“The Corporate Takeover of Housing”

Yves here. It is very hard to know where to begin with this article, since it repeats many tropes about the US housing market that are simply false. The big problem in the US is housing affordability. There is no housing shortage:

The total is just short of 148 million. About 35% is rental property, which has a typical vacancy rate of 7%, so one could argue for reducing the total stock by 3.6 million. FRED shows the active listings for owned residences at under 1.1 million; Zillow has the for-sale inventory as of end of June at 1.3 million. Generously (for the purpose of this analysis) using the Zillow figure and assuming all homes listed for sale are not occupied, we get 143.1 million, so say 143 million.

The Census put the number of households (admittedly as of 2023) at 127.8 million.

So there is no housing shortage on a macro level, as many claim.

Now real estate is always and ever local, so there are shortages in certainly chronically underhoused metro areas like New York City, and no doubt in certain other spots.

The not-sufficiently-discussed issues are the mismatch in housing stock composition versus needs (particularly the dearth of affordable housing) and the way policy schemes to increase housing affordability, just like the canard of health care “access”, have increased prices and enriched providers.

Let’s go through some underlying issues:

1. The breakdown of the traditional model of housing as a forced savings vehicle for retirement. Matt Stoller wrote about this in a law review article: The Housing Crash and the End of AmericanCitizenship. Back in the days when blue collar workers could buy a house, pay for a car in cash, and have a stay-at-home wife, jobs were stable. My father, who changed employers a few times, got raised eyebrows for tenures of less than 10 years. And even if not, labor demand was generally strong enough that a worker had good odds of landing other work in the same community for the same or even better pay.

So the 30 year mortgage was a good match for a typical career duration. A worker or professional would buy a home and pay off the mortgage and then live in it at lower cost when he retired.

Much shorter employment tenures are the norm. The average US employee has been with their current company only 3.9 years. Changing employers might entail moving, when transaction costs compared to the equity in a house are high. Divorce and disability also lead to home sales rather than staying put until you pay off the mortgage.

2. The US response to lack of housing affordability: to make housing less affordable. Dean Baker wrote about this after the global financial crisis (with worked examples) and was ignored. First buyer subsidies, allowing for more leverage, using government guarantees to lower interest rates allow for greater borrowing when buying homes which over time has helped drive up prices.

3. Zoning and shelter porn have contributed to too much building of too many big houses and not enough “starter homes” of the sort constructed after World War II and more modestly-sized condos and townhouses.

This table, although with dated data, presents per capita as opposed to per house data, and gives an even clearer picture of how extravagantly housed (on average) Americans are:

Many communities also resist building denser, as in less expensive housing, aka apartments and townhouses.

Another zoning contributor has been the end of single room occupancy hotels and boarding houses, where tenants would rent a room and share a bathroom. Some boarding houses offered meals for an additional charge. I had assumed that gentrification was the big driver for the loss of this sort of dwelling. However (and the passage of these laws and regulations may have been part of this gentrification process), in California, and I assume nearly all places, it is illegal to have a housing unit with no bathroom. The argument is that it was a health risk to have a shared bathroom.

4. As Elizabeth Warren outlined in The Two Income Trap, not mentioning how rising income inequality and the loss of inexpensive college education at often very good state schools (government subsidies fell markedly in the 1980s) has led to much greater competition to get into “good” colleges, led in turn to the phenomenon she flagged, of the big premium for housing in “good” and “pretty good” school districts.

The article also incorrectly states that “home prices have surged nationwide.” Admittedly this Zillow chart goes back only to 2017. However, the price appreciation over that period is about 5% less than CPI inflation, which most readers believe understates actual inflation. I don’t consider nationwide price increases that are less than CPI inflation to amount to a “surge”.

However, it is true that with stagnant real wages, the increase in housing prices can and likely does exceed the increase in average real wages. And that is a huge issue. But that was not the claim made.

