A new report from the Lee Institute finds 75% of participating Mecklenburg County residents believe their communities have been negatively impacted by corporate landlords.
The report, commissioned by the Mecklenburg County Board of Commissioners (BOCC), found that three quarters of participants believed their communities have been negatively impacted by corporate landlords, while 79% of renters see corporate landlords as a threat to housing affordability and economic mobility.
In 2021, more than 11,000 single-family homes in Mecklenburg County were identified as being owned by large corporations, according to reporting by UNC Charlotte’s Urban Institute. County staff has since updated that number to be closer to 13,600, according to the Lee Institute report.
“This trend has shown both positive and harmful impacts on rental housing stock and neighborhood stability,” the report from Lee Institute states, “raising concerns that it will further exacerbate the existing housing affordability crisis in Mecklenburg County.”
Participants of the report’s community engagement sessions recommended that the county explore the feasibility of regulating corporate landlords, investigate rent regulation, and incentivize more affordable housing creation within the county, among other suggestions
Following a presentation to BOCC on Dec. 12, however, county commissioners were quick to point out that they do not have the authority to implement many of the suggested solutions.
“Some suggestions were made about what could be done, but I’m not convinced that the residents had a full understanding of what local, federal or [other government branches] could do in terms of responding,” said Angelique Gaines, research assistant with UNC Charlotte’s Urban Institute, which partnered on the report. “They were just like, ‘We want something done.’”
For now, commissioners have prioritized educating constituents on the differences in what local, state and federal government agencies can and can’t do while county staff continues to explore options on how to hold corporate landlords accountable.
The rise of corporate landlords
According to the Lee Institute report, research points to the period immediately following the financial crisis of 2008 when corporations ramped up their acquisition of single-family homes. The flood of distressed mortgages created an opportunity for investors to buy single-family homes at depressed prices, which at the time was seen as a positive by some, as it helped stabilize home values.
As BOCC chair George Dunlap chair pointed out at the Dec. 12 meeting, corporate landlords helped fill in some gaps at that time, as there was concern the large amount of foreclosures would lead to a dearth in county revenue from property taxes.
“While the corporate landlords provided stabilization for residential homes to both individual sellers and banks with growing portfolios of repossessed properties, existing literature provides evidence of negative experiences for the communities in which the properties were located,” the report reads.
Studies have found an association between corporate landlords and higher rates of eviction — though eviction rates vary by corporate landlord or other factors such as whether the corporate landlord is a publicly traded entity that requires public disclosure.
Corporate landlords have been found to have transactional advantages when purchasing single-family homes — such as greater access to financial markets and taking properties as they are without an appraisal or mortgage contingency — that allow corporations to crowd out individual buyers, according to the report.
Although purchases of single-family homes by corporate landlords have slowed in recent years, the effects are still present as these investors continue to own homes purchased in prior years, the report states.
A corporate landlord is defined in the report as a corporation that owns more than 100 homes that they rent out to generate income.
Insights from local residents
The report was the result of a community engagement project by Lee Institute carried out in the spring to gather the insights of residents on the rise of corporate landlords in Mecklenburg County.
Lee Institute partnered with UNC Charlotte’s Urban Institute, which helped with data collection tool development, analysis and reporting; as well as help with facilitation from Charlotte-based, Black-women-owned agencies Alexandra Arrington Consulting, Civility Localized, The Inspower Agency, and Tupponce Enterprises II. More than 1,500 respondents participated through surveys, listening sessions, pop-ups at high-traffic events, and interviews.
Researchers sought to answer two main questions during their community engagement sessions: How have you and/or your community been affected by corporate landlords? And what actions, if any, do you believe should be taken as it relates to corporate landlords in Mecklenburg County?
The four primary themes found to come up most regularly among the researchers’ engagement with community members, meaning they appeared to be front of mind in conversations about the topic with participating residents, were as follows: the negative impacts of corporate landlords, housing affordability, concerns for community (property maintenance, safety, community bonds, etc.), and a call for action to regulate corporate landlords.
One survey respondent, a non-homeowner living in Mecklenburg County, described the way that corporate landlords keep residents paying rent while at the same time making homeownership less accessible.
“Corporate landlords keep tenants on the rent treadmill by consistently raising rental prices each year, forcing ‘priced-out’ tenants to other properties (where the majority of homes they can afford monthly are also owned by corporations),” the resident wrote.
