Is there someone to blame for the housing crisis?

December 8, 2025, 7:57 AM ET

We have a housing crisis, as you probably, painfully, know. Wouldn’t you like to have someone to blame for it?

The United States is short 4 million housing units, with a particular dearth of starter homes, moderately priced apartments in low-rises, and family-friendly dwellings. Interest rates are high, which has stifled construction and pushed up the cost of mortgages. As a result, more Americans are renting, and roughly half of those households are spending more than a third of their income on shelter.

This crisis has many causes: restrictive zoning codes, arcane permitting processes, excessive community input, declining construction productivity, expensive labor, and expensive lumber. And, some say, the aggressive entry of private equity into the housing market. Institutional investors have bought up hundreds of thousands of American homes since the start of the coronavirus pandemic, outbidding families and pushing up rents—a trend lamented by everyone from Alexandria Ocasio-Cortez to J. D. Vance.

Casting private equity as a central villain in the country’s real-estate tragedy makes intuitive sense. Who’s going to win in a bidding war for a three-bedroom in a suburb of Cincinnati: a single-income family with a scrabbled-together 10 percent down payment or a Wall Street LLC offering cash? Still, housing economists and policy analysts have argued that institutional investors have played at most a bit part. Supply constraints began cropping up on the coasts a generation ago, if not earlier, whereas Wall Street started buying up significant numbers of homes only after the Great Recession and especially after the pandemic. Moreover, even if big investors are purchasing thousands of homes, they don’t own significant numbers of homes compared with small-scale landlords and individuals.

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Yet in some markets, the balance has shifted. Last month, the Lincoln Institute of Land Policy and the Center for Geospatial Solutions published a report showing that corporations now own a remarkable one in 11 residential real-estate parcels in the 500 urban counties with data robust enough to analyze. In some communities, they control more than 20 percent of properties.

I figured that big investors might be picking up vacation rentals in Colorado and expensive apartment buildings in the Bay Area and the Acela Corridor. They are, the report’s authors told me. But these investors are pouring the most money into “buy low, rent high” neighborhoods: communities, many of them in the South and the Rust Belt, where large shares of families can’t afford a mortgage.

“They’re pulling all the starter homes off of the market in low-income, high-minority-density neighborhoods,” George McCarthy, the president of the Lincoln Institute, told me—a trend that is intensifying the country’s yawning racial wealth and homeownership gaps. In Cleveland, corporations own 17.5 percent of residential real-estate parcels. In the city’s East Side, which contains many predominantly Black neighborhoods, just one in five homebuyers in 2021 took out a mortgage. The rest—many investors, presumably—paid in cash or took out a loan from a non-traditional financier.

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In Baltimore’s majority-Black McElderry Park and Ellwood Park/Monument neighborhoods, owner-occupants made just 13 percent of purchases in 2022. In a majority-white neighborhood not far away, owner-occupants bought more than 80 percent of homes that same year, and out-of-state corporations owned less than 1 percent of residential parcels.

The report made me see the country’s real-estate crisis in a different light. Private-equity firms and other deep-pocketed investors aren’t why Seattle and Boston are unaffordable. Those cities have had shortage-driven housing crises that have intensified over decades. The firms aren’t why many towns in the Mountain West have seen jumps in home values and a corresponding increase in homelessness, displacement, and eviction. In those communities, white-collar emigrants from big cities have arrived and outbid locals. But investor money is distorting the housing market in communities with low wages and decent-enough housing supply, pushing thousands of Black and Latino families off the property ladder. Tens of thousands of workers who would like to invest in a home are instead stuck paying rent, and putting up with the associated uncertainty.

While not all corporate landlords are bad landlords, *some *are bad landlords. Corporations are more likely to threaten to evict and to actually evict their tenants. They are also prone to skimping on maintenance and upkeep. “At the neighborhood level, when more than half of the properties are owned by outside investors—when you’ve now flipped that neighborhood from being primarily homeowner driven to investor driven—that matters, because homeowners behave very differently, politically and otherwise,” McCarthy said. An out-of-state investment firm might be less likely than a longtime resident or a local property manager to plant shade trees and demand safe sidewalks, for instance.

In response to the rising corporate ownership of homes, a variety of politicians have pushed for policy fixes. In New York, Governor Kathy Hochul has proposed legislation barring firms from bidding on single-family or two-family homes for the first 75 days they are on the market. Washington State is contemplating capping the number of units that corporations can own. Other legislators have suggested revoking tax benefits from large-scale owners.

McCarthy said that caps probably would not work well: Corporations might simply set up multiple entities to get around the rules and keep purchasing properties, for instance. “It’s just not going to fly,” he said. But he supports treating firms that own more than 10 properties in a given jurisdiction as commercial owners rather than residential owners, subjecting them to higher property-tax rates and higher taxes on their capital gains.

If nothing is done, what’s happening to majority-Black communities in Ohio and Virginia and Georgia and Michigan might start happening in communities around the country. Private equity might not be causing the housing crisis, but corporate owners could end up making it a lot worse for everyone.

About the Author

Annie Lowrey is a staff writer at The Atlantic.

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