In addition, the headline claim is incorrect as far as single family homes are concerned. Yes, private equity firms bought foreclosed homes from Fannie and Freddie after the crisis (and not in bulk sales, there was so much interest that the GSE did only “mini-bulks”). We warned at the time that single family homes were not well suited to corporate ownership and property management. They are too diverse in type and construction and too spread out to be managed efficiently. There are no scale factors save at most in rent collection. Consider the corporate owner’s economics versus that of the classic small landlord. He might be an electrician, plumber or carpenter and have someone regular who could perform the tasks beyond his expertise. The houses he owned would be nearby. And he would know their quirks.

By contrast, the driving distances alone and the difficulty of managing maintenance staff efficiently works against the owner of dispersed single family homes.

Wikipedia notes:

According to John Burns Research & Consulting, only 0.4 percent of single-family homes in the United States are owned by institutional investors with over 1,000 homes in their portfolio. This share rises to 3.8 percent of single-family homes for institutional investors owning over 100 homes, and up to 10 percent in certain metro areas such as Atlanta. Housing researcher Paul Fiorilla, quoted in the Washington Post, stated that it is unlikely that large institutional investors have a significant impact on prices, except for select areas where their concentrations are unusually high: “‘Any segment that owns such a small percentage of the market cannot have that much of an impact on prices,’ with the possible exception of a handful of communities with a significant concentration of big investors.” Some housing advocates have argued that public attention to large institutional investors distracts from structural causes of the housing affordability crisis, such as the housing shortage and its roots in exclusionary zoning and other laws that empower NIMBY obstruction of housing.

Indeed.

Now to the main event.

By John P. Ruehl, an Australian-American journalist living in Washington, D.C., and a world affairs correspondent for the Independent Media Institute. He is a contributor to several foreign affairs publications, and his book, Budget Superpower: How Russia Challenges the West With an Economy Smaller Than Texas’, was published in December 2022. Produced by Economy for All, a project of the Independent Media Institute

The 2025 U.S. housing market presents a paradox. Home sales are down, and there are far more sellersthan buyers, yet prices continue to hit record highs. Over the past decade, home values have surged nationwide, including in once-affordable Sunbelt cities.

Policymakers appear ill-equipped to respond to the situation. In a July 2025 interview with the New York Times, 16 U.S. mayors listed housing as one of their top concerns. During her 2024 presidential campaign, former Vice President Kamala Harris proposed tax credits for first-time buyers to alleviate the crisis, while President Donald Trump has renewed calls for interest rate cuts to help lower mortgage rates.

Homeownership remains central to the American dream, and U.S. homeownership rates have typically hovered around 65 percent “from 1965 until 2025,” according to Trading Economics. But the high-water mark came in 2004 when it reached 69 percent, and despite a temporary COVID-19-era spike, the rate has continued to inch downward. Worryingly, even among those who own homes, equity is shrinking. Many homeowners own less than half of their property’s value today, with the balance tied up in debt.

Many of the pressures are structural. Construction costs have soared, labor is in short supply, and tariffs have raised the price of materials. Zoning laws, tax regimes, and anti-density regulations have stifled urban growth, while sprawling development is hitting geographic and environmental limits. Mortgage rates remain high, and the national housing shortfall, now estimated to be more than 4.5 million, continues to worsen.

But the crisis has opened the door for new kinds of investors. A growing cast of corporate actors is moving into residential real estate, lured by the prospect of stable returns in a tightening market. Though they still own a minority of U.S. housing, these firms are often concentrated in key regions and markets. Increasingly capable of setting the terms of access to housing, their rising influence threatens to reverse the post-World War II surge in widespread homeownership.

Buildup

Large-scale corporate ownership of homes and influence over rent prices is a relatively recent development. Before 2008, most institutional investors stuck to apartment buildings and urban areas, as single-family homes were seen as too dispersed and costly to manage. That changed after the housing crash, when a wave of foreclosures flooded the market, leading to the availability of deeply discounted homes in the suburbs.

“In the decade since the global financial crisis of 2007-2009, major institutional financial actors have invested heavily in U.S. single-family housing, acquiring anywhere up to three hundred thousand houses, and then letting them out,” stated a 2021 article in Sage Journals.

