Where Have All the Houses Gone: Private Equity, Single-Family Rentals, and America’s Neighborhoods

On June 28, 2022, Brookings Metro Senior Fellow Jenny Schuetz testified to the U.S. House Committee on Financial Services’ Subcommittee on Oversight and Investigations, during a hearing titled Where Have All the Houses Gone: Private Equity, Single-Family Rentals, and America’s Neighborhoods.  

Addressing in her testimony several aspects of the single-family rental industry (namely, how the expansion of the single-family rental industry impacts renters, prospective homebuyers, and communities; and relevant racial, ethnic, income, or demographic disparities), Schuetz provided vital context for current challenges to housing affordability and availability, and offered policy recommendations for how Congress can help address the needs of America’s renters and homebuyers. 

• Emphasizing that growth of institutional investors is a symptom, rather than the cause, of extremely tight housing markets, Schuetz recommended that Congress create financial incentives for local governments to revise their zoning in favor of small, moderately priced homes, and better integrate federal investments in housing, land use, and transportation. This should be supported with federal funding for technical assistance to local governments. Schuetz noted that these types of actions already have bipartisan support in Congress and are included in the Biden Administration’s Housing Supply Action Plan. 

• Stressing that high housing costs create more distress, and greater barriers to homeownership, for low-income, Black, Latino, and Native households, Schuetz emphasized that the most direct, straightforward way to help low-income households afford decent-quality housing and accumulate savings is to give them money. Increasing funding for housing vouchers, renewing the expanded Child Tax Credit, or making the Earned Income Tax Credit payable monthly instead of annually would all be effective tools to support financial stability for low- and moderate-income households. Congress could also create federal tax incentives to better target first-time homebuyers. Encouraging households to set aside short-term savings would increase financial stability for both renters and homeowners. 

• Affirming that rental housing quality and tenant legal protections are important to renter households’ well-being regardless of who owns the property, Schuetz noted that better data collection from federal agencies could increase transparency of rental property ownership and monitor concentrated ownership within local markets. Local and state governments would benefit from federal financial support and technical assistance in setting up rental registries. Federal agencies, such as the Consumer Financial Protection Bureau, could be enlisted to monitor actions of large firms with rental portfolios that extend across multiple states. 

• And finally, asserting that single-family rentals are—and have always been—an important part of housing ecosystem, Schuetz stressed that policymakers should make it easier for households at all income levels to access high-opportunity neighborhoods through diverse housing types, both rental and for-sale, at a wide range of prices and rents. 

To read Schuetz’s full testimony, click here. To watch the testimony video, click here.