Armand Domalewski recently stated on social media that "it’s objectively true that corporate landlords are a tiny part of the housing market." This assertion highlights an ongoing debate regarding the influence of institutional investors on the U.S. housing landscape, where their national footprint is indeed small, yet their impact in specific metropolitan areas is notably substantial.
Corporate landlords, typically defined as companies owning large portfolios of single-family rental homes, emerged prominently after the 2008 financial crisis. They capitalized on a surplus of foreclosed properties, converting them into rentals. This marked a shift from the traditional "mom-and-pop" landlord model, with companies like Invitation Homes and Progress Residential growing significantly.
Nationally, institutional investors own approximately 2% to 3% of the single-family rental housing stock. For instance, companies with over 1,000 homes in their portfolio own just 0.4% of all single-family homes. However, their presence is highly concentrated in specific Sunbelt markets such as Atlanta, Charlotte, Jacksonville, Tampa, Phoenix, Dallas, and Houston.
In these concentrated markets, corporate landlords' market share can be considerably higher, reaching up to 11% in metro Atlanta by early 2022, with some estimates suggesting 25% in Atlanta's single-family rental market. Critics argue that despite their small national share, these entities wield outsized power in specific regions, contributing to aggressive rent increases and outcompeting individual homebuyers.
Projections from MetLife Investment Management suggest that Wall Street could control as much as 40% of all single-family rentals by 2030, indicating a potential future expansion of their influence. While some economists argue that their overall impact on housing prices is limited due to their small national share, others point to their strategic acquisitions and build-to-rent models as factors exacerbating housing affordability challenges in key areas.