- 7 months ago
In this conversation, Richard Ross, CEO of Quinn Residences, discusses the evolution and significance of dedicated rental communities in the housing market. Richard explains how dedicated rental communities differ from traditional build-to-rent models, why they are purpose-built specifically for renters, and what years of real estate experience have taught him about shifting housing preferences. He also breaks down how COVID accelerated demand for single-family rentals, changed renter demographics, and reshaped expectations around space, privacy, and community.
The conversation digs into why the average resident in these communities is 38 years old, how thoughtful community design and longer lease structures foster stability, and why outdated perceptions of renting continue to hold back policy progress. Richard also makes the case for regulatory reform as a necessary step toward solving the country’s housing shortage.
This episode offers a grounded look at where rental housing is headed—and why the future of housing won’t be defined by ownership alone.
Here’s a glimpse of what you’ll learn:
• What separates dedicated rental communities from traditional build- to-rent
• Why today’s renters prioritize community, amenities, and flexibility
• How COVID permanently shifted rental demand and preferences
• Why the average renter age is older than many assume
• How community design drives satisfaction and retention
• The role of long-term leases in creating stability
• Why renting is increasingly a long-term lifestyle choice
• Common misconceptions that frame renting as “second class”
• The scale of the U.S. housing shortage
• Why streamlined regulation is critical to expanding supply
Related to this episode:
Richard Ross – Chief Executive Officer at Quinn Residences
https://www.linkedin.com/in/richardrossquinn
Quinn Residences
https://live-quinn.com/
The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire president Diego Sanchez every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio.
The conversation digs into why the average resident in these communities is 38 years old, how thoughtful community design and longer lease structures foster stability, and why outdated perceptions of renting continue to hold back policy progress. Richard also makes the case for regulatory reform as a necessary step toward solving the country’s housing shortage.
This episode offers a grounded look at where rental housing is headed—and why the future of housing won’t be defined by ownership alone.
Here’s a glimpse of what you’ll learn:
• What separates dedicated rental communities from traditional build- to-rent
• Why today’s renters prioritize community, amenities, and flexibility
• How COVID permanently shifted rental demand and preferences
• Why the average renter age is older than many assume
• How community design drives satisfaction and retention
• The role of long-term leases in creating stability
• Why renting is increasingly a long-term lifestyle choice
• Common misconceptions that frame renting as “second class”
• The scale of the U.S. housing shortage
• Why streamlined regulation is critical to expanding supply
Related to this episode:
Richard Ross – Chief Executive Officer at Quinn Residences
https://www.linkedin.com/in/richardrossquinn
Quinn Residences
https://live-quinn.com/
The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire president Diego Sanchez every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio.
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NewsTranscript
00:00Welcome back to Powerhouse, the show that brings you candid conversations with the leaders reshaping how America lives, builds, and finances homes.
00:08In this episode, we're sitting down with Quinn Residence's CEO, Richard Ross, to talk about scaling purpose-built single-family rental communities, making quality housing more accessible, and what real leadership looks like in the build-to-rent space today.
00:20Richard, thank you for joining me.
00:30Thanks, Sam. Happy to be here.
00:32Yes, sir. Very happy to have you.
00:34So I have quite a few questions that I want to dig into your past a little bit, and I'm curious as to how you got here.
00:41But with this audience, we've got people that are in the mortgage sector, housing executives, real estate agents.
00:48We have a few appraisers that listen, kind of all across the board.
00:51So I want to set the stage properly for the audience and really for myself as well.
00:57I come from a lending background.
00:59I'm an LO. I don't originate anymore, but I still keep my license.
01:03I'm a glutton for punishment.
01:04So I am familiar with the BTR, the build-to-rent market, but we've never spoken before.
01:11So whenever I was doing a little bit of background research on you, listening to a few of your other podcast appearances,
01:17I noticed the dedicated rental communities, DRC, is attached to Quinn and attached to your name.
01:25In this world, I'm definitely a novice.
01:27Is there a difference between the two?
01:29Is DRC a subset of the BTR market?
01:32Is it its own thing?
01:34Yeah, it's a great question, and it's a term we've used to sort of differentiate ourself and hone in on what it is exactly that we do.
01:45So let's just start with SFR, right, single-family rentals.
01:50And I think most of your audience is probably familiar.
01:52There are many companies.
01:54There's five big ones, two of which are public.
01:57The others are private, who during the GFC, during the great financial crisis, bought up a lot of homes.