In 2012, government-backed mortgage giant Fannie Mae began selling thousands of foreclosed homes in bulk to investors, showing single-family housing could be bought, held, and profited from at scale. At the same time, both Fannie Mae and Freddie Mac expanded support for institutional buyers through favorable financing terms and lower rates. Homebuilding, meanwhile, had collapsed, and a supply shortage began to take hold.

“The crash badly hurt a variety of sectors, but it simply devastated the home construction industry, given that the crisis was directly centered there. … with a glut of foreclosures on the market and prices falling fast, America simply stopped building homes. New private home starts plummeted by almost 80 percent to the lowest level since 1959,” according to a 2024 article in the American Prospect.

Investor interest surged as home prices recovered in the early 2010s. This era brought record-low interest rates and trillions in financial stimulus from the Federal Reserve and government, which helped stabilize the economy and flooded capital markets. With cheap borrowing and rising prices, housing became an attractive asset.

The COVID-19 pandemic accelerated this trend. Remote work drove people from cities to suburbs, while eviction moratoriums pushed many small landlords to sell, opening the door for larger buyers. Digital platforms made it easier to browse, purchase, and manage properties remotely. Alongside traditional banks, a wide range of financial firms and platforms have been profiting from rising demand and tightening supply.

Wall Street Landlords

Blackstone, one of the world’s largest private equity firms, became a pioneer in large-scale housing acquisitions after 2008. In 2012, it helped launch Invitation Homes, now the largest owner of single-family rentals in the U.S. Though Blackstone sold its stake in 2019, it reentered the market by acquiring Canadian real estate firm Tricon Residential in 2024, and sold 3,000 homes that year to UK’s largest pension fund for approximately $550 million, showcasing its global influence in housing.

Other major firms have followed suit. Progress Residential, backed by Pretium Partners, has come under fire for evictions, maintenance failures, and excessive fees. Amherst Holdings was profiled in Fortune in 2019 for using early predictive algorithms to identify and acquire homes, and advances in AI have only made this process more efficient.

Real Estate Investment Trusts (REITS), originally designed in the 1960s to give everyday investors access to real estate profits, are now largely dominated by major institutional firms like BlackRock, Vanguard, and private equity funds. Invitation Homes agreed to pay $48 million to the Federal Trade Commission in 2024 for junk fees, unfairly holding security deposits, failing to inspect homes, and using improper eviction tactics. Professor Desiree Fields, in testimony before the Senate Banking Committee in 2021, meanwhile, singled out Invitation Homes and American Homes 4 Rent as “particularly vocal about the use of extraneous fees to increase total revenue,” stated a 2022 article in the Charlotte Observer.

Corporate homebuying continues to climb. Institutional investors bought 15 percent of U.S. homes for sale in the first quarter of 2021, which climbed to nearly 27 percent by early 2025. In some markets, the footprint is even larger: during the third quarter of 2024, investors accounted for 44 percent of all home flips.

Some firms, like Rise48 Equity, focus on acquiring and renovating large multifamily buildings to raise rental income and property value. Others, like Amherst Holdings, are beginning to enter the rent-flipping space as part of a larger expansion policy. Unlike smaller flippers who tend to cash out quickly, these companies renovate and hold properties long term. A growing number of companies are focusing on build-to-rent subdivisions, with entire neighborhoods constructed specifically for rentals.

No single company dominates nationally, but corporate influence is unmistakable in certain cities. In Atlanta, private equity owns more than 30 percent of single-family rental properties, with corporate ownership disproportionately affecting Black neighborhoods, intensifying housing insecurity and displacement.

Large firms enjoy several structural advantages. They access cheaper institutional financing, often pay in cash, and benefit from early access to listings and local policy influence. Firms can use creative financing tools, like combining many homes into a single investment package and using the expected rent payments as collateral to borrow more money.