“Additionally, the excessive price for rent posted by these companies makes it extremely difficult for first time homebuyers to save money but also reduces the amount of supply of single-family homes to purchase due to corporations being able to buy those homes in cash or buy at above asking price,” they continued. “It causes a critical housing crisis in our community.”
A common theme among respondents was how corporate landlords are often absent from the community and slow to respond to issues in rental properties — some of which are already in bad condition when tenants move in.
“I am renting from corporate and it has been awful to work with,” wrote on survey respondent. “I moved into a pest-infested home. Getting someone to help took 6 months. They do not care for upkeep. There have also been others in the neighborhood that moved into rental homes that are unkept.”
“They’ll say that’s the tenant’s responsibility … because it’ll pass inspection, initial inspection,” added one participant in a listening session. “But say if the refrigerator dies out, stove dies out, they’ll say, ‘Well, it was working when they got there, so it’s a tenant responsibility to get it fixed.”
Another survey respondent expressed a feeling repeated by many participants who felt that corporate landlords are a threat to the broader sense of community among neighbors.
“Corporate landlords have no connection to the community,” they wrote. “They exist simply to profit off our citizens. They drive rent/housing prices up, while returning nothing into the city.”
“The question that arises for me as a concerned resident is how do you get the corporation to really care about the community?” added another interview respondent. “When it is really looking to turn a profit, how do you get it to think about the day in, day out? You know, the management of an area and what is really important to the people that live there versus the people that just own a property there.”
Commissioners weigh in
County commissioners at the Dec. 12 meeting struggled with their own lack of authority on the issue. County manager Tyrone Wade told commissioners that there was no new action the county had become authorized to make in the 20 months or so since the board last heard a presentation on corporate landlords in Mecklenburg County.
“There’s not a lot that has changed legally, you know there was a bill that went before the general assembly that didn’t get much traction so there’s not a lot of additional action that the board can take,” Wade said. “Education was something that was talked about pretty significantly last time this came before the board.”
Arthur Griffin Jr., an at-large commissioner who was sworn in earlier in December and was not on the board for the previous presentation, asked that staff place the issue on the board’s intergovernmental agenda to be discussed with state lawmakers.
“In terms of the things we’d like to do, we can’t do without some enabling legislation,” Griffin said. “Inclusionary zoning, rent control, certain caps, I’m not sure where we are with the legislative agenda that we submit every year, but that would be one suggestion from me [to add to that agenda] in my first year as a commissioner.”
He went on to suggest that the board look into expanding rent subsidies to help low-income residents in the short-term until other solutions can be found.
“In absence of legislative guardrails in the private market, then there has to be some type of subsidies to some about,” he said.
He pointed out that, according to the 2023 State of Housing Instability and Homelessness Report, the hourly wage needed to afford a one-bedroom unit in Mecklenburg County while working full-time is $21.04, up from $17.96 per hour in 2020.
Griffin suggested that increasing the minimum wage to exceed that number could be a solution that’s in the jurisdiction of the board. The minimum wage for county employees is currently at $20 per hour.
District 4 rep Mark Jerrell said that the Lee Institute’s collection of data was important in learning the community’s thoughts, and more education of those community members should be pursued, but he also suggested that staff look into actionable solutions that can be carried out in the meantime.
Those included expanding county support for Legal Aid of North Carolina, to which the county gave $500,000 in its most recent budget, for use on tenants rights services. He also agreed with Griffin that rent subsidy programs should be expanded.
“When you take 11,000 to 13,000 homes off the market, there is a disproportionate impact in respect to supply for our residents who can’t purchase,” Jerrell said. “So we are just perpetuating this cycle of poverty and lack of access to the American Dream … The cost of living is just outpacing what people are making.”
Jerrell also suggested that the county reach out to the “Big Six” — six companies that have been found to be behind much of the rise in corporate homeownership in recent years — to let them know that they will be held accountable for absenteeism and violating tenants’ rights in Mecklenburg County.
Board chair Dunlap wrapped the discussion on Dec. 12 by saying that the Lee Institute report confirmed the things commissioners had suspected after hearing from constituents on an anecdotal level, and now the next step will be to find out what power the county has to help.
“Now that there’s confirmation, the question is, what do we do?” Deunlap said. “If you don’t know what you can do, I would just say we’re still working on it — and now the real work begins.”
SUPPORT OUR WORK: Get better connected and become a member of Queen City Nerve to support local journalism for as little as $5 per month. Our community journalism helps inform you through a range of diverse voices.
This work by Queen City Nerve is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.