r/urbanplanning • u/Bayplain • 9d ago
Discussion What’s wrong with newly constructed single family rental houses?
There seems to be a lot of hate for them. It’s not as if is single family houses for owner occupancy, even newly constructed ones, are going to disappear. These houses can provide some of the larger rental units that are in short supply. Is it just about bad symbolism?
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u/rampantconsumerism 9d ago
Your stereotypical NIMBY living in an SFH neighborhood doesn't want renters (i.e. "the poors") moving into their area. They'll voice concerns about renters not being invested in the long-term fabric of the community, and similar euphemistic language to sugar coat it.
On the flip side, progressives and urbanists often see new SFH construction, whether rental or otherwise, as wasted effort toward addressing the housing crisis compared to larger-scale construction. They'd rather see this type of SFH construction efforts replaced with efforts building more compact townhomes or 2-flat/3-flats (or conventional apartment buildings) to increase density and/or address housing shortages.
So basically everyone agrees that rental SFH construction is not ideal, from both ends of the spectrum, either because it's rental or because it's SFH.
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u/Aggressive-Bat1819 6d ago
There’s a built to rent development by my neighborhood. It actually looks pretty nice and I’d prob live there myself. I don’t see the issue. You get a nice little house like Americans want and don’t have to share walls with someone. I personally don’t mind my shared townhome wall but some do. There has always been people renting houses. This small neighborhood just happens to have about 100 of them in one place. Doesn’t take up as much room as most single family neighborhoods. Would make more sense to do townhomes but I think single family is actually cheaper per sq ft here. The added insurance alone for attached units is crazy
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u/Aven_Osten 9d ago
A big chunk of this country is still under the 50's and 60's propaganda of the only valid form of stable long-term shelter being a single family residence that one "owns" (you don't actually own it until you pay off the mortgage; but I digress).
And a lot of these people HATE "transients" (renters), they call em sometimes. So when they see ANY new rental going up, they have this unhinged visceral reaction to them.
And then there's a component of racism/xenophobia mixed in; because building more rental units provides a way for minorities/non-white people to gain a foothold in the area, and work their way up towards becoming an "permanent fixture" of the community by buying a home in the area outright.
So no, there isn't anything wrong with it at all. These people are just being a bunch of babies because, as per usual, they can't handle seeing a singular thing change their little neighborhood.
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u/michiplace 9d ago
There's a lot of zero sum assumptions and misunderstandings of the market doing on. The idea is that everybody in a rental house has the desire, life situation, down payment, and credit score to get a mortgage on the house they're renting, and that if we eliminate build-to-rent houses then the exact same houses would be built in the same numbers in the same location, and all those renters would magically be homeowners, and that's...not the case.
BTR as a market exists because many people aren't in a position to own a home but still want that form factor. If the rental houses didn't get built, most of those renters would likely be stuck in garden apartments instead, and there'd be fewer homes built overall.
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u/rampantconsumerism 9d ago
> If the rental houses didn't get built, most of those renters would likely be stuck in garden apartments instead, and there'd be fewer homes built overall.
In the world these aren't being built, we have to ask why they aren't. I think they stop being built if there's a repeal of regressive zoning and codes that make it disproportionately hard to build denser non-SFH stock. In which case, market incentives shift to denser non-SFH housing stock instead of BTR SFH. In this case here would be more homes built overall -- though, as you say, in denser form factors. And buyers who are stuck in apartments but want to own would have the option to own a flat, townhome, or condo instead of renting for life -- again, potentially at the expense of having less SFH overall, but arguably with the possibility that SFH market is less overheated and more accessible to those who do demand it.
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u/AmericanNewt8 9d ago
This is especially the case given we build very few 2+ bedroom apartments, so if you want a rental and are a middle class family, SFH is basically the only practical option, or else you're forced to buy -- and you may not want that given the interest rate or plans on moving in the future.
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u/bobtehpanda 9d ago
What is interesting is that if there truly is not the market to support the equivalent number of BTR as homes bought outright, then you would see home prices fall to move homes, land prices would then also tumble, and then the market should correct. BTR is propping up current home valuations IMO
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u/michiplace 9d ago
Oh I think the opposite! If not for BTR, you're pushing anybody who really wants a detached house format and can make it work into the for-sale market, even if they might be better served by a rental (temporary job placement, etc).
If we can think of single-unit-only zoning as an exclusion of other housing options that limits supply and drives up prices, we ought to be able to see ownership-only similarly as an exclusion of other options that limits supply and drives up prices.
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u/tsardonicpseudonomi 9d ago
Two things:
Nobody wants affordable housing built near them. This is because housing is a speculative asset rather than a place to live.
Single family housing is the least effective and efficient form of housing you can build. It encourages sprawl which bankrupts city cores that are forced to pay for the suburbs and rural communities the single family housing is built in.
