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Rebecca Harris’s experience is becoming all too common. After relocating to Huntersville, North Carolina, in 2020, she rented from FirstKey Homes. The property had ongoing issues, including sewage leaks and broken plumbing, which were never addressed despite multiple repair requests. Frustrated, Harris withheld rent, ultimately facing an eviction notice.
This story highlights a larger trend where Wall Street-backed corporate landlords like FirstKey Homes are buying up single-family homes at a rapid pace. From 2010 to 2020, they acquired nearly 270,000 homes, driving up rent prices and home costs. In cities like Phoenix and Charlotte, this shift is making it increasingly difficult for first-time buyers, especially from marginalized communities, to afford homes.
Corporate landlords now own about 7% of the single-family rental market. This share is projected to jump to 40% by 2030, reshaping the housing market and creating barriers for those seeking to buy homes. These companies, often backed by private equity, are outbidding local buyers, fueling the housing affordability crisis across the nation.
In response to this, policymakers are starting to take action. Senator Jeff Merkley recently introduced a bill aimed at limiting corporate ownership of single-family homes. States like Arizona and Georgia have also passed laws to curb the power of corporate landlords, in an effort to promote a more balanced housing market and provide opportunities for first-time homebuyers.
The rise of corporate landlords can be traced back to the 2008 financial crisis. At that time, investors saw a chance to purchase distressed properties at bargain prices. Today, those investors control a growing segment of the housing market and continue to reap large profits. But this comes at the expense of local communities struggling with skyrocketing rents and limited homeownership opportunities.
For many renters, corporate landlords prioritize profits over maintenance and tenant satisfaction. Tenants often report unresolved issues, such as leaky plumbing or malfunctioning appliances, and face steep rent increases. In Harris’s case, FirstKey Homes ignored multiple requests for repairs, a situation all too common across the nation.
When renters, like Harris, withhold rent in protest of poor living conditions, they are often met with eviction notices. This practice leaves tenants with little recourse, even if they are being mistreated by their landlords. As corporate landlords gain more control over the market, this creates significant challenges for renters, who now face the constant threat of eviction when they stand up for their rights.
Evictions are becoming an alarming trend, especially for tenants who are unable to pay rent due to unaddressed maintenance issues. Corporate landlords often respond quickly with eviction notices, exacerbating the housing insecurity faced by low-income families. These families, already struggling with high rent prices, are now at risk of being displaced from their homes without any accountability from their landlords.
In many cities, corporate landlords are outbidding local buyers, creating an environment where homeownership is out of reach for many. Institutional investors now control a growing portion of the market, increasing rents and limiting affordable housing opportunities for families. The imbalance is particularly evident in communities of color, where rising rents and limited opportunities for homeownership are leading to deeper racial disparities in housing.
The National Low Income Housing Coalition reports that over half of Black renters live in areas where institutional investors control properties. This trend is contributing to a growing racial wealth gap and further deepening inequalities in homeownership. As corporate landlords continue to expand, the challenges facing renters and future homeowners are expected to worsen.
Data from the Urban Institute indicates that institutional investors owned 6.7% of single-family rental homes in 2021, and this share is expected to increase dramatically by 2030. The surge of corporate landlords presents an even greater challenge for renters who are already grappling with high rents and limited options. The rise of these investors, however, is now facing resistance from a new, powerful single-family rental lobby determined to balance the scales in favor of tenants and local communities.
Image Credits - Unsplash