A report by the Terner Center at the University of California Berkeley, The Rise of Single-Family Rentals after the Foreclosure Crisis, examines the growing number of renters of single-family detached homes. A recent survey of single-family renters indicates their choice was influenced by their preferences for privacy, parking, home size, a yard, and private laundry. The majority of them hope to become homeowners within the next five years but face financial barriers to doing so. More than half had previously owned a home, 26.5% of whom had been through foreclosure.
Nearly 200 single-family renters from 115 metropolitan areas completed a survey about their search for housing. In-depth interviews were conducted with 19 of them. Forty-three percent of the survey’s respondents identified greater affordability, convenience, or access to better neighborhoods as the reasons for renting. For some interviewees, renting gave them greater flexibility for moving to job opportunities or dealing with other life-events like divorce, while others enjoyed lower maintenance costs associated with renting. More than half of the respondents said their choice of a single-family home was influenced by their preferences for a private laundry, privacy, adequate parking, a yard, a larger home, and space for storage. Neighborhood factors, like school quality and safety, were also influential, especially among respondents with children.
Eighty percent of the respondents hoped to become homeowners within the next five years. Nearly two-thirds of these respondents identified the investment value and wealth-building potential of homeownership as factors in their desire to be homeowners. More than half identified the desire to have more control over their living space and approximately one-third wanted to protect themselves against future rent increases or eviction. More than 64% of those wanting to own a home could not afford a down payment or closing costs and more than 50% had insufficient credit scores.
The report’s authors recommend alternative approaches to homeownership, including shared equity programs. They also recommend policies to support renters, including a renters’ tax credit and longer-term leases.
The Rise of Single-Family Rentals after the Foreclosure Crisis is available at: https://bit.ly/2Fbqbw6