Last week, the Columbus Dispatch reported on a rise in nationally-operating landlords that have acquired more than 6,000 Columbus-area homes. The story notes that six national companies each own more than 400 properties across Franklin County.
This is not a new trend. GOPC has been tracking the surge in so-called “institutional real estate investors” for the past several years. GOPC has been hearing about the increase of investors from members of the Revitalization Steering Committee, a multi-sector community that tracks on emerging issues that can accelerate property blight and neighborhood de-stabilization and develops state policy responses to mitigate harm. GOPC has stewarded the RSC for over a decade.
According to the Urban Institute, Columbus and Cincinnati are among the top 20 markets in the U.S. for institutional investors (referred to in their 2023 analysis as Mega Single Family Rental Investors (Mega SFR)). The Urban Institute analysis found Mega SFRs make up 85 percent of the single-family properties held by institutional investors, and 32 mega investors own almost 446,000 properties across the U.S., 78% of the properties which were analyzed in the report.
In recent years, institutional investors in Ohio have tended to buy single family homes in “middle neighborhoods”, areas where first time homebuyers and moderate income families often to live. Middle neighborhoods usually have modest, but solid, housing stock that can be purchased by a buyer earning the area’s median income.
However, the Columbus Dispatch reports within Franklin County, recent acquisitions are now moving outside of inner-city neighborhoods, with a large concentration of purchases now taking place in adjoining suburbs and adjacent counties. GOPC knows from RSC members that similar buying behavior is occurring in the Cincinnati and Dayton metros as well.
The perception that renters do not connect or care about their neighborhoods is not always true. What has been true among institutional investors across Ohio, however, is that the large corporations that own homes have higher numbers of code violations and complaints on issues that are the responsibility of the landlord.
To curb the negative impact of institutional real estate investors on neighborhoods across Ohio, GOPC has been working with State Senator Bill Blessing (R- Colerain Twp) since 2022 on a number of proposals. These legislative proposals have included: providing tenants an opportunity to purchase a rental property at a foreclosure sale before institutional investors had a chance, as well as legislation that would enhance the disclosure requirements around who owns properties that are rented, and levying fees on companies based on the number of properties they own in any one county.
While none of those bills have advanced out of committee in any of the past three legislative sessions, work does continue at the Statehouse.