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Meet the A.I. Landlord That’s Building a Single-Family-Home Empire

July 31, 2019

By Shawn Tully : fortune – excerpt

Data science helped Amherst Holdings CEO Sean Dobson make a fortune in the housing crash. Now he’s deploying A.I. to profit from properties that most investors wouldn’t touch…

…The rise of the single-family-rental industry reflects profound shifts in the finances and attitudes of America’s families. Homeownership, long a bedrock of financial stability, has become unattainable or undesirable for many middle-income workers—for reasons including tighter lending standards, large college-debt loads, and lagging wage growth and savings. According to ­Yar­deni Research, slightly more than one in three households that would have been buying first homes before the financial crisis is now either renting or still living with their parents.

The business remains highly fragmented: Institutional investors own only about 2% of America’s 15 million single-family rental homes. But over the past seven years, those investors have amassed a substantial portfolio—some 300,000 houses in all. The biggest players include Invitation Homes, a REIT that’s the product of a merger of rental divisions of several investment firms, including Blackstone, Starwood Capital, and Colony Capital; American Homes 4 Rent; and Amherst. All these landlords use automated house-hunting to fuel their growth. But Amherst differs from its rivals in focusing its computer models—and its business model—on affordable suburbs in the solid middle of the U.S. housing sector … (more)

Financialzation of housing: Many of us have worked to change the housing narrative promoted by Silicon Valley, media, and legislators: “Cities are to blame for the housing crisis; therefore their planning authority should be curtailed.” Michael Storper called it “the financialization of housing.” Here’s evidence of the the way this trend is growing. Unchecked, it will have dire consequences on the middle class, communities and democracy. We have a housing problem; but the crisis is CA legislators playing into the hand of institutional investors by undermining local control, community, and democracy.

– Comments by Susan Kirsch, of Livable California

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