After many single-family homes went into foreclosure after 2008, investors, instead of re-selling, turned these homes into rentals. A new study from Cornell authored by Suzanne Lanyi Charles, assistant professor of city and regional planning, identified how these rental trends impact housing, from more unaffordable housing and household instability to increased rents and evictions, depressed house prices and deferred maintenance.
“Single-family rental housing is an increasingly prevalent form of housing tenure in U.S. suburban neighborhoods, representing a paradigm shift in how households gain access to a suburban single-family home,” Charles wrote.
Charles notes that in an attempt to stabilize neighborhoods hit hard in 2008, foreclosed single-family houses were sold off in bulk to large corporations. Increases in suburban single-family rental housing may provide households access to neighborhoods that are otherwise off-limits to renters, Charles said, but the reverse is also true.
Charles notes that while policymakers including Democratic presidential candidate Elizabeth Warren have proposed legislation limiting large-scale institutional investment in single-family rental housing.
Warren noted that, as President, she would create a national public database of information about large corporate landlords, including information like corporate landlords’ median rent, the number and percentage of tenants they evicted, building code violations, the most recent standard lease agreement used, and the identity of any individuals with an ownership interest of 25% or more, either directly or indirectly, in large landlords’ corporations, LLCs, or similar legal entities.
According to Charles, while Warren’s plan is more “broad brush,” more focused changes may be more impactful.
“Single-family rental housing in some neighborhoods may afford renters access to the opportunity that some neighborhoods can provide, while … in others [it] may have negative effects on households and neighborhoods,” Charles said. “Thus, a highly tailored policy approach to single-family rental housing is warranted.”