02:04And this is what we called scattered sites.
02:06So in a subdivision of 250 homes, they might have bought, you know, 10 homes, one here, one, you know, half a mile away, and what we call scattered.
02:15That's the scattered model and in various different markets.
02:19Then BTR became sort of a thing.
02:23This was probably started in 2015-ish out west, particularly in, like, Arizona and Nevada, and then morphed into, during COVID, into the southeast.
02:37And build-to-rent is a term that's used for a home or community that's built specifically for rent, but it's a brand-new home.
02:49And some of the public guys are doing it.
02:52A lot of home builders did it.
02:54So they would build a subdivision and then sell the, you know, sell out.
02:59You're familiar with this in your lending business.
03:01They sell the first 60% of the community.
03:04And for whatever reason, the economy, affordability, they couldn't sell the last, you know, 40% of the homes or the last 40 homes.
03:13And so they packaged those in a deal and sold them off to one of the big operators that we've talked about.
03:18And that's a different kind of build-to-rent.
03:23What a dedicated rental community is, is a purpose-built community, the entire community.
03:29And our sweet spot today is somewhere between 150 and 250 homes, where the entire community is built, dedicated, or on purpose for rental.
03:39So we're not going to sell off one home here or one home there.
03:44And we're not just a little piece of a much bigger for-sale community.
03:50The entire community and the amenity, all of the things that go into it, are dedicated for rental.
03:57Does that answer your question?
03:58Does that make sense?
04:00Yes, sir, completely.
04:01And it's really interesting, especially the community aspect of it.
04:05Because I live in Texas, but all throughout the South and the Southeast, I think Texas is one of the places where you see it the worst, is where you're combating this sprawl, right?
04:17And there's, over the past five or ten years, I feel like there's been an outcry for more planned communities in general.
04:26And it's not, generally it's not thought of from a rental perspective, right?
04:30But just an outcry in this region, especially throughout Texas, for these more planned, like you said, more planned communities and areas for people to, like, it's kind of like a Texas or southern version of, like, southern urbanists, I guess.
04:47Sure, and if you think about it, right, in Texas and elsewhere and other markets, in this scattered site model that we talked about, where, you know, in a subdivision of 200 homes or 1,000 homes, 50 or so are for rent, there's a perception that the renter is sort of a second-class citizen, and they're not part of the overall community, if you will.
05:13Same is true if there's a little pocket of 20 rentals or whatever in a big subdivision that's been for sale, what we call a retail sale.
05:23But when the entire community is for rentals, let's just look at an apartment building, right?
05:28Typically, if you live in an apartment building, whether it's a garden-style apartment building, right, with, I don't know, 20 buildings of 10 units each or a high-rise, you know, in Dallas or Fort Worth, a 300-unit high-rise, that's a community.
05:43Right?
05:44Now, typically, those apartments skew towards younger folks, right, single people, primarily one and two bedrooms, maybe has a few three bedrooms.
05:53So the dedicated rental community is literally the same thing, just broken apart into either townhomes or what we call detached single-family residences.
06:04And that sense of community drives our business and differentiates us from many of the other sort of build-to-rent or SFR companies.
06:14I want to put a pin on this because there's a lot that I want to explore with the renter type, your profile, the community buy-in.
06:25I have quite a few questions on that.
06:27But before we do this, let's take a step back.
06:30You've been in the industry for over 40 years or so.
06:33Is that correct?
06:34That's correct.
06:35Okay.
06:35And through kind of the accounting world, isn't that?
06:41Yeah.
06:41I came up.
06:43I was trained in accounting.
06:44I have an accounting degree.
06:45Interestingly enough, my father was a home builder.
06:48And he went through not the GFC but an old GFC, you know, real estate every 40 years or so.
06:54We have to have some crisis.
06:55He went through the oil embargo of 72 and didn't fare well.
07:00And so I became an accountant because I wanted a job, right, that I could rely on a profession.
07:06So I was in accounting for 10 years and then sold my accounting practice in public accounting, you know, doing tax returns and audits for people.
07:14And that's when I got into the real estate business now, yeah, almost 40 years ago.
07:19And I started with a company that here in Atlanta, Georgia, that sort of created or developed class A garden-style apartments, right?
07:30Well-amenitized, well-landscaped, sort of higher-end apartments, a company called Post Properties.
07:36And that was in the early 90s and had been in the real estate business since that time.
