Imagine you're looking to buy your first home, but every time you find a promising listing, you're outbid by a corporation with deep pockets. It’s a frustrating reality for many aspiring homeowners across the country. With corporations buying up single-family homes to rent out, the dream of homeownership is slipping out of reach for many. Is this a fair practice, or should there be restrictions?

Welcome to your Dinner Table Debates Daily Deep Dive where we explore real topics from our decks, and give you everything you need to debate, in under 10 minutes. Today's topic is “Corporations should never be allowed to purchase single-family homes with the intent to rent them out in residential neighborhoods,” and comes from the Economics category in our Full-Size Essentials Collection deck.

Let’s dig in!

Over the past few decades, corporate ownership of single-family homes has become more prevalent. Investment firms, real estate trusts, and other large entities have increasingly turned to residential real estate as a profitable investment. This trend is relatively new, fueled by factors like low-interest rates and a growing demand for rental housing. Large investment firms as well as individuals both see single-family homes as a stable asset class, offering great potential for rental income and long-term appreciation.

According to a 2021 report, institutional investors owned over 200,000 single-family rental homes in the U.S. Companies like Invitation Homes and Blackstone have been acquiring single-family properties across the country, especially in the fast-growing Sun Belt markets like Phoenix and Atlanta, where more than a third of homes on the market are now being purchased by private equity firms or dedicated single-family rental companies. These corporations use algorithms to identify neighborhoods with high rental potential and often purchase homes in bulk. While this can benefit sellers who receive all-cash offers, it limits the options available to buyers relying on traditional financing and significantly reduces the number of homes available to families and first-time homebuyers.

In addition to corporations, real estate companies like Redfin and Opendoor have also been actively purchasing single-family homes. They use technology to identify undervalued properties, purchase them for cash, renovate, and resell at a profit. Similar to all the home renovation shows you see on HGTV, but done by these real estate companies. This practice, known as iBuying, can contribute to rising home prices in neighborhoods where it is common. By purchasing homes in bulk and renovating them quickly, these companies can increase demand and drive up prices, making it more difficult for individual buyers to compete.

This trend has raised concerns about housing affordability and availability. In some markets, corporate purchases accounted for more than 20% of all single-family home sales. As these corporations purchase homes, the supply for individual buyers dwindles, driving prices up further, surging almost 50% since 2020, making it increasingly harder for regular families to buy a home.

Historically, homeownership has been a cornerstone of the American dream, representing stability, investment in one’s future, and a sense of community. The rise of corporate landlords is seen by some as a shift away from these traditional values, raising questions about the role of corporations in residential neighborhoods, as well as the impact on community dynamics.

It's important to note that housing is a complex issue with no easy solutions. A var...