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In the years since the Great Recession, when , Wall Street investors have been buying large numbers of single-family homes to use as rentals. As of 2022, big investment firms .

this practice drives up home prices and worsens the housing shortage, making it harder for families to afford to buy. Industry advocates , arguing that large investment firms own a tiny fraction of single-family rental housing across the U.S.— of the total.

As a , I wanted to understand how this trend was affecting my neighbors. So I analyzed more than 1 million property sales in the Atlanta metropolitan area from 2007 to 2016. Since the study period included the , I excluded bulk sales, such as the packages of foreclosed homes, that aren't available to typical homebuyers. I examined only of single-family detached homes, where buyers and sellers act independently.

I found that global investment firms buying up local properties are indeed hurting Atlanta families—specifically, Black ones.

Neighborhood transformations

In the period I studied, homeownership declined across the Atlanta metro area by , similar to a nationwide trend. For an average neighborhood, home purchasing by large corporate investors explained one-quarter of that decline.

But when I broke the analysis down by race, I found that Black families were hit much harder: Large investment firms buying up local properties explained fully three-quarters of the decline in African American homeownership. In contrast, non-Hispanic whites were largely unaffected.

It turns out that while Wall Street firms control just a sliver of the single-family rental market nationally, they can have much more influence at the local level. In the Atlanta metro area, these firms own nearly one-third of all single-family rental properties. They're even more concentrated , where can be owned by the same corporation.

In my study, I found that large investors tend to snap up housing in majority-nonwhite, lower-income suburban neighborhoods. This makes homebuying even more challenging for middle-class families of color, as they get by global investors.

Home is where the financial security is

Homeownership has long been one of the main pathways for the American middle class to accumulate wealth. Despite this, the national homeownership rate declined between 2007 and 2016, reaching a five-decade low of 62.9%. Although homeownership has rebounded somewhat since 2016, it remains below pre-2008 levels.

And who owns these homes is starkly divided by race. Between 2015 and 2019, more than 70% of white families owned a home, compared with , according to an analysis by Harvard University's Joint Center for Housing Studies.

To be sure, policies like , fueled low homeownership rates for Black Americans long before the Great Recession. But global investors' growing control of single-family homes only widens existing racial gaps in homeownership and wealth.

Directions for new research

While my study focused on Atlanta, it's not the only place where residents are for housing. Investment firms' single-family rental portfolios are largely , including Phoenix, Charlotte and Jacksonville. It wouldn't be surprising to see similar conflicts playing out in those cities.

Since my analysis stopped in 2016, I can't be sure that Black Atlanta residents are still affected by Wall Street firms buying up housing. Many investment firms have recently been business model to a , which could complicate matters.

In the meantime, while that large corporations don't invest in local communities, researchers lack robust evidence this is the case. Academics should study whether properties owned by institutional landlords are more likely to be or have , as anecdotal evidence suggests.

It's also worth investigating whether big investment firms undermine local revenue collection by .

An open-source tool for housing policy research

It's been hard for researchers to identify corporate-owned, single-family homes, since it requires proprietary real-estate data and labor-intensive number crunching. In a separate project, my colleagues and I have developed a that gets around such challenges with the use of open-source software and public tax parcel data.

Local governments and nonprofits can use our methodology to unveil all the corporate-owned residential properties in any neighborhood and link them to outcomes such as code violations. Using data-driven approaches like this is an important step toward developing policy solutions.

This article is republished from under a Creative Commons license. Read the .