Home purchases by corporations increase in Pittsburgh, Allegheny County

As Pittsburgh’s real estate market heats up, a new study shows corporations are buying up residences at increasing rates, driving up competition with local residents.

A study by the nonprofit Pittsburgh Community Reinvestment Group shows the share of Allegheny County homes sold to corporate entities nearly doubled over the past decade, from 9.7% of homes sold in 2010 to 18% of homes sold in 2021.

Corporate purchases also increased in the city of Pittsburgh, from 15.5% of homes sold in 2010 to 24.8% of homes sold in 2021.

PCRG policy director Chris Rosselot said corporate buyers often have a leg up on residents and can often beat them to the best buys.

“These are mostly cash buyers. They can purchase quicker than your average first-time homebuyer,” said Rosselot.

The study only looked at residential properties of one to four units that were purchased for more than $1,000. It excluded homes purchased by the government or nonprofits.

Corporate homebuyers included small limited liability corporations, which are typically owned by local home renovators and investors, as well as out-of-state buyers making bulk purchases.

The study comes as corporate home purchases have come under increased scrutiny in Pittsburgh. Some neighborhood groups have called the purchases predatory.

Rosselot said he hopes the study will encourage the development of the city’s land bank, since the pool of quality, affordable homes is shrinking as corporate buyers snatch up homes. He also hopes the city, state and federal governments will draft new laws to ensure increased transparency and enforcement against predatory home buying practices.

He cited the Stop Predatory Investing Act, introduced by U.S. Sen. Sherrod Brown of Ohio, and supported by U.S. Sen. John Fetterman, D-Braddock. That bill seeks to prohibit some tax benefits for corporate entities that own 50 or more single-family homes.

“We need increased enforcement of some of these predatory practices,” Rosselot said.

Pittsburgh City Councilwoman Deb Gross, D-Highland Park, introduced local legislation on Wednesday that aims to curb predatory practices by residential property wholesalers.

She said these wholesalers are less likely to have a stake in the community and may be less motivated to maintain the properties compared to traditional homeowners.

The PCRG study showed corporate home purchases were highest in lower-income census tracts and those where a majority of residents are Black. Additionally, corporate purchases tended to be for lower prices.

Of the 12 census tracts in Pittsburgh where the share of corporate purchasing is highest, 10 tracts had an average sale price under $75,000, according to the study.

Real estate analyst RedFin said the median sale price for a Pittsburgh-area home in July was $260,000, up 4% compared to the year before.

Rosselot said this high corporate rate makes it harder for lower-income and Black residents to buy cheaper homes.

An analysis of the quality of the homes purchased was not included in this study. The Pittsburgh region has one of the lowest quality housing stocks in the nation, with a significant share of homes classified inadequate as defined by the U.S. Department of Housing and Urban Development.

Rosselot said PCRG is working on a follow-up study to check the home quality of purchased homes.