A Conversation with Housing Economist & PM Trends Co-Author Jay Parsons

There's some markets in some cities, I should say, that just don't make sense to be doing business anymore. I know a lot of really earnest, honest owners and investors and property managers who want to be part of the solution, but you know, they're hitting their head against the table because they're tired of being labeled the bad guy and they're tired of being demonized and called greedy because, you know, they're trying to, you know, cover their costs and their costs are going up. Everybody wants to limit the rents more than they can end up without limiting the cost. If you're in a city that I think is, that is open-minded, And by the way, this isn't red or blue. This is about like just being willing to have conversations. 'Cause I've talked to some people in some cities, they look, they can't, they won't even talk to us without yelling at us. So if you're in a city where you can have those conversations, the best advice is a very simple one. It's the same thing about running a business is you gotta just talk to people. You gotta go up to city hall, meet with the people who are making these decisions, not just the elected officials, but the city staff. Like they're very influential. Share facts with them. Hey, look, like here's the rea— here's what's going on with taxes and insurance rates and our maintenance costs. You know, here are the things that we're struggling with. Here's why we had to raise the rent. Like all of those things, like they don't know these things. Like they don't, they only know it if you talk to them. And so I think if you make a real effort to build those relationships and put that time in, I mean, that's really, unfortunately, and just educate. I mean, that's what it takes.

Welcome back to Peter Lohmann's podcast. I'm thrilled today to introduce Jay Parsons. Jay, welcome to the show.

Thanks for having me, Peter.

I'm excited to get into conversation with you about the PM Trends Report, which you co-authored. And you have a really interesting background. You've worked your way through this industry kind of from a different path, but I love the perspective you bring. You share a lot on Twitter about your analysis of the industry and trends and legislation and policy decisions. If you wouldn't mind just taking a couple minutes and give us your backstory on what you've been up to and what you're doing today.

Sure. Yeah. So, you know, I think like a lot of us, unless you grew up in the industry with, you know, parents and family who were, you know, who owned rental homes, I mean, very few of us grow up thinking, man, I'd love to be in rental housing. And I was certainly in that group as well. So I stumbled into it back in the great financial crisis. It was, 2008, 2009, needed a job, started off as a research analyst and had no intent of sticking around very long. But you know, really just fell in love with the industry and a lot of the misconceptions, which I think, you know, some of the things that the survey helps debunk and I think as well, it's, you know, everybody thinks they understand rental housing and quote unquote landlords, which I hate that term, but you know, it's much more nuanced and complicated and in some ways complicated, in some ways it's not, but it's a very misunderstood space even among investors. I think have a lot of misunderstandings about it. So, I fell in love with that. And then more recently in the last year, I joined a Texas-based multifamily group called Madera Residential and continued to do my own kind of independent consulting and speaking for both multifamily and SFR and research as well.

Perfect. Well, let, let's try drive right into the PM Trends Report. So if you're listening and you're like, what the heck is the PM Trends Report? Jordan Weyler and I and a couple co-authors got together and engaged with Harris Poll to commission a new survey of rental owners., and we had Harris contact rental owners who are working with professional property management companies and those who were not, and those who previously had. And we had them ask those respondents a billion questions about property management, real estate, rental properties, expectations of property managers, response time. Why do they hire property managers? Why do they fire property managers? How much do they expect to pay? What do they expect to pay for? Just a million questions that we really wanted to know from the mouth of our actual customers, speaking as a professional third-party manager. So we put all this together in a nice report, which was released about a month ago for free to the industry. And here recently, I've just been returning to the report. You know, I was kind of so close to it that I didn't even really have a chance to digest it and internalize the findings. Now that I've had a little time and space, It's been interesting and I'm coming away with new insights. So we pulled Jay in to help guide the direction of the survey a bit. He's got a lot of experience with large datasets and interpreting results. And so, you know, Jay, as we look over this report, you know, quite clearly it was showing a movement toward professional property management. So back in 2007, I'm sorry, 2017, Harris Poll did a similar survey At that time, about 70% of properties from, you know, that basically small multifamily and single-family, about 70% were professionally managed. And that dropped to 64% with our 2024 results. So we're seeing a shift here. What do you think is going to be the impact of this shift toward professional management on both residents and property owners? How do you see this playing out?

