Private equity firms, corporate landlords fueling spike in rental housing costs in Jacksonville, UNF professor says

JACKSONVILLE, Fla. – Skyrocketing rents are one of the biggest complaints about housing in Jacksonville. Besides that, with so many moving to our area, there is also what the city is now calling a housing crisis.

Some have blamed that on big investors buying up rental properties for profit and ignoring the upkeep. But some of those investors are crying foul.

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On Friday, the city should release its final recommendation from a task force that has been looking into affordable housing in Jacksonville.

One of the possibilities on the table is changing the zoning codes so more duplexes and apartments along with public housing can be built in Jacksonville. But there is also concern about who would own them.

You don’t have to go far to see Jacksonville’s housing crisis firsthand.

News4JAX spoke with Roy as he was going into a Springfield public housing unit trying to get a place to live. Right now, he is sleeping on his sister’s couch.

“I’ve been waiting for about two years now,” Roy said. “Rent, everything that’s going on. Everything is too high. Everything is too high.”

That is something the housing committee looking into affordable housing is trying to change. It has been hearing from various agencies and companies about the problem.

At Monday’s meeting one of its members also took aim at a recent report conducted by the University of North Florida which questions the number of corporate landlords buying up properties in Jacksonville.

In the report, people complained about those landlords jacking up the prices and not doing proper maintenance. The study was done last February by UNF’s Dr. David Jaffee. At the meeting, Vice Chair of the Board Alex Sifakis, who is also with JWB, a company that handles thousands of rental homes in Jacksonville, said corporate landlords are not the problem.

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“I think by and large, investors are not ignoring the property because then their property is worthless. So I think most investors are investing in the property. They’re renovating the property, and they’re delivering a better quality of housing, not to say that everyone is doing that, but I think if you look at the data, the vast majority of investors are investing in the property and delivering a good rental and for sale product,” Sifakis said.

But Dr. Jaffee takes issue with that.

“The business model of corporate landlords is to ensure a high return to shareholders by raising rents, collecting fees, and cutting back on basic maintenance costs -- not meet the affordable housing needs of working people,” he said. “Institutional investors, private equity firms, or corporate landlords, have sharply increased their ownership in rental properties. This is what we describe as the financialization of human shelter. This is happening in every major city in the US but particularly the sunbelt cities with Jacksonville no exception. Every major city is attempting to figure out a way to monitor and regulate concentrated acquisition and ownership by institutional investors that allows price setting of rents and squeezes supply for first-time home buyers. Whether it is single family homes purchased, converted to rental properties, and bundled into investment vehicles for wealthy clients or multifamily apartment complexes purchased and included in an investment portfolio.”

The committee will meet again on Friday.

About the Author:

Jim Piggott is the reporter to count on when it comes to city government and how it will affect the community.