Trendspotting: For Rent: Suburbia.

NewsWire: 6/22/21

• Built-to-rent homes are growing in popularity, with such subdivisions built or in development in nearly 30 states. They’re attracting urban renters who want to live in suburbia, but either can’t or don’t want to buy a house. (The Wall Street Journal)
• NH: For many years, certainly since the GFC, institutional investors have been buying up individual single-family homes, typically scattered across different communities, and then renting them out. Now comes something new: the building of entire suburbs made up of rentals.
• According to real estate consulting firm Hunter Housing Economics, built-to-rent single-family homes typically make up just over 6% of new homes built in the U.S. each year. This share is projected to double by 2024.
• For some renters, their choice has been driven by rising housing prices. These are often urban dwellers who want to relocate to suburbia but have been priced out of the market.
• But for many others, renting over owning is a lifestyle preference. Built-to-rent homes are managed like new apartment buildings, with dedicated on-site maintenance staff. The real estate company is the HOA. Renting is seen as more convenient and more flexible--and it means you’re not tied down to a 30-year mortgage. At a time when nearly everything else is available to rent, why not a house?
• Some local governments have begun pushing back. In Georgia, the town of Stockbridge passed a moratorium earlier this year on built-to-rent developments as part of a larger effort to ban them entirely. Since renters tend to move around more than homeowners, officials argue that these residents will be less connected to their communities. And even if they don't move, they will treat their home "like a rental"--with no incentive to invest in making it a better place to live.
• The Stockbridge council has a point. Rental-only suburbs illustrate how starkly the social dynamics of homeownership have changed. The original suburbs that sprang up in the late 1940s and 1950s were the realization of a New Deal vision. Homeownership was a dream that was actively promoted through state and federal legislation (insured thrifts, insured mortgages, tax breaks, and so on). Its goal was to free America's working class from "the fear" of being dependent renters--and to enjoy the security and pride of "ownership" that, argued Democrats ever since Presidents Jefferson and Jackson, was the birthright of a nation of yeoman farmers. It was also believed that a so-called "ownership society" fostered rootedness and family-friendly community over time.
• Now apparently it's not just the affordability of homeownership that has faded. It is the desirability as well. The attributes that Millennial and Xer renters say they value--convenience, freedom, lack of hassle--may be beneficial for individuals but antithetical to the forming of communities. Offered a home of their own by Jimmy Stewart, many prefer to rent a unit from Old Man Potter. They no doubt hope that the vicious social tone of "Pottersville" isn't part of the bargain.
• A nation of renters may be what today's younger generations want. But at a time when loneliness and civic disconnection is so great, it's probably not what they need.