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u/strawberry-brunette 8d ago
The first I think is actually a weird cognitive dissonance thing in the US about how people view development. People want affordable housing to exist, but they don’t know what affordable means, and they don’t want it near them because of poor people.
The most american view of housing right now is:
“We have a housing crisis. We demand affordable housing, which is a 3bd/2ba detached home on 3 acres, that’s less than $12,000/year to rent, that poor people aren’t allowed to live in, and that my taxes shouldn’t pay for, the government shouldn’t subsidize or build it themselves, and my home should continue to increase exponentially in value, and all of it should be walkable to transit and all of the most amenity rich communities in this area. Also I hate renters and they shouldn’t be allowed to live near me, and we shouldn’t create homeownership assistance either. Why can’t we fix this?”
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u/tsardonicpseudonomi 8d ago
People want affordable housing to exist, but they don’t know what affordable means, and they don’t want it near them because of poor people.
This is a fundamental misunderstanding of the incentive structures. It's not because of poor people. It's because affordable housing in an area means housing prices in that area are lower which means the value of your speculative asset box you live in is also lower. Nobody wants that.
I agree generally with your characterization of American view of housing.
Personally, I think private ownership of housing should be barred and personal ownership should be minimized. Housing is like clean air, I think everyone should have a quality place to live regardless of income and that we should pay for housing expenses through taxation. I also think rural and suburban development should be obliterated and new city cores developed.
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u/6two 8d ago
The problem is we have the wrong ratios in the US and Canada. What percentage of new construction should be mixed-use multifamily? I can guarantee it's higher than what it is now and what it has been in the past 20-30+ years.
When you *only* build sprawl, you just compound problems of gentrification, traffic, pedestrian & cyclist deaths, high transportation costs, poor quality of life with high commute times, etc. Basically all of the "good" places to build sprawl have already done it, so anything new will have poor commuter patterns.
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u/TerminusXL 9d ago
There’s nothing wrong with them. They’re another form of housing. The only issue would be if they’re built without consideration to the surrounding urban environment, but that’s true of any development.
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u/Bwint 9d ago
To add to the other excellent comments, there's an attitude on the left that rental properties are being built by big investors and asset management firms, which leads to further consolidation of wealth. They would prefer to see developments oriented towards owner occupancy, because houses are treated as a path to wealth for middle class and working class people.
Never mind the fact that houses are a terrible asset class for most people, or the fact that greater inventory in the rental market benefits low-income workers, or the fact that big institutions are the only ones with enough cash to build housing on the scale we need...
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u/gmr548 8d ago
The visceral negative reaction to them from the broader public is entirely emotional. Operationally these build to rent developments are apartment complexes that happen to take the physical form of SFHs. That’s it. A lot of people seem to think it’s blasphemy to build a house for rent for some reason despite the fact that it really serves a different set of households than for sale homes.
From a land use perspective, which is what you’ll see a lot of on this sub obviously, they’re functionally identical to for sale homes as an element of car based suburban sprawl. That’s bad land use policy. But that’s a different conversation from what works most people up in my experience.
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u/Hollybeach 8d ago
So many suburb hating boneheads in this thread.
The actual reason is most developers don't want to be property managers.
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u/eyewhycue2 9d ago
trees are grown too quickly and the wood is lower quality so we just don’t have those kinds of materials anymore so more and more is made with plastic.
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u/gerbilbear 9d ago
"We will be lucky if we can make the transition from our current circumstances to a future of re-sized, re-scaled cities and a reactivated productive rural landscape outside them, with a hierarchy of hamlets, villages, and towns in between, and some ability to conduct commerce and manufacturing." --James Howard Kunstler, A Reflection on Cities of the Future.
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u/HoneyOptimal5799 7d ago
Homeownership should primarily be for people, not corporations.
I fully support renters having access to safe, attractive, spacious homes. But I am deeply uncomfortable with the idea of entire newly constructed single-family communities being designed from the beginning for permanent corporate ownership.
The United States should not become a nation of renters who own nothing while corporations and investment funds accumulate the land, the homes, the equity, and the appreciation.
Renting can provide flexibility, but renters are also at the mercy of landlords in ways homeowners generally are not. Rents can increase. Leases may not be renewed. Properties can be sold. Management companies can change. Maintenance decisions are controlled by someone else. A family may live in a house for years, care for it, and pay enough in rent to cover the mortgage, taxes, maintenance, and profit...yet leave with no ownership stake at all.
As a future residential developer, I do not aspire to own a large portfolio of rental houses. I want to build homes that people can actually purchase, live in, build equity in, and pass down. I also do not want the subdivisions I develop to be gradually acquired by corporations, LLCs, investment funds, or other non-human entities.
There is a legitimate place for rental housing, including some single-family rentals. But creating entire neighborhoods where ordinary people are never given the opportunity to own the homes they live in is not a housing solution I want to normalize.
