According to the Urban Institute, single-family rentals have grown 30% in the past three years due to shifts in attitudes toward homeownership, as well as affordability, since the Great Recession. This has caused some home builders to shift their marketing toward renters—some companies have even deployed “build-to-rent” models. The latest data from the American Community Survey reports that 14.6% of North Carolina units are single-family homes occupied by renters, compared to the national average of 12.5%.
This trend may be new in recent years, but it is not historically unprecedented. In the 1940s and 50s, when the discriminatory lending practice known as “redlining” made it nearly impossible for African American families to get mortgage loans, they often entered rent-to-own contracts. In Cleveland, this type of arrangement has re-emerged since the Recession. However, rent-to-own can have pitfalls. For example, missing just one payment can result in the property being foreclosed. And unlike traditional rental properties, maintenance and property tax expenses are often the responsibility of the renter/buyer.
