Abstract
After the U.S. foreclosure crisis, institutional investors purchased thousands of homes and converted them into rental properties. Past research links these entities to a number of negative outcomes, including rent increases and eviction filings. This paper examines a larger variety of investors, including private equity firms and contract sellers. Using a national dataset of real estate transactions from 2010 to mid-2017, we examine the inter- and intra-metropolitan geography of institutional investors. Consistent with prior research, we find that large publicly traded entities purchased homes in growing Sunbelt metros, yet some specific firms target weaker-market metros. Large, publicly traded firms have concentrated investment in higher-value neighborhoods with larger shares of white residents. In contrast, private equity firms and contract sellers tend to invest in relatively lower-value neighborhoods with larger shares of Black residents. Results suggest different potential implications for these diverse actors’ investments, from crowding out prospective homebuyers to racial targeting.
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Eric Seymour, PhD. is an Assistant Professor researching community development, housing, informatics, statistical research methods, and GIS