Anonymous corporations own more and more of our cities.
BY CHUCK COLLINS

INVISIBLE FORCES ARE disrupting housing markets in most metropolitan areas, fueling the most acute housing crisis in a generation. As pandemic protections are lifted, many communities are anticipating waves of evictions and foreclosures. By one estimate, the U.S. has a shortage of more than 5.5 million units of housing.

Among these invisible forces is an explosion in short-term rentals, a shift to corporate ownership of rental housing, and a plague of global billionaires looking to park money in U.S. real estate markets. Put this on top of inequality-fueled gentrification and many cities have a full-blown affordability and supply crisis.

In some communities, thousands of apartments and homes are being snatched up by anonymous corporations. Now a growing number of community leaders are pressing to know: Who is buying our cities?

The last decade has seen a dramatic shift in the ownership of rental housing, from local ownership to Wall Street corporate ownership. Today, anonymous shell companies own 40 percent of the rental housing market, an estimated 18 million out of 48 million rental units nationwide. Some of this is being used for short-term rentals, like Airbnb. But corporate ownership is also moving into the single-family home market in neighborhoods that were once largely owner-occupied. Global investors—some with illicit funds—find anonymously owned U.S. real estate to be an attractive destination for parking cash. In major urban areas, thousands of apartments are vacant, serving as investor wealth storage units instead of housing.

The Financial Crimes Enforcement Network, an arm of the Treasury Department, has been working to monitor the use of illicit funds in real estate. But it maintains a private database that is not available to local policymakers or affordable housing advocates. To get a clearer picture of who is buying their communities, some cities and states are requiring ownership disclosure. They advocate for public registry of what is called the true “beneficial owners.” Attorney Robert Nessen explained to me, “What if the identities of these beneficial owners had to be recorded on the public record in order to allow these beneficiaries to have any legal rights?” In other words, to have legal standing, you need to tell us who you really are. Public disclosure could be implemented on a city, county, or state-by-state basis. Local lawmakers in Washington, D.C., and Philadelphia have passed real estate disclosure laws. New York State passed legislation in 2019 to require the disclosure of real owners and the creation of a public registry. “Neighbors have a fundamental right to know who owns the home next-door to them,” said lead sponsor Sen. James Skoufis. A few months later, however, the real estate industry mobilized to prevent the registry from being made public.

In October 2020, the Los Angeles City Council unanimously voted to direct the city attorney to make recommendations for public disclosure of ownership in LA. Councilmember Mike Bonin wrote that action was required to “curb [the] predatory forces that contribute to eviction, gentrification, and the loss of affordable housing.” A month later, LA County introduced a similar motion. “This motion will provide us with better data so that we can distinguish between corporate investors and mom and pop landlords as we develop safeguards for renters at risk of losing their homes and address our affordable housing crisis,” said LA County Supervisor Sheila Kuehl.

The possibility of dozens of major U.S. cities requiring public disclosure of real owners would boost the movement for real estate transparency and put pressure on national policymakers. Cities could pass laws aimed at curbing vacancies and taxing luxury real estate transfers to fund permanently affordable housing. Knowing who is buying up the block is the first step.

Chuck Collins
Chuck Collins, author of The Wealth Hoarders: How Billionaires Spend Millions to Hide Trillions, directs the program on inequality at the Institute for Policy Studies, where he coedits Inequality.org.