Transcription
It's been catastrophic. Really, just a few firms have been able to target and and corner the market here. Their business model is built on exploitation and on having a very uneven playing field tilted in their favor.
It makes you feel insane because it's like there's a conspiracy against me at this point. If you're looking for a place to live right now, you face a radically different housing market than people did even just 15 years ago. Home prices have gone up, rents have gone up, evictions have increased, and a whole group of would-be home buyers has been priced out of home ownership, becoming permanent renters. They've been replaced by an industry that treats our communities and neighborhoods like a day trader treats stocks, just something to buy and sell to maximize return.
This is a problem that didn't exist 10 or 15 years ago. Taylor Shelton is a geographer who maps the ownership of single-family homes. Prior to the 2008 foreclosure crisis, large corporations were really not involved in the single-family rental market at all. After the 2008 crash, Wall Street saw an opportunity in millions of foreclosed homes, especially in the Sun Belt city's hardest hit.
What the foreclosure prices presented was a mass of available inventory for extremely cheap. So when property values skyrocketed over the next decade, the proceeds went to Wall Street, not to the people who now rented the homes. The result has been a housing recovery without a homeowner recovery. By 2022, large investors were buying more than one in every four single-family homes sold in the US.
There's really three things that that these landlords are able to do. The first is these landlords raise rent and fees at much faster rates than any other type of landlord. The second thing is that eviction is a really core part of their business model. Institutional investors are way more likely to file for eviction not as a kind of last resort but actually at the very first moment they're able to. And then the third thing is that we know these companies are actually producing worse outcomes in terms of building maintenance. So they are in effect providing a worse product for higher prices.
In Atlanta, Wall Street landlords now own more than a quarter of single-family homes. I met up with Robbie Kaban, an Atlanta broker who's been working in real estate for over a decade.
What I've seen is that that my clientele, that buying pool of first-time homeowners, they're no longer able to purchase. um they have just been wiped out uh because they cannot compete with the other buyers in the market. The pool of homes available has been so diminished that in essence normal people are priced out and they're forced into rentals.
According to one study, the shift from owning to renting has resulted in over a billion dollars of lost equity for renters over the last 10 years. And that's just in