Corporate Landlords on the Rise: What is the Impact on Florida Renters

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Corporate landlords control most rental properties in Florida, intensifying competition and driving up rental costs.

This trend reduces the inventory of homes available for purchase. It concentrates market power in the hands of a few large players, a situation of significant concern for renters' affordability and accessibility.

Renters face heightened challenges as corporate landlords dominate vital markets, particularly in greater Tampa Bay. Large firms are acquiring numerous single-family homes and employing aggressive rent increases and ancillary fees, increasing the burden on individual tenants and highlighting the issue's human impact.

"My landlord will be increasing my rent by $200 when or if I renew. It is a decent place and we like the Tampa area but the spike will hurt us financially."- Juan Medina-

For instance, Clearwater and St. Petersburg tenants have reported significant issues with unresponsive maintenance and steep rent hikes. These personal stories highlight the human impact of the growing influence of these corporate entities, exacerbating the rental crisis and leaving many Floridians struggling to cope with the rising costs and deteriorating conditions under these corporate-managed properties.

"I keep filing work orders for multiple maintenance issues, but I get the runaround every day. When the maintenance man shows up, he just bandages the problem rather than fixes anything. But I have to deal with it because I can't afford to move."- L Hawkins-

The Growing Influence of Corporate Landlords

The growing presence of corporate landlords has significantly reshaped the landscape of the Florida rental market. The largest institutional investors own over 430,000 single-family rental homes nationwide, with a notable concentration in Florida.

These corporate entities, including real estate investment trusts (REITs) and private equity firms, now command a substantial rental market share. For instance, in the greater Tampa Bay area alone, the five largest corporate landlords own an estimated 20,000 single-family homes. It represents a significant proportion of the local rental market, illustrating their expanding influence.

These corporate players have leveraged their market power to dominate specific neighborhoods, reducing the availability of homes for purchase and increasing the rental inventory.

This trend has been driven by the broader housing shortage and rising home prices, making it increasingly complex for potential buyers to enter the market. The shift towards corporate ownership in the Florida rental market highlights a broader trend where institutional investors are becoming prominent players in the residential real estate sector.

Methods of Acquisition

Corporate landlords utilize two primary strategies to expand their holdings: purchasing existing homes and adopting build-to-rent models. The build-to-rent approach, which involves constructing homes for rental purposes, has become dominant.

In 2022 alone, construction commenced on 120,000 build-to-rent homes, accounting for 12% of all single-family starts. This method allows corporate landlords to enter markets with new, tailored rental properties from the ground up.

Alternatively, these corporations acquire homes through the resale market. Their substantial resources enable them to outbid individual buyers, securing properties more effectively.

This dual strategy—combining new builds with acquisitions of existing homes—enables corporate landlords to quickly scale their operations and assert greater control over the rental market in Florida and beyond.

Impact on Renters

Corporate landlords significantly influence rental prices and fees in the Florida rental market. These corporations can leverage their market dominance by owning many rental properties to increase rents and impose additional costs.

For example, in some metro areas, Invitation Homes raised the average rent by 7.1%, adding to $145 in mandatory monthly fees, including smart home technology and utility management charges.

This trend of rising rents and fees is not isolated. It is widespread in Florida. The influx of corporate landlords into areas like Tampa Bay and St. Petersburg has exacerbated rental costs, making it more challenging for renters to find affordable housing.

In these markets, corporate landlords have increased rents and added fees, driving up the overall cost of renting. As the need for rental properties remains high, renters face financial pressure, often paying more in rent than what it would cost to purchase a home, particularly given the high costs associated with homeownership, such as down payments and mortgage rates.

Maintenance Issues

Renters under corporate landlords frequently encounter maintenance problems that the owner must promptly address. Common issues include delays in repairs and unresponsive management, as reported by tenants in Florida cities like Clearwater and St. Petersburg. For instance, renters in Clearwater have reported extensive delays in fixing issues such as leaks and mold damage, which can lead to significant health and safety concerns.

In St. Petersburg, tenants like Todd Bates' experience highlights the difficulties in dealing with corporate landlords. Bates, who tracks corporate-owned rental properties, notes the challenges renters face, including the need for more responsiveness and adequate maintenance.

These issues are not just isolated incidents but part of a broader pattern affecting many renters across Florida. The growing concentration of rental properties in the hands of large corporations continues to impact renters, often resulting in unaddressed maintenance issues and increased financial strain.

Market Concentration and Its Effects

Corporate landlords are notably dominant in Florida's rental market. Areas in Florida, particularly in the Tampa Bay region, have experienced significant impacts from corporate ownership.

For instance, the five largest corporate landlords own approximately 20,000 single-family homes across Hillsborough, Pinellas, Pasco, Polk, and Hernando counties. This concentrated ownership in specific areas has heightened scrutiny and concern regarding the effects on local housing markets.

Data reveals that corporate landlords have concentrated their holdings in specific counties within Florida. Research by the University of Florida's Shimberg Center for Housing Studies has highlighted the uneven distribution of these corporate-owned properties. This geographic concentration amplifies their market influence and poses challenges for local tenants seeking affordable housing options.

