By David Howard
June 25, 2023
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In North Carolina, and many other states, the primary challenge facing the housing markets is simple: supply.
In North Carolina, and many other states, the primary challenge facing the housing markets is simple: supply. Over a generation, America failed to diversify its housing stock. The pace of building new homes hasn’t kept up with demand, and today, in markets across the nation, there are widespread ramifications.
As the housing policy nonprofit, Up For Growth, reported markets across North Carolina face significant housing shortages, including: Charlotte (21,622) and Raleigh (13,473). A BiPartisan Policy Center study of housing supply conditions showed that while the state’s population has increased by more than 1 million residents over the past decade, the housing stock has grown by only 480,000 homes.
America needs more housing of all types to support families no matter where they are in life. Every person, no matter their income, background or profession, deserves access to quality neighborhoods, and single-family rental homes provide access that Americans need. Amid high interest rates, single-family rental homes can contribute to the diversity of housing offerings by providing access to well-located, affordably-priced, professionally-managed homes.
A June 7 article in The N&O and The Charlotte Observer titled “Corporate landlords caused billions in lost wealth, study says” ignored this point, presenting a view of home ownership that is at odds with the reality of today’s housing market.
It quoted a Georgia Tech study that asserts that providers of single-family rental homes, especially large corporate providers, are the cause of all that ails housing in America. However, the study draws its implications from an examination of a single metropolitan area — Atlanta — focused on short-run effects between 2007 and 2016. The design of this study is out of date and the study fails to account for changes in housing market dynamics in the past nine years.
Given the relatively recent emergence of “corporate landlords” in the housing market, it’s not clear how their presence could have had anywhere near the impact the article claims, which the writer acknowledges when he refers to the industry as “the barely 10-year-old single-family home rental industry.”
Large providers of single-family rental homes own just one-third of 1% of the housing in America, and of all the rental housing in the U.S., large providers own just about 1%. And, over the past decade, the share of the country’s single-family housing market accounted for by rental homes has actually declined by about 1.5%.
Including key data points relevant to the Atlanta housing market in the article would have brought much needed context. Federal Reserve data show homeownership rates in Fulton County and the seven other primary counties in the Atlanta metropolitan statistical area (MSA) are higher today than they were in 2016.
Concerning Black homeownership, an Urban Institute analysis of the top 20 MSAs in the U.S. — including Atlanta — published this spring, concluded, “institutional single-family operators” are not disproportionately concentrated in nonwhite areas. Atlanta’s rate of home equity growth over the past five years is the seventh highest in the nation, having increased 14% per year on average during that time.
Whether in Atlanta or elsewhere in the U.S., working families deserve access to great homes in great neighborhoods. They should have options to meet their individual circumstances. This is what the Georgia Tech study and flawed analyses of the single-family residential market often miss — housing is a continuum, and single-family rental opportunities occupy an important place in that continuum. They are a solution to many families’ financial challenges, and often unlock opportunity for those who need it, including access to quality schools in quality neighborhoods.
Housing should not be viewed as zero sum. We need more supply, of all types, to help ensure we meet the needs of today — and tomorrow. And single-family rentals are an important component for working people in any housing market.
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