This industry includes establishments primarily engaged in the operation of dwellings other than apartment buildings. By definition, such dwellings contain four or fewer housing units. This industry does not include hotels, rooming and boarding houses, camps, and other lodging places for transients. Hotels and motels are classified in SIC 7011: Hotels and Motels; rooming and boarding houses are classified in SIC 7021: Rooming and Boarding Houses; and camps are covered in SIC 7032: Sporting and Recreational Camps.
531110 (Lessors of Residential Buildings and Dwellings)
Bixby Ranch Co. of Seal Beach, California, which placed second in the industry with 1998 sales of $82 million, found itself embattled with residents in its home town who opposed a 218-acre development that started out as a golf course plan and grew into a combined housing and shopping center plan. Residents expressed concern over increased traffic and pollution resulting from the commercialization of its community, preferring a housing-only development. Bixby pointed out several compelling arguments defending its position: first, the Bixby family owned the land since 1875; second, the project passed the scrutiny of a thorough environmental impact review as well as city council approval; and third, that the commercial interests will bring in revenue and create jobs in the depressed economy.
Gertrude Gardner Inc. of Metairie, Louisiana led the industry with sales of $222 million for its fiscal year ended September 30, 1998. Indianapolis-based Gene B. Glick Company generated 1999 sales of $74 million, and New York City-based Time Equities Inc. placed fourth in the industry with 1998 sales of $28 million.
This segment of the real estate industry is small—worth an estimated $3.5 billion by the mid 1990s—primarily populated by individual owners of rental properties (generally houses). Large chains or companies are a relatively small presence, typically limited to regional influence. As an established, albeit minor, element of the larger real estate industry in the United States, establishments involved in this industry are influenced by the same economic and social factors that impact the largest real estate property management firms. The U.S. Census Bureau estimated some 9,000 establishments in this category in the early 1990s.
As the U.S. economy surged, beginning in 1992 and continuing into the new millennium, rental properties in general became more appealing to small investors, both companies and individuals. Individual investors began to put more capital into investment properties even though federal tax changes in the late 1980s had limited deductions on investment property. Many of these individuals sought small properties in which to invest so that mortgages would be manageable or not necessary.
An example of a company that capitalized on this trend in the late 1990s is the Burnett Financial Group, headquartered in Edina, Illinois, near Chicago. Burnett was ranked as the country's fourth largest real estate brokerage in 1995. In early 1997, Burnett opened a subsidiary, Burnett Property Management, which had several functions. It handled traditional rental properties, particularly for small investors who did not want to perform all of the management functions such as screening tenants and making emergency repairs. It also provided property management services for people who were temporarily leaving the area or who had to move before they could sell their single-family residences.
DeNitto, Emily. "Eighties Redux? Invested Interest: Individual Investors Taste Past Glories in Newly Profitable Residential Market." Crain's New York Business, 13 January 1997.
Gendler, Neal. "Burnet Financial Group Announces Creation of Property Management Group." Star Tribune, 19 February 1997.
Infotrac Company Profiles, 19 February 2000. Available at http://web4.infotrac.galegroup.com .
"1996 Executive Summary; Real Estate Industry Forecasts; 1996 Landauer Real Estate Forecast." National Real Estate Investor, January 1996.
Segura, Joe. "Calif. Homeowners Complain about Commercial Devlopment." Knight-Ridder/Tribune Business News, 6 May 1997.
"The Residential Market; Real Estate Forecasts; 1996 Landauer Real Estate Forecasts." National Real Estate Investor, January 1996.
Tuinstra, Rachel. "Proposed Seal Beach, Calif., Development Builds Up Anger." Knight-Ridder/Tribune Business News, 19 December 1998.