The Kansas City Star recently published a piece on investor-owned housing that seeks to raise the alarm on corporate landlords, claiming, “large corporations buying single-family homes have contributed to rising prices.”
The story is similar to a piece published almost a year ago by Flatland, an online news source operated by Kansas City PBS that claims to be “committed to providing context” to the region’s challenges. The breathless piece was titled: “5 Companies Own 8,000 Kansas City Area Homes, Creating Intense Competition for Residents.” That claim comes from a 2023 study from the Mid-America Regional Council (MARC), which states: “Nearly 14,000 single-family homes in the region are owned by 33 companies. Of these, five companies own nearly 8,000 homes.”
Okay. Is that a lot? How many single-family homes are there in the region? The MARC report doesn’t say. Flatland, despite its commitment to context, provides none. Neither does the Star.
I’ve reached out to MARC for these data, but while I’m waiting, I did some basic calculations. The Census estimates there are 969,534 housing units in the Kansas City Metropolitan Statistical Area. Nationwide, about 74% of housing units are single-family residences. Data provided by the Greater Kansas City Regional Housing Partnership indicate there are 682,546 single-family homes in the region. If 14,000 are owned by institutional investors, that amounts to 2% of the market.
Are we being asked to believe that large firms and investors owning 2% of the housing market is “contributing to rising prices” or “creating intense competition?” Really?
The worst part is that, according to the Star, Missouri legislators are considering an effort to bar corporations from buying residential real estate.
While it may be ideologically satisfying to cast corporate landlords or institutional investors as the real enemy, it does nothing to actually solve the problem. The truth is that housing affordability is driven more by restrictive government regulations that impede the ability of the free market to meet demand. Zoning restrictions, burdensome regulations, neighborhood NIMBYism, and slow permitting and approval processes are the actual drivers of housing costs. Addressing those problems requires real policy work.
Using legislation to tinker with who is permitted to buy homes may feel like progress, but it is more likely to reinforce the problematic status quo in housing—too many rules and not enough houses.
