How to Rent Lots of Homes « The Washington Independent
Felix Salmon links to a post by Barbara Kiviat asking: If the government wants to build more incentives for affordable rentals, and more and more people will need to live in rentals since the housing bust, who is going to rent out all those houses?
According to government data, 89% of single-family detached houses are owner-occupied. Meanwhile, 83% of apartments are rented. There is a certain logic to this. An apartment building provides an economy of scale for a landlord that a suburban housing development doesn’t.
The answer: Probably not individuals who cannot afford to own their homes and pay their mortgages anymore. (Of course, many individuals do rent out their homes. But it does require some work, and some willingness to deal with the hassle of it. What if the tenant breaks things? What if they do not pay their rent on time? Who do you go to for legal work? etc.)
The question becomes whether big rental companies and developers, with the credit to purchase lots of properties and the savvy to make a business of it, will be willing to step in. Of course, the government has all sorts of carrots to convince them to do so. And it seems many subsidized rental programs are going well, if they are oversubscribed.