Would-be homeowners across the Sun Belt increasingly find themselves in competition with deep-pocketed private equity firms. Can a new housing law level the playing field?

Guests

Carol Camp Yeakey,  Marshall S. Snow Professor of Arts and Sciences and professor in the School of Public Health at Washington University in St. Louis.

Bianca Motley Broom, mayor of College Park, Georgia. A suburb in the Atlanta metro area.

Adrianne Todman, CEO of the National Rental Home Council.

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Transcript of Full Broadcast

The version of our broadcast available at the top of this page and via podcast apps is a condensed version of the full show. You can listen to the full, unedited broadcast here:

Part I

MEGHNA CHAKRABARTI: In the mid 2000s, Kevin Jarrett thought he had found the American dream. He was a real estate agent in Cape Coral, Florida, and he bought a waterfront house there for himself for nearly $750,000. In a 2010 interview with PBS’s NewsHour, Kevin remembered the unique feeling of satisfaction and security that comes with owning your own home.

KEVIN JARRETT: I walked into the home, stood right here, put my hands on the counter and looked out here and I said, “This is it. This is where I want to be.”

CHAKRABARTI: That satisfaction and security were almost immediately wiped away. In 2007, the housing market began its collapse, followed by the 2008 financial crisis. The value of Kevin’s home plummeted by more than 50%.

Everything started crashing, and I didn’t have the cash to pay it off like I expected to. So I started paying the minimum and then the below minimum, which just kept putting, adding on to the back end of the house. I tried to keep everything going as long as I could, waiting for something to change, because everybody said that this market crash was gonna last six months.

Obviously not.

CHAKRABARTI: So Kevin’s debt kept growing. Eventually, the bank moved to foreclose.

During that process, I also lost my family. I went through a divorce. My wife and my daughter now live up north. I have literally lost everything.

CHAKRABARTI: And obviously, Kevin is far from alone. By early 2012, more than three million Americans had lost their homes to foreclosure.

Mortgage-backed securities tied to those homes were suddenly worth nothing, and they took down all the exotic financial products that banks and investment firms had created to ride the wave of greed and speculation that helped fuel the original housing crisis. Given how interconnected the financial system is, huge companies had massive exposure to these toxic assets.

That’s basically what gave way to 2007, 2008, and 2009, because the bottom fell out of those companies and threatened to take the U.S. economy with it. Lehman Brothers, then the nation’s fourth-largest investment bank, filed for bankruptcy. More terrifying, Fannie Mae and Freddie Mac, which together owned or backed half of the U.S. housing market, were also on the verge of collapse.

So in a matter of days, hours really, the federal government stepped in with hundreds of billions of dollars to bail out the banks and take the failed mortgages off their books. So this history is important because many of you will remember that you, that Americans, still had to weather the Great Recession of 2009 and beyond.

They didn’t get a bailout, and millions, as we said, lost their homes. But the federal government wasn’t going to hold on to those mortgages forever. By 2012, President Barack Obama talked about finding a way to get the foreclosed houses occupied again.

BARACK OBAMA: We’re working to turn more foreclosed homes into rental housing. Because as we know, and a lot of families know, that empty house or for sale sign down the block can bring down the price of homes across the neighborhood.

CHAKRABARTI: However, the Obama administration did not sell those homes back to individual Americans. You clearly heard Obama say there that he wanted to turn the foreclosures into, quote, “rental housing.” So the administration essentially had decided to divest of the homes by selling them in bulk to investors. In 2012, the Federal Housing Finance Agency, which oversaw Fannie Mae and Freddie Mac, began pooling homes into large groups and auctioning them off.

The first auctions were in places hardest hit by the housing crash, like Atlanta, Phoenix, Las Vegas, Los Angeles, Chicago, and parts of Florida. Remember, Florida is where Kevin Jarrett lived. One investor in September of 2012 bought 700 repossessed Florida homes for $78 million, or about $110,000 each, an absolute fire sale.

NPR visited Doug Brien, who was buying foreclosed houses in California and Arizona.

DOUG BRIEN: We purchased almost 1,300 homes. We actually bought 137 homes last month.

CHAKRABARTI: For generations, the single-family rental business had been dominated by local landlords who owned a handful of properties. Brien believed that companies like his could do it on a much larger scale, and eventually, that investment model expanded to other cities.

There are no brands. This is really an unprecedented opportunity for us to come into a new space and be the one to set the bar in terms of how this industry is going to be run.

