In poorer pockets of Ohio’s six biggest counties, real estate investors – not occupants – have made nearly half the home purchases between 2018 and 2024, according to a new study from the Federal Reserve of Cleveland.
There, as many as one in three of the single family homes there are owned by LLCs or trusts and rented out.
This leaves would-be homebuyers in poor and working class neighborhoods competing in the marketplace with sophisticated, professionalized investment firms that usually pay in cash.
With rents and home prices soaring, Wall Street has come under scrutiny for its role in the housing market. The new research from the Federal Reserve, which sets monetary policy for the country and publishes economic research, provides some of the most authoritative data that backs up a central claim of the investors’ critics: that the recent rise in home prices has tracked with the increasing number of institutional investors in Ohio’s neighborhoods.
“It has been talked about so much in communities where they were seeing the trend, but it was so hard to calculate the actual impact,” said Amy Reigel, executive director of the Coalition on Homelessness and Housing in Ohio.
“The sources that were needed to really monitor the data were either really hard to access or it was just so cumbersome that communities themselves couldn’t do this work.”
An estimated 32 hyperscaled investors own more than 450,000 homes in the U.S., according to previous research from the federal government. At a city-wide level, these institutional investors make up about 2% of the single-family home market in Columbus or 5% in Cincinnati.
But as the Fed’s research makes clear, those investments aren’t evenly distributed across cities.
Investors cluster in poorer, less white neighborhoods
Compared with the rest of the state, those hotspots’ residents are far more non-white, the vacancy rate is nearly three times as high, and the home values are half the price. Almost all are considered low- to moderate income neighborhoods.
“The problem is, we have a lot of investors who are not acting responsibly, and not complying with local municipal housing codes, in some cases not paying taxes,” said Frank Ford, a senior policy adviser at Fair Housing Center who has studied Cleveland’s housing market for decades.
Of the investor purchases studied by the Fed, 60% were made with cash – a proposition that’s far out of reach for all but the wealthiest earners on the spectrum.
And as housing experts said in interviews, the investors often move fast and waive inspections or appraisals, making them more enticing to sellers over more cautious, individual buyers.
The Fed looked at Ohio’s Cuyahoga, Franklin, Hamilton, Lucas, Montgomery and Summit counties, plus Allegheny County, Pennsylvania, between 2018 and 2024. Researchers looked for all purchases from LLCs, companies, corporations, plus any individuals or trusts that made at least two real estate transactions per year over the six-year window.
| County | Share of homes owned by investors in 2024 | Shares of homes owned by out-of-state investors in 2024 |
| Summit | 33% | 17% |
| Lucas | 31% | 27% |
| Franklin | 30% | 12% |
| Montgomery | 30% | 14% |
| Cuyahoga (2023 data) | 26% | 22% |
| Hamilton | 25% | 13% |
Out-of-staters
While it’s not so pronounced everywhere, out-of-state investors have shown particular interest in Cuyahoga and Lucas county.
Take Lucas County, home of Toledo. There, investors have purchased more than 50% of the single family homes on the market in the past three years. Most of the money comes from California, Florida, New York and Nevada, the Fed found.
As a proxy for home improvements, the Fed researchers tracked rates of pulled permits on the investor-owned houses. They found that from 2018 to 2024, in-state investors pulled permits at a higher rate (8%) than out-of-state investors (5%). Dayton was the only city that saw out-of-state investors pull permits at a higher rate than in-state ones.
But across all buyers in the six counties, the difference in rates of pulled permits is about 2% or less between investors and owner-occupants. That raises red flags for researchers, given the run-down state of the investors’ housing stock.
“Based on the data that in the Fed study and other research, we know that investors tend to be purchasing lower quality housing,” Kobie said. “So I would expect the permit pull rate to be higher. That’s just kind of how I’m thinking of it now. I would expect the gap to be larger in a lot of these cities.”
The issue of out-of-state investors is particularly keen to tenants, who often say the physical distance between a house and its owner makes for a culture of deferred maintenance and repairs.
A 2023 study in Cleveland found that 13% of homes owned by out-of-state investors received grades of D or F, compared to 5% for in-state owners.
“I think that proximity always has some impact – if you’re from an area that you still have a little bit of pride and reputation at risk,” Reigel said. “I think that with the in-state investors, perhaps you could see them as a more benign organization that still has a little bit of heart left in this endeavor.”
Cleveland spotlight
Wall Street’s growing interest in single family homes isn’t news to Cleveland. Especially the historically Black neighborhoods on the city’s East Side.
There, businesses were the buyers of more than 46% of single- to three-family homes, according to data compiled by Tim Kobie, who manages strategic code enforcement for Cleveland.
For Cuyahoga County as a whole, the percent of properties acquired by investors nearly tripled between 2004 (7%) and 2020 (21%), he found. He described it as a trend rooted in the foreclosure crisis and ensuing Great Recession.
This has hollowed out some of the stability that owner-occupied housing brings. For neighborhoods on Cleveland’s East Side, the rate of homes occupied by their owners have plummeted by 31% over the past two decades.
The lack of repairs worsens the “appraisal gap” problem, where responsible developers who want to improve properties can’t compete with the investors who let homes slide into disrepair, damaging property values around the block.
And in another ominous sign, the investors often failed to register their rentals with the city at higher rates, Kobie said, which raises questions about what other rules they might not be following.
“To me, it’s like these landlords that aren’t registering are kind of operating outside of the standard rental market,” he said. “If you’re not complying with a simple law like a rental registration, yeah, like what else is going on behind there? Like if we can’t contact you for a simple matter, what happens if there’s a more serious matter?”
Mayor Justin Bibb has tussled with the out-of-state investors, and pushed to pass a slate of housing code changes to force them to better maintain their properties and publicly shaming one particular firm for its use of what it calls “ghetto investing.”
What solutions to house flipping are being tried
Ford pointed to Cleveland’s recent housing code changes as a possible model for solutions. The overall goal, he said, is to make sure every rental home has an owner who is accessible when something goes wrong, and accountable if houses they own fall into disrepair.
To Sen. Lou Blessing, a Cincinnati-area Republican who focuses on housing policy, the investors’ ownership has “absolutely made housing more expensive” and knocked out the lowest and most accessible rung on the homeownership ladder.
In an interview after reading the Fed study, he pitched two general concepts: For one, the law should prohibit property owners from obscuring their common ownership of houses through a web of LLCs and shell companies. For two: he wants to apply a $2,000 per month per house tax on those who own more than single family homes.
In other words, tax them to oblivion if they purchase a 51st home.
While he supports some supply-side efforts to make it easier to build, he thinks policy makers should focus on the buyers.
“It’s not just supply, it’s tamping down on this institutional investors’ demand,” he said.