The Impact of Single-Family Rental REITs on Regional Housing Markets

A Case Study of Nashville, TN

Cover page for the Community Development for Equity and Empowerment Special Issue of the Societies journal, edited by Robert Silverman.

Urban planning professor Robert Silverman, PhD student Chihuangji Wang and collaborators examine the socio–spatial distribution of properties in single family home (SFR) real estate investment trusts (REIT) portfolios to determine if SFR REIT properties tend to cluster in distinct areas.

As editor of the 2018 special issue of Societies, on Community Development for Equity and Empowerment, Robert Silverman writes: "In cities and settlements across the world, calls for equitable community development policy are unparalleled. The forces of globalization, neoliberalism, and accompanying austerity measures pose new challenged to practitioners engaged in community development and advocacy work. This special issue on “Community Development for Equity and Empowerment” examines strategies to navigate these challenges across a number of domains." View the full issue

The U.S. Congress authorized the creation of real estate investment trusts (REITs) in 1960 so companies could develop publically traded real estate investment portfolios. REITs focus on commercial property, retail property, and rental property. During the last decade, REITs became more active in regional housing markets across the U.S. Single-family rental (SFR) REITs have grown tremendously, buying up residential properties across the country. In some regional housing markets, SFR REITs own noticeable shares of single-family homes. In those settings, SFR REITs take large numbers of housing units off of real estate markets where homeownership transactions occur and manage these properties as part of commercial rental inventories. This has resulted in a new category of multiple property owners, composed of institutional investors as opposed to individual investors, which further exacerbates property wealth concentration and polarization. This study examines the socio–spatial distribution of properties in SFR REIT portfolios to determine if SFR REIT properties tend to cluster in distinct areas. This study will focus on the regional housing market in Nashville, TN. Nashville has one of the most active SFR REIT sectors in the country. County tax assessor records were used to identify SFR REIT properties. These data were joined with U.S. Census data to create a profile of communities. The data were analyzed using SPSS statistical software and GIS software. Our analysis suggests that neighborhoods with clusters of SFR REITs fit the SFR REIT business model. Clusters occur in communities with newer homes, residents with higher levels of educational attainment, and middle to upper-middle incomes. The paper concludes with several recommendations for future research on SFR REITs.

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Authors

Ken Chilton
Associate Professor
Department of Public Administration, Tennessee State University

Robert Silverman
Professor
Department of Urban and Regional Planning, UB

Rabia Chaudhrey
Masters Student
Department of Public Administration, Tennessee State University

Chihuangji Wang
PhD Student
Department of Urban and Regional Planning, UB

Publisher

Societies

Date Published

2018