Fighting Corporate Takeover of Suburbia

 What to do about the corporate landlords who are gobbling up residential properties?

The Problem:

Like hundreds of communities across the United States, Hamilton’s neighborhood had become the target of large companies amassing empires of suburban homes for rent. Since the Great Recession, when millions of Americans lost their homes to foreclosure, these companies have been expanding their portfolios of tens of thousands of single-family houses, a disproportionate number of them located in majority-Black neighborhoods like Potters Glen.

The rise of investor purchases has spawned complaints that the companies, flush with Wall Street money, are pricing out first-time home buyers and renting to tenants who have not been properly screened.

As investors have targeted the American suburbs, faraway companies have begun to take over entire blocks. Last year, investors bought nearly 1 in 7 homes sold in the nation’s top metropolitan areas — the most in two decades of record-keeping, according to a Washington Post analysis of data from realty company Redfin.

In Charlotte and surrounding Mecklenburg County, landlords backed by Wall Street own roughly 11,500 houses — more than 4 percent of single family homes, according to an analysis last year by the University of North Carolina at Charlotte Urban Institute. Most of the houses are in the starter home price range, “likely putting the most pressure on the lower end of the market,” said the institute’s Ely Portillo.

Possible Solutions:

Using the same legal authority that allows homeowners associations to punish people who fail to cut their grass, the Potters Glen board erected a hurdle for investors: a new rule required any new home buyer to wait two years before renting it out.

Since the board adopted the rule in 2019, property records show the pace of investor purchases has dropped by more than half.

Since the new rules took effect, some investors have sold their properties, Miller said. The homeowners association has organized monthly neighborhood cleanups and property values have risen, she said.

Restricting rentals is not always easy. Charlotte attorney Mike Hunter said homeowners associations come to him about once a week asking for advice. Some, like Potters Glen, are worried about long-term corporate leases, while others want to curtail short-term rentals offered by companies like Airbnb and VRBO.

In North Carolina, Hunter said, at least 67 percent of homeowners in a community typically must approve new rules, and reaching that threshold can be a challenge.

Hamilton, meanwhile, recently learned that spurning investors can come with a cost.

Adamant that she would not sell to rental companies, Hamilton added a line to the real estate listing for her home: “Per seller, investors will not be considered!”

The teacher’s offer was $13,000 less than the investors’ highest offer. But, Hamilton said, “She touched my heart.”