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Do Wall Street Landlords Undermine Renters’ Welfare?

Author

Listed:
  • Umit G Gurun
  • Jiabin Wu
  • Steven Chong
  • Serena Wenjing
  • Tarun Ramadorai

Abstract

We examine the recent rise of institutional investment in the single-family home rental market and its implications for renters’ welfare. Using institutional mergers to identify local exogenous variation in institutional landlords’ scale and market share, we show that rents increase in neighborhoods where both merging firms owned properties (i.e., overlapped neighborhoods) relative to other nonoverlapped neighborhoods. Meanwhile, the crime rate also significantly decreases in overlapped neighborhoods after mergers. Our findings suggest that while institutional landlords leverage their market power to extract greater surplus from renters, they also improve the quality of rental services by enhancing neighborhood safety.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Suggested Citation

  • Umit G Gurun & Jiabin Wu & Steven Chong & Serena Wenjing & Tarun Ramadorai, 2023. "Do Wall Street Landlords Undermine Renters’ Welfare?," The Review of Financial Studies, Society for Financial Studies, vol. 36(1), pages 70-121.
    • Handle: RePEc:oup:rfinst:v:36:y:2023:i:1:p:70-121.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhac017
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    Citations

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    Cited by:

    1. Jessica Rutherford & Ronald Rutherford & Abdullah Yavas & Lei Wedge & Marcus T. Allen, 2025. "Micro Evidence Relating to House Rents, Prices and Investor Size from a Matched Dataset," The Journal of Real Estate Finance and Economics, Springer, vol. 70(1), pages 38-64, January.
    2. Stephen B. Billings & Adam Soliman, 2025. "The social spillovers of homeownership: evidence from institutional investors," CEP Discussion Papers dp2123, Centre for Economic Performance, LSE.
    3. Stefano Colonnello & Roberto Marfè & Qizhou Xiong, 2021. "Housing Yields," Working Papers 2021:21, Department of Economics, University of Venice "Ca' Foscari", revised 2021.
    4. Carlos Garriga & Pedro Gete & Athena Tsouderou, 2023. "The economic effects of real estate investors," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(3), pages 655-685, May.

    More about this item

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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