The debate over corporate landlords owning too many rental properties misses the point say many observers because more landlords is a good thing.
The answer is not who owns the homes but whether there are enough homes to begin with. The Atlanta Journal-Constitution, in writing about Georgia Senate Bill 463 which would restrict out-of-state ownership of single-family rental properties, says it is the housing shortage that is the problem.
It may be politically appealing to accuse investors of driving up home prices, but this idea misunderstands the housing market and risks making the affordability problem worse. The core issue is not that Georgia has too many landlords. It’s that there are too few.
First, it’s important to note that over the past decade, homeownership in the state has been rising, not falling. At the same time, large investor portfolios of single-family rentals have been shrinking. The share of single-family homes used as rentals has also declined.
In other words, investors are not steadily buying up the housing stock and pricing out homebuying families. Many have become “net sellers” who now put more homes on the market than they buy.
New construction is about half what it used to be
Kevin Erdmann is a housing market analyst and a senior affiliated scholar with the Mercatus Center at George Mason University.
This reframes the debate. If prices are rising, it’s because families themselves are competing for too few homes. The shortage has much to do with local governments’ resistance to new construction, which means too few building permits are being issued.
In 2005, nearly 90,000 new single-family homes were permitted across Georgia, according to the Federal Reserve Bank of St. Louis. By 2009, as the state grappled with the Great Recession, that number had collapsed to roughly 14,000.
But today, after prices have gone through the roof, new family home construction still sits below 50,000, little more than half of what it once was.
Multifamily construction — everything from duplexes to apartment buildings — remains tightly constrained by local land-use rules, holding steady at roughly 20,000 units or fewer per year.
But today, after prices have gone through the roof, new family home construction still sits below 50,000, little more than half of what it once was.
Multifamily construction — everything from duplexes to apartment buildings — remains tightly constrained by local land-use rules, holding steady at roughly 20,000 units or fewer per year.
Twenty years of severe underbuilding have real consequences. Without enough homes to buy or rent, prices rise for everyone. The burden falls most heavily on lower-income households and young adults. Rents in the poorest Georgia neighborhoods have risen 40% or more compared to rents in upper-tier markets.
Limiting landlords does nothing to change this reality. The need for homes won’t disappear. Demand coupled with even less supply simply pushes rents higher.
If renters are locked out of single-family homes, they are forced into worse options farther from jobs, schools and family support.
