rising rents attract big landlords? When researchers have tried to disentangle those two trends, they’ve produced mixed results.

One national overview found that rising rents in a city reliably preceded an increase in single-family investor activity three months later. But they didn’t find that the reverse was true, implying that investors chase after rising rents, but don’t cause them.

“I think that the investor problem is kind of a boogeyman for the housing market.”

DARYL FAIRWEATHER, ECONOMIST, REDFIN

But another study found that single-family areas with higher concentrations of corporate ownership did, in fact, see modestly higher rents than comparable neighborhoods. These companies were able to exploit their relative control over a neighborhood’s housing stock to extract higher than fair-market rent from tenants, the researchers found. But the researchers also found a second explanation behind the rental run-up: By beefing up security across a slew of properties in the same area, they were able to lower crime rates and “enhance neighborhood quality.”

Many larger landlords also use rent-setting algorithms designed to squeeze the highest rent possible from new tenants. Defenders of the industry say those programs simply allow landlords to find an area’s market rent, though renters, prosecutors and federal regulators have argued that, at least in the apartment rental industry, it has amounted to illegal price-fixing.

6. Do big buyers take homeownership opportunities away from first-time buyers?

Every house that’s bought by a major investor and converted into a rental is one fewer opportunity for a would-be first-time buyer. That zero-sum trade off is particularly acute in places where few new homes are being built. A study out of Atlanta found that an influx of institutional investment in a neighborhood predicted a decline in the area’s homeownership rate. Likewise, a study in the Netherlands found that the reverse was true: When cities banned investors from converting homes into rentals, the number of first-time buyers shot up.