Shift From An Ownership To A Rental Culture
Sober Look | Jul 11, 2013 02:57AM ET
Trending away from "homeownership culture" in the U.S. seems to be ongoing In spite of improvements in the housing market over the last two years. This may be old news for some, but based on the quarterly data from the U.S. Census Bureau, rental vacancies are at around a decade low...
.. while homeownership rate is at its lowest since 1996.
Even though polls show that Americans still prefer homeownership, issues such as large down-payments, risk of housing price declines and mobility needs are driving more people into rentals. Of course this doesn't mean less demand for housing - just relatively fewer owner-occupied units. Some are suggesting that renting is a cultural phenomenon that doesn't just apply to housing. A recent article in an influential tech blog talked about the 4 Rs of changing cultural attitudes: "Recycle, Reuse, Reduce and Rent".
Ulitzer: Think about the phenomenon of the Zip Car and other such companies that allow you to pick up and drop off a car at convenient locations. Use and pay for the car when you need it, instead of paying for a car – and parking space – when you are not using it. Similarly, in big cities around the world, there is the developing phenomenon of renting bicycles to ride from place to place. Ride a bike when and where you want and never have to buy one if you live in one of these cities.
Think about airbnb.com, the web site that allows people to rent out their couches, beds and homes to others, generating revenue. Hundreds of thousands of people have used airbnb.com on both sides of the economic equation, either to generate revenue or to to pay a price lower than a standard hotel room charge.
Think about all the streaming video and audio sites. They are basically renting content for consumption, not selling content to be owned. They are also allowing one to experience content before buying, which will greatly cut down on the desire or impulse to own. Much of media is – and will – move to subscription models. Subscription is really the renting of content on a monthly basis. So in many major purchase categories, we are becoming less about owning and more about renting.
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It will be interesting to see whether rising rents and supposed improvements in the labor markets reverse this trend over the next couple of quarters - or if this shift in housing persists. Stay tuned.
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