CHAKRABARTI: The auctions were an act of expediency designed to help the government quickly unload tens of thousands of homes. But since the Obama administration never opened up these auctions to potential owner-occupiers and mandated that the homes be turned into rentals, it also marked the beginning of a structural change in the U.S. housing market. Because investment firms and corporations and private equity firms had now become landlords.

Over the next decade, large investors assembled portfolios of thousands of houses, in some cases tens of thousands. By 2022, large investors controlled 18% of single-family rental homes in Charlotte, North Carolina, 21% in Jacksonville, Florida, and 25% of Atlanta. And as those companies grew, critics began to argue that they were no longer just buying distressed assets.

They were directly competing with families trying to buy homes of their own.

RAPHAEL WARNOCK: If you’re a single mom, if you’re the married father of two trying to buy a home owning a small barbershop, you cannot compete with Wall Street.

CHAKRABARTI: So that’s why we went over this history, because here we are now.  You just heard Georgia Senator Raphael Warnock speaking earlier this year and talking about the 21st Century Road to Housing Act.

Now, that act passed Congress with strong bipartisan support. President Trump refused to sign it, but the act still became federal law in the middle of just last month, and it’s been called the most significant housing bill in a generation. It’s a big, complicated bill, but today we’re going to focus on one part of it, new guardrails around private equity and corporate ownership in the housing market.

WARNOCK: We need to continue to build homes in Georgia, all across the country. We are 5 million units short in housing in our nation, and that’s what’s driving up the price. There’s just not enough stock. And so what I want to do is to stop the spread of corporations buying homes. So if you’re already in a home that’s owned by one of these corporations, this does not force the corporation to sell that home.

But what we’re trying to do is stop the spread.

CHAKRABARTI: But truthfully, corporate ownership of single-family rentals across this country really varies based on where you live. So how much can we blame the nation’s housing affordability crisis on Wall Street or private equity? Because when you look nationwide, large investors still own barely 1% of homes.

Now, of course, in places like Atlanta, as we said, that percentage is much, much higher. But will this bill even make a difference in the housing-crunched locations of this country, like Atlanta, Georgia? So that’s what we’re gonna look at today, and we’re gonna start with Carol Camp Yeakey. She’s the Marshall S. Snow Professor of Arts and Sciences and a professor of public health at Washington University in St. Louis, and also co-author of the forthcoming book, When Wall Street Is Your Landlord. Professor Camp Yeakey, welcome to On Point.

CAROL CAMP YEAKEY: Thank you for having me. … Okay. So I want to actually start with where we are right now in terms of large-scale corporate ownership of single-family rental homes across the United States. That 1% number that I quoted actually makes it sound like they are a diminishingly small part of the rental housing picture in the United States.

Would you say that?

CAMP YEAKEY: Yes, but they aren’t. It depends upon which region of the country you’re talking about. Because while we like to concentrate on one region, say, the Sun Belt, as if that is the region where they predominate, I’ve had colleagues across the country who are talking about the same problem in Oakland, California.

Throughout the Midwest, as far as Boston, you have the same issue of single family rentals and billionaires who have entered into the housing market.

CHAKRABARTI: Okay. Throughout the Midwest, tell me more about that because that’s not an area that I thought very often when it comes to this consolidated ownership of rental housing.

But you must, because remember, one of the main issues and areas that the investors look for are blocks of distressed properties that have been foreclosed upon, and largely, albeit not exclusively, in neighborhoods of color. So you can look at Kansas, you can look at St. Louis, Missouri, you could look at Cincinnati; Cleveland, Ohio.

You can look in the metropolitan area of Philadelphia. Same thing for Boston. This is not to exclude the Sun Belt region, but the issue is national. It’s not regional.

CHAKRABARTI: Okay. Point taken, and thank you for clarifying that. We are going to focus a little bit on the Sun Belt today and we’ll hear from voices representing that area in just a minute here.

But Professor Camp Yeakey, the reason why I wanted to go over that 2007, ’08, and ’09 history in detail is because other folks have said this, and I’d like you to elaborate a little bit. How much of a change in terms of norms of ownership in single family rentals did happen in that 2012 period when the Obama administration decided to do these large auctions of distressed assets to investors?

