Old Wine in Private Equity Bottles? The Resurgence of Contract‐for‐Deed Home Sales in US Urban Neighborhoods

Abstract

This article describes the reemergence, in the wake of the mortgage crisis, of a predatory financial practice in predominantly black neighborhoods in the US: the contract for deed (CFD)

“Our Customer Is America”: Housing Insecurity and Eviction in Las Vegas, Nevada’s Postcrisis Rental Markets

“…This research needs to be conducted in multiple, diverse settings to assess whether the findings of this study hold for other locations. These findings are consistent with and extend work on opportunistic investment in weaker housing markets, particularly the opportunistic postcrisis expansion of slum rental portfolios and exploitative contract-for-deed arrangements situated at the boundary between homeownership and rentership (Akers & Seymour, 2018;Desmond, 2016;Immergluck, 2018a). These local entities can be particularly hard to track using administrative data, given the sometimes inductive nature of this research; the names of these parties are not the subject of national media attention and they often utilize multiple shell companies to disguise their holdings.…”

Racialized geographies of housing financialization

“…The geography of corporate landlords tilts more toward Sun Belt metros with a greater supply of newer homes (places like Phoenix, Dallas, and Tampa) than metros in the Midwest and the Rust Belt, where contract selling by private equity is more deeply entrenched (Carpenter et al, 2019; Colburn et al, 2020; Fields et al, 2016; Immergluck, 2018a; Seymour and Akers, 2019). Within this Sun Belt-dominated geography, single-family rentals have grown most in older and racially and ethnically diverse suburbs; in neighborhoods with low property values before the crisis that experienced more foreclosures during the crisis and slower recovery afterwards (Immergluck, 2018b; Pfeiffer et al, 2020).…”

Building the Eviction Economy: Speculation, Precarity, and Eviction in Detroit

“…Reminiscent of the disastrous mortgage-backed securities of the 2000s (Gotham 2009), these products enroll individual homes into global networks of speculation, generating pressure for property managers to keep income flowing (Fields 2018; Raymond et al 2018). But in distressed housing markets where home prices and income remain extremely low, investors follow a different model for generating profit, purchasing large numbers of low-cost foreclosed homes and either renting them without making additional investment or selling them via high-cost land contracts (Akers and Seymour 2018; Immergluck 2018a). The substantial number of foreclosed homes purchased by investors following these models in distressed housing markets, paired with the growing number of low-income households with irregular income and impaired credit dependent on investor-landlords for housing, has exacerbated housing insecurity in low-income neighborhoods and has all but guaranteed increasing numbers of evictions.…”

“…In this article, we are not only interested in landlord practices leading to eviction but also the upstream channels through which landlords in low-income areas acquire inventory. A major source for currently operating landlords and contract sellers is the large number of mortgage-reverted properties sold by banks and federal agencies beginning around 2008 (Immergluck 2018a; Seymour and Akers 2019). These entities rapidly sold large numbers of properties at steep discounts to strike distressed assets from their ledgers (Dixon 2011; Immergluck 2012).…”