The Corporate Takeover of Housing

Wall Street Landlords Cashing In

THIS ARTICLE BY JOHN P. RUEHL

https://www.counterpunch.org/2025/07/14/the-corporate-takeover-of-housing/

As of July 14, 2025, the current state of the housing market in the United States presents a notable contradiction. Despite a decrease in home sales and an abundance of sellers compared to buyers, prices persist in reaching unprecedented levels. Home values have experienced a significant surge nationwide over the past decade, even in regions like the Sunbelt that were once known for their affordability. The response from policymakers appears inadequate in addressing this situation. In an interview with the New York Times in July 2025, 16 mayors across the U.S. ranked housing as one of their primary concerns. During her presidential campaign in 2024, former Vice President Kamala Harris suggested the implementation of tax credits for first-time homebuyers to alleviate the crisis, while President Donald Trump advocated for interest rate cuts to reduce mortgage rates.

The concept of homeownership continues to hold a central place in the American ethos, with homeownership rates in the U.S. traditionally hovering around 65 percent "from 1965 until 2025," according to Trading Economics. Although the peak was recorded in 2004 at 69 percent, with a temporary spike during the COVID-19 period, the rate has gradually declined. Concerningly, even among homeowners, the equity they possess in their properties is diminishing, with many owning less than half of their home's current value, the remainder being tied up in debt.

Numerous challenges contribute to this scenario. Construction expenses have risen significantly, there is a shortage of labor, and tariffs have pushed up material prices. Factors such as zoning laws, tax structures, and regulations limiting urban density have curtailed urban expansion, while sprawl development is encountering geographical and environmental constraints. Mortgage rates remain elevated, and the national housing deficit, now exceeding 4.5 million, continues to worsen.

Nevertheless, this crisis has paved the way for a new breed of investors. An increasing number of corporate entities are venturing into residential real estate, attracted by the promise of steady returns in a tightening market. Although they currently own a minority share of U.S. housing, these companies are usually concentrated in specific regions and markets. Their growing influence in shaping housing access poses a threat to the longstanding trend of widespread homeownership since the post-World War II era.

The landscape of large-scale corporate homeownership and its impact on rental prices is a relatively recent phenomenon. Before 2008, institutional investors primarily focused on apartment complexes and urban areas, considering individual homes too scattered and costly to manage. This perspective shifted after the housing market crash, which led to a surplus of foreclosed homes being available at discounted rates in suburban areas.

According to a 2021 article in Sage Journals, in the decade following the global financial crisis of 2007-2009, significant institutional financial players heavily invested in U.S. single-family housing, acquiring up to three hundred thousand houses for rental purposes. The initiative by government-backed mortgage giant Fannie Mae in 2012 to sell off numerous foreclosed homes in bulk to investors demonstrated that single-family housing could be efficiently purchased, maintained, and turned into profitable assets at scale. Concurrently, Fannie Mae and Freddie Mac expanded their support for institutional buyers through favorable financial terms and reduced rates. The collapse of homebuilding during that period led to a shortage in housing supply.

The interest from investors surged as home prices rebounded in the early 2010s, aided by historically low interest rates and substantial financial stimulus from the Federal Reserve and government, which stabilized the economy and injected capital into the markets. With inexpensive borrowing costs and rising property values, real estate became an attractive investment avenue.

The trend towards corporate investment in housing was further accelerated by the COVID-19 pandemic. Remote work prompted a shift of residents from urban centers to suburban areas, while moratoriums on evictions pushed many small landlords to sell their properties, creating opportunities for larger investors. Digital platforms facilitated remote property browsing, purchasing, and management, enabling a wide array of financial entities and platforms to capitalize on the rising demand and limited supply.

Blackstone, a prominent private equity firm, emerged as a trailblazer in large-scale housing acquisitions following the 2008 financial crisis. In 2012, it played a pivotal role in the establishment of Invitation Homes, now recognized as the largest owner of single-family rental properties in the U.S. Despite divesting its stake in 2019, Blackstone reentered the market by acquiring Canadian real estate firm Tricon Residential in 2024 and selling 3,000 homes to the UK's largest pension fund for approximately $550 million, underscoring its global influence in the housing sector.

Other major players in the industry have followed suit. Progress Residential, backed by Pretium Partners, has faced criticism for its eviction practices, maintenance deficiencies, and excessive charges. Amherst Holdings was featured in Fortune in 2019 for its use of predictive algorithms to identify and procure properties, with advancements in artificial intelligence further streamlining this process.

Real Estate Investment Trusts (REITs), originally devised in the 1960s to provide ordinary investors access to real estate earnings, are now predominantly controlled by major institutional entities like BlackRock, Vanguard, and private equity funds. In 2024, Invitation Homes agreed to pay $48 million to the Federal Trade Commission for unfair fees, mishandling security deposits, neglecting property inspections, and utilizing improper eviction strategies. Professor Desiree Fields, in testimony before the Senate Banking Committee in 2021, specifically highlighted Invitation Homes and American Homes 4 Rent for their excessive fee practices, as reported in a 2022 article in the Charlotte Observer.

The trend of corporate home acquisitions continues to rise. Institutional investors acquired 15 percent of available homes in the U.S. in the first quarter of 2021, a figure that climbed to nearly 27 percent by early 2025. In certain markets, this influence is even more pronounced, with investors accounting for 44 percent of home flipping activities in the third quarter of 2024.