CAMP YEAKEY: It’s important to look at the financial aspects of it, but you have to look at the fact of what homes represent for Americans. They are the American dream. That is the place where you build wealth and psychic income. But houses are more than just shelter. Housing is wealth, and housing is health as well.

So it wasn’t just so much of a financial disaster that has occurred, but it’s a physiological and emotional one as well. But you really have to go back to earlier than the Obama administration because of the predatory loans and the downturn in the economy that impacted people financially so that they couldn’t pull themselves up because they lost jobs, foreclosures, banks had lost the bottom. And the government came in and supported them. I’m not suggesting that they shouldn’t have. However, it didn’t trickle down to mom and pop or Main Street or low-income workers.

Part II

CHAKRABARTI: I definitely heard you when you were talking about before the break of all the factors that fell into place even before 2008, right? Like the issuing of all those subprime mortgages, the downturn in the economy, and the fact that really dragged down millions of individual American families.

That point is well, well taken. But I do want to ask you to help us understand a little bit more about why the Obama administration decided, in terms of these auctions, to open them to institutional investors in 2012. And I think it’s important to understand this because the federal government was not and should not be a large-scale housing owner for a long period of time.

They had to get these assets off the federal books. And perhaps was this a moment where institutional investors were actually the best positioned to help quickly make that transition and put those houses back on the rental market and off of Freddie Mac and Fannie Mae’s shoulders?

CAMP YEAKEY: In many ways, yes. They were the only entities that had the sustenance and the financial wherewithal. And remember, corporate investors are not single individuals. They’re groups of individuals, from LPs, LLCs, to REITs, R-E-I-T-S. So they’re groups of individuals who have pooled monies to buy bulk property.

And remember, banks don’t really make money off foreclosed properties. They make money off of mortgages for individuals who can satisfy their regulations and their mandates for getting a mortgage, persons who have very secure jobs. And so one of the things we’re forgetting is that not only were the banks in distressed with this overage of bulk of foreclosed homes, but we forget that the unemployment rate rose. It doubled. So the individuals who were formerly in foreclosed homes, they had no jobs, so how could they purchase homes in which they were being put out of because they didn’t have money to pay the mortgage? The only entities that had the money were the consolidation of the investor class, and in so doing, we created a monster.

CHAKRABARTI: Yeah. I very much remember those times, professor, and I remember the impassioned argument from individual homeowners and advocates for single family home ownership that the administration was able to cough up $900 billion to bail out the banks, why couldn’t they exercise the same amount of imagination in order to help homeowners move back into their own homes?

But at the risk of over-litigating or re-litigating all of that, I actually want to move into the present now and talk about how much the corporate ownership or investor ownership of single-family rentals has continued to grow. A little later in the show, we are going to hear from an industry group that represents large scale owners.

That’ll be a little later in the show. But now I want to turn to Bianca Motley Broom. She is mayor of College Park, Georgia. It’s a suburb of the Atlanta Metro area, and Mayor Motley Broom is the one who joins us from On Point station WABE in Atlanta. Mayor Bianca Motley Broom, welcome to On Point.

BIANCA MOTLEY BROOM: Thank you for having me.

CHAKRABARTI: So describe a little bit what the rental housing market is like in College Park.

MOTLEY BROOM: Our rental market looks a lot like metro Atlanta in general, in that more than one in four of our single-family rentals are institutional investor owned. And that has been a real challenge for people who are trying to get their foot in the market for that starter home.

Our police officers, our teachers, the folks who are doing the work in our communities are finding that they have to move further and further out. We have a lot of trouble having folks who work for our city actually live in our city, because they can’t compete with folks who are coming with all cash offers.

It’s been a very challenging situation, because in College Park, we have a percentage of rentals, or rental occupied units, that’s the flip of the state. It’s about 75 to 80% of our residents who are renters. We want to change that dynamic in College Park, but it makes it very difficult when folks are competing with institutional investors.

CHAKRABARTI: Okay, let me hit pause there. So in College Park, you said the vast majority, almost 80% of people who live there are renting. And of that 80%, one in four homes are owned by institutional investors?

MOTLEY BROOM: That’s a metro Atlanta statistic. But it certainly is, it is something that we see daily in College Park.

Institutional investors in metro Atlanta have specifically targeted, as the professor was saying, communities of color. College Park is majority minority, and in particular, south of I-20, some very historic neighborhoods that have great housing stock, but our residents may not individually understand what happens when someone’s presenting them with an all-cash offer.

