IDEAS home Printed from https://ideas.repec.org/a/gam/jsoctx/v8y2018i4p93-d171162.html
   My bibliography  Save this article

The Impact of Single-Family Rental REITs on Regional Housing Markets: A Case Study of Nashville, TN

Author

Listed:
  • Ken Chilton

    (Department of Public Administration; Tennessee State University, Nashville, TN 37209, USA)

  • Robert Mark Silverman

    (Department of Urban and Regional Planning; University at Buffalo; Buffalo, NY 14214, USA)

  • Rabia Chaudhry

    (Department of Public Administration; Tennessee State University, Nashville, TN 37209, USA)

  • Chihaungji Wang

    (Department of Urban and Regional Planning; University at Buffalo; Buffalo, NY 14214, USA)

Abstract

The U.S. Congress authorized the creation of real estate investment trusts (REITs) in 1960 so companies could develop publically traded real estate investment portfolios. REITs focus on commercial property, retail property, and rental property. During the last decade, REITs became more active in regional housing markets across the U.S. Single-family rental (SFR) REITs have grown tremendously, buying up residential properties across the country. In some regional housing markets, SFR REITs own noticeable shares of single-family homes. In those settings, SFR REITs take large numbers of housing units off of real estate markets where homeownership transactions occur and manage these properties as part of commercial rental inventories. This has resulted in a new category of multiple property owners, composed of institutional investors as opposed to individual investors, which further exacerbates property wealth concentration and polarization. This study examines the socio–spatial distribution of properties in SFR REIT portfolios to determine if SFR REIT properties tend to cluster in distinct areas. This study will focus on the regional housing market in Nashville, TN. Nashville has one of the most active SFR REIT sectors in the country. County tax assessor records were used to identify SFR REIT properties. These data were joined with U.S. Census data to create a profile of communities. The data were analyzed using SPSS statistical software and GIS software. Our analysis suggests that neighborhoods with clusters of SFR REITs fit the SFR REIT business model. Clusters occur in communities with newer homes, residents with higher levels of educational attainment, and middle to upper-middle incomes. The paper concludes with several recommendations for future research on SFR REITs.

