Investor Impact on Single-Family Housing in the KC Region

Single-family homes account for nearly 75% of the built environment in the Kansas City region. What we often assume to be a market of individual buyers and sellers has seen significant changes over the last decade. Well-financed equity investors began purchasing single-family houses in bulk and converting them to rentals. Short-term rentals, like Airbnb and VRBO, popped up with increasing frequency. These market transitions have repercussions for homebuyers, tenants and communities across the region. This report provides the first regional data on single-family rentals and provides cities and communities with new information on the investors who own these properties and the geography of their holdings.   

As housing prices and rents continue to rise, a lack of supply is a major factor decreasing affordability of single-family homes in the region. New construction has been slow to rebound in the aftermath of the foreclosure crisis. This lack of supply means higher prices for first-time homebuyers and higher rents for tenants. Over the last decade, the rise of large investors in single-family housing has made it harder for first-time homebuyers to compete against cash offers and the subsequent consolidation of rental ownership gave large investors greater control over rents.

Since 2011, homeownership in the Kansas City region declined by 2.9%. This decline was largely driven by the foreclosure crisis. It was during this crisis that large institutional investors identified an opportunity to profit from treating single-family homes as an asset, like a stock or bond, to be bought, leveraged, traded or sold. In the years that followed, these companies acquired hundreds of thousands of homes across the country. As of 2023, these large investors hold nearly 14,000 houses in the region with much of their holdings concentrated in the region’s suburbs and on the northern and southern edges of Kansas City, Missouri.

This story provides a data-driven understanding of the region’s single-family residential rental market and how it operates. This is the first study to consolidate, aggregate and systematically investigate single-family rentals at the regional level in the Kansas City area. Parcel records were gathered from all nine counties in the MARC region, cleaned and analyzed. The result is a comprehensive picture of small (10-50), medium (51-100), large (101-500) and mega investors (over 500) within the region’s single-family rental market.

This research focused on owners with 10 or more properties as prior academic research in other markets has shown this volume of ownership to have potential negative impacts on tenants, neighborhoods and local governments ( Akers et al ). In the case of large and mega investors, those owning 100 or more properties, a growing body of research has found this volume of ownership contributes to rising rents, increased eviction filings and lower levels of maintenance and upkeep.

Single-family rentals are a standard component of the housing market. These rentals are spread throughout the region and in nearly every community. One way that urban planners have understood affordability to occur in the housing market is through a process called filtering which occurs as homes age and people with growing families move to larger homes elsewhere. The idea being that both age and size result in more affordable housing in the market. Unfortunately, this cycle has never provided a substantial increase in safe, affordable and stable housing, particularly for low-income households, and it has been further disrupted by investor demands for single-family rental housing. This, coupled with limited supply, is pushing affordable housing further out of reach for many.

In the last decade, the single-family housing market underwent significant changes. Waves of foreclosures generated a new approach to housing as an asset class to be bought, sold and traded like a stock or bond. New digital tools and technology also made acquisition and management of property easier for companies. A relatively new approach, communities are still grappling with the impacts on neighborhoods and residents as subdivisions transition from owner occupied housing to primarily rental units. For most communities, these changes are currently understood through anecdotes or individual experience rather than systematic review of data. Two factors contribute to that. One is that these changes are new. The other is that the data needed to understand housing as more than a market is not kept in one place and takes a lot of time to stitch together. Separate agencies often keep the information in separate places. Counties keep ownership data. Cities maintain code enforcement data and courts collect eviction data.

The data presented here serves as a platform for further work on how investor ownership is impacting the region and affecting the lives of residents. How it can be used will be up to regional partners and the questions they seek to answer. This information provides a base which allows for a more thorough and data-driven analysis of how changes in the single-family housing market are impacting homeowners, homebuyers and renters, and the possible avenues for local governments to engage.  

In our next story we will focus on the five largest investors in the single-family rental market.

Parcel records were gathered from all nine counties in the MARC region, cleaned and analyzed. This process identified all single-family houses and located potential rentals by matching the property address and the owner address to produce a set of likely rentals. Identified properties were then categorized by ownership volume. This resulted in a data set with owners of 10 or more properties. Corporation filings in Missouri, Kansas and other states were used to aggregate holdings and identify parent companies.

1. Christophers, B., 2023. How and why U.S. single-family housing became an investor asset class. Journal of Urban History, 49(2), pp.430-449.