Yeah, I think taking a step back, I mean, as you, Peter, you know this very well, it's property management has gotten a lot more complicated and difficult. I think especially since COVID a lot more regulatory pressures on the industry. That's the one part of it. But also the other part of it is renter expectations. You know, this is the Amazonification of the consumer today. Like they expect immediate service. They expect to be able to do things online or through apps that, you know, traditional sort of mom and pops, you know, aren't necessarily equipped to be able to have. And that makes it harder to compete. And we talk, you know, that we'll get into this I'm sure a little bit too, like a lot of issues around maintenance. And so it takes a wide set of skills now to manage properties to the expectations of renters. And that again, plus the more challenging environment, more challenging to be profitable. And I think, you know, the increase of professionalization across the industry has raised the bar for everybody. And so it's like, I think we're seeing kind of two things. There are, one is we've seen a lot of smaller mom-and-pops who've exited the space altogether, or two, they've, you know, taken on these third-party management like you're talking about.

Yeah, it's interesting you mentioned that expectation of renters going up. That's definitely true. We're seeing that, you know, throughout this data and other industry data that I've looked at. I mean, I don't necessarily love it as a property manager. It means I have to keep increasing our speed of response time and our days to repair and, you know, provide more amenities and packages for residents. But, you know, I had never really thought about that angle you just mentioned when I'm speaking with a prospective client, a property owner, you know, the idea of bringing up, hey, We're going to help you be competitive for the best residents. We're going to help your home, you know, look and show its best, and we're going to provide reassurances to prospective tenants that you may not be able to offer as an independent landlord. So that's an interesting angle I hadn't considered.

Yeah, absolutely. And, and, and I think also it's the communication piece. I mean, anybody who's, you know, managed this on their own, you know how difficult that is because And again, if you're working on their job, you know, things going on and, you know, someone calls you, you may not be able to get back to them right away. And so people who are full-time jobs or to take care of these issues and, you know, I mean, now it's, you know, chats and text messages, everything else that's, you know, it's good if someone comes from a property and had that before, it's good. They're not going to be very happy, you know, having to wait to get back to you, to have someone get back to them because they're, you know, have their own job and in a meeting somewhere.

Yeah. So Jay, you currently work and have worked with many large multifamily owners and operators and managers. I'm curious, often thinking about the difference between multifamily and single family and the industries in some ways are just night and day apart. Just very different models, different concerns, but in a lot of ways they're also identical, right? You're renting units to residents. In your experience, how do you see these larger institutional landlords thinking differently about property managers than the individual property owners that we surveyed? In other words, if you were to take these same questions from the survey here and issue them to institutional SFR owners and multifamily owners, how do you expect the answers would be different?

Yeah, that's a good question. I think first and foremost, and you alluded to this, Peter, I think the lines are blurring more and more between SFR and multifamily, institutional and sub-institutional. It's like, you know, I think, you know, these rising tides tend to boost all ships, right? I mean, the, there's, you know, the technology's gotten easier to the point where you don't have to have an infinite budget to be able to support, you know, things like online leasing or whatever. So I think in some ways, like the, the, it's been a more level playing field in, in recent years. You know, in terms of how the differences are, I mean, obviously with an institutional group is they're really looking for kind of the best practitioners in a given market. Like that's a real priority. They've become, I think like you see in the surveys, investors are increasingly hands-on. Doesn't matter if you're an individual or an institution. You know, when I first got in the industry, you know, a couple of decades ago, it was kind of, hey, doing that monthly and quarterly report and have a meeting. And nowadays, I mean, you have, The expectation is daily business intelligence data that's going to give them an insight into what's going on.

How do we go back, Jay? Can we go back to how it was? Yeah.

And they're calling you guys. And I mean, it's a much more active institutional owner today. They're in the data, they're in the business, and they want to be able to catch things fast and they're communicating. And oftentimes to the, probably the annoyance of the property managers, to try to catch things really early on.

Interesting. Yeah. And I think that's trickling down to even the individual mom-and-pop owners. I'm trying to think in my experience, I've been doing this professionally for almost 13 years now, and I'm, I'm trying to like gauge my own experience. Have owners become more involved over time or, or have their expectations of update frequency and response time gone up? I think I have to say yes. I think— and you're right, you mentioned like the Amazonification that is definitely pervasive. And we see that in the responses to the survey, everything from, you know, response time expectation to a lot of the other details where the trend is definitely in one direction for professional property managers. Absolutely.