07:42But you got into the DRC world.
07:47We started Quinn almost six years ago now.
07:51We closed our first community in Raleigh, North Carolina, February of 20, and then we had the lockdown the next month, right?
08:02So we're coming up on six years.
08:04We've got over 5,000 homes now across 33 communities.
08:08But it's been an interesting development of sort of that little niche of dedicated rental communities.
08:15So what were your first couple of nights into the lockdown, I mean, being a month into this new venture?
08:23Well, we were terrified, you know, start a brand new business and a concept that no one had ever really heard of.
08:30I mean, people had heard of right out of the GFC buying scattered homes and, you know, fixing them up and renting them.
08:37But those homes are 25, you know, 20 whatever years, 27 years old.
08:41But, you know, ours are brand new homes and people would scratch their heads, like particularly lenders.
08:46Say I came to you six years ago and said, Seb, I want you to lend me money.
08:50I'm going to build an entire subdivision for rent.
08:53Most people, even sophisticated real estate, were like, you're going to do what?
08:58And then, of course, you have a lockdown.
08:59So, like, are people going to be able to pay rent?
09:02Like, you know, they can't go to work.
09:04Like, what's going to happen?
09:06Well, was construction, I mean, construction was still going on, too, right?
09:09You had to worry about your – just the builders being –
09:11Oh, yeah, absolutely.
09:12Were they flagged as essential workers?
09:15Yes, but there were still people, you know, you'd have a crew get COVID, right?
09:19Sure.
09:20And a framing crew, I'm just making that up.
09:22And all of a sudden, they're out for two weeks, right?
09:24So, it was obviously very disruptive.
09:27Having said that, there's a lot of things driving this business, and we can get into that on the demand side.
09:34But COVID sort of poured gasoline on it because now everybody in apartments, our typical resident on the young end, our average age is about 38 years old.
09:44Typically, they come out of an apartment.
09:45And so, you can imagine, you know, you're sharing a corridor, you know, nobody knew what COVID was, and people were just terrified.
09:54And they said, well, I want to get out of an apartment and live in a house where I have my own four walls and I have a yard, and I'm not sharing corridors or sharing close quarters with other people.
10:07And a place where I can work from home, too.
10:09So, that was the huge driver.
10:12So, once we established that people could pay their rent, obviously, we had all that government stimulus, and there were very favorable rules, some favorable, some not.
10:21In other words, you couldn't, like, evict people.
10:24But that sort of poured gasoline on an already formative business plan.
10:29What about inspections and the red tape?
10:34Yeah, all of those, all of that got worse.
10:37And, frankly, to just digress a little bit, hasn't 100% recovered that part of the business.
10:45The labor's recovered.
10:46The materials have recovered.
10:47The supply chain has recovered.
10:50What hasn't recovered is the inspections and stuff like that because a lot of these municipalities laid people off, and they've been the slowest to bring them back.
11:01So, that's still a challenge we face.
11:02Again, forgive my ignorance here, but is there, even dealing with the local municipalities and the cutting through the red tape and the inspection process, the approvals, are they, I would assume there is some difference between, like you were talking about, the scattered single-family BTR and then these planned communities.
11:24Did you find that the local municipalities, even on their best day, were kind of equipped to handle the approval process or the green lighting of this sort of construction, these projects?
11:35No, I mean, put the pandemic aside, that was its own problem with just staffing and, you know, our city council's meeting and things like that.
11:42But there is, and still is, a negative perception of renters, you know, and particularly if you're building a subdivision, your typical starter home subdivision, as opposed to building an apartment building.
11:58I think municipalities can get their arms around, okay, we're going to put apartments in this part of town, right?
12:04And we understand that that's higher density and more people and more, maybe stress on roads and traffic and things like that.
12:13But the rental community subdivision was a new animal.
12:17And so, it's taken some time for them to understand what it is that we do.
12:22Right.
12:23Yeah, and I can imagine that you're kind of, you're feeling, you're satisfying multiple needs in the marketplace.
12:30And you had mentioned earlier that the average renter is around 30, right?
12:36Was that about?
12:3738.
12:38Oh, 38.
12:39I thought you said 30.
12:39So, I'll give you a little, let me give you a little profile.
12:41Our average resident is 38 years old.
12:45They have more pets than children, which was a real surprise to us.
12:52The most important things to them are a fence backyard and a garage.
13:00Those are the drivers of the business.