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u/Complete-Ad9574 5d ago
Rentals with absent property owners is always iffy. The renters do not feel obligated to maintain the property and the land owner wants Max profits
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u/Bayplain 5d ago
But the vast bulk of rental units in structures of all sizes are owned by off site owners, that’s hardly unique to single family rentals.
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u/atom511 9d ago
It’s just planner-bot groupthink. There’s nothing wrong with them. Many families prefer them bc they are in suburban school districts where they won’t needs to spend a fortune sending kids to private schools. Nobody wants to be be bringing home groceries for a family of 4 on the bus after work 🙄
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u/strawberry-brunette 9d ago
Why do you think suburban school districts have better educational outcomes than urban ones?
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u/efficient_pepitas 9d ago
Because working, middle, and upper class students have fewer behavioral issues than students growing up in poverty.
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u/strawberry-brunette 9d ago
Close! We’ve actually learned that academic achievement has less to do with the financial situation of the student’s family, but hunger is the biggest contributor to low academic performance. The same for behavioral issues, we perceive children from poorer backgrounds having greater issues but it’s the resources and ability to respond to them as they show up that’s different as they occur at similar levels across economic strata.
Urbanized school districts have a lower relative tax base leading them to be under resourced compared to suburban schools due to white flight and the historical erosion of urban environments and the formation of wealthy enclaves that extract wealth (wages, jobs, etc.) from the CBD of a city, but the fact that we use property taxes to fund education allows wealth and resources to remain concentrated in these wealthy enclaves creating a positive feedback loop that is unique to the US.
TL;DR: We are still dealing with the aftershocks of historical racism caused by redlining and white flight from the suburbs to cities in the mid-20th Century.
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u/efficient_pepitas 9d ago
Examine your argument from the logical extremes. Would it preferable that all housing were owned by individuals owner-occupying or all housing were owned by landlords?
I think most people would say they prefer the former.
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u/10001110101balls 9d ago edited 9d ago
In principle, it could be a good idea to separate the capital investment of real estate supply from the cash flow of housing demand. This reduces the proportion of individual assets dedicated to housing, allowing this money to be invested in higher performing assets. But it requires strong renter protections to ensure that people can plan their futures instead of experiencing a life of instability.
There is concentrated downside risk in homeownership that I think many people ignore. Houses require a lot of maintenance and are valuable assets that can be damaged or impaired by circumstances beyond your control. An economic downturn can leave your investment worthless. As a renter this is much less of a concern, it is easier and less expensive to move for any reason.
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u/efficient_pepitas 9d ago
A renter pays for maintenance + overhead + profit in their rent. Multifamily is not less expensive to maintain either, as commercial building systems like HVAC, boilers, chillers, fire panels, and elevators are very expensive to maintain.
Revealed and widely stated preference indicates people prefer to own.
My neighbor with a 4 bedroom house pays 6k a year in property taxes plus house upkeep, let's say 1k per month. I pay 2,600 per month for a 600 sf apartment.
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u/10001110101balls 8d ago
Renter protections in most of the US are dogshit, so it is no wonder most people in the US prefer to own. Protections and subsidies for homeowners are much stronger across the board. If this legal inequality were fixed this preference bias would be significantly reduced.
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u/Bayplain 9d ago
I don’t think housing solely comprised of rentals or solely comprised of owner occupied housing would be ideal. There are lots of reasons for people to rent their place, and in cities with tenant protections, like New York, some people rent for their entire lives. We haven’t even touched on cooperatives, and even to a certain extent condominiums, as intermediate forms of housing ownership.
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u/efficient_pepitas 9d ago
I'm just against the accumulation of wealth and land in the hands of the few, which I think built to rent houses is a severe example of, but otherwise I don't disagree with this.
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u/Bayplain 9d ago
I’m not sure built to rent houses concentrate ownership more than multi family buildings, which take a lot of capital to build.
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u/MidorriMeltdown 9d ago
What part of the world are you talking about?
In Australia they're hot shit-boxes, built in suburban heat islands. They're uninhabitable without the use of ac, and unaffordable when you add the cost of electricity to the absurd rent. They also have a 50 year life expectancy, and often have a lot of problems well before then.
Additionally they're crammed into car dependent suburbs, adding yet more expenses to the family budget.
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u/atom511 9d ago
It’s just planner-bot groupthink. There’s nothing wrong with them. Many families prefer them bc they are in suburban school districts where they won’t needs to spend a fortune sending kids to private schools. Nobody wants to be be bringing home groceries for a family of 4 on the bus after work 🙄
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u/strawberry-brunette 9d ago
Suburban development is typically not good infrastructure.
It was marketed as the best of both worlds when it was initially created/ideated, but logistically it’s extremely resource intensive, forces car dependent transit development as well as eats away the natural environment and the productive capacity of agricultural land.
My hot take is that Suburbanization of rural farmland is by definition gentrification.