Yeah. And I think in the end that's going to, it leads to a survival of the fittest, right? I mean, the property managers that are really good are going to have more success and get more business. And those that are kind of stuck in the ways of the past, I mean, and people, I think one thing, Peter, I think is interesting is like people get historically get kind of locked into like high touch, high service versus all this new stuff. And it's, and the reality is I think, as you know probably better than me, is that it's both, right? Like, you need to have the personal approach, you need to know your customers, know your investors. But at the same time, as the expectations, like we're talking about, they have increased, they want information faster and they want resolutions to issues faster too.

Yeah. And it seems to me that they're not really willing to pay for those things. Like, they're not willing to pay more for, you know, higher service, faster responses, higher touch. So we, as operators have to find ways to cost-effectively deliver those results that our owners want, basically without breaking our, our business model, breaking our bottom line. And that's, that's our challenge as an industry. How do we structure our company and how do we pull in the right technology partners so that we can give our owners what they want without breaking our bank?

Yeah, no, that's obviously easier said than done. I think that That's one reason why it's hard. I mean, a lot of it comes on the cost side and knowing how to do maintenance well, and obviously that's gotten a lot more expensive and being able to be efficient without cutting corners. Yeah.

Speaking of that, I want to talk to you about chatting with property owners about specifically like days on market or leasing timelines. So this is something that you pay very close attention to. On a nationwide basis. You're always posting great updates to Twitter and LinkedIn about here's what we're seeing for rents and here's what we're seeing for leasing times. You know, the survey actually asked property owners about their expectations for leasing. And to summarize, property owners' expectations of how quickly we should be able to fill their vacancies are not in line with current averages. Nowhere close. So how do we talk to property owners about that? Without making it sound like we're making excuses?

No, I love that question. And I'll tell you, whether it's multifamily or SFR, the number one challenge— I speak at a lot of investor events and groups will bring me in and talk to theirs and they get dinners and whatnot. And the number one thing I find is unrealistic expectations. And a lot of it stems, I think, from the COVID era especially that brought in so many new investors in the space, or recent memory bias. And they start to think like the best of times is somewhat, they'll like, oh yeah, I understand that's the best times. The benchmark has moved up though. And in reality, as you know, Peter, is like, it's cyclical. And I think also too, the thing that's challenging for SFR is everyone sees these headlines in the Wall Street Journal saying, hey, the rent-to-own gap is the biggest it's ever been, so everyone's going to be renting. And so again, that sets an unrealistic expectation. Like, yeah, the market's fine, but it's not blazing hot. Like some people sort of intuitively think it should be, or it is. And so I think the reality is like, we've gotta, you've gotta do a good job of not just telling, I mean, people, investors, they don't want to hear, hey, it's, we're not, it's not that hot. I mean, you gotta show 'em data, right? Yeah. And that's why I love what, like, I'm a data nerd, right? So I'm biased toward data, but you know, there's a lot of great data out there that, that'll help illustrate some of these points. But if you're just saying on your own and saying anecdotally like that, that's, it's not going to solve the issue.

Yeah. You gotta show 'em external data. Yeah. Exactly. And I wanted to ask you, where can we go to get that data specifically? I think the data point I'm interested in is the average days on market for SFR and small multi in a given metro area.

Yeah, there's not as much data on SFR, obviously, as for multifamily, but a couple of the ones that I like is John Burns Research and Consulting. They do a good job tracking SFR and they do some surveys that track, I dunno if it's that particular metric, but they do have things that kind of show is leasing momentum and activity is prospect interest, is it increasing and is it decreasing? And they showed some numbers for, their last report showed that leasing activity's down in most markets. And again, I think a lot of investors didn't realize that because they expected to see better numbers because people weren't buying homes. Another one that I think is starting to be kind of a newer one on the radar is, oh shoot, what's the Resi Club? You know, their new publication. Started by Lance Lambert, formerly of Fortune. They've done some surveys and other things as well. They've got a pretty good pulse on SFR. So not a ton of sources out there, but there are a few that I think are worth looking at.

