When big investment money moves into mass home ownership. How private equity funds are changing the real estate market and rentals.
In the depths of the Great Recession, waves of American homes went into foreclosure. Homeowners were in deep trouble. And big time American investment money - private equity – moved into American neighborhoods and bought up thousands and thousands of homes. Turned neighborhoods into rental districts, waiting to resell. They’re still buying, and its changing who owns, who rents, what they pay, how we live. This hour, On Point: When big investment money hits the neighborhood and home ownership. -- Tom Ashbrook.
Susan Wachter, co-director of the Institute of Urban Research at the University of Pennsylvania. Professor of real estate and finance at the Wharton School of the University of Pennsylvania. (@Susan_Wachter)
From Tom's Reading List
Michigan Radio: Pushed Out: A Documentary On Housing In Grand Rapids — "Michigan Radio pored through thousands of property records to assess what’s happening with real estate in Grand Rapids. One thing that pops is how many single family homes are now owned by investors. We looked at whether the land bank has contributed to that trend. And here’s what we found. Between 2008 and 2016, 57% of homes that bypassed the tax auction and went straight to the Land Bank are now owned by investors – some of which are non-profit developers. For the homes that did go to auction, the number is 68%."
The Washington Post: High Housing Costs Discourages Homeownership Among Millennials, Survey Says — "The survey found that more consumers say they will opt out of homeownership in high-cost housing markets, with 32 percent of those in the West saying they will continue to rent this year compared with 24 percent last year. The Northeast saw the biggest jump in renters deciding to opt out of homeownership, up to 26 percent this year from 13 percent from 2016. Younger people are particularly less likely to buy now."
Citylab: The Rise of the Rich Renter — "Putting off homeownership means that high-income households are adding to growing demand for rentals—especially in the most-sought after metros. The result? Rents that are already too damn high are climbing higher. The NYU Furman Center report finds that between 2012 and 2015, rents rose in most of the 53 metros analyzed—and faster in already-hot markets like San Francisco and San Jose. Denver, which saw the highest increase at 6.6 percent was an exception in that it wasn’t super expensive to begin with."
This program aired on October 9, 2017.