Single-family rentals: Trends and policy recommendations

Single-family rentals (one-unit properties) are not a new phenomenon; they have always been an important part of the rental market, offering renters the ability to rent larger homes or live in communities that have few multifamily properties. Large institutional investors remain a small overall share of all single-family rentals, but they are highly concentrated in particular geographic areas. The evidence on the behavior of these entities and their impact on markets is limited. It is clear they are more responsive to the market in setting rents, and they submit more eviction filings. It is unclear if they ultimately evict more tenants, or if they are better or worse than smaller investors at maintaining their properties. Our policy recommendations are threefold. First, to create more transparency in ownership structures, we call for the widespread adoption and enforcement of rental registries. Second, we recommend that regulators impose more requirements on large investors, who, due to their size and capacity, can be asked to do more to serve and protect tenant interests. This includes reporting rent payments to credit bureaus, accepting housing choice vouchers, offering security deposit insurance in lieu of security deposits, offering one-page summaries of lease terms, and giving tenants a warning and some time to correct the payment deficiency before filing an eviction notice. Third, we call for improving renovation financing for owner occupants to help level the playing field for individual homeowners seeking to buy homes that need repairs.