Private equity firms own about 20% of Richmond-area apartments
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Illustration: Brendan Lynch/Axios
Richmond has one of the highest shares in the nation of apartments owned by private equity firms, according to a new report.
Why it matters: In communities where investment companies own a significant share of housing, residents tend to see lower housing affordability, higher rent and "aggressive evictions," per the report's author, watchdog nonprofit Private Equity Stakeholder Project.
The big picture: Private equity firms have been snapping up housing across the country in recent years, including in Richmond, where they're buying single-family homes, mobile home parks and even nursing homes.
- Home purchases by investors more than doubled during the pandemic before cooling off in 2023 and then coming back with a vengeance last year, a Redfin report found.
- The types of properties they buy may vary, but the playbook generally does not. When investment companies take over, residents often see longer wait times for maintenance issues, a proliferation of "junk fees" and rent hikes, the Stakeholder Project found.
- These firms are also more likely to use controversial rent-pricing software that can further drive up renters' costs.
Between the lines: Just over a quarter of Richmond renters spent more than half their income on housing in 2023, according to Census data.
- That data followed a report by the Harvard Joint Center for Housing Studies that found that at least 52% of Richmond renters spent 30% or more of their income on rent in 2022.
By the numbers: There are 18,460 apartment units in metro Richmond owned by private equity firms, or around 20% of all apartments in the area, according to the report.
- Richmond ranks 10th in the nation of cities where investment companies own a significant share of multifamily buildings.
- Raleigh ranked the highest with 35%.
Zoom in: At least a dozen of the private equity firms PE Stakeholder Project analyzed have holdings in Richmond, per an Axios review, including Blackstone, the largest private equity firm in the world.
- It bought The James, a student-focused apartment complex on Chamberlayne near VCU and VUU, in 2022 for $44.7 million, BizSense reported.
- A one-bedroom there starts at $1,399.
Zoom out: Statewide, these firms own 77,345 units, or 13.4% of apartments.
- Nationwide, 121 private equity firms own more than 8,200 apartment buildings with 2.2 million units. Two-thirds, or 1.4 million of those units, have been acquired since 2018.