Since I was a kid, I’ve always been a fan of old, classic movies. One of my favorite dialogue exchanges of all time is from The Graduate, between Dustin Hoffman’s coming-of-age character, Benjamin, and a family friend named Mr. McGuire: Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.
Benjamin: Exactly how do you mean?
Mr. McGuire: There’s a great future in plastics. Think about it. Will you think about it?
Well, I’ve got one word for you, community builders of the world: rentals. Will you think about it?
It seems evidence is building every week as to why rentals are the “plastic” of the housing market. Just last week, a new survey commissioned by the MacArthur Foundation revealed more about how American’s are viewing personal housing goals in light of the recent housing bust. Turns out, the majority of respondents are asserting that policies should be directed “to encourage rentals equally as much as home purchases.”
While the survey found that Americans still have a strong desire to become homeowners someday, the overall appeal of renting versus owning is changing. Fifty-seven percent of adults believe that “buying has become less appealing,” and by nearly the same percentage (54 percent), a majority believes that “renting has become more appealing” than it was before. Even more surprising, nearly half of all homeowners surveyed said they can picture themselves one day becoming a renter. And a whopping 61% said they believe renters can be as successful as homeowners at achieving the American Dream.
Put plainly: renting isn’t just for folks who can’t afford to buy a home anymore. Rather, it’s a housing option that is growing in its appeal for a diverse set of Americans, and this is going to have a big impact on Western communities. Take, for example, the community I live in – Garfield County, Colorado. The American Community Survey tells us that nearly half of our rental stock is occupied by households that make more than $50,000 a year – and around 500 of those units are occupied by households that make over $100,000 a year.
A growing number of households looking to rent coupled with a large amount of wealthy households renting could make for higher rental prices in years to come, making affordable options harder and harder to come by – both for working families and Millennials who are just starting careers.
Housing diversity is a key component of the economic success of our communities, and affordability continues to be a challenge, despite the fact that we are all still emerging from the recent recession. If we want our communities to be attractive to young entrepreneurs, retiring Baby Boomers, working families, wealthy families, and everyone in between – we need to not only look at our owner-occupied home construction trends, but also to rentals.
Our zoning needs to allow for smaller units, smaller lots, accessory dwelling units, and multifamily construction to allow developers the ability to meet these growing demands. Nationally, as of this last December, multifamily construction was two-thirds of the way back to the pre-recession peak while single-family construction was only a third of the way back.
Developers are seeing it: there’s a great future in rentals. Think about it. Will you think about it?