Corporate Landlords Redux

Last month, we shared a snapshot of the landscape of large corporate single family landlords across metro Atlanta, showing that just the top ten of these companies own over 30,000 properties here in the five core counties. Since then, The Atlanta Journal-Constitution published an investigation into these landlords that lends additional credence to the countless other pieces of evidence about these investors and their exploitation of tenants across Atlanta and the rest of the country. Using a more extensive set of records of property ownership across six additional counties, the AJC ultimately arrives at a figure of over 65,000 single family homes owned by these institutional investors across the metro.

The AJC story even scooped a bit of work we’ve been doing – again in partnership with friend and colleague Eric Seymour – that shifts from treating all of these corporate landlords under one big umbrella to looking at them one-by-one. In the maps in the AJC’s investigation, they focus in particular on the five biggest single family landlords around Atlanta – Invitation Homes, Pretium Partners, Amherst Holdings, American Homes 4 Rent and Tricon American Homes – but also include other similar companies under one catch-all banner.

Like the Dangerous Dwellings series from last summer – that we also added some more geographic context to – this latest investigation does an excellent job at telling the stories of the tenants who have been so negatively affected by the predatory and exploitative practices of these corporate landlords. But in our eyes, the story also makes one subtle mistake when it comes to characterizing the geographic logic behind these companies’ property acquisitions. In their initial story, Brian Eason and John Perry write that “…disproportionately, investors buy in places with entry-level homes and in communities of color”. This isn’t wrong per se, but it also isn’t entirely true either.

Not all corporate landlords target communities of color. Some do, but some tend to stay away from them as much as possible and instead prefer to buy in predominantly white neighborhoods. While all of these corporate landlords follow a similar script in their overall business models, they’ve also developed unique spatial strategies for their property investments that mean we can’t paint them all with the same broad brush. Essentially, these companies have learned to target different kinds of neighborhoods with different demographic characteristics in order to avoid competing with one another, which in turns allows each company to maximize their market power and their profits.

Because of these differences, it’s important to tease apart these spatial strategies in a more comprehensive way rather than treating any individual firm as a synecdoche for the broader phenomenon. Even cartographically speaking, the way that the AJC mapped all of the properties for these firms as individual dots ultimately obscures just how concentrated investments are in certain places, and makes it harder to untangle the particularities of each firm’s investment strategies.

To examine these patterns in more detail, we mapped an odds ratio for the properties held by each of the ten largest corporate single family landlords across the five core counties of metro Atlanta,¹ which you can see in the maps below. In effect, an odds ratio is a measure of local-scale concentration relative to a baseline value for a larger population at a broader scale. Values greater than 1, signified in the green shading in the maps below, mean that there is more of that thing in that place than we would expect if everything were distributed perfectly evenly across space. Values less than 1, shown in purple here, mean that there’s relatively less of that thing than we would have expected in that place.

So in this case the odds ratio lets us see where each corporate landlord’s investments are geographically specialized relative to the overall number of single family rental properties across the metro area which, as you can see, differ dramatically from firm to firm. It is important to note that just because a given firm is underrepresented in a given place doesn’t mean that that firm doesn’t own any properties – or even a lot of them! – in that place. It just means that they own a smaller share of the properties there than we would have expected.

Despite the subtle variations from firm to firm here, one major geographic trend holds true across all of these different companies: private equity-controlled firms are significantly more likely to concentrate their investments in predominantly Black and more working-class suburbs in the southern parts of the metro, while publicly-traded REITs tend to invest in whiter (but still fairly diverse) and more middle-class suburbs in the more northern parts of the metro across Cobb and Gwinnett counties. If we aggregate the three publicly-traded REITs (Invitation, AH4R and Tricon) together and the other seven private equity-controlled firms together and compare them directly using the same odds ratio measure, we can see this pattern quite clearly in the map below.

This is, in short, yet another instance of Atlanta’s ur-choropleths in action. Like practically everything else about this city, the geographies of corporate landlords respond to – and reinforce – the racial divisions that have been inscribed into Atlanta’s landscape for roughly a century and a half (even though they have, of course, evolved over this time).

And so while we think it’s important to understand precisely which companies are making their money off of targeting Atlanta’s working-class Black families, this isn’t meant to absolve any of these other companies for their less explicitly racist, but no less exploitative business models. But without knowing who we’re targeting and why, we’ll continue to struggle to make inroads in fully understanding the effects and fighting against these corporate behemoths.

¹ Our top ten list here is ever so slightly different than the one in the map we posted back in January. Here we’ve replaced properties owned by Home Partners for America with those owned by Starwood Capital. All other companies remain the same, though some of the values for each firm have also changed in that time as we’ve ironed out some kinks in our methodology.