Rental Housing: A Perennial Safe Bet

July 7, 2022

By Carson Halley

Portland, Oregon

Investment trends come and go – bringing with them the occasional “unicorn” runaway successes and more often, many failed ventures. But some investments, while not particularly sexy like Bitcoin or NFTs, are almost always a safe bet. Hidden in plain sight, one of these is rental housing – particularly in urban and suburban markets. 

Rental housing is always a viable choice for a large chunk of the population – even in 2006 as home ownership soared and people predicted the demise of rentals, that never came to pass. This means it is also an excellent investment choice. We’ve written about the many factors that make rental housing a strong investment before (see our annual letter from February 2022), but the story bears repeating, especially in such uncertain times.  

So - why housing? And why, rental housing in particular?  There are several factors that make this a strong market:

  • Housing is a Basic Human Need

Let’s start with Maslow’s Hierarchy of Needs, where “shelter” is among the most fundamental of all human needs. Westland’s founder Jerry Mason jokes that real estate is the “second oldest profession” – as long as humanity has been around, people need a place to live! And as the population grows, we will need MORE places to live, which brings us to….

  • Demand is Outpacing Supply

Studies show that the US is currently short about 3.8 million housing units required to meet the needs of the growing population. Given that it will be at least three years before construction growth catches up with the demand, existing supply becomes that much more valuable.  

  • Construction Labor is Limited

According to this article from NPR, problems finding skilled construction labor began with the housing bubble collapse of 2008, when many construction workers found themselves suddenly out of work. They retrained to work in other industries and have never returned to construction. The problem has been exacerbated by the great resignation spurred by COVID and the retirement of many Boomer-era construction workers. This means construction projects suffer from delayed start times or extended timelines due to the limited worker supply.  

  • Renters on the Rise

While home ownership has long been a big part of the “American dream,” renters consistently make up over one third of the housing market, and studies show that homeownership is declining. In 2021, the nationwide homeownership rate declined 3.7 year-over-year (LINK to study). With mortgage rates going from 2.75% to 5.3% this year, the average mortgage payment went from $1200 to $1900. This certainly makes renting even more attractive, as rents (while also increasing) are not likely to increase at such a high rate.

  • Mobility and Flexibility 

Employees’ desire for remote work and flexibility is most definitely here to stay in the post-COVID world. Millennials value the ability to travel and work from anywhere – which makes rental housing far more appealing. LINK to study. Having no strings attached and avoiding things like down payments and maintenance costs make for simpler, more flexible arrangements that appeal to this next generation. This trend has likely contributed to the decline seen in homeownership and is expected to continue as more businesses adapt to ongoing remote work.  

For all of the above reasons and more, we at Westland fundamentally believe in housing as a strong, strategic investment for the foreseeable future. We’ve seen this play out as truth over the past 40+ years, which is why we’ve stayed in this very business for so long. While there are always storms in any asset class, housing always bounces back – often stronger than ever – due to its fundamental nature. Our philosophy is that housing is and will continue to be a valuable investment for decades to come. 

To learn more about our investment approach, please contact us at


more news