That’s not what he said.
At ~7:05 He said “Corporate landlords represent 2% of all single family rental housing”
Very misleading statement, because corporations tend to focus, understandably, on markets where the rents have the potential to be higher based on the economy, ignoring large swaths of the country wide market. I started to notice this trend back in 2012 when I started to look at buying in Atlanta when Eldest was in college, continuing to follow that market for several years. With the housing bust in that area around 2008, corporations swooped in and scooped up properties hand over fist. I don’t blame them, it was a great buying opportunity, but it has made it very difficult to buy a starter home and raised the rents in a big way.
We live in a small city with a great diverse economy and constraints to building new homes. Our area rents, relative to purchase price, were already pretty high, which is why we kept the house as a rental after we found a home we preferred two years later. In fact, I told DH as we toured the home, that this would make a great rental if we decided to move elsewhere. Even when we bought 5 years ago, the market was super tight, with homes often under contract before they hit the MLS. (The Realtors here have developed an excellent strategy to protect themselves from internet facilitated FSBOs and discount Realtors.) Covid intensified the sales demand and process further. We have many corporations and Mom and Pop landlords with many many properties. So while “Corporate landlords represent 2% of all single family rental housing,” their 2% of national market represents a MUCH higher percentage in desired regions. The housing economy has to be looked at locally, and IMO has large problems with numbers being extrapolated to national trends.
IMO, it is local and Federal gov’t that needs to control this, in order to continue to provide affordable housing to the locals. Currently our city is eliminating SFH zoning in favor of 3+ units, which will only make buying properties more interesting to investors and compound the problem. One way to mitigate the growing affordability problem could be to change the tax rules for owner occupied vs rentals, or perhaps for more than X rentals, be that 1 or 4, or whatever. Locally, that could be a higher tax base for rental properties than owner occupied. Property taxes have skyrocketed in our city, with escalating sales prices, causing long time owners, many elderly, to have to sell their home. Escalating assessments are kicking many who were previously in the real estate tax waiver program to lose the benefit simply because they stay in their home as it’s value escalates past the max home value for the program, while their income does not grow. Federally there could be take backs for over X rentals of many of the great tax breaks one gets on a rental property. There is a feeding frenzy from corporations because they see the purchase as a great deal. Tax law changes could mitigate those benefits for investors and even the playing field a bit.
Corporations will understandably continue their feeding frenzy until actions like these are taken.
FWIW,
IP
appreciating the high value exit to the rental business, but really not wanting to experience the revolts that will come if things don’t change