Examining the Behavioral Differences of Corporate Landlords
While corporate landlords file more evictions, charge higher rents, and house more voucher holders than non-corporate landlords of the same building, a new study by the NYU Furman Center examining the relationship between corporate ownership and tenant outcomes in the New York City multifamily market from 2012-2023 shows that the differences may be more modest than a naive comparison across buildings with different owner types would suggest.
As corporate and institutional investor landlords have increased their ownership share in rental markets in recent decades, a growing bipartisan consensus now links their rise to the dramatic increase in rents over the same period. Yet, there is little research investigating the motivations and behaviors of corporate landlords, as well as a lack of research into corporate ownership of multifamily buildings.
The paper, “The Rise of Corporate Landlords: An Examination of Behavioral Differences in the Multifamily Market,” by authors Katharine WH Harwood of the University of North Carolina and New York University’s Furman Center’s Co-Faculty Directors Ingrid Gould Ellen and Katherine O’Regan explores how the behavior of multifamily landlords varies with corporate status by examining four critical outcomes in the rental markets: eviction filings, asking rents, housing code violations, and the share of units occupied by housing choice voucher subsidy recipients.
The authors used a novel dataset on landlord ownership in New York City to examine building-level effects and found, on average, corporate landlords file 1.5 more evictions each year per 100 units, charge 3% higher asking rents, and house 0.6 more voucher holders per 100 units than non-corporate landlords of the same buildings. They found no significant difference in the number of code violations issued to buildings owned by corporate and non-corporate landlords.
Their results are consistent with related studies, which have found that corporate, institutional, and larger landlords file more evictions and charge higher rents, though their estimated impacts are more modest in size. These findings are also consistent with similar research into the growing share of institutional investors in the single family market, which has been tied to losses of local homeownership, particularly in communities of color. However, their research is distinct from most existing studies in its focus on isolating the impacts of ownership type from other landlord characteristics, such as the scale of a particular owner’s holdings.
The research is also distinct for its ability to control for differences in the buildings owned by corporate landlords. After controlling for fixed building effects as well as recent renovation activity and market concentration in neighborhoods, these differences are cut in half. In other words, much of the observed difference between corporate and non-corporate landlords is driven by differences in the buildings they own. That said, differences in eviction filings, asking rents and the presence of voucher holders remain even after controlling for building attributes. The authors also found that the effects of corporate status do not appear to be operating through portfolio size and only partly through the timing of purchase.
Instead, corporate landlords appear to have a greater focus on maximizing profits that is directly tied to their corporate nature as opposed to other secondary traits, the authors find. The figure below shows that, on average, corporate owners increase asking rents after purchase while non-corporate landlords do not.
The authors’ findings show that many of the accusations about corporate landlords may be overstated. However, it also underscores the opacity of currently available data on rental property ownership, and illustrates the importance of transparency and accountability for targeted, evidence-based policymaking.
“This [research] suggests that rather than targeting specific types of landlords for enforcement, policymakers would be better served by tracking actual building outcomes of different landlords, such as eviction filings and code violations,” the authors write. “But to do so, transparent ownership is crucial.”
While New York City’s rental registry is publicly available, the information is not easy to access, and many localities across the country do not have any form of landlord registry (and in some cases, states prohibit localities from introducing them). Even with the registry, much of the ownership information is opaque and obscured behind generic LLCs.
“To better target tenant protection policy and hold landlords accountable for any unfavorable actions, policy makers should be able to identify who they are,” they write.
