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How corporations took over single family home rentals

November 12, 2019

By citylab – excerpt


View of the Mission from Bernal Heights photo by zrants

The Great Housing Reset has led to growing numbers of single-family homes shifting from owner-occupied housing to investment vehicles for large corporations…

When most people think of housing, they separate it into two types: single-family suburban homes that people own, and apartments, largely in cities and urban centers, that people rent. Until recently, the popular image was more or less correct. Most single-family houses provided homes for the families that owned them.

But more than 12 million single-family homes are currently being rented in the United States. Those homes, valued at more than $2.3 trillion, make up 35 percent of all rental housing around the country. In the past, the great majority of single-family homes that were rented out were done so by their owners or small real-estate companies. But today, a large and growing share of single-family rental homes are owned and managed by large corporations, real-estate firms, and financial institutions. The percentage of home owners is at its lowest level since the 1960s.

More than $220 billion in housing wealth has been transferred from Americans who once owned, or would have owned, homes to large corporations…

Rental Yields are Higher Where Home Prices Rise Slowly… (see article for graph)

A basic pattern jumps right off this graph. On the one hand, in cities with lower overall housing prices, the rate of housing-price appreciation is lower, but rental yields are higher. On the other hand, in more expensive cities, yields are lower but appreciation is higher.

…. (more)

So, for house flippers looking for appreciation, they may do better in the more expensive cities, while renters who hold onto their property longer, get better returns by spending less, It depends on how you want to play the game and how big you are.

Corporations want to grow so the bigger they are the more likely they are to buy the competition to control the market. They do it with homes and food, nothing is off-limits for corporate takeover. Amazon wants to buy your local grocery store so they can control your diet. How many farmers will they put out of business in this endeavor? Is it worth it to lower cost or does the consumer get eaten by taking he bait and helping eliminate the little guys?

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