When Large Corporations Buy Homes and Become Landlords
"Just as high-priced condos in expensive cities have become a new kind of asset for large companies and wealthy foreigners, so too have larger and larger numbers of single-family homes been turned into investment vehicles for large corporations," writes Richard Floria.
A new working paper from the National Bureau of Economic Research shows that one of the outcomes of the Great Recession was a decline in home ownership of 4 percent between 2007 and 2014, when private companies came in and acquired these properties. "This represents more than $220 billion in housing value—a huge transfer of wealth from Americans who once owned, or would have owned, these homes, to large corporations," says Florida.
These companies, notes Florida, are profiting both from rental incomes in cities with lower home prices and from the appreciation of properties in more expensive cities. "For a growing number of families, the American Dream of owning their own home and the wealth and financial security that comes from it have given way to renting a place to live from a mega-corporation."