Big landlords are in the hot seat
The role big companies like Invitation Homes, American Homes 4 Rent and other investment firms play in the single-family home market came under congressional scrutiny Tuesday.
Why it matters: The number of institutional investors shot up after the 2008 financial crisis, and again during the housing boom of the past couple of years — yet details on the single-family rental market are relatively hard to come by.
- Plus, the hearing comes at a time of soaring rents. Markets in some areas are so hot that bidding wars have taken place, the WSJ reported this week.
Driving the news: At the hearing, held by a House Financial Services subcommittee, Democratic lawmakers, advocates for affordable housing and academics criticized large firms for driving up rents and home prices — and for exacerbating the racial gap in wealth and homeownership.
- Representatives from those firms didn't participate.
Background: A report this week by the subcommittee examined the role that the five largest institutional landlords play. Some highlights ...
- In 2011, no single investor in the U.S. owned more than 1,000 homes. By the third quarter of 2021, the top five companies had 280,637 homes combined, according to data they provided to the committee.
- Corporate landlords evict tenants at higher rates than smaller landlords, per the report.
- Corporate landlords filed to evict at least 70,000 tenants between September and May of 2021 when the federal eviction moratorium was still in effect, according to data cited.
Yes, but: The crisis in affordability isn't the fault of these investment firms, said Jenny Schuetz, a senior fellow at the Brookings Institute, at the hearing.
- "Since the Great Recession, the U.S. has not built enough housing, leading to historically low vacancy rates and rapidly rising costs. Private equity firms and other institutional investors benefit from tight housing supply, but they did not create the problem," she said.