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33 May 2025 May 2025 » C O V E R S T O R Y things like that in the neighborhoods and communities where their homes are located. But there are some out there who are not part of NRHC or organiza- tions like NRHC, and it's hard to police and monitor. When we have an opportunity, whether we're talking with the media or policymakers, to say, "The housing market needs help, and we want to be a part of that solution." Let's get past some of these narratives. Institutions are not buying every home in every neighbor- hood across the country. They're not competing with homebuyers, they're not hurting homeownership. What they are doing is providing quality, well-located, affordably priced housing where people want to live. Q: How have rising interest rates and tighter credit conditions impacted the business models of NRHC members? Howard: Our members are not im- mune to what's happening in the broad- er economy. When it's more expensive for you or me to purchase a home because mortgage rates are close to 7%, it's also more expensive for institutions to purchase homes. When the cost of capital is higher, you see less activity. Over the past couple of years, you've seen a fairly dramatic decrease in the number of homes that our members are purchasing and that the larger compa- nies in the industry are purchasing. At the same time, you've seen the drop- off also in the number of homes that smaller investors are purchasing. That's directly attributable to the cost of capi- tal. It's just more expensive to purchase. At the same time, you've also seen more of a focus on the building of new homes because of how the financing dynamics work out. It can be less expensive to build homes from scratch than it is to go out and purchase a home. Q: With the ongoing evolution of build-to-rent communities, how do you see that segment complementing or disrupting traditional homeownership models? Howard: Build-to-rent is a win-win for owners of single-family rental homes, builders of single-family rental homes, and also residents who choose to live in newly constructed single-family rental home communities. As a resident, you're living in a brand-new home with all the bells and whistles that a new home offers. Everything is clean and modern and everything works. You get all the amenities, but you also get the convenience and flexibility that renting offers. You don't have to come up with a down payment. Coming up with a $50, $60, $70,000 down pay- ment is a major impediment. One of the primary reasons why there hasn't been more homebuying is that people can't come up with that down payment. Renting a single-family home is about $1,000 less on average per month than paying a mortgage on a single-family home. We know that people tend to stay in build-to-rent homes longer than they do existing single-family rental homes. Q: What legislative or regulatory developments is the NRHC most focused on right now, and how might these impact the broader real estate investment landscape? Howard: It comes down to supply. We work closely with members of Congress and the administration on ways that we can unlock more investment geared to- ward increasing the housing supply. For example, one of the areas we're involved with is this idea of opening federal lands to housing development, which we think is something that will work very well in some locations. We also do a lot of work on low-income housing and tax credit issues, encouraging builders to develop properties in certain locations that have been identified by local policymakers as those that where they want to see housing development. That's something that also extends to the state level. We're very involved in those states where our members are more active—places like Georgia, Texas, Tennessee, and Florida, which are places where you tend to see more in-migration. People talk about institutional investors being in Charlotte, Nashville, and Atlanta, and places like that, and my response to that is, well, that's where people are moving. We know there's a direct correlation between in-migration and population growth and the demand for rental housing, for both multifamily and single-family. Because of that, we do a lot of work in [places like] Geor- gia at the state, county, and municipal levels on various issues related to rental housing. Q: How are investors being impacted by spiking property insurance rates, especially in places heavily impacted by climate-related natural disasters such as Florida and California? Howard: That's a really important question. When you look at markets like Florida, which happens to be a very important market for us and our members, property insurance has become a real problem. Also, now we're dealing with things like tariffs and a lack of immigration. I don't say this as a political thing, but when you cut off the flow of people coming into this country who traditionally have gravitated toward fields like construction and home-build- ing, that's going to have an impact. So, there could be fewer people available to build homes. Lumber and glass are more expen- sive to import, so that's going to have an impact on the cost of a new home, or an existing home when it comes to improvements and renovations. The institutional owner has a little bit of an advantage, in that if you own 5,000 homes in a market, you probably have enough scale to be able to obtain goods and services at a lower price than somebody who might own one or two homes.