Single-family Rentals Part 5: The Economy

Ender Economy

American political discourse often portrays rising homeownership rates as a hallmark of strong economic growth. However, evidence suggests that homeownership rates tend to decrease as nations become wealthier. This is not a coincidence.

International Homeownership

In an international context, the U.S. homeownership rate is relatively modest, ranking 33rd among 41 nations—positioned slightly below the Netherlands and just above France. Countries like Romania, Lithuania, and Croatia are at the higher end of the spectrum, whereas nations with the lowest homeownership rates include Switzerland, New Zealand, and Germany.

This trend can partly be attributed to the limited investment alternatives available in less developed economies, where land often remains a primary asset. In contrast, more advanced economies, i.e., less agrarian economies, offer a broader array of investment opportunities beyond real estate, which leads to lower homeownership rates.

Research also indicates that high homeownership rates can negatively impact the economy, steering investment away from critical sectors such as technology and innovation. Regions with excessive homeownership show lower levels of innovation, productivity, and overall economic growth.

American Homeownership

Even within the US:

cities with high levels of homeownership—in the range of 75%, like Detroit, St. Louis and Pittsburgh—had on average considerably lower levels of economic activity and much lower wages and incomes. Far too many people in economically distressed communities are trapped in homes they can’t sell, unable to move on to new centers of opportunity.


The cities and regions with the lowest levels of homeownership—in the range of 55% to 60% like L.A., N.Y., San Francisco and Boulder—had healthier economies and higher incomes. They also had more highly skilled and professional work forces, more hightech industry, and according to Gallup surveys, higher levels of happiness and wellbeing.

I agree with the author’s conclusion:

Those who plan to stay in one place, who have secure jobs, and who can afford to should still buy homes. We need only tilt the balance, reducing the current homeownership rate from our current rate of just over two-thirds to perhaps 55% or 60%, comparable to that of the most economically vibrant regions. It’s in our economic interest to help make that happen.

Additionally, homeowners’ political actions often deepen economic and political inequalities. Homeownership shapes beliefs and encourages active civic engagement, which can lead to the support of policies like restrictive zoning. These policies typically advantage homeowners, often to the detriment of those without property. This behavior perpetuates economic divides, effectively pulling up the ladder and creating a stark division between affluent homeowners and the wider community.


If you go to McDonalds, you know what the fries will taste like. When you go to Chipotle, you know what’s on the menu. People encourage sameness. Sameness is a convenience and a cost. The majority of restaurants (57%) are franchised. As a society, we trade uniqueness for predictability and affordability.

This has led to our higher standard of living. It could have been cool to have a handmade refrigerator. But as a society, we would rather have more affordable refrigerators with reusable components than fewer unique refrigerators.

Manufacturing processes scaled the industrial age, and business processes scaled the service industry. For all the slack they get, standardized services massively improve the average quality of life. It’s no different for single-family rentals. 

Housing Stock

Having a quality, reliable living situation is a necessity. We consistently need more homes built. Freddie Mac estimates that the current shortage of homes is close to 3.8 million, up substantially from an estimated 2.5 million in 2018. And our existing housing stock is aged. Fifty-two percent of owner-occupied homes and 64% of renter-occupied homes were built before 1980. Home quality and reliability are degrading. 

The rise of single-family institutions will increase the supply of rental housing, as will the development of build-to-rent communities. Single-family institutions make renting more professional, efficient, and accountable.

Single-family Institutions

Institutional landlords are skilled professionals in property management. They possess expert knowledge in tenant screening and rent collection, supported by robust systems and processes. Familiar with the pertinent regulations, they also employ specialized staff focused on property management tasks. 

Moreover, they place significant emphasis on maintaining positive relationships with tenants and vendors, often tracking this through NPS scores. This professional approach stands in contrast to the more casual management style of the typical single-family rental homeowner, who often oversees properties as a side hustle.

Unfortunately, we’re going in the wrong direction. Between 2016 and 2018, the number of owner-occupied single-family homes increased 3.5 percent to 68.6 million. In contrast, the number of renter-occupied single-family homes declined 3.6 percent to 14.7 million.


Managing a large portfolio of properties brings its own challenges and demands. For instance, overseeing 365 properties equates to handling an entire year’s worth of issues from a single property every day. If that number rises to 3,650, it’s akin to managing a decade’s worth of problems daily. Thanks to their extensive experience and refined processes, professional managers are adept at handling any situation that arises, backed by thousands of hours of practical experience.

There’s a pressing need for more construction and, equally, for professional management groups to provide consistent, high-quality service. Enders is at the forefront, empowering institutional managers to excel in delivering top-tier service.

Part 6: Exploring Extremes in Ownership