How do you know when an industry is getting serious?
When it forms a trade group. And that's what the burgeoning business of big-money-backed single family rental homes did today.
A handful of the single-family rental giants that scooped up at least 130,000 homes in Southern California and elsewhere over the last two years launched the National Rental Home Council on Wednesday, a Washington, D.C.-based operation that will "educate" and "advocate" about the "professionally-managed single-family rental industry."
The coalition includes arms of Wall Street giant Blackstone Group, Santa Monica-based Colony Capital, Agoura Hills-headquartered American Homes 4 Rent, and Oakland's Starwood Waypoint Residential Trust. Combined, these firms and a few others have spent billions of dollars over the last two years buying up thousands of homes, with an aim to become giant landlords.
The group's website is full of data and stories about the upsides of renting instead of owning your house, the benefits of "professionalizing" property management and the neighborhood and economic impacts of all this home-buying.
"Our investment in local communities helps to create new jobs through renovation and property management, and drives economic growth by providing income for local businesses and tax revenues for state and local governments," said Justin Chang, chief executive of Colony American Homes, in a statement. "Our investment in local communities contributes to a vibrant and stable single-family rental market nationwide."
And while the Home Council has no stated legislative agenda, it could also provide a forum to push back against growing criticism of the big buy-to-rent sector from housing groups and homeownership advocates, who say it's crowding out first-time buyers and potentially driving up rents. Earlier this month, 78 such groups sent a letter to federal regulators asking for new safeguards to protect buyers and tenants as the single-family rental industry evolves.
"There are some eerie parallels between what’s happening now and the mortgage meltdown," said Kevin Stein, associate director of the California Reinvestment Coalition. "In both cases, the overarching similarity is a drive for higher and higher profits without regard for harmful impacts on families and communities."
A spokesman for the National Rental Home Council said the trade group was not formed in response to that criticism and has been in the works for some time.