NEW YORK CITY—The demand in the rental housing market has risen steadily over the last decade as middle-class workers and families have chosen to rent after being priced out of purchasing homes. In fact, according to Harvard's “Joint Study on Apartment Affordability,” the annual growth in renter households has averaged just below one million since 2010, and it is estimated that the number of renter households will continue to increase by 500,000 annually until 2025.

Younger generations prefer the flexibility and convenience of renting and more and more people are living alone for longer periods of time (e.g., delayed marriage, aging population). Personal balance sheets are increasingly strained by student loans, and other debt and wages that don't keep up with the cost of living in many areas. Meanwhile, overall housing production is not keeping pace with demand before even considering the affordability or rental desirability.