LISTEN: A new study by Georgia Tech researchers attempts to measure how much wealth Atlantans have lost over the past decade or so, as they've been pushed to the sidelines by large corporate real estate investors. GPB's Peter Biello speaks with researchers about the study.

If you've been looking for a single family home in Atlanta, you've encountered competition from other buyers, and a significant number of those buyers are corporations, not other people. A new study by Georgia Tech researchers attempts to measure how much wealth Atlantans have lost over the past decade or so, as they've been pushed to the sidelines by large corporate real estate investors. Researchers Brian An and Nicholas Polimeni spoke with GPB's Peter Biello.


Peter Biello: So Wall Street investors really took advantage of the Great Recession in 2008 and 2009. They started buying up properties when property values were in the basement. And your study is the first to really take a look at the impact of all their purchasing and then selling. And you looked at three points of reference: the purchasing, the holding of the property and then the selling. We'll start with you, Nicholas. Why those three?

Nicholas Polimeni: Our goal was to identify the unique advantages that corporations had in the market, and how that was impacting the wealth of local communities. So these three activities undertaken by corporate landlords — the purchase, the rental, and then the sale — are the three activities in which they may extract wealth from communities. Specifically, though, I do want to point out that we looked at the difference between what a corporation paid in comparison to the fair market value of that home. And we did that because we wanted to identify, again, the unique advantage that corporations have. And as a result we saw that corporations tend to pay less than individuals when buying from other individuals.

Peter Biello: In part because they have more purchasing power. Right? They can pay in cash, they can buy in bulk, that kind of thing?

Nicholas Polimeni: Yes. So more specifically, we found that corporations actually paid about 37% less than individual buyers would for the same property. And that's in comparison, again, to fair market value. So are these corporations getting better deals than the average and typical buyer? And we found that they are. And then once they acquire these homes they rent them out, which also could potentially prevent people from buying into home equity, if a lot of the neighborhood's homes are rental homes, instead of being transacted upon in the market or owned by individuals. And then finally, when these corporations go to sell, they actually tend to also sell for higher than fair market value.

Peter Biello: And the number you came up with when all is said and done was $1.25 billion in wealth, correct?

Nicholas Polimeni: Yes. That is across all of Atlanta's neighborhoods that we studied, which are 95. This is the neighborhood statistical areas as defined by the city.

Peter Biello: Brian, why specifically focus on those neighborhoods?

Brian An: There have been many studies that examined Atlanta metropolitan area and how much these big corporations have been engaged in single-family home purchasing. Many look at broader trends, regional trends. But we, as individuals and residents, are living in neighborhoods. So we wanted to really focus on the neighborhood-level analysis. And we also examined low-income versus high-income neighborhoods and majority-minority neighborhoods versus majority non-Hispanic white neighborhoods — and how much we see the differences between these different types of neighborhoods.

Peter Biello: And one of the stunning things you found in this study was that more than half of the wealth that was not realized by Atlantans came from majority nonwhite communities. Correct, Nicholas?

Nicholas Polimeni: Yes. And this is a pretty important finding because while about 50% of Atlanta is Black based on population, that is not necessarily true for the amount of wealth that these communities have. Unfortunately, due to historical patterns, a lot of majority Black communities tend to have lower property values. And yet we're still seeing such a strong finding that a lot of wealth in total from all of Atlanta is still coming from these neighborhoods, despite them having a lesser share of that wealth overall.

Peter Biello: So, Brian, if that wealth had been able to stay in Atlanta, what would that have done for the people of Atlanta that it was not able to do because it went into the pockets of corporate landlords out of state?

Brian An: There could be many different outcomes that we can imagine. For the first thing, more minority residents would have obtained home ownership, we can say. No. 2, home is not just home. Once you have secured [a] home to live, then you can have job stability. You can have more opportunities in terms of pursing educational attainment. So, you know, there are multiple spillover effects.

Nicholas Polimeni: So for the neighborhood that suffered the most share of loss — and by that we mean in comparison to the neighborhood's overall wealth, which was calculated from the income that families in that neighborhood generated — Bush Mountain was the neighborhood that had the highest share of equity loss compared to their income. And for that neighborhood in 2019 — the worst year for them — they lost nearly $4,000 per family in wealth. Of course, now, this isn't like an exact metric. They aren't losing that from their income, right? Nobody is taking that out of their income. But effectively, $4,000 per family in that community was somehow being extracted, whether it be purchase, rental or sale by corporations from the overall wealth of that community. And to put that in perspective, the average family income in Bush Mountain is only about $40,000 a year. So that, in 2019, that loss was almost 10% of their income.

Peter Biello: Now, in this study, you referred to the effects of the corporatization of landlording here as another step in the systemic way wealth is extracted from Black communities. You likened it to redlining and the discriminatory policies that previously had prevented Black families from becoming homeowners. And you also write that in addition to finding a way to fix this in the future, there should be some backward looking in ways to repair the harm that's been done in the past. Brian, what would that look like?

Brian An: We really need to think about what has been the cumulative impact that has been wrought on these neighborhoods over the past more than 10 years, and nobody is talking about that. And we can quantify those community impacts, the harms on the communities when we have the necessary data. So I think policymakers and elected officials really need to think about which neighborhoods has borne the brunt of these negative harms and how much, so that they can think about where they can prioritize their resources for affordable housing preservation and acquisition and community wealth building. And also this is — this is an ongoing trend, right? The corporate landlording activities still going on even as of today. So we really need to think about the mechanisms that could hold them accountable for their rental business.