Bulk purchases allow them to cut costs on repairs, insurance, and maintenance, while builders are more inclined to sell homes in large blocks at a discount rather than wait for individual buyers, helping firms to avoid bidding wars. Unlike individual homeowners who often sell for financial reasons, institutional landlords can hold assets for years and sell only when market conditions are favorable.

Tax policies further tilt the scales. While individual sellers pay capital gains taxes on home sales, corporate buyers can use the 1031 exchange to defer taxes by reinvesting profits into like-kind properties, pushing tax burdens into the future. Rental property owners also get tax depreciation benefits, which allow them to deduct part of the building’s value each year, reducing their taxes, which compound over time.

Tech

Big Tech, with similar vast financial resources, has also become essential to the expansion of corporate housing. It enables investors to scale up, manage properties remotely, and influence markets and consumers to their advantage.

One of the most influential tools is YieldStar, a rent pricing software developed by RealPage, purchased by private equity firm Thoma Bravo in 2021. RealPage gathers extensive rental data from participating landlords and uses algorithms to recommend optimal prices. Landlords who don’t use the technology are often left at a disadvantage. Many property managers adopt these recommendationsautomatically, often under performance monitoring that discourages underpricing or offering tenant concessions.

In cities like Seattle, where a handful of property managers control large shares of the market, RealPage’s pricing influence can be especially powerful. A ProPublica investigation found that in one neighborhood, 70 percent of apartments were handled by 10 firms, all using RealPage software. Recommendations by the software included accepting lower occupancy rates if it leads to higher overall rent revenue. Critics argue that RealPage enables coordinated “rent-setting,” effectively encouraging landlords to behave like a cartel. The U.S. Justice Department opened a lawsuit against the company in 2024 for causing harm to American renters by using its “algorithmic pricing software.” The investigation remains ongoing.

At the same time, short-term rental platforms like Airbnb have also reshaped housing. With vast reach and deep legal resources, Airbnb has helped normalize rental conversions and contributed to higher rents in many cities. In 2025, the New York Post reported that the company funded $1 million to alleged grassroots groups, such as Communities for Homeowner Choice, to oppose a New York City law requiring hosts to be present during guest stays. It has also backed tax battles and filed lawsuits across the U.S., challenging occupancy taxes and other local regulations, costing cities millions in legal fees.

In both long- and short-term markets, tech platforms have made large-scale rental operations possible. Through pricing tools, political lobbying, and data leverage, housing is emerging as a more managed commodity. As corporate consolidation deepens and larger landlords become more integrated with tech platforms, these companies, and increasingly the property owners themselves, will exert even greater control over rent markets with less transparency or oversight.

Addressing the Issue

Organization for Economic Co-operation and Development countries, including the U.S., now have some of the lowest home ownership rates in the world, and the rise of institutional landlords will drive those numbers lower. The core problem remains supply, with Wall Street firms targeting homes precisely because there’s a shortage—something they openly acknowledge and tout to investors as a profit opportunity.

The city of Austin is a rare success story. After peaking at $550,000 in May 2022, median home prices fell to $409,000 by January 2025, and indicators point to a continual downward trend. The key difference has been that Austin has built more affordable housing, providing incentives to ease zoning laws.

Homeownership remains most common in rural areas, while urban centers have been hardest hit by rising investor activity and housing scarcity. Public involvement is critical to reducing the problem. Landlord interests, represented by groups like the National Multifamily Housing Council, carry enormous influence, while tenants rely on thinner support networks like the National Low Income Housing Coalition. Federal agencies like the Department of Housing and Urban Development and the Federal Housing Finance Agency play a role, but lag behind corporate influence. In comparison, Blackstone has faced greater resistance in European countries with stronger tenant protections and better-organized renters’ movements.

Policies like taxing the unimproved value of land could encourage development and discourage speculation on vacant or underused properties. Without effective measures, the concentration of land in private hands will only grow, whether through corporate landlords, billionaires like Bill Gates (who owns 250,000 acres spread out over 17 states), or creeping attempts to privatize public land. At stake is not just affordability but also whether the public retains any real claim to land and housing or surrenders it entirely to private capital.