The Rising Influence of Private Equity in Tampa Bay’s Housing Market
Nearly 25% of apartment units in the Tampa Bay area are now under the ownership of private equity firms, reveals a recent report from the Private Equity Stakeholder Project. As these firms continue to assert control over the housing market, the implications for renters are increasingly concerning.
The Scope of Private Equity Ownership
According to the report, leading private equity firms such as Blackstone, Greystar, and Starwood Capital have collectively acquired an astounding 8,200 apartment buildings, which translate to 2.2 million units across the country. This figure represents approximately 10% of all apartment units nationwide, with nearly two-thirds of these acquisitions taking place since 2018.
Key Findings:
- Sunbelt Concentration: The trend is most pronounced in the Sunbelt region, specifically in states like:
- Texas
- Florida
- California
- Georgia
- North Carolina
- Rent Burdened Residents: Regions with substantial private equity ownership often coincide with heightened rent burdens, where residents spend over one-third of their income on housing.
Tampa Bay: A Hotspot for Private Equity Firms
The Tampa-St. Petersburg-Clearwater metro area has ranked as the seventh highest in the nation for concentration of private equity-owned apartments. Rent in Tampa Bay surged by 49% from 2019 to 2023, raising alarms about the affordable housing crisis.
Jordan Ash, the housing campaign and research director for the Private Equity Stakeholder Project, emphasized:
“States with weak tenant protections attract private equity companies. The growing population intensifies demand for rental housing, leading to higher rents.”
The Impact of Rising Rents
While it’s difficult to pinpoint a single cause for rising rents, Ash has highlighted the compelling evidence linking private equity ownership to the issue.
- Price-Fixing Allegations: Several firms are embroiled in lawsuits over alleged price-fixing involving a software called Real Page, designed to analyze client data to optimize rent pricing.
- Tenant Complaints: Observations indicate that private equity-owned apartments often suffer from neglected maintenance and implement aggressive eviction tactics.
Beyond Multi-Family Rentals: Single-Family Homes
Private equity firms are diversifying their portfolios by acquiring single-family homes for rental purposes. Notably, 117,000 homes across Florida are owned by large corporations, with approximately 27,000 situated in Hillsborough, Pasco, and Pinellas counties.
- Progress Residential, the leading operator of single-family rentals, is backed by the private equity firm Pretium. Local tenants have reported numerous maintenance issues, ranging from mold to broken plumbing and air conditioning systems.
Recent Market Trends
The buying spree witnessed from 2020 to 2022, coinciding with significant population increases in Sunbelt states, has begun to slow down due to rising interest rates. However, Ash notes:
“There’s an uptick in purchases recently, as we discuss the possibility of a recession. This poses another opportunity for private equity firms to profit by acquiring more properties.”
Conclusion: The Future of Tampa Bay Housing
As private equity firms expand their influence in Tampa Bay’s housing market, the implications for renters are profound. The interrelationship between corporate ownership, rising rents, and diminishing tenant protections continues to pose significant challenges. Understanding these dynamics is crucial for residents and policymakers alike, as the region confronts its housing crisis head-on.
Stay informed about your housing rights and keep a close eye on local developments to ensure a sustainable living environment for all.