Suggested Citation

  • Ken Chilton & Robert Mark Silverman & Rabia Chaudhry & Chihaungji Wang, 2018. "The Impact of Single-Family Rental REITs on Regional Housing Markets: A Case Study of Nashville, TN," Societies, MDPI, vol. 8(4), pages 1-11, September.
  • Handle: RePEc:gam:jsoctx:v:8:y:2018:i:4:p:93-:d:171162
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2075-4698/8/4/93/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2075-4698/8/4/93/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Georgia Alexandri & Michael Janoschka, 2018. "Who Loses and Who Wins in a Housing Crisis? Lessons From Spain and Greece for a Nuanced Understanding of Dispossession," Housing Policy Debate, Taylor & Francis Journals, vol. 28(1), pages 117-134, January.
    2. Kim Mckee & Tom Moore & Adriana Soaita & Joe Crawford, 2017. "‘Generation Rent’ and The Fallacy of Choice," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 41(2), pages 318-333, March.
    3. Herman Donner, 2017. "Foreclosures, Returns, and Buyer Intentions," Journal of Real Estate Research, American Real Estate Society, vol. 39(2), pages 189-214.
    4. Desiree Fields & Rajkumar Kohli & Alex Schafran, 2016. "The emerging economic geography of single-family rental securitization," Community Development Working Paper 2016-2, Federal Reserve Bank of San Francisco.
    5. Desiree Fields, 2017. "Unwilling Subjects of Financialization," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 41(4), pages 588-603, July.
    6. Manuel B. Aalbers, 2017. "The Variegated Financialization of Housing," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 41(4), pages 542-554, July.
    7. James Mills & Raven S. Molloy & Rebecca Zarutskie, 2015. "Large-Scale Buy-to-Rent Investors in the Single-Family Housing Market: The Emergence of a New Asset Class?," Finance and Economics Discussion Series 2015-84, Board of Governors of the Federal Reserve System (U.S.).
    8. Chan, Su Han & Erickson, John & Wang, Ko, 2002. "Real Estate Investment Trusts: Structure: Structure, Performance, and Investment Opportunities," OUP Catalogue, Oxford University Press, number 9780195155341.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Das, Prashant & Füss, Roland & Hanle, Benjamin & Russ, Isabel Nina, 2020. "The cross-over effect of irrational sentiments in housing, commercial property, and stock markets," Journal of Banking & Finance, Elsevier, vol. 114(C).
    2. Aveline-Dubach, Natacha, 2022. "The financialization of rental housing in Tokyo," Land Use Policy, Elsevier, vol. 112(C).
    3. Mikhail Samarin & Madhuri Sharma, 2021. "Rent burden determinants in hot and cold housing markets of Davidson and Shelby counties, Tennessee," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1608-1632, September.
    4. Natacha Aveline-Dubach, 2020. "The Financialization of Rental Housing in Tokyo [La financiarisation des logements locatif à Tokyo]," Post-Print halshs-02440007, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Davies, Clementine, 2021. "Financialisation and rental housing: A case study of Berlin," IPE Working Papers 153/2021, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    2. Frances Brill, 2020. "Complexity and coordination in London’s Silvertown Quays: How real estate developers (re)centred themselves in the planning process," Environment and Planning A, , vol. 52(2), pages 362-382, March.
    3. Renee Tapp, 2021. "Introducing the YIMBYs: Renters, housing, and supply-side politics in Los Angeles," Environment and Planning C, , vol. 39(7), pages 1511-1528, November.
    4. Jordi G. Guzmán, 2023. "THE HOUSING/FINANCIAL COMPLEX IN SPAIN: After the 2008 Global Financial Crisis," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 47(6), pages 900-916, November.
    5. Michael Byrne & Michelle Norris, 2022. "Housing market financialization, neoliberalism and everyday retrenchment of social housing," Environment and Planning A, , vol. 54(1), pages 182-198, February.
    6. Feng, Yi & Wu, Fulong & Zhang, Fangzhu, 2022. "The development of local government financial vehicles in China: A case study of Jiaxing Chengtou," Land Use Policy, Elsevier, vol. 112(C).
    7. Nick Revington & Martine August, 2020. "Making a market for itself: The emergent financialization of student housing in Canada," Environment and Planning A, , vol. 52(5), pages 856-877, August.
    8. Richard Waldron, 2019. "Financialization, Urban Governance and the Planning System: Utilizing ‘Development Viability’ as a Policy Narrative for the Liberalization of Ireland's Post‐Crash Planning System," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 43(4), pages 685-704, July.
    9. Desiree Fields, 2022. "Automated landlord: Digital technologies and post-crisis financial accumulation," Environment and Planning A, , vol. 54(1), pages 160-181, February.
    10. James Payne & George Waters, 2007. "Have Equity REITs Experienced Periodically Collapsing Bubbles?," The Journal of Real Estate Finance and Economics, Springer, vol. 34(2), pages 207-224, February.
    11. Colin Lizieri & Stephen Satchell & Qi Zhang, 2007. "The Underlying Return‐Generating Factors for REIT Returns: An Application of Independent Component Analysis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 35(4), pages 569-598, December.
    12. Stefano Di Bucchianico, 2020. "A note on financialization from a Classical-Keynesian standpoint," Department of Economics University of Siena 824, Department of Economics, University of Siena.
    13. zu Ermgassen, Sophus & Drewniok, Michal & Bull, Joseph & Walker, Christine Corlet & Mancini, Mattia & Ryan-Collins, Josh & Serrenho, André Cabrera, 2022. "A home for all within planetary boundaries: pathways for meeting England’s housing needs without transgressing national climate and biodiversity goals," OSF Preprints 5kxce, Center for Open Science.
    14. Crystal Lin & Hamid Rahman & Kenneth Yung, 2009. "Investor Sentiment and REIT Returns," The Journal of Real Estate Finance and Economics, Springer, vol. 39(4), pages 450-471, November.
    15. Josh Ryan-Collins, 2021. "Breaking the housing–finance cycle: Macroeconomic policy reforms for more affordable homes," Environment and Planning A, , vol. 53(3), pages 480-502, May.
    16. Léna Pellandini-Simányi & Adam Banai, 2021. "Reluctant financialisaton: Financialisaton without financialised subjectivities in Hungary and the United States," Environment and Planning A, , vol. 53(4), pages 785-808, June.
    17. Hanna Hilbrandt & Monika Grubbauer, 2020. "Standards and SSOs in the contested widening and deepening of financial markets: The arrival of Green Municipal Bonds in Mexico City," Environment and Planning A, , vol. 52(7), pages 1415-1433, October.
    18. Natalya Delcoure & Ross Dickens, 2004. "REIT and REOC Systematic Risk Sensitivity," Journal of Real Estate Research, American Real Estate Society, vol. 26(3), pages 237-254.
    19. Rahel Kunz & Julia Maisenbacher & Lekh Nath Paudel, 2022. "Remittances, development and financialisation beyond the Global North," Environment and Planning A, , vol. 54(4), pages 693-701, June.
    20. Zhenfa Li & Fulong Wu & Fangzhu Zhang, 2023. "State de-financialisation through incorporating local government bonds in the budgetary process in China," Journal of Economic Geography, Oxford University Press, vol. 23(5), pages 1169-1190.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsoctx:v:8:y:2018:i:4:p:93-:d:171162. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.