Brown Bill Further Discourages Investment and Innovation in America’s Housing Market

July 11, 2023 (Washington, DC) – Recently-introduced legislation by Sen. Sherrod Brown, targeting the legitimate ownership and development activities of America’s leading providers and builders of professionally-managed single-family rental homes, will serve to reduce the availability of quality, affordably-priced housing for hundreds of thousands of renter households; disincentivize the building and development of new units of much-needed rental housing; further prevent families from renting housing located in neighborhoods near quality schools, employment centers, and transportation corridors; and stifle innovation and entrepreneurialism in the rental housing market.

“At a time when housing throughout America is challenged by an unprecedented shortage of homes brought on by decades of underbuilding, legislation discouraging and restraining new housing development and investment only serves to make housing more scarce and unattainable. This bill will create a housing market that is less efficient, less competitive, and ultimately less able to meet the needs of homeowners and renters, both current and future,” said David Howard, CEO of NRHC.

The U.S. single-family rental home industry accounts for approximately forty percent of America’s rental housing market, providing access to quality, affordably-priced housing for more than 16 million households. The vast majority, in excess of 85%, of single-family rental homes are owned by small, local businesses. “Large corporations”, the target of Sen. Brown’s bill, own just one-third of one percent (0.03%) of the housing in America. Whether large or small, owners and builders of single-family rental homes are committed to the communities in which they invest and build, by providing families with more options for housing to meet the needs of local residents.

The undersupply of housing in America is estimated at between 3.8 million and 6 million units, and it is this shortage of homes, not the activities of “housing investors”, that should be the focus of policymakers. Demonstrating the extent of the challenge, recently-released data from Realtor.com show 15.5 million households were formed in America in the decade between 2012 and 2022, yet only 11.9 million housing units were completed. By making it more difficult for experienced rental housing providers to participate in the owning and building of single-family rental homes, this bill will constrain the flow of capital and investment into local housing markets, exacerbate existing nationwide housing supply challenges, and cause additional hardship for homeowners and renters.

This bill also has the potential to impact the vibrancy and appeal of local neighborhoods and communities. Recent data from the NRHC/John Burns Single-Family Rental Market Index show large providers of single-family rental homes invest nearly $30,000 on average in property renovations and upgrades for newly-purchased homes. And the Urban Institute concluded in an April 2023 report profiling owners of single-family rental homes, “Most [large] investors buy properties that need repairs and then invest a significant amount in upfront capital to repair the properties.”

In today’s economic environment, where it now costs, on average, more than $1,000 per month to own a single-family home than rent, rising interest rates have pushed homeownership further out of reach for millions of American families. Rather than consider additional oversight initiatives and regulatory barriers that constrain the ability of rental housing providers to do what they do best – provide more housing – NRHC encourages policymakers at all levels to work with industry collaboratively to spur new development and housing investment.

To meet the demand for quality, affordably-priced rental housing, NRHC members are investing in local staff, hiring local contractors and business partners, and bringing property management expertise to local markets all to ensure a positive experience for residents and families who choose a single-family rental home lifestyle. As evidence, in 2022 NRHC members invested nearly $2 billion in home renovations, upgrades, and other property-level operations while employing more than 8,000 local businesses and contractors in markets across the country. Additionally, many NRHC members support residents on their path toward homeownership by reporting on-time rent payments to credit agencies and providing access to financial literacy programs.

July 11, 2023