Love that. Thank you for those resources, and we'll dig up links to those and include those in the description. I think that's going to be really helpful. So speaking of regulations and changes that have made being a landlord more difficult, which is driving a lot of the the movement toward professional third-party management. One of the frustrations I hear from my peers quite often is around these changes, you know, whether it's rent control or any, you know, source of income discrimination protection. There's a lot of things that are affecting in a very real and visceral way our day-to-day operations as property managers and making things harder or making it feel unfair for our clients who we really identify with. And in many cases, Property managers also own rental properties. So the frustration around these things is running high right now. You know, you've got a large, a long history of engaging with some of these policy changes and watching them take shape. What's actually effective for property managers who would like to make an impact on the local— let's ignore federal for actually for the whole podcast maybe, but for, for state and local rental regulations and legislation, what is actually effective for a given property manager to do?

Well, that's a great question and I've spent more and more of my time on these type of issues in recent years. Again, especially since COVID And one thing to remember is that it's very rare to unwind things once they start. Once that slippery slope starts, like it's very, very difficult to go backward. And so I think I'm going to give you two answers. The first one's a bad answer, but it's the truth. The first answer is there's some markets in some cities, I should say, that just don't make sense to be doing business anymore. And I know a lot of really earnest, honest owners and investors and property managers who want to be part of the solution, but you know, they're hitting their head against the table because they're tired of being labeled the bad guy and they're tired of being demonized and called greedy because, you know, they're trying to, you know, cover their costs and their costs are going up. Everybody wants to limit their rents more than they can end up without limiting the cost. And there's some cases where, you know, and I won't name names, but there's some cities where it just doesn't make business sense. Like if you want to run a nonprofit, maybe you can do that, but it doesn't make business sense anymore. And ultimately that's going to be to the detriment of those cities and they're going to learn those lessons the hard way, like a few of 'em are. Now the other answer I would say is if you're in a city that I think is maybe that is open-minded and does, and by the way, this isn't red or blue, this is about like just being willing to have conversations. Because I've talked to some people in some cities, they look, they can't, they won't even talk to us without yelling at us. So if you're in a city where you can have those conversations, the best advice is a very simple one. It's the same thing about, you know, running a business is you gotta just talk to people. You gotta go up to city hall, meet with the people who are making these decisions, not just the elected officials, but the city staff. Like they're very influential. Get in with the city staff, spend time with them, understand their problems, listen, you know, and then let them just share facts with them. Hey, look, like here's what's going on with taxes and, and our, you know, insurance rates and our maintenance costs. You know, here are the things that we're struggling with. Here's why we had to raise the rent. Like all of those things, like they don't know these things. Like they, they only know it if you talk to 'em. And so I think if you make a real effort to build those relationships and put that time in, I mean, that's, that's really, unfortunately, and just educate. I mean, that's, that's, that's what it takes.

Yeah. I'll give you my perspective here in Columbus. Over the last 5 years, there have been a few waves of legislative changes for the city of Columbus specifically, and this affected everything from security deposits to source of income, which is basically we have to take Section 8 now in the city of Columbus, and a variety of other changes to local rental regulations. The way I responded to all those things, I went to like the first city hall, I attended virtually to like the first meeting about it or whatever, and I was so disheartened by what I saw that I completely checked out of the whole thing and was just got really frustrated. In retrospect now, what I should have done is there was one specific person who was driving most of these changes and wanted basically, uh, legislative victories as it relates to rental housing. She wanted those attached to her name because she had higher ambitions politically, which have now been fulfilled. And she— but she needed a— she needed a win. She needed to look like she was making a difference for renters in the city of Columbus, and this was how she was going to do it. So knowing that now, what I should have done is exactly what you said. I should have gone back in time. If I could go back in time, I would go visit with her and I would get to know her and I would get coffee with her and I would be a voice from the other side. I'm not telling her how she was wrong and this is stupid and you need to stop, but just like learning what her, what her desires were and what impact she was trying to make, and then collaboratively coming up with solutions that were gonna not be a big pain in the butt. Frankly, for us to deal with as an industry and even potentially harm. Because my belief is a lot of these changes actually hurt the very people they're trying to help. Absolutely. Yeah. And so if I could have helped her see that, does this mean that no painful changes would have been enacted over the last 5 years? Probably not. Like, it wouldn't have been, but it probably would have been better. So that's just a little story from, from Columbus. Maybe you've got something similar going on in your city. I just encourage you, go reach out and this is people, right? It's not like there's like 5,000 unidentifiable, uh, robots that are making these changes. It's like one or two people usually that are the driving force behind these things. And if you can get in their ear, you could actually make a difference, I think.

