Overview of Two indicators for lowering the rent
This Planet Money / The Indicator episode examines two proposed paths to making housing cheaper: cracking down on corporate landlords and bringing back ultra-cheap housing types like single-room occupancy buildings (SROs). The episode argues that large institutional investors are often blamed for high rents, but the evidence suggests they are not the main driver of housing costs and may even increase supply in some cases. By contrast, the historical loss of SROs helped eliminate one of the cheapest forms of independent housing in U.S. cities, contributing to homelessness and leaving policymakers with fewer low-cost options today.
Corporate landlords and housing affordability
The core question
The episode begins with renter Amanda Cantrell, who noticed that many homes in her Tennessee suburb were owned by large corporate landlords rather than private individuals. That frustration has become politically popular across the spectrum, leading to bills that would limit institutional ownership of single-family homes.
What the research says
Housing economist Stephen Billings argues:
- Institutional investors do influence prices a little, but
- They make up less than 1% of U.S. home purchases, so they are not the main cause of rising rents or home prices.
- Bigger forces are low housing construction and low interest rates.
A more nuanced view of corporate landlords
The episode notes that large landlords can sometimes expand the rental supply by:
- Buying distressed homes and renovating them
- Using bulk purchasing and financing advantages to repair properties quickly
- Building “build-to-rent” homes, a growing segment of new construction
A key concern raised by experts is that banning or heavily restricting these investors could reduce new rental construction, making housing affordability worse rather than better.
Tradeoffs and mixed effects
The episode also acknowledges possible downsides when corporate ownership is concentrated in a neighborhood:
- Higher rates of property crime
- Slightly higher violent and drug crime in some research
But it also stresses that renting in better neighborhoods can produce major benefits for low-income families, especially children.
The case for more build-to-rent housing
Why supporters like it
Industry advocates argue that build-to-rent communities:
- Give families access to neighborhoods they could not otherwise afford
- Offer homes that may be expensive to buy upfront, but easier to access as rentals
- Add supply in a market that desperately needs more housing
Main takeaway
The episode’s bottom line is that restricting build-to-rent could backfire by discouraging new housing from being built at all.
The lost history of SROs and boarding houses
What SROs were
The second half of the episode shifts to single-room occupancy buildings (SROs)—cheap rooms with shared bathrooms, common in cities like New York, Chicago, and San Francisco.
Historically, SROs were:
- Extremely affordable
- A common stepping-stone for working-class, elderly, and vulnerable residents
- Often converted from older buildings, hotels, or warehouses
Why they disappeared
SROs declined because of:
- Urban renewal policies
- Stricter building codes
- Fire safety, sunlight, heating, and minimum-size regulations
- Pressure from neighborhood opposition and class/race-based assumptions about who should live there
By the 1970s, about a million rooms had been eliminated or converted to other uses.
How that affected homelessness
The episode highlights research showing that SRO loss contributed to rising homelessness:
- About half of men entering New York City shelters in the 1980s had previously lived in SROs
- Rebecca Baird-Remba argues that if SRO construction had kept pace with other housing, the U.S. might have 2.5 million more rooms today
Modern attempts to revive SRO-style housing
Why some advocates want them back
Supporters say SROs could again provide:
- Inexpensive housing for people getting established
- A bridge between homelessness and stable housing
- A practical option for people who do not need a full apartment
Challenges
The episode also notes real drawbacks, especially for older residents:
- Harder to age in place
- Limited privacy and space for medical equipment or caregivers
- Greater vulnerability to communicable diseases
Main takeaway
The episode’s central argument is that the housing affordability crisis is not mainly caused by corporate landlords. In fact, efforts to block institutional investors from building or managing homes may reduce supply and worsen costs.
Instead, the bigger lesson is that the U.S. once had much cheaper housing models—like SROs—that were largely eliminated. Reviving or reinventing those low-cost options may be more promising than simply blaming corporate ownership.
Notable insights
- “Just a grain of truth”: institutional investors can raise prices slightly, but they are a small part of the overall market.
- Supply matters most: low construction is a bigger driver of high housing costs than corporate ownership.
- Cheap housing was deliberately reduced: zoning and housing rules helped eliminate SROs, shrinking the supply of ultra-low-cost units.
- Housing policy has tradeoffs: regulations meant to improve quality can also make the cheapest housing impossible to build.
Key people featured
- Amanda Cantrell – Tennessee renter whose experience reflects public frustration with corporate landlords
- Stephen Billings – University of Colorado Boulder real estate professor
- Lori Goodman – Housing Finance Policy Center, Urban Institute
- Adrienne Todman – National Rental Home Council
- Vera Hill – New York resident living in an SRO-style supportive housing building
- Rebecca Baird-Remba – Journalist covering New York housing and SRO history
- Paul Freitag – Westside Federation for Senior and Supportive Housing
Bottom line for listeners
If the goal is lower rents, the episode suggests policymakers should focus less on demonizing corporate landlords and more on building more housing of all kinds, including experimental or revived low-cost formats like SROs and build-to-rent communities.