Profit or Perish: An Examination of Landlord Characteristics and Strategies

Keywords: housing, landlords, residential ownership, administrative data
Session Type: Virtual Paper Abstract
Day: Sunday
Session Start / End Time: 2/27/2022 11:20 AM (Eastern Time (US & Canada)) - 2/27/2022 12:40 PM (Eastern Time (US & Canada))
Room: Virtual 74

Abstract

Landlords may utilize different property management strategies on their road to profit. Previous work examining landlord strategies has often grouped landlords by size or their corporate status. While work using these characteristics has demonstrated notable differences, there may be other relevant factors driving the operation of landlords and in turn the outcomes at their properties. Furthermore, it has been increasingly difficult to determine the actual nature and size of ownership as owners are increasingly hidden behind the corporate veil of Limited Liability Companies (LLCs). This work seeks to clarify the composition of property ownership and understand how and when landlords take different property management strategies. Using a novel dataset of public corporation records linked to assessment records from the City of Boston from 2004 to 2020 and property-level outcomes related to crime and disorder (e.g., 911 calls, 311 calls, violations, etc.), we seek to uncover these ownership structures and their property management strategies. We look at a number of landlord characteristics including size, corporate status, obscurity of ownership, and absentee status. We find that landlords take divergent strategies depending on their characteristics and the geography of their rental properties. While some employ a ‘profit or perish’ strategy marked by disorder and higher-risk tenants, others employ a ‘profit by improvement’ strategy through increased capital investment and renovations to attract higher paying tenants and increase property values. Our results demonstrate the importance of a nuanced approach to studying landlord characteristics and strategies.