Institutional Investors In Housing (Winter 2023)

Editor’s Note

This issue of Evidence Matters explores the role and influence of institutional investors in the housing market. Institutional investors are increasing their footprint throughout the country, particularly in the Sun Belt states, so analyzing the impacts of these investors, including their impacts on low- and moderate-income communities and communities of color, is important. With the finding that large corporate investors tend to concentrate their single-family rentals in low-income neighborhoods that are historically nonwhite, it is vital that we undertake a critical analysis of this trend as we work to reduce the racial wealth gap, increase homeownership opportunities, and support the growth of intergenerational wealth.

The lead article, “Institutional Investors Outbid Individual Homebuyers,” examines the relatively recent entry of institutional investors into the single-family housing market, their effect on renters and prospective homebuyers, and ways to combat their negative impacts. The Research Spotlight article, “Institutional Investors: A Local Perspective,” looks at institutional investor activity in two metropolitan statistical areas: Dallas-Fort Worth-Arlington and Houston-The Woodlands-Sugar Land. The In Practice article, “Investments in Affordable Housing,” highlights three local organizations that are working to preserve affordable housing in Atlanta, Louisville, and Milwaukee. Through strategies such as a loan fund, acquisition and rehabilitation, lease-to-purchase programs, downpayment assistance, and homebuyer education, these organizations play an important role in their communities and serve as useful models for others.

The research and data highlighted in this issue of Evidence Matters are particularly timely as institutional investors shift the dynamics of the nation’s housing market. We hope readers gain knowledge and a better understanding of this emerging topic. We welcome feedback at www.huduser.gov/forums.