In late January, the White House released the Bill of Rights for Renters, “laying out a set of principles to drive action by the federal government, state and local partners, and the private sector to strengthen tenant protections and encourage rental affordability.” While I agree with the main sentiments behind this gesture - including providing access to safe and affording housing, a clear and fair lease, unlawful discrimination and access to resources to avoid eviction - I believe what the government missed are guidelines to help to dismantle the stigma around institutional ownership and address the enormous undersupply of homes we are experiencing in this country.
The housing crisis cannot be overlooked. According to USA Today, experts estimate there is a nationwide housing shortage between two and six million homes. How can you protect renters if they have nowhere to live? While having guidelines for responsible property management is important, diving into the root of the problem is paramount to finding the solution.
Credit: contributed
Credit: contributed
Dismantling the stigma surrounding institutional ownership, meaning hedge funds and private equity firms owning homes, is paramount to understanding the rental housing industry. First, let’s tackle the stereotype that the institutional landlord is buying homes out of the grasp of hard-working Americans and renting the homes out to make a quick buck. In reality, institutional owners do not even own close to the majority market share of rental homes in this country. The Atlantic reported that Georgia, a state with a relatively high amount of investor activity, saw some 8.5 percent of 2021 home sales go to the largest investors. Nationwide, institutions own less than 2% of the roughly 23 million single-family rental homes in this country.
Next, institutional landlords often get a bad rap for being the “uncaring landlord” that lets homes fall into disrepair and renters’ concerns go unheard. Frankly, it’s just the opposite. At the very least, a majority of these companies will not allow their investment to decline in value. They will make sure the taxes on their homes are paid, the residents are taken care of, the lawns are mowed and the homes are well-maintained.
Finally, institutional owners aren’t just buying existing homes, they’re also building new ones. My company, Quinn Residences, is institutionally backed, and our business is solely focused on the build-to-rent sector. BTR is providing more inventory to help mitigate the massive housing shortage. In 2022, Quinn more than doubled our footprint from 2,043 to 4,956 homes in 37 communities across five states. While this country still has a long way to go in terms of housing supply, the BTR industry is only helping to increase the amount of housing options. We also aren’t just building homes, we’re building communities full with amenities like fenced-in backyards, dog parks and more.
But, we can’t build neighborhoods without the support of the local community. The single biggest threat affecting our industry is NIMBYism (Not in My Backyard). Naysayers are trying to stop communities everywhere out of fear of the unknown. Our homes accommodate a diverse mix of residents including renters-by-choice, young couples and empty nesters – all looking for more space, less maintenance and increased flexibility. We thoroughly vet our residents, and Quinn’s build-to-rent dwellers are on average 37 years old and earn nearly five times their monthly rental payment. In fact, most neighboring communities wouldn’t even realize our homes are for-rent instead of for-sale.
Local municipalities are tightening restrictions and throwing out bogus claims to stop BTR communities from even beginning construction. Just recently, The Atlanta Journal-Constitution reported Snellville strengthening its parameters for build-to-rent homes. Without the support of the local government, the build-to-rent industry could cease to exist and the housing shortage will continue to worsen.
We need assistance from the federal government in order to continue our business and complete our mission of providing more housing to an industry in need. In addition to focusing on regulatory concerns with the Bill of Rights, the federal government needs to turn its attention to long-running supply constraints affecting housing availability and affordability. The White House should consider incentives to developers that will help boost available housing. The more housing available, the more affordable it will inherently become.
Education is also key, especially for local municipalities. The federal government does not need to control the local level, but what it can do is provide resources and guidance on the benefits build-to-rent has to offer. People need to know that the American Dream has changed. Not everyone is interested in building their wealth by owning a home, but that should not inhibit every American from having a roof over their head. The build-to-rent industry is providing more reasonably priced options, especially for those who cannot afford a down payment or simply do not want to own a home.
And we need help. Along with others in the industry, I am asking the government and the general public to consider why a build-to-rent community could be a positive addition to any city. Does every city not deserve to have a community of well-maintained homes positively contributing to the city’s economic structure? Where residents can build their lives and experience the benefits of living in a home without sacrificing financial stability?
The build-to-rent industry is here to stay, so help us be a part of the solution in providing reasonably priced, purpose-built homes to offset the extreme housing crisis.
Richard Ross is CEO of Quinn Residences.
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