13:02And then, obviously, next comes amenities.
13:05Is there a swimming pool?
13:06Is there a green space, dog park, playgrounds?
13:10All of those things are critical to our resident satisfaction and what attracts people to rent our homes.
13:18Then you get on the affordability side.
13:20So, if you look at the average, our average rent is around $2,200 a month, you know, varies depending on the market, where we're located.
13:30To own the same exact home in the same area, and I'm talking about literally the identical home.
13:36So, we have solid surface countertops, stainless steel appliances, pretty sophisticated technology package in the home, hard surface floors, no carpet.
13:48Same home.
13:50We're about 50% to 60% cheaper than owning that same home side by side next door.
13:57And that's because down payment, right, mortgage rates today, property taxes, insurance, maintenance, and we cover all of that.
14:08So, that has been a huge driver of this business as well and allows folks to be in, you know, a three-bedroom, four-bedroom home for significantly less on a monthly basis than it costs to own that home, the same home.
14:23So, let me ask you this.
14:26I was listening to a podcast the other day, and there was a lady that runs the HAPI, the Human Architecture and Planning Institute.
14:36And she was actually – she was talking about how if you go to the Harvard School of Business, now you have to take classes on feelings and emotions and the consumers.
14:46And there was a luxury automaker that, right out of COVID, they redesigned their car, their flagship model to where whenever you step into the car, you automatically feel the premises that you feel like your mother is hugging you.
15:03And that was a direct result of a lot of the loneliness and isolation that people felt during the lockdown.
15:08So, I'm curious as to how these communities are designed.
15:15Like whenever you have someone that walks into these, you know, a planned community like this, what's the – what do you want them to feel?
15:22Is it a sense of community and belonging or is it more like kind of what you were alluding to earlier?
15:27It's like, well, I've got a – I'm not renting a place like you would traditionally think of it.
15:33I've got a house that I'm paying far less for that I don't have all these other requirements that I'm tied to like a judicial buyer.
15:40Sure.
15:40And there's a couple of things that we do.
15:42First and foremost, the amenity, so whatever that is, typically a wet amenity, so a swimming pool and some sort of clubhouse, a dog park, a playground, maybe pickleball, you know, which is obviously very popular today.
15:56All of that needs to be in the front of the community.
16:00Traditionally, in a starter home subdivision, the builder puts that in the back, right?
16:05And it's kind of built after all the homes are built and sold or most of them are sold.
16:10What we've learned, in some cases the hard way, is that amenity needs to be right in the front, so close to the entrance, and it needs to be ready to be used when you're first opening the community, so when the first 20% of the homes are complete.
16:25So, number one, so when they come in, they see a very welcoming place.
16:30The second thing that's important is, you know, sidewalks, green space, and a sense of being at home, if you will.
16:41And then, you know, we have, as I mentioned, a pretty sophisticated technology package, and that, again, gives people a sense of security, and that's very important.
16:52So, I would say placement of the amenity when it's ready is probably first and foremost, and then green space, a feeling of welcome, if you will.
17:05And you might have, I think you mentioned a little bit of it, and maybe I didn't catch all of it just a second ago, but when are the, when the community is 50% finished?
17:17Are people able to move in, or do people move in after everything is completed?
17:23Yeah, we typically will open a community when 20%, let's say, let's just say a 200-home subdivision, let's do some rough math.
17:30So, when we have 40 homes completed or ready, 20 to 40 homes, we'll open the community.
17:36And we want the amenity to be ready by then, meaning they can swim in the pool and use the pickleball courts.
17:43And then, so the construction then moves from the front to the back, so that the people living there don't have to drive through, you know, construction site and things like that.
17:52And that makes it much more amenable to particularly those early residents who get a little bit of a discount because they're moving into a community that's not completed yet.
18:03I was kind of creeping on you last night, looking at some of your LinkedIn posts, and I caught a recent one where you said that you've watched the younger generation.
18:16You've seen how they've approached housing, and all assumptions about renting is a sign of delay or instability they no longer hold.
18:24So, can you unpack that a little bit for us?
18:26Sure.
18:28So, look, I'm, you know, a boomer, tail end of the boomer, and the playbook, if you will, for me was, you know, you go to school, go to college, get out, you rent an apartment, you find a partner, have a couple kids, buy a house, live in that house for 30 years.
18:47You know, maybe you die in that home or you sell that home, go to the nursing home, and that's kind of been the American dream, if you will, until I would say the last 20 years, maybe 10 years.