I get text messages weekly about folks who want to come and buy my property. But I understand that means something bigger for our community as a whole, because we lose those opportunities for people to have that start at generational wealth. I would not be talking to you if I did not own my own home.

CHAKRABARTI: Yeah. So let’s talk about that for a second, and Professor Camp Yeakey, let me turn back to you. Because when we broadly talk about how home ownership has been the historic means of creating wealth in the United States, I think it’s important to emphasize what the mayor just did, that the real beneficiaries of that wealth are the next generation, right?

The children and grandchildren of the first-time homeowners. Because the presumption was that someone would buy a buy a home, live in it, be able to eventually pay off the mortgage, and then upon their passing, that is the wealth that gets passed to the next generation. And I think right now there are millions of people who could only imagine what it would be like to suddenly have the relief of high housing prices and high rent high rental costs just completely taken off of their shoulders because of the fact that they had inherited a home from their parents or grandparents, and that allows them to use their funds for other things to increase the quality of life for their family.

That’s a fair description of why housing is so central to wealth building in this country, Professor Camp Yeakey, isn’t it?

CAMP YEAKEY: You’re absolutely correct, and the mayor is absolutely point on. And remember now, this has consequences because what we presently have now is a renter nation.

And we clearly are delineating between the haves and have-nots. Those who have wealth can pass it on. Those who do not have wealth and have no opportunity to build it are similarly passing on social immobility. Which transfers through generations.

CHAKRABARTI: So let’s talk more specifically about what is exactly in the 21st Century Road to Housing Act that’s trying to deal with this, the high percentage of corporate ownership in the rental market.

I think the first one that’s grabbed a lot of people’s attention is an investor cap now, that the new law prohibits corporate entities from owning more than 350 single family properties. Large scale owners who have more than that already are being grandfathered in.

But going forward, that cap, I believe, is going to be in place, Professor Camp Yeakey. Is that correct?

CAMP YEAKEY: We hope so.

CHAKRABARTI: Ah, okay.

CAMP YEAKEY: And the problem is, those who have, have. And we can’t do anything about the generations who presently have been locked out. And I’m not sure how much, given how amendments occur, how much caps will matter.

And an even broader point is that single family rental market and the investor class are a symptom of the broader problem of housing affordability. They are not the cause of housing affordability. They simply took advantage of the market and the profitability in the market. Remember, the whole adage used to be if you own a home, you buy low and you sell high.

For the investor class, you buy low and you rent high. Because there is no cap on rents, and rents are escalating in comparison to the low-wage rates, which have not kept up with the cost of housing, and have not kept up with the cost of rentals at all. We’ve looked at the rising rents across the country, and they are nowhere in comparison to the low-wage rates, which have remained not stable, but stagnant.

CHAKRABARTI: Okay. So Mayor Motley Broom, going back to the housing situation in College Park, Georgia, would this new cap help on corporate ownership? Would it help change the status quo in College Park at all? I’m not sure I’m hearing that it would.

MOTLEY BROOM: I think it’s better than what we have right now.

And I really am grateful for Senator Warnock’s advocacy in this, because he has been on the front lines of it. But the ability to at least compete for our families in College Park and across Metro Atlanta, look, it is hard enough to get something through Congress of any shape or form. The fact that this was bipartisan, there had to be compromises made.

And I get that there was probably, I know that other iterations of the bill before it was passed had stricter provisions in it. At the same time, starting in January, institutional investors can only own 350 houses. That is something that’s better than where we are right now. And we have to take those incremental gains, because to the professor’s point, the rental market is very different when you are renting from an institutional investor versus a mom and pop.

I own two homes in College Park, the first one that I bought when I moved there in 2008, and then my husband and I moved about five years ago a half a mile away. We rent out the second house and the first house. But we’re not trying to evict the people that we know in that house. So if they’re a couple of days late on their rent, we work with them.

We don’t charge above market rent for that property, because we have an interest in stabilizing the community because we live in it. We’re invested in it, and that’s not always the case when you’re dealing with some of these larger institutional investors.

CHAKRABARTI: I understand that you were served as a magistrate court judge for a couple of years and saw eviction cases.

MOTLEY BROOM: Absolutely, yes. They’re devastating. They’re absolutely devastating. Because when that happens, it’s essentially a scarlet letter on your credit, and it starts a cycle of sort of downgrading in housing attainability and affordability, that it’s very difficult for individuals to get out of.

