Trends Emerging in Future Rental Market

Key Highlights

• Experts participating at Urban Land Institute’s virtual Spring Meeting spotlight trends likely to dominate rental market
• Panelist experts spotlight institutional investment, NIMBYism and multigenerational home

Institutional Investment in Single-Family Rentals

Single-family rentals have been on the radar of individual investors for a while now.  Think of the millions of “hosts” registered with Airbnb, VRBO, etc. who rent out their second- and third- homes periodically to generate “extra” revenue.

The COVID pandemic accelerated the importance of single-family rentals as demand skyrocketed for more and more private indoor and outdoor space among renters…spaces that apartment living simply cannot provide.

Now institutional investors want in to this already existing product. Vicki Mullins, CFO at the development company Newland, believes that single-family rentals cater to consumers wanting space, schools, and private, not shared, walls in suburban areas.  Single-family rentals “…give you that single-family experience…” Mullins would not be at all surprised to see single-family rentals as components within master planned communities.

Multigenerational Homes

Daryl Carter, CEO of Avanath Capital Management, an affordable rental-housing operator, said that his company sees both demand and success with larger three- and four-bedroom properties.  The draw? The ability to house family members from multiple generations.

Carter said, “The biggest demand is from multigenerational families led by a baby boomer.”

NIMBYism

A.J. Jackson, vice president with JBG Properties, a real estate investment trust, believes that NIMBYism is a huge obstacle to new construction of single-family and multigenerational rental housing.

Jackson is hopeful that “not in my backyard” thinking is on the wane. However, history confronts that hope.

Mullins said, “It (NIMBYism) has been there…it’s probably going to continue to be there.”

Thanks to the Urban Land Institute and Inman.

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