Homeless rights activists hold a rally outside of the U.S. Supreme Court on April 22, 2024 in Washington, D.C. The Supreme Court heard oral arguments in City of Grants Pass, Oregon v. Johnson and Smith v. Spizzirri, a dispute over the constitutionality of ordinances that bar people who are homeless from camping on city streets. (Photo by Kevin Dietsch/Getty Images)

A shortage of affordable housing in the U.S. is driving up rents and mortgages and keeping many without homes. A report published Monday points to an important cause of the problem: billionaire investors parking their money in real estate and keeping homes vacant.

The report by the progressive Institute for Policy Studies points out a painful result as big investors such as private equity funds buy up real estate and turn it into short-term rentals or hold it vacant as it appreciates in value.

“In cities and communities across the country, homelessness is growing — but vacant homes actually outnumber unhoused people several times over,” it said. “Wealthy investors are buying up properties but holding them vacant, in order to profit from speculating on real estate appreciation. They make money not from rents, but from treating real estate as a luxury asset. Our communities suffer because housing is not actually being used to provide people with homes, but is just an asset for the rich to park their wealth in.”

It cited a 2022 Washington Post story that said investor purchases of real estate in 40 markets had more than doubled since 2015, and that majority-Black neighborhoods were disproportionately affected. It also cited a 2023 United Way report that said there are 28 vacant homes in the United States for every homeless person.

Also in 2022, the news organization ProPublica reported how big apartment owners were using an algorithm in a way that enabled them to simultaneously raise rents, which prompted some lawmakers to propose banning the practice. 

But the Institute for Policy Studies report said that huge investors are eager to buy up real estate for other reasons. 

For example, Blackstone, the private equity group, “owns 149,000 multi-family apartment units, 63,000 single-family homes, 70 mobile home parks with 13,000 lots, and 144,300 beds of student housing in 205 properties. Blackstone also recently acquired 95,000 units of subsidized housing,” the report said, adding, “Corporate landlords and their billionaire investors are targeting communities of color in particular with rent increases and high rates of eviction. Their actions exacerbate race, gender, and economic inequality, as displacement harms the most economically vulnerable people in our communities.”

The Coalition on Housing and Homelessness in Ohio at the end of last year reported that spiking rents were happening in conjunction with an increase in homelessness, with the latter increasing nearly 7% over three years. In Franklin County at least, homelessness continued to increase this year, up nearly 2% over last year, the Community Shelter Board reported.

The Institute for Policy Studies report that was published on Monday detailed several links between billionaire ownership of housing and increased homelessness. A 2016 paper by the Federal Reserve Bank of Atlanta found that in Fulton County, large corporate landlords were 8% more likely than their smaller counterparts to file eviction notices and that private equity firms served eviction notices on a full third of their tenants.

The Institute for Policy Studies proposed several fixes:

Expand the “community housing sector” — homes that are controlled by government or community organizations and are not available to speculators. 
Require transparency of housing ownership so residents can know who is buying up homes in their neighborhood. 
Increase taxes on real estate transactions and use the revenue to address homelessness, including through housing first programs.
Limit the number of short-term rentals such as Airbnb and Vrbo in a community.

One possible solution suggested by some economists wasn’t included in the report — switching to a land-value tax. Such a system would tax land more heavily and decrease taxes on buildings and other improvements. The thinking is that it would discourage investors from buying up real estate and letting it sit unused.