And the laws in Georgia are very strict. We had a 3:00 docket where if your case was there, you just stood up, and we told you that your defense was not legally sufficient, and you had seven days to move out.

CHAKRABARTI: Wow.

MOTLEY BROOM: And for families that are right on the edge, this can be the thing that gets them in a hole that they never get out of.

And a cycle of efficiency apartments or extended stays, living in cars, living, piling up with friends and family. It’s a really tough cycle to get out of.

CHAKRABARTI: Let me ask you something, Mayor Motley Broom … I definitely hear you when you’re talk, when you talk about sort of the different relationship that renters have with corporate landlords versus local mom and, mom-and-pops.

But as Professor Campy Yeakey was talking about earlier, this is all within the larger pressing issue of housing affordability, right? So I’m wondering if you think that limiting corporate ownership is actually going to do anything meaningful about the larger scale affordability issues. Because it doesn’t necessarily change the picture in terms of, are there enough new housing starts?

Is there enough affordable housing being built so that the 80% who are renting in College Park can move into ownership if they want?

MOTLEY BROOM: I think some of the broader provisions of the 21st Century ROAD to Housing Act address those concerns, and that’s why we have to look at the bill as a whole.

The flexibility that community development block grants get to actually help with additional housing, the support for fewer regulations for infill housing when you’re using federal funds, those types of things are going to help us on the local level to increase housing stock at a faster rate. Because a lot of developers don’t want to come in and build one house.

Or one house on one block and then one three over, and one five blocks from there. But if we can streamline those processes and I really am very excited about this legislation because of the fact that it provides us carrots, not sticks. It’s a great way for us to be working with the federal government to achieve some of those goals to increase housing supply.

CHAKRABARTI: Bianca Motley Broom is the mayor of College Park, Georgia. It’s an Atlanta suburb, and Mayor Motley Broom joined us today from WABE in Atlanta. Thank you so much for joining us.

MOTLEY BROOM: Thank you for having me.

CHAKRABARTI: Professor Camp Yeakey, we have a minute before our next break here, and I was wondering if I could quickly turn that same question to you in terms of how does putting some guardrails around corporate or private equity ownership of rental housing, is there a relationship with that and tackling the bigger housing affordability drivers in this country?

CAMP YEAKEY: Absolutely. It’s a step in the right direction, if we can find out who the owners of the properties are. Because these corporate entities have been so sophisticated that they have a multitude of shell companies to hide behind. So unless you’re going into county assessor records, you really don’t know who owns what property.

That’s number one.

CHAKRABARTI: You may not even be able to find that then. I did a lot of reporting on housing in Boston, trying to chase down corporate ownership, and ultimately it would end with some company whose job was to be the shell, and that was the end of the paper trail.

CAMP YEAKEY: Precisely. So as I’m glad that we have the bill. It’s a step in the right direction, but there’s another critical issue that we haven’t dealt with, and that is the fact that one of the issues impacting housing affordability is the fact that we have so many local restrictive housing covenants that prevent the building.

Part III

CHAKRABARTI: I’d like to bring in Adrianne Todman into the conversation. Adrianne is CEO of the National Rental Home Council. It’s a nonpartisan group that represents professional owner-operators, builders, and large-scale and managed rental housing platforms.

Adrianne, welcome to On Point.

ADRIANNE TODMAN: Thank you so much for having me.

CHAKRABARTI: So tell me a little bit about what you and your organization, and obviously the owners that you represent, what role do you see large-scale owners playing in the larger single-family rental market in this country?

TODMAN: Certainly. Thank you for the question.

I would first like to just acknowledge the work and accomplishments of both of your prior guests, Dr. Yeakey and Mayor Motley Broom. Their voices are important to this larger debate as we talk about how to help families move forward. Now, to your question, so the National Rental Home Council represents housing providers housing investors.

We represent folks who are providing quality single-family rentals to families and individuals who prefer to rent a home versus renting what we traditionally think as an apartment. And there is value to that, not just to the entire health of the housing ecosystem, because 30% of the families in this country are renters, but also to the people who choose to or need to rent and prefer to rent a home rather than an apartment.

So the work that NRHC’s members provide brings value not just to housing communities who need quality rental providers who are helping to renovate distressed units or helping to bring online homes that had been offline, but most importantly to the people who are looking to rent at that point in their life.

