In 2015, on average over 100 eviction notices were filed each day in Fulton County, Georgia, which is composed of much of the city of Atlanta and other municipalities and unincorporated areas. That means about 20 percent of all renter households received such a notice and 12.2 percent were forcibly displaced. It's also an area experiencing increased investment by large corporate entities like private equity firms and hedge funds, which are now managing more single-family rental units. Even after controlling for property quality, location, and foreclosure history, large corporate entities are 8 percent more likely than small landlords to file eviction notices in Fulton County. These findings, from the recently released discussion paper "Corporate Landlords, Institutional Investors, and Displacement: Eviction Rates in Single-Family Rentals," have important implications for households and communities.¹

Eviction often an early sign of a downward spiral for people and places
Housing instability and evictions have a long list of negative consequences for households and neighborhoods. People who are evicted face homelessness, health problems, and job loss. At the neighborhood level, high eviction rates are associated with poor housing conditions, high rates of school turnover, community instability, and dilapidated housing (Desmond, 2016; read more from Matthew Desmond's visit to Atlanta in "Putting a Human Face on Eviction").

Since the real estate and financial crisis, the proportion of households renting has increased; urban rents and rental housing instability have also risen. There is mounting evidence of high rates of eviction in U.S. cities, partly due to tenants' inability to afford higher rents. Chart 1 shows the growing number of households paying more than 30 percent of their income for rent. As of 2015 it was over 20.4 million, up from about 17.4 million at the beginning of the crisis.

A closer look at one Atlanta county
The discussion paper explores housing instability in the heart of the Atlanta region. Examining eviction records scraped from the Fulton County Magistrate Court website, it finds a high rate of evictions in the city of Atlanta and its suburbs and places housing instability in the context of the increasing influence of institutional investors in single-family rental housing.

In Fulton County, an average of 107 eviction notices were filed each day in 2015. Over the entire year, that adds up to 22 percent of all rental households in the county. It is difficult to say how many of these filings resulted in forcible displacement, but the paper estimates a 12.2 percent eviction rate (meaning 12.2 percent of all renter households were evicted or forced to vacate their homes). See the table. For comparison, one study found eviction rates of 11 percent and 7 percent in Cleveland and Chicago, respectively (Desmond, 2016).

Census tracts with particularly high rates of eviction filings were concentrated in southwestern Atlanta and Fulton County. This geography coincides with predominantly black neighborhoods. While many factors drive eviction rates, this pattern alone demonstrates that the households bearing the brunt of the extremely high housing instability in Atlanta live in predominantly black neighborhoods (see chart 2).

A new kind of landlord
The paper also investigates the impact of the shifting players of Atlanta's rental housing market on housing instability and eviction rates. In addition to decreased rates of homeownership, the post-housing crisis years have seen the emergence of single-family rentals owned by large corporate entities like private equity firms and hedge funds. Renting single-family houses, traditionally the purview of mom-and-pop landlords, recently became a venture of large financial firms. The paper finds that large corporate owners of single-family rentals² are 8 percent more likely than small landlords to file eviction notices in Fulton County, even after controlling for property quality, location, and foreclosure history.

Although the paper finds that institutional ownership was related to housing instability in the single-family rental market, there is no reason to expect that these landlords must always engage in practices that will lead to more evictions. Further research is needed to understand why large corporate landlords increase housing instability compared to their smaller peers, and to work toward providing safe, stable affordable rental housing for the growing number of households that rent in Atlanta and elsewhere.

Who is working on these issues?
Affordable housing advocates, court systems, legal services organizations, and asset and wealth building groups, among many others, are engaged in developing strategies to address the process of evictions as well as the challenges they raise for families and neighborhoods. Cities and states also create laws to protect and keep tenants and landlords informed of their rights and responsibilities. As rental property ownership and management diversifies in some neighborhoods, it will be necessary to expand the group of stakeholders working together to create safe and affordable housing opportunities.

Reference

Desmond, M. (2016). Evicted: Poverty and Profit in the American City. New York: Crown.

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¹ The paper was written by Elora Raymond and Richard Duckworth, Federal Reserve Bank of Atlanta; Ben Miller, Georgia State University; Michael Lucas, Atlanta Volunteer Lawyers Foundation; and Shiraj Pokharel, Georgia State University.

² Large corporate owners are defined as nonbank or government entities that own more than 15 single-family rental properties in Fulton County.