In cities as different as Philadelphia, Richmond, Virginia, and Jacksonville, Florida, large institutional investors are increasingly buying up single-family homes in distressed neighborhoods and turning them into rentals, which threatens home ownership and wealth building for residents, according to a report by researchers at Drexel University and Reinvestment Fund.
In these cities’ most distressed neighborhoods — defined as places with low sale prices, high vacancies, and elevated mortgage denial rates — homeowners sell to investors in more than one in five sales, according to a September report written by researchers at Reinvestment Fund, the Philadelphia-based community investment nonprofit, and the Nowak Metro Finance Lab at Drexel.
The researchers focused on sales of one- to four-unit homes. From 2020 to 2021, investors bought roughly 24% of these homes sold in Philadelphia, according to researchers. In about 15% of these transactions, homeowners sold to investors. The rest were cases of investors selling to fellow investors.