So I guess the argument that comes with any sort of consolidation of ownership in any sector, not just housing, is that it provides for economies of scale, right? That if you own a lot of things, you can actually ideally make improvements at more affordable, you could make improvements, say, in those properties more economically.

Is that one of the things that that the NRHC sees in the single-family rental market?

TODMAN: Certainly. And that has been echoed by work done by the Urban Institute, where many of all of NRHC’s members are professional housing providers. I was happy to hear that Mayor Motley Broom herself is a landlord and tends to take care of the issues that are happening inside of her rental units.

I will say through my experience and others, there are many other families who may not have such a positive experience with folks who are smaller scale housing providers. What my members bring is the ability to move swiftly. They’ve introduced technology in a way to create efficiencies to how to process their work orders and how to use economies of scale for a supply.

So they have created a more professional environment to the single-family rental class of home.

CHAKRABARTI: Yeah. And I heard you say a little bit earlier that the National Rental Home Council represents owners, including individuals and families. But truthfully, I’m looking at a report here from 2022 that says, and correct me if I’m wrong, but at least back in 2022, there were five companies, there were five of the many dozens of companies that you represent, but specifically these five companies owned 300,000 single family homes. So when we’re talking about some of the groups that you represent, these are truly, these aren’t necessarily families and individuals.

These are large scale entities, whether it’s private equity or REITs, as Professor Camp Yeakey said earlier. We’re talking about truly large scale ownership.

TODMAN: Yeah, no. Yeah, to be clear, our members are either can own as few as 100 units or own as many as 90,000 units. So we do represent a full range of the diverse types of ownership of single family rentals.

That being said, I would, just like to remind your audience and put that number into perspective. So there are 150 million homes across the United States. Just roughly 16 million of those homes are single family rentals. And 400,000 of those homes are owned by my members or folks who are not my members.

So we’re talking about 3% of the single-family rentals across the entirety of the country, and less than 1% of the single-family homes across the country. So yes, while we do have members that represent large slices of the industry, as an industry, we are very small in terms of the entire rental homes that are owned, and also just the single-family homes across the country.

And I would add one more point. When you look at who owns homes across the country, the preponderance of single-family homes are still owned by owner occupants. The next level are owned by what I’ll call the smaller mom and pops. So these are individuals like the mayor, individuals like my uncle or perhaps someone in your family that owns less than 10 units 10 homes across the country.

The preponderance of single family rental landlords remain the mom and pop owners. And then the more professional housing providers are some of my members. So it’s very small percentage of ownership. So that’s why when we look at what is the impact of their ownership not just across the country, but even sometimes at the county level, they’re not moving the markets.

They’re not necessarily driving the rents because they don’t own enough scale to do that.

CHAKRABARTI: Yeah. Point well taken. And I think when we normalize things on a national level, the things average out to a clearer picture in terms of the smaller impact nationally that these large-scale investors have.

But as you heard earlier, and I know that you’re well aware of Adrianne, in certain markets, that percentage is not 1 to 3%. We just heard that it can be as high as 18, 21%, 25% of large-scale ownership of single-family rentals. But I do want to just take a quick second to ask you about the reason why we’re here having this conversation today.

And that is the new legislation, the new law itself, because I want to say in a little bit more detail what this new cap has put into place or may put into place. So starting very soon, there will be a cap of ownership of 350 units of single-family rental homes. And again, the large owners that already exist will be grandfathered in.

But what might happen if you go over that 350 unit ownership number is civil penalties of greater than a million dollars or three times a home’s purchase price. Now, there are exemptions, which I find interesting. They cover properties that were built or rehabilitated for rent, homes acquired through foreclosure, very interesting, age-restricted rental communities, et cetera.

But the point is that the federal government has looked at groups like the folks you represent, Adrianne, and said, “This problem,” according to the government, “is significant enough that we’re going to do something, I don’t know, almost unprecedented in the housing market. We are going to say you cannot own more than a certain number of homes.”

How do your members respond to that?

TODMAN: I’ve been in the housing business for more years than I care to admit, and what is happening in this country right now is a bonafide housing crisis that has many different intricacies of what’s gotten us here.

There is, of course, some of the things that your previous guests have mentioned in terms of restrictions on being able to build homes. There’s certainly mortgage interest rates that are too high for people who wanna enter. There’s high insurance rates that make it very difficult for people to be a homeowner.

