n the final stretch of her bid for the White House, Vice President Kamala Harris has made improving housing affordability a core promise of her campaign.
In addition to pledging to provide up to $25,000 in down-payment assistance for first-time homebuyers and a plan to drive new housing construction, Harris has also vowed to take on “abusive corporate landlords,” whom she partially blames for rent increases.
Nearly half of all renter households spend more than 30% of their income on housing costs, qualifying them as “cost-burdened,” according to US Census data in September.
While rent prices are undoubtedly rising, it’s unclear how much of the jump is due to corporate investors who buy up multiple properties. There isn’t a universal definition for “corporate landlords,” though Harris has called on Congress to pass a law that would remove key tax benefits for investors who acquire 50 or more single-family rental homes.
“Community after community feels taken advantage of by Wall Street investors and corporate landlords who have bought thousands of single-family homes during recent downturns,” Harris’ policy platform reads.
A CNN analysis found that rent increases recently outpaced wage growth in cities with a meaningful presence of big investors. But overall, these investors’ sway on the housing market is difficult to measure, said Michael Seiler, a real estate and finance professor at the College of William & Mary.
“I don’t know if we’re really going to have a firm grasp on their impact, but right now they’re a pretty small share of the market,” Seiler said. “However, they’re all creating demand for housing, and anytime you create that demand, you’ll see home prices push up.”
Here’s what we know — and what we don’t:
Homes in some cities are more attractive to investors
As of 2021, 71% of single-unit rental properties were still owned by individuals, not corporations, according to the most recently available data from the US Census. Ownership by corporate landlords, which CNN calculated by combining limited liability entities, real estate corporations and real estate investment trusts, stood at 16%.
Mega-investors, or landlords that have at least 1,000 properties, owned around 3% of homes in the United States as of June 2022, according to an analysis by the Urban Institute. While their share of ownership may seem small on a national scale, these mega-investors have bought up a more significant portion of single-family rental homes in cities like Atlanta (27%), Jacksonville, Florida (22%) and Charlotte, North Carolina (20%), according to Urban Institute data.
Some cities with high investor activity have seen considerable rent increases. Among 20 metro areas with a high presence of institutional investors, 13 have seen rent for single-family properties rise at a faster rate than wages compared to a year earlier, according to a CNN analysis of data in August from Zillow and the Bureau of Labor Statistics.
