In recent years, the American dream of homeownership has become increasingly elusive for many working-class families. This shift is not merely due to rising housing prices but also the result of Wall Street’s aggressive entry into the single-family home market. According to Sam Black of More Perfect Union, big investors purchased more than one in every four single-family homes sold nationwide in 2022. This article explores the video that dives into how corporate landlords are reshaping the housing landscape and driving up costs for everyday Americans.
The Rise of Corporate Landlords
The housing market has drastically changed in the past 15 years, becoming a playing field for massive corporate interests rather than individual homeowners. According to Black, “home prices have gone up, rents have gone up, evictions have increased,” and many would-be home buyers are now permanent renters. The culprit behind this shift is Wall Street’s growing influence, which treats neighborhoods like stocks to be bought and sold for maximum profit.
Personal Impact: A Story from Charlotte
Sandra De Los Santos, a long-time renter in Charlotte, North Carolina, provides a firsthand account of this reality. She has rented the same house for seven years but faces eviction despite her efforts to maintain the property. Her landlord, Amherst Holdings, is a private equity firm that owns over 1,500 homes in Charlotte alone. Despite paying her rent on time and even spending $25,000 on repairs, Sandra was given a meager $2,000 offer to vacate her home at the end of her lease. “It’s a slap in the face,” Sandra says, a sentiment echoed by many others in her situation.
Post-2008 Housing Crisis: An Opportunity for Wall Street
The 2008 foreclosure crisis was a turning point for the housing market. Wall Street firms capitalized on millions of foreclosed homes, purchasing them at low prices and renting them out for profit. Taylor Shelton, a geographer who studies housing markets, explains that before 2008, “large corporations were really not involved in the single-family rental market at all.” However, the crisis provided them with “a mass of available inventory for extremely cheap,” allowing them to build substantial property portfolios in a short time.
Declining Homeownership Rates
As a result, homeownership rates have declined, and the benefits of rising property values have disproportionately gone to Wall Street. By 2022, large investors were purchasing over 25% of single-family homes sold in the United States, with companies like Invitation Homes and Progress Residential leading the charge.
Market Influence of Corporate Landlords
The influence of corporate landlords extends beyond simple property ownership. These companies have a significant impact on local housing markets, often outbidding potential homeowners with all-cash offers that are difficult to compete against. This trend has forced many individuals into the rental market, where these same corporations control rent prices. Robby Caban, an Atlanta real estate broker, notes that her clientele, including first-time homebuyers and elderly individuals, “are no longer able to purchase…because they cannot compete with the other buyers in the market.”
A New Type of Monopoly
Wall Street’s dominance in the housing market is particularly pronounced in cities like Atlanta, where institutional investors own over a quarter of single-family homes. “The pool of homes available has been so diminished that normal people with general lending cannot compete,” Caban adds. This situation leaves many with no choice but to rent, often from the very corporations that have priced them out of homeownership.
Building Local Monopolies
The concentration of property ownership among a few large firms has led to monopolistic conditions in some neighborhoods. According to Shelton, “In some neighborhoods, it’s upwards of 50 or even 75% of all single-family rentals are owned by these large Wall Street investors.” This market power allows them to raise rents and fees, evict tenants more readily, and neglect property maintenance, resulting in poorer living conditions for higher prices.
Struggling Renters: Austin Hunter’s Experience
Austin Hunter, a cabinet maker in Atlanta, has experienced the squeeze firsthand. Over six years, his rent has doubled, prompting him to consider living in his van as a long-term solution. “How am I supposed to compete with a hedge fund from Texas that’s trying to buy a house?” Austin asks, expressing frustration at the seemingly insurmountable challenge of achieving homeownership in the current market.
Legislative Efforts and the Need for Reform
Recognizing the negative impact of corporate ownership on the housing market, the Biden-Harris Administration has proposed measures to slow rent increases and curtail corporate landlord influence. The administration aims to “cap rent increases at no more than 5% a year.” Additionally, Senator Jeff Merkley has introduced a bill to limit corporate ownership to 100 properties, requiring excess properties to be sold within ten years. However, despite these efforts, no legislation has yet been passed.
“It Should Be Illegal”
People in the comments shared their thoughts: “It should be illegal for corporations to buy up single family homes, full stop.”
Another commenter said: “This is where government should have stepped in a long time ago: single family homes are for single families ONLY – NO ‘investors’!”
One person concluded: “Greed is not the desire for more, it’s the desire for more at the expense of others.”
The Broader Impact and Need for Policy Solutions
While corporate ownership is not the sole issue in America’s housing crisis, it is a glaring example of a system prioritizing profits over people. The growing influence of Wall Street in residential neighborhoods highlights a fundamental problem: the devaluation of community and individual well-being in favor of financial gain. As Black poignantly states, “We value money, not people. That’s what this system says.”
The challenges faced by renters and prospective homeowners today are deeply rooted in systemic issues that require comprehensive policy solutions. Without significant reform, the dream of homeownership will remain out of reach for many Americans, further entrenching inequality and diminishing opportunities for economic mobility.
Corporate Ownership Limits
What are your thoughts? Should there be legal restrictions on the number of single-family homes a corporation can own to prevent market monopolies? How can laws be strengthened to protect tenants from unfair practices by corporate landlords? What are the long-term social effects of increased corporate ownership of single-family homes on local communities?
For an in-depth look, view the complete video on More Perfect Union’s YouTube channel here.
