I was recently moderating a panel on short-term rentals (STRs) at the Indiana Apartment Association’s Multifamily Industry Summit, and a question came from the audience about the implications of Government Sponsored Enterprise (GSE) policies regarding STRs on the ability of owners to have as liquid a funding and sale market as possible.
This is a question that occasionally comes up in other STR panels and discussions though surprisingly not as often as one might expect. When I first heard this question in 2017, I did some research in early 2018 on this subject; and somewhat coincidentally, I had just updated this research following conversations leading up to NMHC’s OpTech.
First, let me say that our work and experience is completely on the operating side. Neither my team nor I have extensive experience in the financing side of the business. So everything here is a) the result of research into an area a bit out of our sweet spot and b) meant to start a conversation should anyone out there have information more contemporary and/or more accurate.
Back in early 2018, I found two interesting primary source materials:
Fast forward to a month ago, and with the kind assistance of Kim Duty at NMHC, I’ve learned:
It should be emphasized that neither of the updates has been codified in policy. These are all from discussions of what the GSEs are saying they intend to do. Through a Google search, I have not found any written primary source material on the above, but candidly I only spent 10 minutes trying. Also, of course, none of the above directly affects any loans through private capital.
If you have any information that provides primary source documentation or otherwise supports, clarifies or corrects any of the above, please share. This is obviously one of those cases where the energy of entrepreneurial markets has gotten more than a bit ahead of the regulatory process, so I expect it to be a bit volatile over the coming months and maybe even years.
Donald is CEO of Real Estate Business Analytics (REBA) and principal for D2 Demand Solutions, and industry consulting firm focused on business intelligence, pricing and revenue management, sales performance improvement and other topline processes