To Whom Does Philadelphia Belong? Exploring and Defining "Institutional Investment" in Single Family Rentals in Philadelphia

Since the global financial crisis of 2007-2009, single-family rentals have dramatically risen to prominence as a uniquely profitable asset class for institutional investors, especially in the United States. Made possible by a combination of three primary factors – the post-crisis inexpensive Real Estate Owned (REO) homes surplus, the decline in working-class wealth and ability to purchase homes, and the emergence of new property management technology – institutional investors are, for the first time, rapidly acquiring hundreds of thousands of single-family homes. The resulting single-family rental portfolios have also inspired novel investment profiteering strategies, which researchers increasingly argue profit at the direct expense of tenants and prospective owner-occupants. However, at the heart of these arguments, there exist critical unanswered questions around how “institutional investment” is defined and understood. As a result, public interpretations of important research frequently misunderstand its gravity. Journalists and policymakers tend to mitigate researchers’ claims, either arguing that “all home buyers are investors” or reducing all institutional investment to a handful of prominent players. This thesis seeks to empower existing and forthcoming research by clarifying how and why institutional investment should be understood, distinctly, in the modern day. The thesis first traces the historical development of institutional investors, then explores new methods for analyzing under-studied, smaller-scale institutional investment strategies. Most existing research has focused heavily on specific, large-scale investors and the cities where they generally operate. Instead, this research pilots methods to examine under-studied investor behavior in Philadelphia, the largest US city that has thus far received almost no research attention. The thesis then forwards the argument that, without a developed understanding of institutional investment, Philadelphia forfeits power over to whom its homes belong and who profits from those homes.