Is There a New Alternative To Renting Or Owning House?

Article Summary:

One potential alternative to renting or owning a house is publicly owned housing, an idea proposed by Shane Phillips. This housing option would combine rent-style living with the equity-building bonus of homeownership. However, there are several other housing options available, such as living in an RV, on a boat, or co-living with roommates.

When finding a place to call home, the options can seem pretty limited — you can either rent an apartment or buy a house. According to Federal Reserve Economic Data, the median sales price of houses sold in the U.S. in 2022 reached an all-time high of $440,300. And renting an apartment isn’t much cheaper. In February 2022, the average monthly rent for a two-bedroom apartment reached $1,295 — up from $1,100 in 2021. For the average American, these price tags are simply too high.

Is renting or owning a house the only option available? Or are there other types of living arrangements that won’t break the bank? In this article, we’ll explore some out-of-the-box ideas for anyone tired of shelling out big bucks for a roof over their head.

The growing expense of housing

It’s no surprise that housing is the most expensive bill you pay. This is true for most of us, regardless of whether you rent or own. However, this cost has increased far above the average income for many U.S. households.

This results in uneasiness that spreads rapidly throughout the housing community. While some say renting is a waste of money, others are quick to point out the growing dangers of homeownership (think 2008). Ultimately, there are a lot of potential issues with both kinds of living.

Because of this housing crisis, many Americans are considering alternative options to save money on their monthly expenses. For example, some opt to share a living space with roommates to cut living costs, while some move out of highly-priced urban areas and into more affordable suburbs or rural areas. Some even choose to forgo the traditional forms of housing and explore other creative types of living arrangements.

1. RV or van living

As the housing market becomes increasingly competitive in recent years, there’s been a growing trend of people choosing to live in vans and RVs as a more affordable housing option. Obviously, this lifestyle may not be for everyone as there are some downsides like a smaller space, gas prices, and the lack of stability a house would provide. And if you’re living in your van, you may long for a full-sized bed to stretch out on.

That being said, there are plenty of perks to RV or van living as well. Not only can you save a lot of money on rent or mortgage payments, but you can also travel easily and explore different parts of the country without worrying about finding a place to stay. And depending on your setup, you may find that a smaller space is worth the freedom.

Before looking for a van or RV to start your on-the-road lifestyle, make sure you get the right auto loan and insurance for your purchase. Comparing lenders will help you get the lowest interest rates and monthly payments possible, which is especially important when living on a budget.

2. Public ownership rental option

Shane Phillips, the Housing Initiative Project Manager at UCLA’s Lewis Center for Regional Policy Studies, recently proposed an innovative alternative housing idea: the public ownership rental option.

In his article “Renting Is Terrible. Owning Is Worse,” Phillips mentioned how the younger generations are having a more difficult time building wealth through homeownership due to the rising housing prices. To resolve this issue, he suggests that the government make housing more accessible through a public ownership rental program. Here’s how it works.

Publicly owned housing, such as a publicly owned apartment complex, will be built with government loans. These housing units are then run by nonprofit and local for-profit property managers and rented at affordable market prices. There’s no need for a mortgage or a down payment. Instead, you’ll simply move in and pay rent.

As you pay rent each month, you’ll accrue equity. Since your home is a public ownership building, you won’t be able to truly own the property. However, you can draw on the equity you build in the form of dividends or monthly payments in the future — similar to Social Security.

Though this housing program hasn’t been implemented yet, it could potentially become a great way to help low-income households or middle-income individuals afford housing.

3. Co-living spaces

Co-living is a new trend that has been popping up in major cities worldwide. The concept is simple: Instead of renting or owning your own apartment, you live in a communal space with other people.

Co-living spaces include shared amenities like kitchens and laundry facilities, which can help reduce your total housing costs. Plus, co-living spaces often host activities and events to help with community building. So if you love connecting with people on a daily basis, co-living could be a great alternative to renting your own apartment or owning a home.

4. The liveaboard lifestyle

While the liveaboard lifestyle may seem like a crazy idea at first, it’s actually a viable alternative to traditional forms of housing. Living on a boat allows you to travel and explore new places without leaving your home. Plus, you’ll always have a great view of the ocean!

Of course, there are some challenges to living on a boat, such as dealing with bad weather and learning how to repair your vessel. You’ll also have to be okay with smaller spaces unless you can splurge big on a giant yacht. But if you’re up for the challenge, the liveaboard lifestyle might be your cup of tea.

