How much of Utah’s housing market is corporate-owned? This county is digging into the data

Residential developments in the Sugarhouse area of Salt Lake City are pictured on Monday, July 22, 2024. (Photo by Spenser Heaps for Utah News Dispatch)

It’s been an ongoing national story: Institutional investors have been buying up apartment buildings or snatching up starter homes with cash while Americans grapple with the worst housing affordability levels in decades.

The issue impacts some areas more than others, with national research indicating big investors are more concentrated in Sun Belt states and major metros like Miami, Houston and Atlanta. While investor activity isn’t as prevalent in Utah, it’s still happening — and the issue is starting to catch the attention of policymakers as leaders here search for ways to address the state’s persistent housing shortage and affordability crisis.

States in the West, including Utah, saw home prices skyrocket after the COVID-19 pandemic spurred a home buying frenzy amid low interest rates. Then came inflation and, to tamp it down, the Federal Reserve raised borrowing rates. While that certainly cooled a sizzling housing market, high mortgage rates combined with stubbornly high housing prices continue to dangle home ownership out of reach for many Americans and Utahns. 

Meanwhile, the question of investor activity and its impact on regular Utahns has been a lingering, partially unanswered one. Some national sales data has given us an idea of how many investors are in Utah’s market — but there’s still a question mark around how it’s impacting housing affordability, whether it’s from the homebuyer’s corner or the renter’s.

For example, according to the firm John Burns Research and Consulting, 25% of homes sold in the Salt Lake metro area in 2023 were bought by an investor, a figure that’s been slowly rising in recent years. For a statewide figure, a different analysis published by CoreLogic in April showed about 30% of Utah homes sold last year were bought by investors. That analysis defined investors as an entity (individual or corporate) that has retained three or more properties simultaneously within the past 10 years. 

But to policy wonks like Dina Blaes, director of the Office of Regional Development at Salt Lake County, there has been a big question mark over the actual impact behind those numbers in Utah’s most populated county. What is investor activity doing to neighborhoods? Does it impact some areas more than others, if at all? What are its long-term impacts? 

There’s been no shortage of concerns raised — especially after the 2008 housing bubble popped, which prompted a flood of institutional investors taking advantage of foreclosures — but no solid information to pursue data-informed solutions, she said. 

“For years we were hearing all this anecdotal fear … but (there’s) no data – no data – to base any kind of policy recommendation on,” Blaes told Utah News Dispatch in a recent interview. 

So that’s what prompted Blaes to partner Salt Lake County, bringing to bear data from the county assessor’s office, with a Cambridge-based nonprofit think tank, the Lincoln Institute of Land Policy. Together, they’re building a dashboard for county officials to evaluate quality, hyper-local, parcel-by-parcel information on home ownership trends in Salt Lake County.

“We are now just diving in,” Blaes said. “Does the data help inform these policy decisions? We’re confident it will.” 

‘Who Owns America’ — and Utah?

Salt Lake County’s partnership is part of a larger national initiative that the Lincoln Institute has titled “Who Owns America.” In a July 2023 article unveiling the project, the institute said it could help cities “beat predatory investors at their own game,” in which investors use sophisticated market research to pinpoint homes ripe for the taking. 

“It’s a very uneven playing field between private investors, who have the capital and are willing to invest the capital to get this market intelligence, and nonprofits that are struggling to keep the doors open, let alone invest in platforms like this,” said Jeff Allenby, CGS director of Geospatial Technology, in that July 2023 article. “What you see is governments and nonprofits continuously trying to play catch up.”

“Who Owns America” uses a new data mapping tool from the Lincoln Institute’s Center for Geospatial Solutions (CGS) that “can help equip nonprofits, advocates, and local governments with similarly powerful technology to help identify and defend affordable housing stock threatened by real estate speculators and absentee landlords,” the Lincoln Institute said.

It’s still early as researchers are still analyzing the data and building a dashboard Salt Lake County officials can use to more easily glean and understand the data. However, Blaes and a CGS representative shared some interesting takeaways that have already surfaced, looking at trends over the past six years. 

For these figures, analysts defined a parcel as “corporate-owned” if the owner on record is a private legal entity business (versus an individual person, government agency or religious-entity, for example), according to a CGS representative. Analysts determined the classification by examining each property’s owner name record against hundreds of key terms and phrases that indicate ownership type (for example, LLC, Limited Liability, Incorporated, etc.). As an added measure CGS also cross-referenced its categorization for known businesses such as banks, like Morgan Stanley, for example. 

Overall, the stats paint this picture: While housing stock in Salt Lake County has increased, so has investor activity. 