So yeah, no, you're 100% right. And I would just add to that too, it's like find the people you want to influence, find out who influences them. Like, is it the Is it, you know, somebody in another role? Like, you know, be part of their circle and then, you know, again, try to educate 'em on the facts like you said.

I love that. Oh, I got one more question on this topic. You wrote recently about, you know, the source of income discrimination protection, which basically requires property owners and landlords to accept Section 8. You had some really interesting ideas about reforming that a little bit, and I'd love to hear you expound on that and if you have any other ideas for Section 8 reform, because this is getting more and more painful for us right now.

Oh yeah, yeah, this is a hot topic and it's tough because, and just as a brief, I grew up as a kid wanting to be Woodward and Bernstein, do investigative journalism, spend 3 years as a journalist and it ended up being horrible. I did not like it, but it wasn't for me, but I still respect those who do. But I, so I don't want to just, I don't want to be those like media haters, but I'll tell you, it's like the media unfortunately does not do a good job covering this topic because it's just positioned as source of income discrimination. And so, and Peter, I know I'm telling you what you already know here, but for those, anybody who is not familiar with us, just to give you some context here is that it gets positioned as simply, hey, like it doesn't matter if a public housing authority's paying the rent or if someone's paying their own checkbook, like it's, it's, they're still paying the rent. That should not matter. And in principle, it's like, I agree with you, right? Like that's not the issue. Like who pays the rent? As long as the rent gets paid, not the problem. But the reality is that it's, it's much more nuanced than these headlines give it credit to. And I, I think a lot of the policymakers too, You know, number one is, you know, we have a shortage of housing and when you have a voucher holder, you are basically allowing an inefficiency in the market take place. That unit is going to sit vacant longer because of the rent. Much longer. Yes. Yeah. Weeks and not months because of the rent tape associated with the voucher process. Now that's not in anybody's best interest. It's not in the renter's best interest. Obviously not in the property owner's best interest. It's also not in the interest of other renters who cannot find a place because this place is essentially kind of blocked off with unpaid rent and no one living there for a period of time. That's not good for anybody. So, and the other thing too is we'll get into too many details here, but it's like, you know, the inspection process is going to be very arbitrary depending on who's doing it and where it is. There's a lot of different issues. And so one of the things that I think is kind of a common sense solution is and is, hey, like a voucher holder, if you wanted to accept vouchers, like they should have the same rights as a non-voucher holder. They should be able to look at a unit and sign a lease and that rent paid should be paid by the PHA, assuming the voucher checks out everything like the normal background check process, et cetera. And then that gets paid. Now if the PHA wants to come in later, when new inspections, they say find something, then give the renter a choice. Like, and then, you know, the landlord says, hey, I can take care of this. I'm not doing that because I don't agree with you. Then they give the renter a choice. The renter could either say, you know, great, I'm okay with as it is. I'm going to, we'll keep it going. Or they can say, no, I agree with the PHA. I'm not going to stay in these conditions. Well, then give them a lease break without any penalty. And so there's ways to do this where you can solve the, like, these people need places to live. We're making them wait longer. Get them in there if the conditions are acceptable to them. They sign that lease, the PHA pays it, and if they have an issue later, again, like don't penalize them if they want to move out for something, but like, or an issue like that. But it's a common sense solution that I think would be a win to everybody.

Yeah. The local PHA here, which is CMHA, the Columbus Metropolitan Housing Authority, is the only one in the Columbus metro area. We only have one. And for, for years now I've been threatening to start a competitor to them because they're just so bad. They're so bad to deal with. Yeah. And I don't think a lot of people realize these aren't government entities. They're individually owned and operated, essentially like franchises. They get federal funding through HUD, but they're very much a local regional type of operation. And you don't need to only have one in your area. You can start a new one. In fact, I downloaded a few PDFs from HUD about how to start a PHA and it's like hundreds and hundreds and hundreds of pages. And I kind of put that project on pause.

So, we'll see. That makes sense. Yeah. Well, I mean, but unfortunately they're not known for efficiencies and, and there's been various efforts to make these things a little bit better, but it's like people don't realize like how challenging this is.

And it's, again, it's not in the renter's best interest either.

Like it's correct. It's that, that's the silly part about all this.

