On a hot day in July, Alex Coyne was driving around two of the Pittsburgh area’s smaller eastern communities — Wilmerding and East McKeesport.
Coyne, a code enforcement officer for the Turtle Creek Valley Council of Governments, pulled up to a house on a residential street in East McKeesport with a dilapidated garage (or, in the code enforcement parlance Coyne uses, an “accessory structure.”). The property is owned by an out-of-state LLC.
“This owner has been particularly unresponsive over the years,” Coyne said. When property owners don’t respond to complaints, his only recourse is the courts, and even then, some owners still don’t respond.
Local code officials like Coyne are having to deal more frequently with faraway corporate owners, creating the occasional code enforcement headache. But some recent research has pointed to other potential downsides of such corporate buyers, which include limiting the number of houses available for Pittsburghers looking to purchase their first home.
A study from the University of Pittsburgh’s Center for Social and Urban Research earlier this year highlighted three large national companies — VineBrook, SFR3, and Segavepo — that have snapped up a growing number of single-family homes in the region, amassing nearly 1,000 local parcels in just a few years.
“There's a huge rise in the corporate purchase of single-family houses,” said Druta Bhatt, a research analyst with Pittsburgh Community Reinvestment Group. The organization conducted a separate study looking at corporate buyers of housing and found the share of houses sold to corporate entities or investors in Pittsburgh increased from 15.5% of sales in 2010 to 24.8% of sales in 2021; elsewhere in Allegheny County, corporate sales went from 9.7% to 18% during that same time. (This study examined corporate owners of all sizes, both large and also smaller local landlords.)
While the large companies examined in the Pitt study own a relatively small portion of single-family homes overall in Allegheny County, the scale and swiftness with which large corporate buyers have moved into the local housing market is new, said Chris Briem, one of the authors of the study.
“Large outside investors acquiring single family homes — which have not had a lot of corporate investment in the past — really only started a few years ago,” Briem said. “And if you haven't been paying attention … you might look around and see a very different real estate market in your community than there was just a few years ago.”
The study pointed to a host of potential ill effects from such large-scale purchases: Chief among them is a reduction in the supply of single-family homes available for individuals, particularly would-be first-time homebuyers. Such purchases can also be concentrated in certain neighborhoods or suburbs.
Local municipalities might need to have more oversight or more monitoring than they needed in the past to make sure the properties are in good shape, Briem said.
“I think local municipalities are probably on the front line of dealing with this,” Briem said.
Back in Wilmerding, Coyne emphasized that — as a code enforcement official — he doesn’t judge a property by who owns it, and he said he doesn’t see all corporate landlords as unhelpful or unresponsive. He also stopped at a nearby house owned by a different corporate parent and pointed out all of the upgrades the company had made to the property after he told them it needed improvements.
But there’s no denying the surge in investor-owned properties. Coyne’s employer, the Turtle Creek Valley COG, has even created a new software program, CodeNForce, in part to help Allegheny County’s numerous small municipalities track contact details for LLC owners. The program is funded through a combination of state grants, the Henry L. Hillman Foundation, and user fees.
Hurting would-be first-time buyers?
The Pitt study pointed to research elsewhere that found large-scale corporate investor purchases decreased homeownership rates for single-family housing, particularly for Black homeowners.
The concern that corporate buyers are snapping up properties that would otherwise be available to first-time homebuyers is a worry shared by Amanda Settelmaier, who runs the Turtle Creek Valley Council of Governments. The council is a partnership of 20 separate municipalities in Pittsburgh’s eastern suburbs, from bigger communities such as Penn Hills and Monroeville to tiny boroughs such as Wilmerding and East McKeesport.
“With LLCs coming into these communities and purchasing properties in cash, they're undermining the first-time homebuyer to be able to come in and buy affordable housing,” she said.
SFR3 and Segavepo either could not be reached or did not respond to requests for comment.
A representative for VineBrook disputed the number of homes and real estate parcels Pitt researchers said the company owned locally.
Settelmaier has fond memories of growing up in the 1970s and 1980s in working-class Wilmerding, where her father worked for Westinghouse Air Brake. She said she worries about the impact of large corporate buyers on the fabric of communities like this one.
“Growing up in Wilmerding was a wonderful experience,” she said. “I would not trade it for anything in the world, and I just have a firm belief that anyone should be able to live in a safe, healthy community. And affordable housing. And live that life that I had the privilege to live.”
She’s hopeful the research will prompt more conversations among local officials, and she points to the Pitt study’s recommendation to gather more data about where corporate investors are buying.
A lack of regulatory options
Ed Nusser, director of housing strategy for Allegheny County, said he finds the report concerning, but he also said local government’s ability to regulate these types of buyers is limited.
“There is not a ton that can be actively done to, you know, say, 'If you're a corporate interest in Delaware, you can't buy a house.' That’s nothing that we can do,” Nusser said. “But what we can do — and what we need to do — is work with our state and federal partners to position economic development, our county housing authority, first-time homebuyers, and our nonprofit development community, to be able to compete against those corporate interests.”
Some local code enforcement cases end up in the courtroom of Magisterial District Judge Richard King, whose district includes Carrick and other nearby southern Pittsburgh neighborhoods.
Better collection of information about property owners at the time of the sale would help in cases where out-of-state corporate owners are unresponsive, even to courts, said King, who is also president of the Allegheny County Special Court Judges, a group of magistrate judges.
“Even as far as asking if someone is purchasing as an LLC, to give a copy of the officers of that LLC and information on the officers so that there can be some contact. That would be a big help,” King said.
Some local officials have tried to regulate corporate home purchases, but those efforts have thus far been unsuccessful.
A bill sponsored by Pittsburgh City Councilwoman Deb Gross, who represents neighborhoods with some of the city’s hottest real estate markets, would have regulated property solicitations and required certain disclosures to homeowners before a sale.
“We have such bigger actors with so much more buying power,” Gross said. “And so it really throws up red flags as a public policy problem.”
The bill has not been reintroduced since it expired at the end of last year’s legislative session.
Nationally, the Stop Predatory Investing Act was introduced last year by U.S. Sen. Sherrod Brown of Ohio; it would deny certain tax benefits to companies with more than 50 single-family rental properties.
But housing policy expert Jenny Schuetz said corporate buyers are a symptom — and not the cause — of an underlying problem: not enough housing.
Since the Great Recession, she said, the U.S. has not built enough housing to keep pace with demand, leading to historically low vacancy rates and rapidly rising costs for renters and homebuyers.
Initially, large corporations and private equity firms bought up lots of available and cheap foreclosed properties with the expectation they would be short-term holds, Schuetz said.
“And many of them have decided it's actually a profitable business to be landlords … that they can make money off of this,” Schuetz said. “And the reason this is a profitable business is because there's very strong demand and not enough supply. And so there's the ability to raise rents and to collect a lot of income from this.”
She said rather than trying to regulate buyers, elected officials and policymakers should focus on the quality of housing provided to tenants through things such as building inspections or rental registries.
“Focusing on the tenant experience makes more sense than just, you know, ‘Are you an LLC or are you a mom-and-pop landlord?’”
Back in the Turtle Creek Valley, Coyne and Settelmaier said they see code enforcement as a critical function of making sure tenants are safe and neighborhoods are a good place to live.
“It has to be somebody's job that goes out and makes sure that properties are in accordance with, like, just basic health and safety,” Settelmaier said. “But it is a concerted, ongoing effort. That costs money. And a lot of times these towns don't have the money to pay people to do this work.”
