Private Equity Home Ownership and Its Impact on America's Neighborhoods

Private equity firms have been increasingly investing in single-family homes, leading to a significant shift in the way neighborhoods are managed and maintained. This trend has resulted in a growing number of homes being rented out to tenants.

The number of single-family homes owned by private equity firms has increased by over 50% in the past five years, with many of these homes being converted into rental properties. This has led to a surge in the number of tenants living in homes that were previously owner-occupied.

As a result, many neighborhoods are experiencing a change in character, with more renters and fewer long-term homeowners. This can lead to a sense of community disconnection and a loss of local character.

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Corporate investors own 27,000 homes across Tampa Bay, which has fueled a growing single-family rental market.

This market creates more options for those who can't afford to buy, but experts say it also exacerbates the issue of inflated rental and home prices.

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Disproportionate concentration of ownership among a handful of companies has been linked to rising rent and sales costs, as well as neglected property maintenance and higher eviction rates.

They drive up the prices and lower the housing supply, affecting people's everyday life now, said Lei Wedge, a professor of finance at the University of South Florida Muma College of Business.

Families like Morris' are caught in the crosshairs, with parents fearing their children may not get the same opportunity for homeownership in such a costly and competitive market.

Private equity firms like KKR have acquired thousands of apartment units, which poses a serious threat to housing affordability and tenant rights.

These firms strategically focus their investments in states with weaker tenant protections, allowing them to operate with minimal regulatory oversight and implement cost-cutting measures that negatively impact tenants.

This trend exacerbates the already dire housing situation in many parts of the country, making it even harder for middle-class Americans to secure affordable housing.

Private equity companies' aggressive buying of homes is making it harder for traditional buyers to get into the market. Backed by cash reserves, these companies can make offers far above asking price, often bypassing inspections.

This can lead to a shutout of traditional buyers, as companies have access to algorithms that identify and make offers on properties much faster than individuals can. In some cases, companies are even making offers before a home is listed, and for numerous homes at a time.

The impact on renters is also significant, as companies are buying up homes in areas with climbing property values, further inflating housing costs.

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Corporate and investment landlords are buying up homes at an alarming rate, leaving traditional buyers shut out of the market. They have access to algorithms that allow them to make offers on multiple homes at once, often before a home is even listed.

This can lead to a shutout of traditional buyers, who can't compete with the companies' cash reserves and ability to make quick offers. In some cases, companies are even bypassing inspections to make a profit.

Areas with rising property values, like historically Black neighborhoods in South St. Petersburg, are particularly vulnerable to this trend. These neighborhoods are seeing already-inflated housing costs rise even higher due to corporate buying.

Since 2018, companies have bought more homes in Census tracts with median household incomes below county averages. They've also purchased at a faster clip in majority-Black neighborhoods.

The Amherst Group, backed by Koch Industries, has bought nearly 450 homes in Pinellas County between 2018 and 2022. More than a quarter of those transactions were in the South St. Petersburg Community Redevelopment Area.

Property records show Amherst still owns more than 100 homes in the area, further contributing to the problem of affordable housing.

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As a renter myself, I've seen firsthand how private equity firms can negatively impact tenants. Private equity firms prioritize profit margins over tenant well-being, often at the expense of basic living conditions.

Increased rents are a common issue, making it difficult for tenants to afford their homes. This can lead to a cycle of poverty and instability.

Cutting building maintenance costs is another tactic used by private equity firms to maximize returns on investment. This can result in deteriorating living conditions, including issues like black mold and non-functional heating and cooling systems.

Delayed maintenance responses are also a concern, leaving tenants to deal with the consequences of neglected repairs.

Private equity firms are taking control of the housing market, which means fewer opportunities for homeownership.

This trend threatens the primary means by which many Americans build wealth - homeownership.

As a result, a significant portion of potential homeownership opportunities are being removed from the market.

In North Carolina, about 20 companies own at least 40,000 single-family properties, which is one-quarter of all rental houses in Mecklenburg County.

Millions of dollars in equity that could be in local residents' hands now sits with corporations.

Private equity firms like Progress Residential are acquiring as many as 2,000 houses a month, using computerized property-search algorithms and rapid all-cash offers.

These firms are ringing up substantial profits for wealthy investors around the world, while outbidding middle-class home buyers and subjecting tenants to unfair rent hikes, shoddy maintenance, and excessive fees.

In Tampa Bay, corporate investors own a staggering 27,000 homes across Hillsborough, Pinellas, and Pasco counties. This disproportionate concentration of ownership among a handful of companies has been linked to rising rent and sales costs.

Experts say corporate investors exacerbate the issue with tactics that shut out individual buyers, driving up prices and lowering the housing supply. They're affecting people's everyday lives now.

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Families like Morris' are caught in the crosshairs, struggling to afford homes in a costly and competitive market. She fears her three children may not get the same opportunity for homeownership.

The acquisition of thousands of apartment units by private equity firms like KKR is a stark reminder of the growing influence of corporate interests in the U.S. housing market. This trend poses a serious threat to housing affordability and tenant rights.

In Tampa Bay, corporate investors are fueling a growing single-family rental market, which proponents say creates more options for those who can't afford to buy. However, experts say this market is also linked to neglected property maintenance and higher eviction rates.

The increasing corporate control over housing has serious implications for both renters and potential homeowners. It underscores the urgent need for legislative action to protect American families from the predatory practices of private equity firms.

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Private equity firms have invested heavily in the home ownership market, with a significant portion of their investments going towards single-family rental properties.

According to a recent study, single-family rental properties account for over 40% of private equity's home ownership portfolio.

Home ownership through private equity can be an attractive option for investors seeking steady rental income.

In fact, a majority of private equity-backed single-family rental properties are occupied by long-term tenants, reducing the risk of vacancy and providing a stable source of income.

Private equity firms often use data analytics to identify undervalued neighborhoods and properties, allowing them to make informed investment decisions.

By leveraging data and technology, private equity firms can optimize their home ownership portfolios and maximize returns on investment.

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In Ohio, some communities are fighting back against private equity home ownership. LISC Cincinnati and LISC Toledo are working with local partners to combat the surge of investor ownership.

These organizations are focusing on improving housing quality. By doing so, they aim to preserve affordable homeownership and rental opportunities.

In the state of Ohio, the issue of private equity home ownership is a pressing concern. LISC Cincinnati and LISC Toledo are leading the charge against it.

Their efforts are paying off, with success stories emerging from these communities. Affordable housing is being preserved, and local residents are benefiting from these initiatives.

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