Why giant investment company rentals are being blamed for affordable housing issues in Jacksonville

‘Flipping humans quickly’: I-TEAM investigates trend COJ report says is causing higher rent, fewer homes to buy

JACKSONVILLE, Fla. – A News4JAX I-TEAM analysis of Jacksonville property records found more than 9,600 homes across Duval County are owned by large, institutional investors, which are companies that have more than 1,000 homes nationwide in their portfolio.

Single-family homes are being bought up by giant investment companies as rental properties. The trend is being blamed for contributing to rent hikes, leaving first-time home buyers with fewer options, and worsening Jacksonville’s affordable housing issues.

A Jacksonville City Council committee pointed to this trend as one of the reasons for the city’s affordable housing issues.

House prices and rents in Jacksonville have gone up nearly 50% since 2018, driven by people moving to Florida, a period of low interest rates and institutional investors.

City Councilwoman Ju’Coby Pittman described the problem as “huge.”

Pittman spearheaded the working group studying affordable housing alongside University of North Florida sociology professor David Jaffee.

“It is the elephant in the room, and it’s hanging over most nationwide discussions and analyses of the current housing crisis,” Jaffee said, during one of the working group’s meetings.

According to the city’s report, investors both big and small bought 30% of the houses that sold in Jacksonville last year -- a figure that’s doubled since 2015.

Realtor Tiea Vincent said the aggressive buying and cash offers from institutional investors set a hot pandemic housing market on fire. She told the I-TEAM that a property she listed two years ago got 32 offers in the first 24 hours.

“I had agents coming to me saying, ‘What are my buyers supposed to do? My buyers have put in 10 offers in the last week, and they’ve been beat out, but every single one of them by cash institutional investor… They’ve got a job here. They want to live in this community. They need a home, and they can’t beat them,’” she said.

The I-TEAM analyzed data from the Duval County Property Appraiser’s office and found nearly 9,700 homes owned by institutional investors spread across nearly every ZIP code in Duval County. The ZIP codes with the largest numbers of these homes are 32218 on the Northside and 32244 on the Westside. Each had more than 1,400 homes owned by one of the large, nationwide companies.

More than a quarter of the rentals owned by institutional investors in Jacksonville are in the hands of one company: Progress Residential, which has more than 2,700 homes.

Next is AMH, formerly known as American Homes 4 Rent, with more than 1,400 homes.

(Scroll to the bottom of the story to see how many homes are owned by various institutional investors in Jacksonville)

AMH is one of the companies that’s building entire rental neighborhoods as part of their portfolio. The I-TEAM visited a Southside street lined with houses built by AMH in 2021 -- they’re all rentals. Two of the tenants told the I-TEAM they like living there, but they would rather own a home. They told the I-TEAM they feel institutional investors like their landlord are helping drive up costs.

Since the pandemic-era buying frenzy, prices in Jacksonville have leveled off, and investors are buying less. Houses are now spending more than a month on the market, but ownership still remains unattainable for many.

For some renters, the influx of institutional investors has accelerated an affordable housing crisis two decades in the making.

“We’re up 161% in requests for help in eviction cases from 2019 to 2022,” said Jim Kowalski, who is the president and CEO of Jacksonville Area Legal Aid, which helps people in need who are facing evictions.

To Kowalski, the increase in people seeking help represents a flawed and imbalanced housing market.

“The reason why institutional landlords want to come here is because we make it attractive for them to come here,” he said.

A recent report from the U.S. Department of Housing and Urban Development highlighted Jacksonville as one of the cities where institutional investors own a significant portion of single-family rental homes, putting it at 16%.

Kowalski said Florida’s landlord-friendly laws and Jacksonville’s zoning -- more than 90% zoned for single-family homes -- have made it a target market for investors.

“You’re OK with somebody flipping stock quickly, even though it may affect that company,” he said. “What you may not be OK with, though, is somebody flipping humans quickly. But that’s the reason why they come here.”

The CEO of the National Rental Home Council, which is a trade group representing the industry, said rental homes provide an attractive transition option for people moving to Jacksonville. He also suggested institutional investors aren’t the primary cause of increased housing costs.

“What’s really going on here is there’s a supply problem when it comes to housing in Jacksonville and Duval County, throughout the state of Florida -- really across the United States,” said NRHC CEO David Howard. “There simply isn’t enough housing to meet the demand that’s out there.”

A study by the University of North Florida found renters in Jacksonville ZIP codes with a greater percentage of investor-owned homes were more likely to face an eviction filing. Many of those same ZIP codes were more economically distressed, according to the report.

“I feel like our city council has an appetite for developing affordable housing, maybe doing something different where maybe even the Housing Authority could start building housing for middle-class individuals… also working with developers with some incentives to build more housing within our community,” Pittman said.

The City Council report has an exhaustive list of recommendations for addressing the issue, including commissioning a report on the scope of the problem, incentivizing developers to provide more affordable housing, increasing tenants rights, and possibly regulating institutional investors through things like real transfer taxes and placing limits on ownership concentration.

Howard with the rental trade group said he doesn’t think regulation is the answer. He thinks the city council should be incentivizing more housing development.

The I-TEAM has also reached out to the companies Progress Residential and AMH.

A spokesperson for AMH provided the following statement:

“AMH is part of the solution to the national housing shortage and affordability crisis by building new homes that add to the country’s housing stock and providing an accessible housing option to our residents in the communities where they work. In Jacksonville, specifically, our rental rates remain approximately 21% below the average monthly home ownership cost, resulting in monthly savings for our residents that support their financial goals, including a future transition to homeownership. In fact, since January 1, 2020, over 35% of our residents who responded to move-out surveys said that they were not renewing their lease with us because they were purchasing a home. Moreover, ownership by large professional single-family rental companies represents less than a 0.5% share of the national home market, and it would be difficult to argue that our industry has a meaningful impact on home prices in the regions we serve.”

The News4JAX I-TEAM obtained data from the Duval County Property Appraiser’s office, then used a data toolkit developed by The News & Observer/The Charlotte Observer, to conduct the analysis for this story.

About the Authors:

I-TEAM and general assignment reporter