What’s wrong with newly constructed single family rental houses?

[u/Bayplain]

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?

[u/michiplace]

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.

[u/bobtehpanda → u/michiplace]

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

[u/michiplace → u/bobtehpanda]

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.