Two indicators for lowering the rent

**SPEAKER_1** (0:00)
This message comes from Edward Jones, where they believe rich is about taking care of what gives your life meaning. That's why your financial advisor personalizes your plan to help you preserve your progress and create something that lasts. Let's find your rich. Edward Jones, member SIPC.

**SPEAKER_2** (0:20)
This is Planet Money from NPR.

**Darian Woods** (0:25)
A few years ago, Amanda Cantrell was looking for a new house to live with her boyfriend and a friend. She wanted to rent a home with a large garage that would take pets.

**Amanda Cantrell** (0:34)
I have a rescue dog. His name is Digby.

**Wailin Wong** (0:36)
Amanda was searching in one suburb in Murfreesboro, Tennessee and she noticed a lot of the houses were owned or managed by big corporations.

**Amanda Cantrell** (0:45)
It seems that those companies own all of those houses in that suburb but I didn't see one private landlord when I was looking.

**Darian Woods** (0:52)
This made Amanda a little concerned for when she becomes a buyer.

**Amanda Cantrell** (0:56)
We would like to buy a home in the future and the fact that corporate investors can take all of them feels unfair.

**Wailin Wong** (1:03)
This feeling of unfairness crosses the political spectrum. The 21st century Road to Housing Act is a bill aimed at improving housing affordability. It was passed in a bipartisan sweep and this bill restricts large institutional investors from owning too many single-family houses.

**Darian Woods** (1:20)
There are pockets in the country where institutional investors account for a higher share of homeowners. But across the country, it's tiny, less than 1 percent. So we wanted to know, could banning institutional home investors improve housing affordability?
Hello and welcome to Planet Money. I'm Darian Woods.

**Wailin Wong** (1:39)
And I'm Wailin Wong.

**Darian Woods** (1:40)
Today on the show, two indicators about lowering the rent. We take a look at the power players and regulations that help and hurt housing affordability.
We look at the absolute cheapest of accommodation. And we ask how a particular type of ultra-affordable housing went from widespread in American cities to nearly vanished. But first, we ask, are corporate landlords really the villains of the housing market?

**SPEAKER_1** (2:12)
This message comes from Schwab. With the new Schwab Teen Investor account, teens can gain hands-on investing experience. It's co-owned by you and your teen, so you can monitor the account while your teen learns how to invest and manage money. Learn more at schwab.com.
This message comes from LinkedIn Ads. Ever invest in something that seemed incredible at first but didn't live up to the hype? For marketers, that's impressions. When ads don't create revenue, that's a tough conversation with the CFO. Instead, invest in results your CFO will love. LinkedIn Ads generates the highest ROAS of all major ad networks. So advertise on LinkedIn. Spend $250 and get a $250 credit. Just go to linkedin.com/nprpod.
Terms and conditions apply.

**SPEAKER_2** (3:02)
Every episode of It's Been a Minute, NPR's What's Happening in Culture podcast starts by asking three questions. Who? How? Why now? If the culture is asking it, we're talking about it.
At NPR, we stand for your right to be curious and indulge your cultural curiosity. Follow It's Been a Minute wherever you get your podcasts, and we'll break down the zeitgeisty topics that are filling your feed.

**Darian Woods** (3:26)
Let's start with the history.

**Wailin Wong** (3:27)
Stephen Billings is a professor of real estate at the University of Colorado Boulder. Stephen starts the story during the 2008 Great Recession, when homes all around the country were going into foreclosure.

**Stephen Billings** (3:40)
We saw a lot of investors see an opportunity to buy things really cheap.

**Darian Woods** (3:44)
These investors soon realized that having these regular rent payments coming in was actually more lucrative than selling the homes, flipping them.

**Wailin Wong** (3:52)
Finance people would take a whole lot of properties with these regular cash flows and sell it as an investment product. Some of these are called real estate investment trusts or REITs. For investors in REITs, it's a way to get skin in the real estate game without needing to do the messy work of actually being a landlord.

**Stephen Billings** (4:10)
This became a real boon for this whole industry because it led to tons of money.

**Darian Woods** (4:16)
It also led to a backlash from people like Amanda Cantrell, the renter in Tennessee. When house prices in general started to rise a lot in the early 2020s, politicians from Democratic Senator Elizabeth Warren to Republican Vice President JD Vance would blame institutional investors.

**Wailin Wong** (4:34)
Stephen says there's a grain of truth here.

**Stephen Billings** (4:37)
In general, the large presence of institutional investors will drive up housing prices a little bit.