With those downsides in mind, make sure you get the right insurance for your vessel. This way, when you do eventually hit bad weather, you’ll have insurance in place to help pay for your repairs.

Pros and cons of owning a home

For many Americans, owning a home is essential to the American dream. However, you should be aware of the pros and cons of homeownership before you start saving for a down payment or considering an alternative housing solution.


Here is a list of the benefits and drawbacks to consider.

  • More control over the property. When you own your home, you can paint the walls any color you want, put up as many pictures as your heart desires, and plant a garden in the front yard. You don’t have to ask permission from your landlord every time you want to make a change.
  • Wealth-generating potential. Your home’s equity is the difference between the home’s current market value and how much mortgage you still owe. So with each mortgage payment, you’re slowly building equity in your property. And if you need to borrow money down the road (for a major home renovation or college tuition), you can borrow against the equity in your property by taking out a home equity loan or line of credit.
  • Long-term stability. When you own a home, you can stay in the same place for as long as you want. You won’t have to worry about whether or not your landlord will suddenly raise the rent or sell the property. And if you plan on having a family, owning a home gives you the option to pass it down to the next generation.
  • Property taxes. Apart from making your mortgage payments each month, you also need to pay property taxes. Your property tax will depend on where you live and your home’s value. For example, the tax rate in Utah is 0.605%, whereas Hawaii has a tax rate of only 0.281%. So if you own a $275,000 property in Utah, expect to shell out around $1,600 in property taxes each year.
  • Maintenance and repairs. When you own a home, if something goes wrong with your property, it’s your responsibility to fix it. Homeowners spend thousands of dollars maintaining their properties, and even more money to improve their homes. If you’re not financially ready to deal with upkeeping a house, you might want to give homeownership a second thought.
  • High upfront costs. To buy a house, you typically need to put down 3% to 20% of the purchase price — depending on your credit score and other factors. On top of that, you have to pay for moving expenses, closing costs, and furnishing your new home. So, while homeownership has plenty of perks, be sure to factor in the high upfront costs before making the jump.

If you think owning a home is still the best option after considering the above alternatives, start preparing for homeownership as soon as possible. Work on your credit score so you can get a better mortgage rate, and begin setting aside money each month for your down payment.

Use the comparison tool below to see what mortgage rates you qualify for. You can also input your credit score to see how your options may change depending on how your credit score improves or worsens.


What is the best reason why someone would want to rent a house instead of buying one?

There’s no definitive answer to this question since each person probably has a different reason for why they’d want to rent a house rather than buy one. Some might prefer renting because it gives them the freedom to move around without being tied down to a particular property. Others might like the fact that they don’t have to worry about maintenance and repairs. And then there are some who simply can’t afford to contribute a large down payment.

Why do millionaires rent?

It’s a common misconception that only low or middle-income individuals rent while rich people own property. In reality, there are plenty of millionaires who prefer to rent rather than buy.

Though owning a home has its perks, renting an apartment also comes with lots of advantages. You can easily pick up and move when you want to experience a new environment. Plus, you won’t have to deal with maintenance and repairs. Renting is flexible and requires less commitment, which is why many — despite having the financial means to purchase a home — don’t have the immediate desire to become homeowners.

Key Takeaways

  • For many, homeownership has become unattainable due to the rapidly rising home prices. In 2022, the median home sales price reached over $400,000.
  • There are a few alternatives to renting or buying a home. You can consider living in an RV, trying the liveaboard lifestyle, and co-living with other people.
  • Another potential future housing alternative is the publicly owned housing program proposed by Shane Phillips, the Housing Initiative Project Manager at UCLA.
  • Owning a house might not be for everybody. If you’re not financially ready to handle the costs associated with homeownership, consider exploring other options.
View Article Sources
  1. Rental Burdens: Rethinking Affordability Measures — Office of Policy Development and Research
  2. Housing Affordability — U.S. Census Bureau
  3. Home Ownership: Is It Really Worth It? — SuperMoney
  4. How to Save for a House While Renting — SuperMoney
  5. Is This a Good Time to Buy a House? — SuperMoney
  6. The Ultimate Guide To Buying A New Home — SuperMoney
  7. The Benefits of Buying a House in Your 20s — SuperMoney
  8. What is a Single-Family Home? — SuperMoney
  9. How To Finance Multiple Rental Properties — SuperMoney
  10. What Does Free and Clear Mean in Real Estate? — SuperMoney
  11. What is a Multifamily Home? Everything You Need To Know — SuperMoney
  12. How to Buy a House — SuperMoney