Yeah. All right. Well, returning to the study and the analysis here, I'm curious too. So I'm aware of the Iceberg Report from 2017 which also commissioned by Harris Poll and looked at a lot of the same, same ideas, same questions. And we try to sort of follow along that path. Are you aware of other studies or data on the individual mom-and-pop landlords as it relates to property management and SFRs? Because I'm always anxious to take other sources of data and use that to improve our analysis or extend our understanding of trends.

Yeah, no, there's the, again, there's so SFR, especially 'cause it's so, it's so dominated contrary to headlines again by individual mom and pops. Like it's very, there's a lack of data. I know Buildium, a good technology provider, they've done some surveys of their customer base and there's some interesting things in there. But you know, generally speaking, there's not a lot of stuff like this. So it's great to see surveys like what the Harris Poll put together here.

Yeah, I started looking at some, um, census data. There's a couple things that the census, federal census, seems to put together every, every few years using data reported by— maybe it's like Fannie and Freddie, or I don't know how they get this data, but it's like 2 clicks in and you're already downloading like tables of Excel. And I, and I just, I'm not equipped to really analyze that level, you know, to that level. So have you ever looked into any of this or what, how do we, how should we think about that?

I'm not sure what census data you're referring to, but yeah, it could be cumbersome to walk through. I mean, there's obviously data on things like, you know, they have vacancy surveys, things like that, but it's, most of it is pretty lagged by the time you can actually, you know, use it. So I, I don't put a lot of stock in census housing, rental housing data.

Got it. Okay. I've got some more questions, but I want to kind of open it up to you if you had any, you know, major takeaways from this survey that either confirmed some intuitions you had or upended some preconceived ideas or anything like that.

Yeah, I think one thing that really jumped out to me, and this is probably, you know, no surprise to most people who are in this industry, is like you look at investor concerns and priorities, a lot of them are around maintenance and upgrading units. And then also the related concern, one of the top 5 priorities was increasing profit margins. 'Cause again, those have actually thinned out over the last few years, as you know, Peter. So there's obviously conflicting issues here. It's like we need to generate more profitability. At the same time, we have increasing costs. It should only defer for so long. And so one of the things I think is a really big challenge across SFR and multifamily is that a lot of the rental housing stock is, I mean, it's all getting older, right? But a lot of it was built in the '70s and '80s. That's when we had a, you know, our last big, you know, massive supply spike in all types of housing. And that's a, I don't know the exact numbers, but that's a huge percentage of our rental housing stock. So as these units get old, these homes get older, that's going to create more and more, you know, deferred maintenance needs on top of all the upgrades that, you know, people want in terms of, you know, types of appliances and countertops, et cetera. I think that's going to be a really, really interesting challenge to watch these next few years. Just the condition of these properties and the challenge of getting them. So, I mean, obviously I'm generalizing here, but like, you know, this is going to be a big problem, a big challenge over these next, you know, call it 5, 10 years.

Couldn't agree more. I mean, we're seeing that really play out here in Columbus. We have an older housing stock here. Not a lot of new builds or new developments are happening relative to the size of the older homes and apartments. And it is a maintenance nightmare to keep up with all these things. And of course, no one wants to pay to do anything right because it's super expensive and it's doubled in price in the last 5 to 6 years. So definitely seeing that. I also want to get your perspective on, you know, you've got really got an eye for how you've got an eye for how the media reports on things and how the public perceives certain storylines and certain threads. And what I wanted to ask you about is how are we as an industry shooting ourselves in the foot right now? When you think about third-party property managers who are dealing with these mom-and-pop landlords and small multifamily, what are some of the lines of thinking that we just need to give up on? What are some of the ways that we're talking about things that are not going to be palatable to legislators or the general public? I want to take advantage of your outside perspective and maybe like slightly adjust? Like one of the things you mentioned is like not using the word landlord, right? And I feel like there's maybe some other things like that that we are sort of myopic 'cause we're inside it and we're like, to the, to us this is obvious, but anything coming up for you there?

Yeah, yeah. The landlord's a big one just because, I mean, for those of you who don't know, like this, this word hearkens back to medieval times and, you know, awful things. And so it's a, it's, it's not a word that, that I think anybody should be embracing, and it's certainly not a word that even the industry groups are really using anymore these days. So, and nor does it really reflect, I think, the reality of what property managers actually do. It's a very different relationship than the medieval concept.

No, it's like the tenant has become the landlord. I mean, they're the ones in charge. If you look at all the recent regulations and laws, and they honestly more pull the strings than we do anymore. Just trying to evict someone for non-payment of rent in California or New York.

