Investors who are purchasing houses for SFR are buying a disproportionate number of homes in neighborhoods where a majority of residents are Black, according to a new analysis of Redfin data by the Washington Post†
the Posts analysis revealed that last year, nationwide, 30 percent of home sales in majority-Black neighborhoods were to investors, while in other Zip codes investors’ share of the market was only 12 percent.
In presenting these findings, the newspaper focused on the housing situation in Charlotte, NC and surrounding Mecklenburg County, highlighting backlash to the targeting of Black-majority neighborhoods for SFR investments.
The Charlotte region had the second-highest level of investor activity in 2021, with a steep growth rate in home purchases by SFR investors during the pandemic, the Post reported.
The report said 11,500 houses in Charlotte and Mecklenburg county now are owned by a half-dozen major SFR players, including Invitation Homes, American Homes 4 Rent and Tricon.
Pushback to the incursion of large SFR players into Black-majority neighborhoods began two years ago in Potters Glen, a suburb of Charlotte.
The Potters Glen Homeowners Association watched investors purchase two dozen homes in the Black-majority neighborhood with growing alarm. The Association said the new landlords of homes bought by investors weren’t properly screening new tenants.
The Potters Glen Homeowners Association became the first community in the region to enact a rule requiring any new home buyer to wait two years before renting the property out, stretching a legal authority that lets homeowners’ groups tell residents when to cut the grass.
Noting that Potters Glen succeeded in reducing the rate of investor purchases by half during the past two years, communities across the US have moved to adopt similar rules, the Post reported.
The largest SFR players have argued that restrictions like the two-year delay in rental of purchased property make housing less affordable by reducing the available number of rentals. They’ve also claimed rental exclusions are discriminatory, asking state legislatures in Florida, Georgia and Tennessee to block them.
Invitation Homes has called rental restrictions, like the rule imposed by Potters Glen, “prejudicial, discriminatory, uniformed and misaligned with the concept of fair housing.” In a statement, the SFR giant said it is “disheartened by the trend of HOAs [homeowners associations] determining that renters are not welcome in their neighborhoods.”
David Howard, executive director of the National Rental Home Council, an advocate for SFR, told the Post that preventing SFR companies from buying homes in a community “does nothing but reduce the availability of affordably priced rental housing.”