19:00I mean, I have daughters in their 30s, and when I started this business six years ago, I said, you know, kind of, what do you think about buying a home?
19:10And they said, Dad, why would I buy a house?
19:13Like, the GFC, they have friends, good friends, whose families lost everything in the GFC.
19:19And, you know, I can buy Bitcoin, or I can buy Tesla stock, or I can, you know, take a trip to Bali.
19:26Why would I tie myself down to a home?
19:29And so, that was the beginning of me sort of understanding that the American dream may have changed.
19:37And then you had the spike in mortgage rates.
19:41You had affordability, a real problem.
19:45And look, most of our residents, you know, I said our average age is 38.
19:50There's a good group of them who, fine, I might want to buy a house, and, you know, but I need to live in a nice home for three or four years while I save up my down payment.
20:01Because, as you well know, right now you need 20% down to qualify and a good credit score, all of that.
20:09Or, on the opposite end of the spectrum, I might only live in Atlanta for three years, and I might need to move to Dallas or Denver because of a job change or whatever.
20:19And so, why do I want to be tied to a house?
20:22Yeah.
20:22Well, I can also – I'm sorry, go ahead.
20:24No, the other aspect is the maintenance-free lifestyle.
20:27Like, we mow the lawn.
20:29If the toilet gets clogged, you know, you go on your app, and, you know, we got somebody there in a couple hours to unclog the toilet.
20:35If you own the house, you got to deal with all of that stuff, particularly – and as the older the house gets, obviously, the more it is.
20:41So, there's a huge shift change in what the perception of the American dream is.
20:48And, look, I talk about young people there, but we have a number of residents, 20% or so, who are empty nesters, meaning they've sold their first house or their lifetime, their family home, if you will.
21:01The kids are grown.
21:02They're out.
21:03Like, sold the house, put the money in the bank or invested it.
21:06And, like, why do I want to buy another home?
21:10Again, for the same reasons.
21:12Do I want to fix the roof, right?
21:13Do I want to have to deal with mowing the yard?
21:17And I might want to be, you know, 15, 20 minutes from the children, from the grandchildren.
21:22So, this gives me flexibility.
21:24So, it is a bit of a sea change in the perception of what renting is.
21:32Yeah, this is purely speculation on my end, but I kind of worked on the corporate side both on purchase and on the reverse mortgage world.
21:44And, you know, I know that a huge bottleneck that we have also is – you're talking about being a boomer.
21:51And that's some of the – there's this weird cultural tension between boomers and the younger generation and that you have boomers that are not moving out of their homes, right?
21:59And they're sitting on these homes that a lot of, you know, people in their 30s think that they should be in.
22:07But there's nowhere for the boomers to go.
22:08They're sitting there.
22:09And people that are in their 30s are wanting to get out of their apartment, they want to get a house.
22:17So, I'll be curious to see how much of that is serving kind of as a pressure release valve as well, simply because there's just not enough of the homes that you're offering to be – they're just not being built right now.
22:31Not nearly at the supply that's required.
22:35Yeah, and there's the fundamental problem in this country.
22:37I mean, in the last 15 years, we just haven't built enough homes.
22:42I think, depending on who you believe, somewhere between 3 and 6 million short, meaning that we have more households than have houses.
22:50And that's 3 to 6 million.
22:52And interestingly enough, it's not getting better.
22:54I think in 24, there were – I might get the numbers wrong, but they're close enough.
22:59I think 1.6 million households were formed.
23:03So, that means people leave home or have a kid or whatever and form a household.
23:08And I think we only built like 1.2 million homes.
23:11So, that was a $400,000 – 400,000 home shortage.
23:15So, it's getting worse, not better.
23:17And then, to your point, this lock-in effect of, you know, boomers, if you will, or people in their 60s, 50s, 60s, 70s, who have lived in their home for 30 years.
23:28And, by the way, they probably have a 3% mortgage.
23:30So, they're kind of like, where am I going to go until I'm ready to go into sort of the assisted living or the elder care?
23:40It's a real structural problem in this country in terms of housing.
23:44And we're providing one alternative to that.
23:48Right, right.
23:49By building new homes, adding new homes, adding to the supply so that there's – it's almost like a pressure relief valve, as you will, to use your analogy.
