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Real Estate Company CEO Says Renting is on the Rise
Published: September 18, 2007
San Francisco -- The bloated condo and single-family home inventory has made renting a more attractive option, the CEO of Chicago-based real estate investment trust Equity Residential said Monday.
The housing inventory also cut into second quarter profits for Equity, but President and CEO David Neithercut doesn't expect the excessive property issue to hurt the company in the long-term, the Associated Press reports.
Neithercut, speaking at a Bank of America Investment Conference, said that condo construction and the high single-family homes inventory in Florida, Phoenix, Washington, D.C. and in the Inland Empire of California hurt its growth in the second half of 2007.
Neithercut also said recent credit and housing declines and the increased home ownership "affordability gap" -- which swelled in the past decade as incomes didn't keep up with housing prices -- have made renting a stronger option for many.
He blamed "bad public policy" and easy-to-get capital for the homeowner boom of the past decade, which turned "very good renters into very bad homeowners."
Neithercut also expressed hope in the Echo Boomer generation, an estimated 80 million children of Baby Boomers, who are key renters and will be attracted to Equity's core markets -- New York, Boston, Seattle and San Francisco. Because a large amount of apartments have been converted into condos, there is a lack of housing in those areas, which Neithercut said will continue, along with strong employment.
