Innovation in the Rental Housing Market through Utilizing Securitization

ABSTRACT

The method of utilizing securitization is beginning to have an impact on new supply of rental housing, such as leading to an increase in supply of traditionally scarce high-quality rental condominiums. It is possible that the securitization method can also be utilized as a revival measure for dilapidated condominiums, which are expected to rapidly increase in the future. Funds would purchase the dilapidated condominiums by raising capital from investors, and after renovation would revive them as various kinds of rental housing (for young renters, family renters, elderly renters, so-called “weak renters” and so on).

If this scenario were to be actively pursued, it would become easy for elderly people to sell their dilapidated condominiums and use the capital to move to elderly housing. In addition, instead of going out on a limb to purchase housing, it would make it possible for young adults to move among various kinds of rental housing appropriate to their stage in life. This type of housing cycle would also lead to effective utilization of the existing housing stock.