Report: Corporate-Owned Rentals Cut Into Black Homeownership
Thursday, June 24, 2021
MINNEAPOLIS -- Long known for its homeownership disparities, the Twin Cities region has seen a widening of the gap between Black residents and their white counterparts. A new report cites historical factors, but the rise of corporate-owned rentals isn't helping.
Research from the Urban Institute found since 2000, homeownership among Black residents in the metro area decreased by 10%, but remained steady for the white population - despite an increase in Black residents living in the region.
Report coauthor Yonah Freemark, senior research associate at the Urban Institute, noted this all coincided with the rise of corporate landlords.
"Companies that own at least three, but sometimes many more, single-family homes in their portfolio," Freemark explained. "There's some big national companies involved in that trend. But they're particularly focused in a few very vulnerable, lower-income and minority-focused communities, like North Minneapolis."
He said investors often will charge rents higher than what the typical monthly mortgage payment would be.
The report also cites longstanding income and wealth gaps between Black and white families, as well as barriers to achieving good credit and financial literacy. It concludes the resulting lack of homeownership keeps these families from securing long-term economic stability.
The analysis also makes mention of the 2008 recession, and how it disproportionately affected Black Minnesotans. Looking ahead, Freemark predicted there could be even more corporate landlords as a result of the pandemic.
"There has been, at the national level, indication that people working for large investment firms are expanding their investments across the country," he observed.
The Urban Institute report cites a variety of solutions, including stronger public programs to help more Black residents purchase homes. Other suggestions include local governments better protecting renters from eviction, and calling on state and federal officials to enforce regulations that reflect a rental company's impact on marginalized communities.
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