At the Atlantic, they’ve taken note of something we’ve been tracking for a while at HousingWire: namely the growth of single-family rentals, and the reversal of migration to urban centers and back towards the suburbs.
The magazine reports on how the bulk of residential construction in the first half now of 2014 has been in multifamily, and the rise of REO-to-rental.
The magazine makes the standard urbanist complaint about the “dreaded” suburbs, but it at least recognizes and quotes someone saying the obvious – eventually, all the hip urban dwellers (most anyway) will get tired of ironic mustaches, get married, and have children – and they will want something more than high-density living with mediocre public schools.
As Census Bureau data show, growth in cities is tilting ever so slightly back toward the suburbs. Yet multifamily housing, mostly situated in urban centers, is still driving the American housing market. Are developers out of step with demand?
In McKinney (Texas) and other fast-growing suburbs and exurbs, rentals are the major force driving growth—just not multifamily rentals. Abundant stock left over from the single-family housing boom whose bust fueled the Great Recession are being opened to a new generation of suburban renters by major private-equity firms such as the Blackstone Group.
This transformation of the suburbs is a new and not-altogether-welcome development. The single-family homes being bought up, rehabilitated, and then rented out again by investment units such as the Blackstone Group’s Invitation Homes—in the suburbs and exurbs outside Seattle, Los Angeles, Chicago, Dallas, and other cities—are leftovers from a housing boom characterized by cheap construction and easy credit. The conversion of unsold or foreclosed single-family homes creates fewer jobs than new construction. From an urbanist perspective, single-family home rentals come with all the drawbacks of large-plot suburban development and none of the benefits.