Some companies, such as Rise48 Equity, concentrate on purchasing and enhancing large multifamily properties to boost rental income and property value. Others, like Amherst Holdings, are venturing into the practice of rent-flipping as part of an expanded business strategy. Unlike smaller-scale flippers who tend to swiftly sell properties, these corporations renovate and retain assets for the long term. A growing number of firms are focusing on constructing rental-specific neighborhoods, designed entirely for lease purposes.

While no single entity dominates the market at a national level, corporate influence is discernible in specific cities. In Atlanta, private equity firms possess over 30 percent of single-family rental properties, with a notable impact on Black neighborhoods, exacerbating housing instability and displacements.

Large corporations benefit from various structural advantages. They have access to cheaper institutional financing, frequently make cash transactions, and enjoy early access to property listings and influence over local policies. These firms utilize innovative financing mechanisms, such as bundling multiple properties into a single investment package and leveraging projected rental payments to secure additional loans.

Bulk acquisitions enable cost reductions in repairs, insurance, and maintenance, while builders are inclined to sell properties in bulk at discounted rates rather than awaiting individual buyers, enabling firms to sidestep competitive bidding scenarios. Unlike individual homeowners who may sell due to financial pressures, institutional landlords can retain assets for extended periods and sell when market conditions are favorable.

Tax policies further skew the playing field.

While individual vendors are subject to capital gains taxes on residential property transactions, corporate purchasers have the option to utilize the 1031 exchange for tax deferral by reinvesting proceeds in similar properties, postponing tax liabilities. Owners of rental properties also benefit from tax deductions due to depreciation, enabling them to deduct a portion of the property's value annually and thereby reducing their tax obligations over time. Big Tech companies, armed with substantial financial resources, have played a crucial role in the expansion of corporate housing. They facilitate investors in scaling up operations, managing properties remotely, and leveraging their influence over markets and consumers for their benefit. A notable tool in this realm is YieldStar, a rental pricing software developed by RealPage, which was acquired by private equity firm Thoma Bravo in 2021.

RealPage aggregates vast rental data from cooperating landlords and employs algorithms to suggest optimal pricing strategies. Landlords who opt not to utilize this technology often find themselves at a disadvantage. Many property managers automatically adopt these pricing recommendations, often under performance scrutiny that discourages undervaluing properties or offering concessions to tenants. In urban centers such as Seattle, where a small number of property managers dominate the market, the pricing impact of RealPage can be particularly significant. An investigation by ProPublica revealed that in a specific neighborhood, 10 firms managed 70 percent of the apartments, all utilizing RealPage software.

Recommendations from the software sometimes include accepting lower occupancy rates if it results in higher overall rental income. Critics argue that RealPage facilitates coordinated pricing strategies, effectively prompting landlords to act in a manner akin to a cartel. In 2024, the U.S. Justice Department initiated legal action against the company for alleged harm to American renters through its "algorithmic pricing software." The investigation is ongoing. Concurrently, platforms like Airbnb have reshaped the housing landscape, contributing to increased rents in many cities by normalizing short-term rentals. The New York Post reported in 2025 that Airbnb contributed $1 million to purported grassroots organizations, such as Communities for Homeowner Choice, to oppose a New York City law mandating hosts to be present during guest stays.

Airbnb has also supported legal battles and lawsuits nationwide contesting occupancy taxes and local regulations, incurring significant legal costs for cities. Tech platforms have enabled large-scale rental operations in both short- and long-term markets. Through pricing tools, political advocacy, and data utilization, housing is evolving into a more managed commodity. As corporate consolidation intensifies and major landlords align more closely with tech platforms, these entities, and increasingly property owners themselves, are poised to wield greater control over rental markets with diminished transparency and oversight. Addressing the Challenge OECD countries, including the U.S., are experiencing some of the lowest rates of homeownership globally, with institutional landlords playing a key role in driving these figures downward. The fundamental issue lies in the scarcity of housing supply, with financial institutions focusing on homes due to the existing shortage, which they openly acknowledge and promote to investors as a profitable opportunity. Austin stands out as a success story, with median home prices declining from $550,000 in May 2022 to $409,000 by January 2025, signaling a sustained downward trajectory.

The crucial distinction in Austin's case has been its efforts to promote more affordable housing by offering incentives to simplify zoning regulations. While homeownership remains prevalent in rural areas, urban centers have borne the brunt of escalating investor activity and housing shortages. Public engagement is vital in tackling this challenge. Entities advocating for landlord interests, like the National Multifamily Housing Council, wield significant influence, whereas tenants rely on comparatively thinner support networks such as the National Low Income Housing Coalition. Federal agencies such as the Department of Housing and Urban Development and the Federal Housing Finance Agency play a role but lag behind corporate influence. In contrast, Blackstone has encountered stronger opposition in European nations with robust tenant protections and well-organized renters' movements. Implementing policies like levying taxes based on the unimproved land value could promote development and deter speculation on idle or underutilized properties. Without effective measures, the concentration of land in private hands will continue to grow, whether through corporate landlords, prominent figures like Bill Gates (who owns 250,000 acres across 17 states), or gradual attempts to privatize public land. The issue at stake transcends mere affordability, extending to the public's ownership claim over land and housing versus relinquishing it entirely to private capital.

John P. Ruehl is an Australian-American journalist living in Washington, D.C. 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.

HIS COLLECTED WRITINGS CAN BE FOUND HERE: https://asiatimes.com/author/john-p-ruehl/#