Short-Term Rentals Find an Ally in Build-For-Rent Developers
Photo Caption: A short-term rental building by Norhart in Minnesota. Source: Norhart
Skift Take
Built-for-rent projects get a lot of hype, and sure, they suit the socio-economic environment of a tight housing market and a renter-friendly one. But worries about growing inequalities and elusive home ownership persist.
A housing shortage, rising home prices and prohibitive interest rates are putting a spanner, or a wrench, in the housing market. But, as a result, the ease of renting over home-ownership is making developers of build-to-rent projects an ally to the short-term rental industry.
What’s in it for these developers? A stable revenue stream via rentals and a possible chance to get regulators off their backs.
“There is a lot of interest among investors for real estate meant for short-term rentals,” said Dustin Abney, chief executive officer at Portoro, a property management company for premium vacation rentals. “And when they look to invest, they want purpose-built homes. There are cases where communities in South florida have been re-zoned to have short-term rental protections.”
He also pointed to another example where in La Quinta, California the city council approved for a community called Polo Villas to be zoned as short-term vacation rentals.
Abney, whose firm bought properties in build-to-rent communities, called this a win-win-win situation for renters, real estate investors as well as developers — renters have more inventory to access, developers build more such homes backed by investors who believe in this business model.
Short SupplyThere were fewer new homes built in the 10 years ending in 2018 than in any decade since the 1960s. By 2019, a good estimate of the shortage of housing units for sale or rent was 3.8 million in the U.S., a recent Fannie Mae study found. The pandemic made things only worse: construc