But it also raises more questions. 

To Blaes, this first layer of data wasn’t necessarily surprising, especially considering that data point includes not just single-family homes but other types of housing like condos or apartments. However, what set off sirens in her mind was the data point of more than 10,600 homes being sold from private owners to corporate owners. 

“We know that about maybe a third of those that changed hands into corporate ownership are probably single-family residences,” Blaes said. “That’s alarming to me. … I think to myself, is that enough to make a trend? And if it is, where are they happening? Are they happening in a concentrated neighborhood?” 

Blaes said investor activity can potentially damage neighborhoods if the investor is, say, based out-of-state and cares more about its bottom line than it does about how well the property is maintained. 

“This is why this data is so important,” she added, “because we cannot even determine whether this data is relevant and significant in terms of impact on housing stability and housing affordability without now beginning to peel back yet another layer of that onion. Where is this primarily happening and why is it happening?” 

Asked for more detailed information about how much of the corporate-owned units were classified as single-family homes, a CGS representative told Utah News Dispatch her team was “unable to pull additional metrics specific to single-family residences” and they had not yet dug a layer deeper to provide those additional details, but Blaes said it’s an early takeaway as they continue mine.

While the presence of corporate ownership in Utah may not be obvious or seems to be growing at a mild rate, Blaes pointed to what happened to homeowners in Maui last year after wildfires destroyed their homes. ABC 15 reported victims faced aggressive land offers from investors offering to buy their scorched properties, prompting fury over companies trying to take land owned by generations of native islanders. 

While Utah obviously hasn’t seen anything nearly as dramatic, Blaes mused whether “we’re seeing this sort of slow, creeping displacement of families” by investment activity. 

“It’s really a slow motion version, potentially, of those more dramatic turnovers in property ownership. And to me, that’s far more nefarious because we don’t see it happen every day. It’s not happening quickly. It’s happening slowly. But that doesn’t mean that it doesn’t have just as meaningful of an impact in those communities.” 

She said the data is only starting to scrape the surface, and she’s hopeful the partnership with the Lincoln Institute will lead to even deeper data analysis — and possible policy solutions. 

“We’re just starting to unpeel the onion,” she said, adding that she’s “anxious” to “get to the center,” but quality data takes time. 

Will Utah lawmakers consider this data? 

Even before Salt Lake County or the Lincoln Institute was ready to release its first bits of data, Steve Waldrip, the governor’s senior adviser for housing strategy and innovation, dropped a hint that county-level data on corporate ownership was forthcoming in a May interim meeting with legislators. 

After its release, Waldrip told Utah News Dispatch that he, too, looked forward to learning more about what Salt Lake County and the Lincoln Institute would uncover — and that the state’s Commission on Housing Affordability (a body that shapes policy recommendations for consideration of the Utah Legislature) would likely be reviewing the data as it’s released. 

It’s far too early to say what lawmakers will be willing to consider, especially considering the Republican-controlled Utah Legislature (which is made up of a significant number of lawmakers who work in real estate, development or related fields), has been staunchly free-market oriented. However, Waldrip said there’s a growing appetite among lawmakers frustrated with housing affordability to at least look more into the issue of investor activity or corporate ownership. 

“It’s a question being asked all across the country,” Waldrip said. “Some markets obviously have more issues with this than others. Utah is an attractive investment market right now, and it looks to be for the foreseeable future because of our demand. … So we’re a pretty ripe target for investment, which is a great thing in some respects and challenging in some other respects.” 

Waldrip said he’d be interested to know more details from Salt Lake County’s data about how many properties are owned by corporations with large portfolios versus Utahns who have maybe a handful of investment properties. 

He said Salt Lake County’s partnership with the Land Institute is likely to produce never-before known data, and that will be crucial in order to sell any policy reforms to the Legislature. 

“Without that data, a lot of our discussions are based on what you see (anecdotally),” he said. “Having really good data will help us to understand what the issues really are that we’re confronting. Do we really have a significant problem with corporate ownership? Is it driving up real estate prices? Is it creating competitive issues for the working Utahn?” 

If a significant chunk of those corporate-owned homes are single-family homes, Waldrip said that’s something policymakers will be particularly interested in, especially considering the Utah Legislature’s recent efforts to encourage developers to increase the supply of more affordable starter homes. 