23:58Another thing I'm curious about whenever we talk – I know the concern with the increasing number of renters going back, looking at it from a societal or cultural perspective is that if you've – if it's a single-family home in a residential neighborhood, one or two homes, let's say, that, you know, renters are almost treated or seen as kind of transients.
24:22Because if you don't own the home, then, you know, you really don't care what your street looks like.
24:25You don't care what your street looks like.
24:26You don't care what your neighborhood looks like.
24:28You don't care what your neighborhood looks like.
24:29You don't care what your town looks like.
24:30You don't care what your town looks like.
24:31It just further removes – you compile that onto kind of go back to the COVID stuff, the mounting isolation, I guess.
24:39And we're kind of – we're seeing the ripple effects of that at a societal level.
24:43And I know from a – it's interesting from a community standpoint, you know, I can see that not being the case, and I can see the renters being more apt to buy in to an overall sense of community living in a rented – a planned rental community.
25:04But beyond the amenities, what else are you doing to foster support that buy-in?
25:14Like, what does the lease structure look like?
25:16Is it more long-term leases that help ensure that you're getting the type of people in there that are – they're not going to be done in six months, you know, like you're renting a regular apartment?
25:25Yeah, there's several things we're doing.
25:27Well, let's talk first about the leases.
25:29Because we have a two- and three-year lease program, particularly on a brand-new community.
25:36And that's very – I think 40% of our residents take that option, the two- and three-year option, because they know their rent's going to be X.
25:46And we put a little increase, like a 3, 3.5% increase annually, obviously, because for inflation, we need to get a little bit more rent.
25:53But they know what their rent's going to be for the next two or three years, and they know this is going to be their home.
25:58So that's been very, very helpful.
26:00The other thing we did, and you asked me this earlier, and I neglected to mention it, like what attracts – how do we keep – attract the residents?
26:08We encourage them to treat it as if they own the home.
26:14I'll give you an example.
26:15They can put a playground in the back.
26:17They can put a vegetable garden in the back.
26:19They can plant their own plants.
26:21They can put swing sets in, right, decorate however you want to decorate for, you know, Halloween or Christmas, whatever.
26:35And that is, again, something different than, oh, you can't put anything on the walls or, you know, the typical sort of landlord-renter experience.
26:46So we encourage them to treat it as their home.
26:49When you drive through one of our communities on a Saturday when everybody's home and the garage doors are open, what you'll see is very few people park a car in the garage.
27:02The garage is a workout room, a storage unit, a she shed, might be a mechanic shed, might be restoring a Mustang, you know, or something in there.
27:14And so we don't –
27:16Watching the Cowboys lose on a –
27:18Yeah, could be.
27:21We won't go into my football team because they're worse.
27:23But to your point, we encourage sort of that treating the home as if they owned it.
27:34And that works, right?
27:35That's the sense of community.
27:38So if you want to, you know, put something on the walls or plant a garden in the backyard, we have no problem with that.
27:46In fact, we encourage it.
27:47So this market space is still relatively new.
27:52What do you think – what do people get most wrong about it?
27:58Well, I think the perception that it's a second class of a resident or a second class of just the public perception or that we're taking away homes from people who could otherwise would want to buy them.
28:15And that's just – the facts don't bear that out.
28:18For instance, we operate in 10 different counties in Georgia alone.
28:22And in the seven years since we've been in business, home ownership has actually gone up in those counties, not down.
28:30So that sort of debunks that myth.
28:33And historically in this country – and I'm talking like back to World War II – roughly 35% of the households in this country have rented.
28:43So that means 65% of people own.
28:45That percentage changes very little.
28:48It's changed very little in the last 50 years.
28:51It goes up a point.
28:51It goes down a point.
28:53So it's not like rentals have impacted the home ownership.
29:00If you want to own a home in this country – right now affordability is a huge problem.
29:04But that's not – we're not taking away the home ownership option.
29:09What we're offering and all the companies that are in this business are offering is just a different way to live in a three- or four-bedroom home.
29:18And these are brand-new homes, as I said.
29:22And so right now it happens to be much more affordable than owning.
29:26It hasn't always been.
29:27And typically, again, in the last 50 years, renting is about 15% cheaper than owning.
29:33As I said earlier, now it's like half.
29:36But that's sort of an aberration in that, you know, the market will adjust itself over the next five years or so.
29:43But I don't know that it's ever going back to 15%, but maybe it becomes 25% cheaper to rent.
29:48So it's just an alternative.
