A paper in Housing Policy Debate, “Gentrifying Atlanta: Investor Purchases of Rental Housing, Evictions, and the Displacement of Black Residents,” finds that investor purchases of rental housing in Atlanta’s neighborhoods predicted a spike in eviction judgments, as well as the loss of Black residents. Investor purchases of apartments are associated with a 33% increase in the odds of an eviction spike, and investor multifamily purchases resulted in 166 fewer Black residents in a neighborhood, compared to adjacent neighborhoods without an investor purchase.
The authors focus on investor purchases because the existing literature suggests that private equity firms and corporate investors may have an economic interest in displacement and gentrification that leads to higher profits. The authors note that there is more research on eviction in disinvested neighborhoods than on eviction as a mechanism of displacement, and it is unclear from previous research how investor purchases relate to racial transition.
The authors examined 5-year American Community Survey (ACS) data from 2004, 2010, and 2016; evictions data from Princeton’s Eviction Lab at the neighborhood level for each year from 2000 to 2016 in Fulton County, Georgia; and Fulton County deeds data from CoreLogic for 2000-2016.
The authors first examined whether investor purchases of multifamily residential real estate result in eviction-led displacement in a neighborhood, measured in terms of an increase in eviction judgments. Investor purchases were identified using proprietary data from CoreLogic that indicated whether a property was purchased for investment purposes and was confirmed by a review of the purchaser entities. They found that investor purchases are associated with a 33% increase in the odds of an eviction spike in the neighborhood in the same year. Investor purchases of older garden-style apartments are associated with a 41% increase in the odds of increased evictions, while investor purchases of mid-rise apartments are associated with a 34% increase in the chance. Non-investor purchases (where the purchaser is not a private equity or real estate investment firm) are not associated with any increase in the odds.
Second, they examined whether investor purchases cause racial transition within neighborhoods. Comparing neighborhoods that had an investor apartment purchase between 2010 and 2016 with adjacent neighborhoods that did not, they found investor purchases are associated with declines in the Black population. Investor multifamily purchases resulted in 166 fewer Black residents and 109 additional white residents in the neighborhood. The average population of a neighborhood in their study was 1,635.
The authors argue these results show that theories of gentrification that focus on real estate investment activity are useful for providing early warning signs of displacement pressure. Real estate transaction data, including sales, evictions, foreclosures, and rising prices, can provide information about those pressures before census data regarding demographic transition are available.
The report can be found at: https://bit.ly/3aX0qCH