Well, yeah, but also it's honestly like the, if you look back to that old model, it's like the cities are really more, their role is more equivalent to the medieval landlord concept.

Like, ah, interesting.

Property owner.

Yeah.

I mean, a property owner obviously doesn't have unlimited rights to do whatever they want in their property. Like it's very controlled by the city, even in terms of building improvements. I mean, everybody knows, I mean, just trying to do sometimes a renovation, you get a building permit for, which could take forever just to try to improve something. Your costs go up because you gotta pull a permit and on down the list. And so the real landlord is probably more of the city than the owner.

I love that framing.

The other thing I would tell you, I tell investors all the time, I think in terms of, I like the way you frame the question. I think we need to be very careful how we talk about homeownership because we're still the nation where homeownership's the American dream. You saw in this election that we just went through, both parties are making a big issue, and I'm not criticizing, I mean, it's just, it's fair game is that we need to boost first-time homebuyers. And so I think I'd be very careful how we talk about rentals in proximity to for-sale housing. Like I don't think it's something to celebrate that homeownership, that first-time homebuyers are more challenged. And number one, because it's not, it does not a good look, but number two, it's out of the data doesn't back it up. I mean, again, We had a terrible year for home sales last year. It was kind of an okay year for SFR. It wasn't 2021 when home sales were booming and we had a lot more rental demand. So I would avoid that. And then also too, I think related is I would really be positioning, I think we ought to do a better job positioning rental housing as part of the solution and really thinking about it as like, hey, these are homes. And I think we could spend a lot more time on that, but I think the more we think if we position rental housing as a solution, I think is is the better way to do it.

Yeah. Jordan Wailer, the co-author on the study here, has a great way of talking about this where the property manager is kind of like the factory that turns an unusable structure into a home that's ready to move into. And, you know, I think critics of landlords and property managers, they kind of try to make it sound like these homes and apartments just exist. It's like, take as a given all homes and apartments are habitable. It's like, well, wait a minute, there's actually like a lot that goes on to maintaining these structures and keeping them habitable and getting them ready to rent between tenants. There's, there's a ton of work of oversight and management and physical labor that's happening to make this all work. And I think, yeah, just like you said, rental housing is part of the solution, and the people who make that rental housing possible are also part of the solution. These things don't just exist in a vacuum. This isn't like a physics problem where you can just assume there's no friction. It's like, no, I mean, if landlords and property managers ceased to exist, we wouldn't have some utopia where everyone could just move into all these vacant homes and it would be in this amazing thing. Everything would instantly start to deteriorate. The lack of contract enforcement would cause chaos and fighting and murders. It would just be mayhem. And so It's like, how can we articulate that in a way that reminds folks like someone's actually keeping these things going? There's a lot more to it than just collecting the rent. Absolutely.

And I'll give you another thing too, is if I mentioned part of the being rental housing part of the solution, I mean, think about this, it's like a lot of people listening to this that you probably have homes in neighborhoods that are places where people, maybe they could afford to be a home buyer somewhere in your metropolitan area, but not in that neighborhood where they actually want to live.

Yeah.

And so what rental housing really does is it unlocks neighborhoods to people who couldn't otherwise afford or want to, for whatever reason, to be buying in that neighborhood. And so in that way, it's, I mean, there's plenty of research on this too. It's like rental housing helps diversify our communities, you know? And that's something that I think that we don't talk about enough is the role that rental housing plays in creating a fabric for our communities at both, you know, age and gender, race, whatever, but also think about like the diversity of, you know, there are some cases, I remember years ago where there's a growing suburb here in Dallas that at the time wasn't really building many apartments, whatnot. And they couldn't get, they were all these retail stores opening and whatnot. They're having this, people were coming in, they were having to pay people more to bring people in to work in these stores and the malls and the restaurants because they didn't think about the fact that, hey, like rental housing is important for the fabric of our community. Like we need people who can afford to live here in order to have the retail and restaurant amenities that we want.

Yeah, I'm picturing like a national ad campaign, like the Got Milk ad of years gone by where all the dairy producers got together. We need to get all the rental housing providers together and we need to run ads. It's like rental housing unlocking neighborhoods or like some sort of way to highlight some of these positive impacts that rental housing really has on, on society and, and on encouraging diversity within neighborhoods and things like that.