On a separate but related note, the growing prevalence of short-term rentals (think Airbnb or VRBO rentals) have also been a burgeoning problem — and a fair share of them could be owned by investors or corporate interests. Consider:

• In 2021, Utah had more than 18,700 short-term rental listings, up nearly 27% from 2019, according to research from the University of Utah’s Kem C. Gardner Policy Institute. 
• As a share of total housing units broken down by county, many of them were concentrated in vacation hot spots: 23% in Summit County (home to the ski destination of Park City), and nearly 20% in Grand County (home to Moab). 
• By sheer numbers, Summit County is again a leader with more than 6,000 short-term rental listings, while Salt Lake County had above 3,400 and southern-Utah’s Washington County (home to St. George) had more than 2,800. 

Waldrip said short-term rentals are likely part of the housing affordability puzzle, and he said it’s possible lawmakers will re-evaluate the Legislature’s passage of HB253 in 2017, which banned cities from prohibiting Utahns from listing their homes on a short-term rental website.

“I think there may be an appetite to revisit that rule and to see if it’s time to make some adjustments to allow some balance in the market,” Waldrip said, though it’s unclear what lawmakers will ultimately decide to do. “Do we limit it geographically? Do we limit it by number? By percentage?” 

As for the broader question about investor or corporate ownership, Rep. Gay Lynn Bennion, D-Cottonwood Heights, presented on the issue in an interim committee meeting in November and offered some policy suggestions, though none advanced during the 2024 session. 

Bennion listed some approaches other states or states have taken: Cincinnati is buying homes that could be bought by large investors and selling them to owner-occupants. California prohibits bulk sales of foreclosed homes, and Nevada has considered rent controls. Knowing that likely wouldn’t fly in Utah, she also suggested some alternatives, like maybe:

• Tightening underwriting for investor buyers.
• Rewarding corporations who participate in rent-to-own programs.
• Mandating the owner must live in the property for a year before renting it out.
• Expanding Utah’s new first-time homebuyer program to not just newly built homes, but existing homes. 
• Requiring institutional investors to register with the state, allowing more access to data.
• Enabling counties to assess higher tax rates on properties that sit vacant for an extended period of time. 

Waldrip said it’s possible Utah policymakers could mull some type of tax policy to potentially discourage some investor activity — but that remains to be seen. He said they look forward to diving into Salt Lake County and the Lincoln Institute’s data to determine if there is something lawmakers can or should do. 

Waldrip said he hopes more Utah cities or counties partner with the Lincoln Institute to help build an even more robust database. The more data the better, he said, because policymakers don’t want to craft legislation as a shot in the dark. 

“We don’t want to just kind of throw darts and see what sticks,” he said. 

The national story

Investors bought roughly 26% of the country’s most affordable homes in the fourth quarter of 2023, with low-priced homes making up 46.5% of all investor housing purchases, according to a Redfin analysis of home purchases from 39 of the U.S.’s most populated metropolitan areas, published earlier this year. 

Nationally, large institutional investors (those that owned at least 100 single-family homes) owned roughly 574,000 single-family homes as of June 2022, according to an Urban Institute study. Out of about 15.1 million single-family rental properties nationwide, institutional owners made up about 3.8%, according to that study. 

That may seem like a small percentage, but the concentration of institutional investment — and its impact on housing affordability — varies depending on region. Institutional investors are particularly concentrated in major cities in Sun Belt states. Atlanta, Georgia and Jacksonville, Florida have some of the highest shares of single-family homes held by investors, (25% and 20%, respectively), according to a U.S. Government Accountability Office analysis of Urban Institute data. 

Some worry investment activity can hurt regular homebuyers by outbidding them, flipping homes and driving up costs while eating into housing stock. Still, “there is an open question about how big of an impact investors are having on the housing market,” as Redfin put it. 

In other words, it’s complicated. 

Zeroing in on investment activity in the single-family home market, a research paper published in June by the Federal Reserve Bank of Philadelphia had some interesting conclusions. 

Researchers found institutional investors raise rents at 60% higher rates than the average when first acquiring properties — and higher investor share in a neighborhood is correlated with faster rent increases for non-investor landlords. However, they wrote they did not find evidence that “investor entry is associated with gentrification, as neighborhoods with high investor activity saw reductions in White and college educated resident share relative to other neighborhoods in their metro area.” 

“While it may be that these investors are playing a role in supplying (single-family) rentals and opening up neighborhoods to households who are credit constrained, they are also accelerating the pace of rent increases and are more aggressive in seeking out new renters in order to do so,” researchers wrote.

In that same paper, researchers called for more study to assess the impact of investors on the housing market, as well as on the welfare of renters and homebuyers.

“Crucially,” the research paper concludes, “policymakers will also need to balance the need to meet rental demand, the decrease in the supply of homes available for homeownership, and rent increases that follow investor entry.”