The Institutionalization of the American Dream

Currently, there is a gap between what is offered via the single-family homeownership model in the United States and what is desired by home consumers. Home consumers make one of the biggest investment decisions in their lives primarily based on utilization needs. The state of the housing market, available inventory, borrowing capabilities and interest rates, and where in life the consumer finds oneself are material factors that sometimes play second fiddle to the occupancy objectives consumers pursue when deciding between renting and owning shelter. Factors influencing occupancy related decisions can range from long-term growth or downsizing requirements, job stability, geographical labor mobility, and cost of living that are sometimes in conflict with traditional societal pressures to pursue the American dream of home ownership. Even though the purchase of a home is one of the biggest investments the average American will make it rarely is evaluated solely as an investment because the timing and market conditions are normally dictated by one’s occupancy needs. This thesis introduces a more flexible housing offering for consumers looking to enter more established single-family communities, particularly in the Northeast region of the United States where the recent Single-Family Rent (“SFR”) and Build to Rent (“BTR”) models have yet to become broadly institutionalized. Due to the binary own vs rent decision tree that consumers in these established markets face, there are limited options to align investment with occupancy decisions. As a result, there is a mismatch in what single-family home ownership models offer with what consumers are looking for depending upon their particular criteria. Via institutional partnership, additional housing transaction offerings focused on optionality can be introduced into the marketplace resulting in a more expansive menu of renting and buying opportunities for consumers to ultimately engineer more tailored investment vehicles for their financial and personal needs. This unique housing offering proposal will be presented in the form of an investment pitchbook under the fictitious name – The Housing Menu. The attributes of the investment opportunity, strategy, and structure will be applied and evaluated in a case study approach to ultimately determine the viability from an institutional investment perspective as well as to present the benefits to prospective homeowners in the hope to expand on the current homeownership menu offering.

Name thesis:degree_name

Master

Department dc:contributor.department

Massachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2022

Author dc:creator

• Geoghegan, James G.

Advisor dc:contributor.advisor

• Shen, Kairos

Statement dc:rights

• In Copyright - Educational Use Permitted
• Copyright retained by author(s)

Licence dc:rights.uri

• https://rightsstatements.org/page/InC-EDU/1.0/

Handle dc:identifier.uri

https://hdl.handle.net/1721.1/144663

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/144663