Assistant Professor Suzanne Lanyi Charles has recently published two papers stemming from her ongoing research concerning the post-crisis financialization of housing. Charles’s research explores the shifts in the way global capital is being reinvested in local housing markets since the 2008 housing crisis and the effects of those shifts on households and access to housing. One important manifestation of these shifts is an increase in single-family rental housing (SFR) in suburban neighborhoods. While increases in suburban SFR may provide access to neighborhoods otherwise off-limits to renters, the increasing dominance of corporate ownership of SFR may be problematic.
Charles takes look at SFRs in a broad collection of U.S. metropolitan areas in “A Latent Profile Analysis of Suburban Single-Family Rental Housing (SFR) Neighborhoods” (Housing Policy Debate, October 29, 2019). “Single-family rental housing (SFR) is an increasingly prevalent form of housing tenure in U.S. suburban neighborhoods, representing a paradigm shift in how households gain access to a suburban single-family home,” she writes.
Using a specialized data analysis technique, the paper classifies types of suburban neighborhoods having high rates of SFR located in the 20 largest U.S. metropolitan areas. Concentrations of SFR were found to be located in a variety of neighborhoods, including diverse middle-class, older white middle-class, low-income Hispanic, low-income African American, and affluent neighborhoods. The study finds that the composition of high-SFR neighborhoods in these areas varies substantially. The article examines the variation in the types of high-SFR neighborhoods for the areas studied and presents a detailed analysis of the spatial distribution of high-SFR neighborhood types in Atlanta, L.A., and Boston.
In “The Financialization of Single-Family Rental Housing: An Examination of Real Estate Investment Trusts’ Ownership of Single-Family Houses in the Atlanta Metropolitan Area” (Journal of Urban Affairs, October 11, 2019), Charles writes that a new type of SFR investor emerged after the 2008 housing crisis — real estate investment trusts (REITs) that funnel large amounts of global capital into local housing markets.
The paper presents an examination of investments made by the four largest publicly traded SFR REITs in the Atlanta metro area. Using exploratory spatial data analysis methods, the study examines the intensity and locations of statistically significant spatial clusters of SFR owned by REITs. Findings indicate that overall, houses owned by SFR REITs are highly spatially clustered in neighborhoods forming a U-shape surrounding the city of Atlanta. Furthermore, many of the places where SFR REIT ownership is clustered are places that were hard hit by the 2008 housing crisis. Increased rents, depressed house prices, deferred maintenance, and increased evictions due to REIT ownership may increase unaffordability, create greater instability, and decrease quality of housing for households in an already precarious position in the housing market.
Charles’s research has received grants from the U.S. Department of Housing and Urban Development, the Real Estate Academic Initiative at Harvard University, Harvard University’s Joint Center for Housing Studies, the Institute for the Social Sciences at Cornell, and the President’s Council of Cornell Women.
By Patti Witten