Corporations purchasing residential property is actually the best tool we have to sure up the shortage of affordable housing. Banning corporations from owning residential property would guarantee an even more severe affordable housing shortage. The umbrella term corporations includes both for profit actors like banks, which occasionally assume ownership over foreclosed properties, conventional landlords, and condo associations and non-profits such as community land trusts and housing co-operatives. The last two come in clutch for rent burdened tenants in highly speculative markets like coastal California as they are forms of land value capture I.e. the only permanent solution to the affordable housing crisis. The best current example of this is the Bay Area Community Land Trust which has bought up several multifamily housing complexes in Berkeley, CA including a $3 million 12 unit rent controlled apartment complex recently that was about to be sold by the family of a deceased landlady. The acquisition by the land trust not only saved the tenants of the property from steep rent hikes on top of “rent controlled” rents that are already an insane $1350 to $2,200 a month in a location where the average rent is nearly $2700 a month but allowed them to acquire equity in the building while stabilizing the location value of the property by assuming non-speculative ownership over the site.
Of course, the Champlain Housing Trust in Burlington, VT is still the largest of the 300 or so community land trusts in the U.S.
Banks will sell foreclosed homes a fraction of their market value. While no one considers this a solution to the affordable housing crisis the alternative would be devastating to the middle class. Under a regime where corporations are not allowed to buy or own residential properties you would end up with housing market where either only people wealthy enough to pay upfront and in full would become homeowners or only people who could afford balloon mortgages would own homes. Since homeownership is a defining feature of the American middle class you would end up with a much smaller middle class without the possibility of banks assuming ownership of residential property. Condo associations make it possible for homeowners to collectively buy and manage denser housing in high demand locations. 27% of Americans own a condo or HOA property as their primary residence. Without corporate ownership of real estate the vast majority of Americans would be renters as they were in the late 19th and early 20th century.
