Planet Money

Two indicators for lowering the rent

19 min

This episode of Planet Money examines two indicators that could lower rent: the role of institutional investors in housing markets and the potential revival of single-room occupancy (SRO) housing. It finds that while corporate landlords are often blamed for high prices, they represent less than 1% of home purchases nationally and may actually reduce rental costs by increasing supply. The podcast also explores how the elimination of SROs, once a common form of ultra-affordable housing, contributed to homelessness, and argues that bringing them back could help address affordability.

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✨ Key Takeaways

1

Institutional investors own less than 1% of single-family homes nationally, and research shows they have a minimal impact on housing prices; instead, they often reduce rental costs by adding supply and renovating distressed properties.
2

Single-room occupancy (SRO) housing, which once accounted for over 10% of New York City's rental stock, was largely eliminated due to urban renewal policies; if it had grown at the same pace as other housing, there would be 2.5 million more rooms today.
3

Laws restricting corporate landlords, like the 21st Century Road to Housing Act, could backfire by discouraging 'build-to-rent' projects that increase housing supply for families who can't afford homeownership.
4

Despite concerns about crime, corporate-owned rentals can help low-income families access better neighborhoods and schools, with research showing significant long-term benefits for children.
5

SROs offer extremely cheap housing—as low as $100 per month in today's dollars—but their drawbacks, like shared bathrooms and risk of disease, make them challenging for aging residents.

💬 Notable Quotes

"It seems that those companies own all of those houses in that suburb, but I didn't see one private landlord when I was looking. — Amanda Cantrell, renter in Tennessee"
"I would love to have an apartment with a kitchen. You have to share a bathroom? Yes. Oh, that's... — Vera Hill, SRO resident"
"If SRO construction had grown at the same pace as other housing in the U.S. and those million SROs had not been eliminated, there would be 2.5 million more rooms today. — Rebecca Baird-Remba, housing reporter"