“Though inveighing against big monied investors for the high cost of housing is a “huge distraction,” it has obvious political appeal, said Stan Oklobdzija, a UC Riverside public policy professor. “Attacking institutional investors is the latest iteration of appearing to do something without actually doing anything. …It’s just kind of archetypical cheap talk.” – CAL MATTERS
Silicon Valley residents and employees look around and they do not see large corporate investors buying up single-family homes as rental properties. However there is a local presence that buys single family homes – Stanford University.
Stanford University publishes information about the housing it owns.
- On-Campus faculty ownership units: 900
- Off-Campus rental housing for affiliates: 1,600
- Off-Campus faculty ownership units: 250
- Off-Campus housing units for general community: 1,200
The 3,950 units it owns is a significant ownership. Stanford University’s housing ownership helps it to attract employees and students. Having the housing near the university reduces commute traffic. It would be hard to argue that its ownership creates problems. It is an organization that aids its people to obtain housing. Should more companies and government entities do the same? Doesn’t that make it harder and more costly for people not working for those companies to obtain housing?
Fixing A Problem Or Heading Off A Problem
Regulations that prevent a problem are most likely cheaper and more effective than trying to fix a problem after it is created. However, if the regulations are falsely proposed as a fix to an existing problem, needed solutions likely won’t be addressed.
The California Research Board examined home ownership by investors having more than 10 units. Current large investor ownership in Silicon Valley counties is approximately:
- San Mateo 1.8%
- Santa Clara 2.8%
- Alameda 3.5%
- Contra Costa 3.1%
- Santa Cruz 3.7%
Companies like Invitation Homes, Blackstone, Progress Residential and AMH Homes have focused on markets with relatively low prices and rapidly growing populations. Silicon Valley is not attractive to corporate investments in housing for rental income. The Urban Institute found that institutional investors typically respond to, rather than cause, rent price increases.
More information about Corporate Ownership Of Single Family Homes is available.