Yeah, absolutely. I like it. Yeah.

So let's wrap up by looking forward, casting our eyes forward a little bit. What should property managers expect over the next 4 years? We just had kind of a surprise election back in November, and if I'm putting on my sort of tactical business owner's hat and ignoring my personal feelings, how should I be preparing or what should I be expecting over the next 4 years as a rental housing provider?

That's a great question. I think the first thing is going to be interesting on the policy side. And I know you said we shouldn't talk about federal policy, but I'll just—

Well, we'll make an exception now. Yeah.

Yeah. You know, in your great state of Ohio, you know, Senator J.D. Vance is now going to be Vice President Vance. And as a senator, he, as you know, Peter, I'm sure, was very critical of single-family rental owners and investors. And he was part of a, I think, a bipartisan group that really, I think, incorrectly labeled any kind of SFRs as kind of like Wall Street private equity, yada, yada, yada. People can't afford to buy houses because of rental investors, et cetera. Now the Trump administration, President Trump has not used that kind of language, and obviously he's a real estate guy, so I don't know that that actually takes root. But I think it's something to watch because again, I think there's some bipartisan alignment ironically around misinformation about the industry that could put a challenge. 'Cause one of the things, and I should point out this too, like when he was senator, he didn't actually endorse this legislation, but the proposed legislation in the Senate would have, I can't remember the exact rule, but it was like if you own so many homes, then all of a sudden there's severe tax burdens that would basically encourage you to sell. Now that's not going to pass, I don't think, but it is something to kind of keep an eye on. And that was your other Ohio senator, right? Senator Brown, who sent the— removed from, or just got voted out. So I think that's always something to watch. I'm hoping that the supply solution comes more around incentivizing builders to build more starter homes for first-time buyers. And I think that'll be a win-win for everybody. Hopefully we do see that. Now in terms of other things, like I think that the demand side will continue to be solid. Over the next handful of years, the demographics are very favorable, I think, for both SFR and for multifamily. And, but everything we just talked about in terms of the professionalization, Amazonification, like again, progress doesn't go backward. Like people are going to expect more and more of this going forward. You know, instant responses, more, you know, more click of the button, you know, things. I think all of that will only intensify. And then, you know, kind of city side too, like the regulatory environment's probably going to get tougher. So yeah, I think that again, demand side's good. I think the affordability story is probably better than most people think. I'm a little more bullish on this than a lot of others. I don't think you're going to have challenges on the affordability side for the most part in most areas. I think demand will be good, but you know, the regulatory environment and technology I think are the two things to keep an eye on.

Last question to end the show today. If we reran the survey, say in 2 years, what are some areas that you think would be fruitful to ask about that maybe we didn't this first time around? And what are some areas you think would be fruitful to double-click on as we talk to individual mom-and-pop property owners 2 years from now?

Well, that's a great question. I, I would like to think about, give you a better answer, but like, I think the, the first answer I think is to better understand how the increased regulatory environment is, I would double-click on that of understanding how that impacts their long-term appetite to be an SFR owner. And I think that would be an interesting one. And really understanding too, like what specific things are challenging their business models in the regulatory. I'm sure it's different by city, whether it's a PHA or whether it's, you know, inspection issues or whatever. I mean, or tax, I don't know what it could be, or just the demonization of property managers, et cetera. And then try to think, the other thing I think would be really interesting to really double-click on is the maintenance issues and really understanding, I think the survey, I really breaking more detail into like upgrades versus deferred maintenance. I think better understanding the depth of deferred maintenance in the SFR stock is, is I think would be a really fascinating issue.

Great. Couldn't agree more. Well, thank you, Jay. I appreciate your time coming on the show and helping me digest this PM Trends report further. For folks who want to follow along with your analysis and, you know, shares from the industry, where can they do that?

Well, you know, there's so many platforms and I feel like I have to get on all of them. So, yeah, LinkedIn, Twitter/X, started dabbling in Bluesky. I've got a blog or a newsletter at jparsons.com. That's— so I'm not too hard to find.

All right, great. Well, thanks so much, Jay, and I appreciate your time today.

Thanks, Peter.

I hope you have enjoyed this episode. If you like the show and want to get connected to the community, you can follow me on Twitter @PSLohmann and subscribe to my email newsletter on my website, peterlohmann.com. I try to share as much valuable property management content as I can on a regular basis. Thanks again for listening and have a great week.