Private Equity Now Owns 1 in 8 Apartment Units, a 50 Percent Increase Since 2021 |
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A new report by the Private Equity Stakeholder Project (PESP) shows that private equity firms now own almost 3 million apartment units in the U.S., which amounts to one in eight apartment units, some 13 percent of apartment units in the country. Approximately half of these units were bought since 2021, highlighting private equity’s turn to the housing market even as the U.S. suffers from a housing crisis.
Private equity firms invest money from pension funds and endowments to buy assets in order to make significant profit. In the housing market, private equity firms look for rents that are unregulated, with capped property taxes, in order to maximize their profits. According to the private equity business model, firms aim to increase the value of buildings before quickly selling them for a higher profit.
The PESP report found that private equity companies bought up almost 1.7 million apartment units — some 57 percent — since 2018, and 1.3 million of them since just 2021.
PESP’s report found that private equity’s expanded presence in the housing market “has exacerbated housing affordability issues, displacing local communities through large rent hikes and aggressive evictions, and diminishing tenants’ quality of life.”
Texas has the largest number of apartments owned by private equity in the country, with almost 580,000 units — and this is likely due to the state’s lenient zoning regulations, weak tenant protections, and lack of state income tax. Though there is a high level of private equity ownership of apartments in New York, California, and the Washington, D.C. area, private equity........