The issue is especially acute in some Sun Belt states amid evidence that investors often can outbid other buyers, keeping starter homes out of the hands of would-be owners, especially suburban Black and Hispanic families. Some local officials in those states are pushing for increased regulation of investor purchases, but many Republican lawmakers oppose such controls.
Investors bought 24% of all single-family houses sold nationwide last year, up from 15% to 16% annually going back to 2012, according to a Stateline analysis of data provided by CoreLogic, a California-based data analytics firm. That share dipped only slightly in the first five months of 2022 to 22%.
Five states saw the highest share of investor purchases. Investors bought a third of single-family homes sold in Georgia (33%) last year, with Arizona (31%), Nevada (30%), California and Texas (both 29%) not far behind. Investor ownership began to grow after the Great Recession of 2008-2009, when large swaths of overbuilt Sun Belt homes went into foreclosure, and investors snapped them up. Investor ownership grew again last year as pandemic-related demand for suburban housing rose, and investors saw a chance to win bidding wars with cash offers.
In North Las Vegas, Nevada, which is mostly Hispanic and Black, residents have gathered petitions for a ballot initiative limiting rent increases, saying they've been outbid by investors who have raised rent sharply in recent years. The controls were supported by Democratic Gov. Steve Sisolak, who blamed "out-of-state speculators coming in buying up homes in our neighborhoods and raising the rent," and says the North Las Vegas plan could become a template for statewide rent controls.
The Georgia Municipal Association, representing Georgia municipailties, opposes the preemption bills that were introduced, partly so that cities can decide for themselves about "build to rent" policies, said Charlotte Davis, the association's deputy director of governmental relations, speaking at an Atlanta-area housing forum in June.
Large-scale rental house landlords often are blamed for rent hikes but still represent a tiny portion of single-family homes, said David Howard, director of the National Rental Home Council in Washington, D.C., a trade group representing single-family home landlords.