29:49I don't know if you remember, Zeb, but way back, you know, 30 years ago when car leasing was like a new thing.
29:56And people were like, you're going to rent a car?
29:59It's kind of the same thing, right?
30:02And now you go into a car deal, and it's like, you want to lease, you want to buy.
30:05Like, we don't care.
30:06It's just, you know, it's just a different way of affording the vehicle.
30:10Yeah, I do remember.
30:12I mean, I was young.
30:14I was a kid whenever that became a – when that was a thing.
30:17But I do remember it could be – I mean, I'm raised in Southeast Texas, very traditional, old school, just part of the world.
30:25So that was a – it's so funny.
30:28You didn't lease a pickup truck, right?
30:29Well, that was a judgment of your character.
30:31You know what I'm saying?
30:31Like, that was a – if you were leasing a vehicle, there was – you were lacking on character.
30:37But now that's something that –
30:38So that's the same thing with housing, same perception.
30:42And it's just the facts don't bear it out is my point.
30:45But that's something that we as an industry have not done a good job of combating, and, you know, we're working on that, educating municipalities, educating the government, educating the public on, you know, what it is that we do.
30:58Have you found – I'm curious about the amenities situation, you know, because you're throughout the Southeast, and, you know, state to state, county to county, region to region could be a bit different.
31:14Do you find that the amenities that are desired vary that wildly?
31:19You know, or is it pretty much a very similar amenities offering that people want, like a bull, dog park, you know?
31:26Yeah, I mean, it's pretty common.
31:28I mean, we are in the South, so, you know, if your community is of any size, meaning over 100, you got to have a wet – what we call a wet amenity, a pool, right?
31:37Because it's just hot in the summer, and they can use that, you know, nine, ten months out of the year.
31:42Dog park doesn't matter where you are.
31:43If you're in Minnesota, you're going to need a dog park and a playground, some sort of playground for the kids to play in.
31:50Although, interestingly enough, only a third of our residents – our residents have more pets than kids.
31:54We found that very interesting.
31:56So, the amenity doesn't change.
31:59Maybe the design does a little bit, and sort of the placement, you know, the further north you get, you want more fire pits, you know, maybe less walking trails, but not significantly different.
32:11What areas throughout the Southeast are you – are you either most concerned, or do you have any concern about, like, overbuilding or policy risk, failure rate?
32:23Yeah, yeah, so we're all over the Southeast.
32:27What's most important to us – in other words, what we look for when we just make a decision to build a community in a certain market – is, first and foremost, is employment.
32:37Are there jobs that our residents can pay their rent, right?
32:43So, Atlanta, Raleigh, Charlotte, Central Florida are all markets that we really like because there's employment there.
32:53Then, the second thing we look for is proximity to retail.
32:57Can they get their groceries?
32:58Can they get their hair done?
33:01Can they go to a doctor, you know, a doc in the box?
33:05Third, interestingly enough, schools are third now.
33:10So, are there good schools in the area?
33:12Schools were second when we first – when we thought they were second.
33:15But, again, only a third of our residents have children, so we kind of switched that.
33:18So, those are the drivers of what we look for in a community.
33:23Some jurisdictions, some markets are better than others in terms of their perception of what it is that we do,
33:30meaning can we get the community entitled?
33:33Can we get zoning?
33:34Can we get permits?
33:35That kind of thing.
33:36So, and then there's some surprises, right, markets.
33:40Savannah, Georgia has been really good for us.
33:42There's a big port there, right?
33:43And so, again, employment.
33:46So, it varies in terms of where we like to locate.
33:50But the perception changes from market to market of the local community, what residents are.
33:59So, what I've found is when we go to the city council and I sit in front of the city council and I show them some of our other communities,
34:07this is what we do, they kind of like our lenders, they say, oh, I had no idea, you know?
34:14And so, once you educate them, it tends to bring them around to, you know, maybe this is something that we should embrace because it allows people to live in a home that they otherwise couldn't afford
34:27and, you know, be able to get to work in a reasonable period, you know, reasonable commute and to shop and support the local community just like a homeowner does.
34:37So, I have a couple last questions for you, Richard.
34:42This is the time of year everybody's looking back at their 2025.
34:47So, as you look back at 2025 and then try to project into the next year, do you, one, what do you feel like you got right about the year and what do you feel you got wrong?
34:59And then how has that shaped how you're moving forward into the next year?
