I think there are a number of issues that make a shift away from home ownership a difficult proposition:
The market tends to be self-limiting.
The kind of on-demand housing you’re describing might work for 18–35 year olds, but is unlikely to work for people outside that age group. Once you’re in a relationship, or if you have kids, you tend to move around a lot less. That stability is good for both relationships and children.
Yes, families can and do move based on new jobs, but that is far less common than it is amongst single 18–35 year olds.
There are legal issues.
There are numerous stories about AirBnB stays that were too long going bad and turning into nightmares for the hosts based on local squatting laws. Often, there is a legal time limit to short term renting, after which the guest becomes the tenant and is afforded a lot more rights.
Trying to play in a space where someone becomes a tenant, but you don’t have the protection of lease agreements and deposits would be a difficult regulatory and financial space to navigate.
Home ownership is actually good.
For most people, their home is their single biggest, safest long-term investment. People who own homes build far more wealth than the vast majority of renters. (Yes, if a renter were diligent about investing the difference between the market rate rent and a monthly mortgage in the same area, that investment might out-perform home ownership, but very few people actually do that.)
Giving Americans yet another way to avoid building long-term wealth seems counter to what we should be doing.
Maybe there’s something in the middle?
An interesting idea for me would be to try to fix the major downside of renting: not building any long-term wealth. It would be a huge win if there were a way to help renters save for the future. If you could incentivize landlords to opt in, it would be even better.
Totally spitballing:
- A renter pays a bit more per month on top of their rent that goes into an index fund managed by this new startup.
- As renters build up savings, they become more attractive to landlords for two reasons:
a) They have savings to help them get through any rough patches.
b) Some amount of the annual gains could be split with the landlord. (Housing appreciation has been somewhere around 1% per year over the last century. For the renter, even after splitting the annual growth on most index funds would put you ahead of that.)
3. Perhaps being an attractive renter with a large renter’s savings fund would open up doors to more flexible renting arrangements.
