Backlash Grows as Real Estate Giants Increase SFR Market Share
February 14, 2022 | Jack Rogers | GlobeSt. com
Sen. Sherrod Brown, (D-OH), chairman of the US Senate Committee on Banking, Housing and Urban Affairs, last week accused real estate investors and large asset management firms of cynically exploiting a “captive” housing market to increase the profit of large stakes they are acquiring in single-family rentals.
“Private equity firms, corporate landlords and investors saw a shortage, and they saw a captive market. They see these [single-family houses] as nothing more than annual return on equity,” Brown said, in an opening statement at a committee hearing Thursday entitled “How Institutional Landlords are Changing the Housing Market.”
A perfect storm of higher home prices, tight inventory and rising mortgage interest rates continues to squeeze home buyers out of the housing market, validating the growth strategies of real estate investors who participated in a “land grab” for single-family houses in recent months, buying up existing single-family rental houses and tracts for construction of more built-to-rent houses.
Brown, who held a separate hearing on Tuesday to allow renters of single-family houses to vent their frustration with 50-percent rent increases and service cuts imposed by new corporate landlords, said real estate investment firms are using the tight market and rent increases as part of their marketing pitch to new investors.
