This podcast was recorded on October 16, 2024.
With an election days away, politics is top of mind for almost everyone. So, now seemed like a good time for the podcast to delve into the politics and policies that impact housing.
David Howard
is the CEO of the
National Rental Home Council
, which advocates mainly for the single-family rental (SFR) sector. David walks us through the ins and outs of national, state, and local housing policies. We had a wide-ranging conversation primarily focused on the rental market, but we also touched on the for-sale world.
- David has been tracking the SFR world since its beginning. The fear and loathing toward institutional actors—by which, David argues, we mean the big actors—has led to some attempts to curtail institutional investment legislatively.
- But, David argues, these efforts are fueled by a misperception. The bigger players have nowhere near enough market share to affect market control. “Large providers own about 600,000 homes across this country, which comes out to 0.4% of the housing in the United States,” David said. 90%, David patiently explains, are mom-and-pop investors.
- Supply is probably where politics most impacts housing. The chronic lack of sufficient housing has made housing a bigger part of the political picture than ever. The moves to possibly restrict larger investors can only exacerbate this dire need. David argues, “The attempt to regulate or restrict the ownership of single-family rental homes as a way to increase supply is not an appropriate path forward.”
- Some policies seek to constrain development, period. Usually, the biggest roadblocks are at the local level. In Georgia, for example, some local jurisdictions have tried to restrict even build-to-rent (BTR) communities for fear that they will dampen homeownership.
- Again, there is a misperception at play here, according to David, who says there is an underlying stigma against renters. David points out how much alike owners and renters are. “The average resident in a single-family rental home stays for 4-plus years, which isn’t much different from the average homeowner, who stays about 7 years.”
- There are solutions, David says. The most obvious and meaningful would be streamlining the process in all those places that erect hurdles to new supply. These hurdles are occurring in places you might not expect. David mentioned a builder in Phoenix who told him, “10 years ago, you could entitle a piece of land and break ground in 6 months. Now, that process takes 4 years.”
- It is not just politics; it can be staffing or the logistics of moving housing developments from plan to floor plan. (This seemed more clever when I first wrote it.) Often, even pro-housing jurisdictions do not have the resources to speed the process.
- While it is not just Florida, but what has been happening in the Sunshine State concerning home insurance is a make-or-break issue that we will be dealing with for years. The impact on homeowners is obvious, but insurance costs also hit the rental market. “When property insurance becomes more expensive, it becomes more difficult for owners to afford to operate those properties,” David said.
- Obviously, David is following the election closely. He is heartened that everyone seems to agree we need more housing supply. He has seen some encouraging ideas, such as opening more federal land for development. It is a time to be optimistic and a time to be nervous. And, no, David definitely did not offer his thoughts on who will win.
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3 周For the TL;DR, here's the highlights: Industry Context: - Large institutional providers own ~600,000 homes (0.4%) of U.S. housing stock - About 90% of SFR homes are owned by individuals or small businesses - The BTR sector is growing as a new housing supply source Policy Issues: - Housing supply shortage is recognized as the fundamental problem across political lines - Local-level decisions have the most impact on housing development through zoning & approvals - Some states (like Georgia) have seen attempts to restrict BTR developments - The entitlement process has grown significantly longer in many areas, affecting housing costs Current Challenges: - Insurance costs are becoming a major issue, particularly in FL & CA - Rising capital costs have led to decreased acquisition activity among larger SFR owners - Often a stigma against renters that affects local policy - The time to entitle & develop new housing has increased dramatically in many markets Positive Developments: - Some states are implementing programs to incentivize faster housing approvals - There's growing bipartisan recognition of the need for more housing supply - BTR communities are helping add new housing stock - Many SFR residents eventually become homeowners
"Leadership is the intention to inspire others to turn their obstacles into opportunities!"
3 周Too many politics and talk, little action.