Wages have not kept up with the growth of rent across the country. So there’s a number of different things that point to why Americans are feeling housing stress or anxiety the way that they do. And so it’s important to acknowledge that. But it’s very difficult to point to anything as easy as it is to point to the boogeyman of Wall Street, right?

As an housing expert and many other housing experts out there would agree, the number one issue that we face as a country is that we simply need to build more housing. And the impact of the Great Recession was not just the shock it took to homeownership, but it was also depressed the way in which we were able to build starter homes and new multifamily in a way that we had done in years past.

But that’s difficult and it takes a lot of words to explain that. It is sometimes hard to create the connection between housing supply and housing costs. What is much easier to do is to point to something or someone that clearly must be at fault. And as I mentioned before, the folks who are NRHC’s members represent a very tiny portion of housing owners across the country. But it was easy to say, “Look, this clearly will help us solve the issue.” So the federal government has spoken and clearly my members will be working in in concert with the executive branch and with the regulatory process to make sure that we are all in compliance of what the next several years look like.

CHAKRABARTI: Adrianne Todman, CEO of the National Rental Home Council, thank you very much for joining us today.

TODMAN: It’s my pleasure.

CHAKRABARTI: Professor Camp Yeakey, I appreciate your patience in listening through to that. I’m just wondering what your response is particularly to where Adrianne left off, and that is in fact you were leaning towards this a little earlier, that Wall Street, quote-unquote Wall Street’s actually just an easy place to point fingers.

But perhaps it’s just a straw man and distracting us from the larger issues or the larger drivers of high housing prices.

CAMP YEAKEY: And the larger issue of housing affordability. And I think one of the reasons why the single-family rental market has appeared to be the monstrosity that it is because of the target population and the target market, which is the lowest of the low.

Low-income families of color, distressed neighborhoods of color and communities. That’s number one. But number two is the housing conditions which they allow in their particular units, which lead to all kinds of physiological as well as mental ills, which is what we found in our national research database.

And so it’s not just home ownership, it’s just what do you do when you have persons who are captured and have no place else to go? And what kind of conditions do you allow them to live in the properties in which you own? And what are the circumstances with which they can deal with you?

What are the byproducts of late rentals? Late rental payments. What are the byproducts when you have mold in the house? Who do you contact if there is no residential manager on site.

CHAKRABARTI: Or super on site … forgive me for interrupting you, but you just said something I wanna follow up on. I think it’s really important. You talk about people who are stuck, and this led me to think of the difference in sort of the economic fundamentals of the housing market for people who seek to buy versus the rental market, right?

Because the homeownership market actually has some external brakes, let’s put it that way, right? If you don’t have enough of a down payment, you won’t be able to buy a certain house, or the bank will tell you we don’t actually think the house is worth as much as you want to offer for it, so we’re not gonna give you a mortgage, or high mortgage rates tend to, or the idea is that they might cool off housing prices.

But there aren’t similar provision, similar braking mechanisms in the rental market, right? The rental market will go up and up based solely on people’s ability and willingness to pay, and that’s different.

CAMP YEAKEY: And it’s unfair. And it’s unfair because you’re penalizing those individuals who can least afford it, and they have no place else to turn.

And I think that is what has made the headlines about single-family rentals so disastrous and punitive. And I’m not saying that it’s ill-deserved. I’m simply saying these are the conditions which exist. We found houses that no one should live in. And remember now, you have families, children, the elderly, and poor housing conditions impact us not only in terms of a place of shelter, but in terms of public health considerations.

Housing conditions have ability to compound frailty and lead to all kinds of disastrous results physiologically as well as mentally and emotionally that are ill-served by none of us. We have less than a minute left, and I know you said earlier that institutional investors took advantage of the situation as it was presented to them.

Housing affordability requires a lot more provisions, a lot more ideas to get it under control. Again, just in a couple seconds, do you think yes or no that the broader bill beyond the corporate ownership portion, does meaningful things to get a hold on housing affordability?

CAMP YEAKEY: I think it’s a step in the right direction, but it’s a step.

Because again, I think two of the underlying causes of housing affordability has to be looked at, and that is low-wage rates which cannot keep pace with the cost of mortgages and the cost of houses. And the second has to be existing housing covenants that do not allow for the positioning of multifamily housing units where people need to live close to jobs.

CHAKRABARTI: Yes. Zoning.

CAMP YEAKEY: Precisely.

This article was originally published on WBUR.org.