In this fifth blog post on our research into corporate ownership of New Jersey’s one- to four-unit residential properties, we share more preliminary findings from our analysis of changes in property ownership between 2012 and 2022. As growing corporate ownership has become a concern for housing advocates and policymakers nationwide, including in New Jersey, we set out to examine how much corporate ownership exists today, how it has changed over the past decade, and which communities have the highest or fastest-growing rates of corporate and other investor ownership.^[1]

To answer these questions, we are using historical tax parcel data to compare counties, municipalities, and neighborhoods based on the share of one- to four-unit residential properties owned by corporate investors. In our last blog post, we shared preliminary results identifying the New Jersey municipalities with the largest shares of corporate-owned one- to four-unit residential properties in 2012 and 2022, which revealed substantial increases in some municipalities.

Building on that work, we are also investigating where corporate investors acquired their properties, particularly the extent to which homes now owned by corporate entities were owner-occupied a decade earlier. This analysis is relevant to concerns that corporate buyers are acquiring homes at the expense of owner-occupants, putting pressure on prospective homebuyers and consigning more households to rent, often at higher and rising prices. However, as we noted in an earlier post, tracking change over time is complicated by challenges including shifting parcel identification numbers. After considerable effort, we are pleased to share additional preliminary findings.

Through this work, we found that in places where corporate ownership increased, those gains came from reductions in both owner-occupied and non-owner-occupied properties, though the relative contributions of each varied across the state. We also found that transitions to corporate ownership were most pronounced in denser municipalities with relatively lower home values, as well as in areas along or near New Jersey’s shore communities.

Figure 1 visualizes these trends, highlighting the top 25 municipalities with the highest rates of conversion from non-corporate to corporate ownership between 2012 and 2022 (excluding municipalities with fewer than 1,000 homes). The figure distinguishes between properties that converted from owner-occupancy to corporate ownership (in blue) and those that converted from non-corporate investor ownership (in purple), which typically reflects small-scale landlords, to corporate ownership. “From Other” refers to properties that were owned by non-corporate institutions, like banks. The length of each bar represents the percentage of homes that converted to corporate ownership in each jurisdiction, while the number (“N”) indicated at the end of each bar reports the actual number of units that converted to corporate ownership.

Among these municipalities with the largest share of conversions to corporate ownership, Trenton sits at the top. Properties that converted from owner-occupancy to corporate ownership accounted for 8.5% of all one- to four-unit properties in the city, while conversions from non-corporate investor ownership to corporate ownership accounted for an additional 10.2%. Together, roughly 19% of Trenton’s one- to four-unit properties transitioned to corporate ownership between 2012 and 2022, totaling 4,005 properties. Other municipalities with high rates of conversion include Bridgeton and Salem in South Jersey and Asbury Park and South Toms River near the shore. Newark had the second largest number of homes that converted to corporate ownership at 3,362, accounting for roughly 11% of all homes in the city, but it also has a much larger housing stock compared to smaller communities like South Toms River and Salem, which have higher overall conversion rates. However, it is important to note that Newark had a high rate of owner-occupied properties that converted to corporate ownership at 7.6%, second only to Trenton among larger cities. By examining these sources of inventory, we gain insights into whether corporate conversions represent changes in the existing rental market landscape or reductions in owner-occupied housing. In Bridgeton, for instance, corporate conversions were largely driven by the sale of a very large portfolio of rental homes held by a local landlord.

In preparing our final report, we will present additional information about these types of transitions at different levels of analysis and examine their association with different contextual variables, including historical housing market conditions, recent experiences of mortgage foreclosures, and changes in homeownership rates in areas with high investor ownership.

Figure 1: NJ Municipalities with the Highest Rates of Conversion to Corporate Ownership (per 100 Properties), by 2012 Owner Type

Notes: Includes municipalities with at least 1,000 residential properties. “N” indicates the number of properties that converted to corporate ownership 2012 to 2022. The numbers in the bars represent the percentage of all homes in the city that converted to corporate ownership.

References:

^[1] Troutt, David and Nelson, Katharine. 2022. Who Owns Newark? Transferring Wealth from Newark Homeowners to Corporate Buyers. Newark: CLiME https://static1.squarespace.com/static/5b996f553917ee5e584ba742/t/626fd98bb8357d201cb8dcb5/1651497359130/Who+Owns+Newark+Final+1.pdf