The metropolitan and neighborhood geographies of REIT- and private equity-owned single-family rentals


After the U.S. foreclosure crisis, institutional investors purchased thou- sands of homes and converted them into rental properties. Past research links these entities to a number of negative outcomes, including rent increases and eviction filings. This paper examines a larger variety of investors, including private equity firms and contract sellers. Using a national dataset of real estate transactions from 2010 to mid-2017, we examine the inter- and intra-metropolitan geography of institutional investors. Consistent with prior research, we find that large publicly traded entities purchased homes in growing Sunbelt metros, yet some specific firms target weaker-market metros. Large, publicly traded firms have concentrated investment in higher-value neighborhoods with larger shares of white residents. In contrast, private equity firms and contract sellers tend to invest in relatively lower-value neighborhoods with larger shares of Black residents. Results suggest different potential implications for these diverse actors’ investments, from crowding out prospective homebuyers to racial targeting.

Journal of Urban Affairs, forthcoming