Concealed exchanges: relational work in racially segregated housing markets

Abstract How do real-estate investors make decisions about where to purchase properties? In recent years, an increasing share of the market has gone to investors, making it critical that we understand the behaviors of these important actors. This study examines investment as a relational process. Through 74 interviews with real estate investors, as well as additional interviews with homeowners and renters in low- to middle-income neighborhoods in Baltimore, I find that strategic interactions and intimate relational work among professional and amateur investors are key to understanding how properties are sold. Professional investors cultivate bonds with new investors by identifying common goals and obstacles. They also use concealment strategies to sell homes, including: legal concealment, concealment through bundling, and concealment through brokers. Legal concealment involves using legal vehicles to transfer properties between owners. Concealment through bundling occurs when properties are bundled together to be sold in bulk. Finally, concealment through brokers entails finding brokers who can connect sellers to investors from other markets. These strategies obscure not only the nature of the relationship between buyers and sellers but also the quality of products being sold. The series of exchanges resemble how products are sold within direct-selling organizations and other predatory industries, which rely on a pyramid-like structure of sponsors and distributors. Furthermore, concealment strategies are more likely to happen in weaker markets and poorer neighborhoods where investor behavior is less constrained—this suggests that concealment has potential to increase urban inequality.