Is Flexible Renting in Your Future?
In his web-based video produced for The Atlantic titled "The Burden of Homeownership" he says that we need a "more flexible rental system." And when he means "more flexible," he means completely reimagined.
What might this pro-renter future look like?
Florida suggests that landlords and management companies should encourage easier movement intra-city and across the country. This way, if you're renting in one apartment on one side of town but get a job on the other, you could move without penalty to another unit closer to work, so long as the new place was owned by the same landlord or management company.
Here's how it might function and why home ownership isn't as likely to create wealth in the future as it has in the past...
More flexible renting might mean that a renter could lease for a year with a rental company but during that time could choose to move to any of their buildings, space permitting.
This option to live closer to work might lessen traffic gridlock as more renters spend less time commuting. It becomes even more powerful for the renter whose job relocates them to another city. Rather than wait out your lease or incur the short-term costs of two leases, you'd be free to move to a new region.
Naturally, this kind of flexibility won't been seen by everyone as good.
Why does Florida focus on this rental revision? He suggests that a more flexible system would drive and support a more mobile workforce. Since he's an expert on future economic growth, he may be on to something that impacts the future of housing.
Yes, renters might indeed be the future.
Why can renters feel good about renting? Well as commenter Manisha Thakor eloquently sums up here: Owning a home isn't the surefire investment that it might have been for our parents and grandparents. Three things changed:
- First, they bought small houses at prices much lower than their annual income.
- Second, they had to put 20 percent down. There weren't fancy mortgage products with flexible rates that, as we've seen, have bitten people. Nor was it easy to use your house as a piggy bank.
- Third, the 1970s and 1980s saw high inflation. This meant previous generations got cost-of-living wage increases while their mortgage payments remained low. Most critically, our generation doesn't have real increases in wages, nor do we stay in the same place for decades.
What might the future of housing look like? Florida has a somewhat radical idea that the future of homeownership might be a hybrid of a rental/ownership model (similar perhaps to a time-share).
Let's hope that if this happens, you won't be locked in a room with a salesman giving you a "free" stereo -- or any of those hard-driving time-share sales tactics of yesterday!