- Corporate owners of single-family homes face mounting criticism as their presence grows.
- They're now hiring communications strategists and scaling lobbying efforts to shift the narrative.
- Industry leaders at a recent gathering in Washington, DC, said they want to burnish their image.
Jocelyn Moore jogged up to the stage of the main ballroom at the Park Hyatt hotel in Washington, DC, on Tuesday afternoon. She was late and out of breath.
Moore, the former communications chief for the NFL, had just returned from an impromptu chat with several leaders from the Center for Popular Democracy, an advocacy group that minutes earlier had stormed the stage to interrupt a conference hosted by the National Rental Home Council, a trade group that represents large owners of single-family rental homes.
Attendees sat in stunned silence as the group unfurled a banner exclaiming "Housing for people not profit!" while shouting demands for limits on rent increases and for better living conditions at rental properties. The protesters were quickly escorted off the stage, but Moore, who now leads corporate affairs for Pretium Partners, a private-equity firm that owns more than 80,000 single-family homes across the country, didn't brush them off — she chased after them.
Moore wanted to make sure they knew they were heard, and she asked that they stick around in the hotel lobby for a more thoughtful dialogue once she was done moderating her panel, titled "Doing Right By Doing Good." The NRHC treated the protesters to lunch as they waited.
The incident and Moore's response illustrate how controversy is brewing over corporate involvement in the $4.4 trillion market for single-family rentals and how investors like Pretium are going on the offensive with their story, aiming to portray themselves as landlords improving the US housing stock and providing good homes at a reasonable cost.
While the single-family-rental industry has expanded rapidly in the COVID-19 pandemic, institutional investors still own less than 3% of the roughly 20 million single-family rentals in the country. Corporate landlords see plenty of room to run, however, and often say their market is still in its infancy.
But they're already feeling growing pains.
Over the past year, companies like Pretium, Tricon Residential, and Invitation Homes — each of which owns tens of thousands of rental houses across the US and is eagerly buying or building more — have increasingly come under scrutiny from housing activists and tenants who accuse them of predatory business practices and of unfairly crowding out average homebuyers in a fiercely competitive market.
In Minnesota, some tenants living at properties owned by HavenBrook Homes, a subsidiary of Pretium, began withholding their rent in an effort to force the company to address health and safety issues at their homes, the Minnesota Reformer reported. In other areas of the country, homeowners are trying a different tack, using homeowners associations to bar companies from buying and renting out homes in their areas.
Institutional owners of single-family homes have typically preferred to operate quietly. But as the increased scrutiny makes that more difficult, the industry is taking a different approach: The NRHC and its members are hiring communications strategists and ramping up lobbying to curb government regulation and spread the message that investors provide a vital service in the housing market.
"We're now publicly facing as an industry," John Hope Bryant, the founder and CEO of The Promise Homes Company, told attendees during Moore's panel. Bryant was also among the NRHC representatives who met with the protesters following the conference session.
Bryant's firm, said to be the largest Black-owned single-family-rental company, owned 663 homes as of January. The company says it's raising capital to grow its portfolio to more than 10,000 homes over the next two to four years.
"The world is paying attention now," Bryant continued, addressing a crowded room. "You're in the only emotional asset in real estate. It's a home."
The rise of the single-family rental lobby
Criticism of the industry often comes in waves, David Howard, the executive director of the NRHC, told Insider. But he acknowledged that such barbs have grown more frequent over the past year.
A recent series of reports by The Charlotte Observer highlighted the growing presence of corporate landlords there. A February headline from NPR warned that "first-time homebuyers are getting squeezed out by investors." And in March, a "60 Minutes" segment linked surging rents and America's housing-affordability crisis with the rise of institutional investors like Tricon, whose CEO, Gary Berman, appeared extensively throughout the episode to push back on that narrative.
Howard said the industry needs to get better at telling its own story. To that end, the NRHC is searching for a communications firm to help craft an outreach strategy, Howard said. The organization, which is based in Washington DC, is also opening a chapter in Charlotte, Howard said, which would establish a presence in a market that has seen an influx of investor interest.
The NRHC has been around only since 2014, and its growth mirrors the rise of the single-family-rental industry. When it began planning its first conference, in 2020, attendance was set to be about 200. But the organization was forced to move its 2020 and 2021 events online because of COVID-19.
This year, however, the crowd reached roughly 400 people, including many of the top names in the business. The attendance was all the more impressive given that the industry's de facto gathering of its biggest players — Information Management Network's Single Family Rental Forum — was held on the same days in sunny Miami.
The biggest companies have taken it upon themselves to set the record straight, in their view. Tricon, which owns roughly 31,000 single-family rental homes, saw the "60 Minutes" segment as the launchpad for its strategy of educating consumers, its chief operating officer, Kevin Baldridge, said during the opening session of the conference.
Baldridge said that guiding the "60 Minutes" reporter Lesley Stahl through a freshly renovated Tricon rental property was "just the beginning" of the company's efforts.
'We're not causing housing-affordability issues'
The business of owning and renting out homes has been around for ages. But in an industry dominated by mom-and-pop landlords, big companies backed by private-equity firms and pension funds are relative newcomers.
That's changing, though. In the decade-plus since the financial crisis, institutional investors have poured billions of dollars into acquiring and developing single-family homes for rent. They're betting that rents will continue to rise and that demand will remain strong, particularly amid a tight for-sale market that's short millions of homes.
Liliana Baiman, a national organizing manager for housing justice at the Center for Popular Democracy, acknowledged that institutional investors have a relatively small foothold in the industry. But she said that holding them accountable will be essential to resolving the housing crisis in the US. Over the past year, the center has been organizing thousands of renters across the country under an initiative known as Renters Rising.
Corporate landlords are "growing, and they're going to keep growing," Baiman said. "We felt like this was an opportunity to start these conversations now."
Institutional owners of single-family rentals argue they're far from the root cause of America's housing-affordability troubles, pointing instead to chronic underbuilding in the decade following the financial crisis and to zoning and regulatory hurdles that prevent enough new housing from being built.
"We're not causing housing-affordability issues," Baldridge said at the NRHC conference. "It's really a lack of supply."
Institutional owners also say they offer their residents a path to homeownership while allowing them to live in neighborhoods with good schools that might be out of their price range at the moment. It's for that reason that Howard is concerned about homeowners associations barring investors from buying homes in certain neighborhoods.
Howard said his group has worked on bills to limit that practice that lawmakers have passed in Florida, Georgia, and Tennessee over the past couple of years. He said NRHC is also monitoring a few other states, such as North Carolina, South Carolina, and Indiana.
"Basically, you have one group of people, homeowners, saying to another group of people, renters, 'You cannot live in this community,'" he said. "We think that's a real slippery slope."