Corporate landlords wield considerable power over local rental markets, significantly impacting tenant conditions. Their ability to control large properties considerably influences rental prices and tenant experiences. In areas like Tampa Bay, the presence of these large corporate entities has led to increased rental costs and less responsive property management, as evidenced by numerous tenant complaints.

The impact on the Florida rental market is particularly pronounced, with corporate landlords using their substantial holdings to drive up rents and impose additional fees. For example, in markets where corporate landlords have a strong presence, such as parts of the Tampa Bay area, tenants frequently face higher rent increases and additional charges, further straining their financial stability.

Overall, the concentration of corporate ownership in Florida has profound implications for housing availability and affordability, affecting both current and prospective renters.

Legislative and Community Responses

Recent legislative efforts aim to address the growing influence of corporate landlords in the housing market, particularly in high-pressure areas like the Florida rental market. Notably, U.S. Senator Jeff Merkley introduced the "End Hedge Fund Control of American Homes Act," which seeks to reduce corporate landlords' dominance.

This bill proposes that these entities sell at least 10% of their single-family rental homes annually over a decade, with steep tax penalties for non-compliance. Similarly, U.S. Representative Adam Smith has sponsored a companion bill in the House. These legislative proposals reflect growing concerns about institutional investors' impact on housing affordability and availability.

Critical Points of Proposed Legislation

• Mandatory Sales: Corporate landlords would be required to offload a significant portion of their rental properties yearly.
• Tax Penalties: Failure to comply with the selling requirements would result in severe tax penalties.
• Focus on Fair Housing: The goal is to ensure more equitable access to affordable housing by reducing corporate control.

Actions Taken by Local Groups and Tenants

Local communities and tenant groups have actively challenged corporate landlords through various initiatives. For instance, in Boulder, Colorado, residents like Miriam de Santiago are fighting for rent control and improved conditions in mobile home parks. Their efforts highlight the struggles faced by corporate landlords due to rising rents and inadequate maintenance.

Examples of Successful Initiatives or Ongoing Struggles

• Successful Initiatives: Some areas have seen progress with rent control measures and increased tenant protections, often driven by grassroots advocacy.
• Ongoing Struggles: Despite these efforts, many communities face significant hurdles, including high rents and unresponsive management from corporate landlords.

These responses reflect a broader movement to balance the growing power of corporate landlords with the needs of local renters, ensuring fair treatment and improved living conditions in the face of rising market pressures.

Personal Stories and Case Studies

The growing dominance of corporate landlords in the Florida rental market has significantly impacted tenants. In St. Petersburg, Todd Bates observed a surge in corporate-owned rental properties near his home, leading him to track these changes meticulously. His findings revealed that corporate landlords had acquired around 600 properties in his area alone, a stark reminder of their increasing prevalence.

Similarly, in Clearwater, Tevhan Jones faced severe issues with his rental from Invitation Homes. He dealt with persistent mold problems caused by a leak unaddressed by his corporate landlord. Jones's experience underscores a broader trend where renters experience inadequate maintenance and poor living conditions due to the corporate ownership of rental properties.

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Examples from Different Florida Cities

Renz Torres's analysis highlights that the most prominent corporate landlords control an estimated 20,000 single-family homes across several counties, including Hillsborough and Pinellas, in the greater Tampa Bay area. This concentration of ownership amplifies their market power and often results in less responsive property management.

Who Owns What in the Tampa and Surrounding Areas

• Invitation Homes 7,381
• Progress Residential (Pretium Partners) 6,250
• Main Street Renewal (Amherst Group) 2,610
• AMH Homes 2,499
• FirstKey Homes (Cerberus) 2,351

The number of homes is estimated. Based on Renz Torres's analysis.

Housing Conditions and Tenant Health

The influence of corporate landlords extends beyond financial strain, significantly affecting tenant health. Research by Human Impact Partners (HIP) reveals that poor housing conditions, such as those inflicted by neglect and inadequate maintenance, contribute to mental and physical health issues. In particular, tenants dealing with deteriorating conditions often face heightened anxiety and stress, leading to conditions such as depression and other health problems.

Juan Pablo Garnham from the Eviction Lab notes that high rent costs can force tenants to cut back on essential expenses like healthcare, further exacerbating health problems. Financial stress and poor living conditions create a detrimental cycle impacting overall well-being, particularly in vulnerable populations.

In summary, the rise of corporate landlords in Florida has profound implications for renters, affecting their financial stability, health, and quality of life.

Final Word

Corporate landlords are increasing their influence in the Florida rental market, becoming dominant players and. While this benefits the local economy, it is not all good news for tenants.

Corporate landlords are not short on money, so they can manage properties better than individual landlords and offer potentially higher-quality rental units.

However, many renters are concerned that this will make it less affordable for them to rent homes. The growing ownership of rental properties by a few large entities may drive up rents and limit options for local tenants, exacerbating the housing affordability crisis.

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Corporate landlords' role in the rental market will likely grow as they expand their portfolios, allowing them to exert more control over rental pricing and property standards.

Policymakers and stakeholders must carefully monitor these developments to ensure a fair property market for renters. Addressing issues related to rent increases and market accessibility will help to maintain a fair yet quality housing market for all Floridians.

This article is for informational purposes only. It should not be considered financial, real estate, or legal advice. The market fluctuates; therefore, not all information will remain the same. Consult a financial or real estate attorney before making significant real estate decisions.