35:03Yeah. 25 was a tough year for us, for everybody in this, but 25 was the toughest year in our six, you know, short six years.
35:12As I mentioned earlier, you know, COVID sort of drove the business for a while and then coming out of that, there was still a lot of demand.
35:19But during COVID and early in the end, this was a hot business and you know real estate, right?
35:26When real estate gets hot and people are making money, we build too many homes.
35:30Sure.
35:30And that's, that's, that's what happened.
35:32So, supply got out of balance and there were too many homes over, I would say, well, end of 24, all of 25 coming on the market.
35:41And obviously, if you have too much of a product, what happens?
35:45The price goes down.
35:46So, 25 was a tough year.
35:49We weathered it well, I think better than most.
35:51And my, again, 30, 40 years in the business have taught me what's most important is keeping the resident in the home.
36:01So, keeping the resident happy, keeping the resident experience.
36:04As I like to say, we call it in the industry, keeping the heads in the beds, right?
36:08Because you can always recoup rent over time.
36:11But if you lose a resident, it costs a lot of money to get a new resident.
36:14You know, you've got to paint the home, you've got to fix the repairs, it might stay vacant for a while.
36:20So, if we have a good resident, we want to, we want to keep them.
36:23And that is sort of what allowed us to get through 25, relatively unscathed, if you will.
36:30Still a tough year.
36:31I think, looking forward, the first half of 26, you know, we've got economic stuff going on, as you well know.
36:39You know, the price of groceries is higher.
36:42Housing is expensive, meaning property taxes and insurance.
36:47So, costs are still going up and people are a little stressed in terms of their pocketbook and their bank accounts.
36:54So, rent's becoming a bigger portion of sort of their monthly outflow.
36:58So, we realize that.
36:59But as all of these homes that were built in sort of the go-go days of built-to-rent get absorbed, and they will because the demand is there, the underlying demand is there, we see, you know, the end of 20, second half of 26 and 27 being back to really good, strong times for this business.
37:19Okay. And the last thing I was going to ask you is if you had a, if you were able to get a builder, a local policymaker, or a federal policymaker, and an investor together, and you were going to figure out a way to continue to build out this space, what is the one thing that you would advocate for?
37:41What's the one thing that you would ask to be changed?
37:43So, I would advocate for streamlining regulation.
37:49And when I mean regulation, every jurisdiction is different.
37:53So, town A is different than county B, is different than city C, and they all have different rules.
37:59And they make, there's no continuity, and many of them don't make sense.
38:04Like your tree, you know, if we put a tree, two trees, a tree in every yard, we call it.
38:08Like, does a tree have to be three inches thick, or does it have to be two?
38:12I mean, literally, they legislate that.
38:14And so, it might be different in Atlanta than it is in Raleigh.
38:20And so, the cost of all of that makes the cost of the house go up and takes longer to get the house entitled.
38:30What's the lead time on that with your team?
38:32Like, how big of a team do you have researching that?
38:34What's the lead time on breaking ground?
38:36To getting, having a permit to, you know, build a house, which takes, can take a year or two years.
38:44Then from shoveling the ground to a fully leased, what we call stabilized community, takes three years.
38:52So, and meanwhile, we're investing millions of dollars, you know, without getting any return.
38:59So, again, what I advocate for is streamlining rules and regulations.
39:04Because look, fundamentally, as I said earlier, we have a housing shortage in this country, and that's not going to go away.
39:11The only way to fix it is to build more homes.
39:14So, to make it easier and more cost-efficient to build homes is what I would advocate for.
39:19The other thing I would challenge some of the youngsters is find a better way to build a house.
39:23I mean, think about it.
39:26We haven't, we've built up, we're building homes today essentially the same way they did in 1950, right?
39:32You buy the land, you scrape the dirt, you pour a foundation, you bring in different crews to put the framing up, the plumbing, the electrical, put the roof on.
39:42But it's not very efficient.
39:44And look, you make this, they make this thing, right?
39:50Right out of, like, we got to figure out a way to build a home better, more faster, and more cost-effectively.
39:55It's not for me to do, but if we can, you know, build an electric Tesla or send SpaceX to the moon, we got to figure out a better way to build a home.
40:06Right, I couldn't agree with you more.
40:07Richard, thank you so much for sharing your time with us and your insights, and I appreciate you having us on, and I look forward to talking to you again in the future.
40:13Richard, thanks, Sam.
40:15Appreciate you having me.
40:16Yes, sir.
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