The Lebanon City Council used a work session last Thursday to discuss rental properties within the city after a national “homes for rent” entity made a splash on Leeville Pike, surprising nearby residents and city leaders.

Councilors Fred Burton, Camille Burdine and Chris Crowell discussed rental properties as Lebanon Mayor Rick Bell and Lebanon Planning Director Paul Corder highlighted their presence and regulations surrounding them in the city.

Bell said Rowland Farms is not the first property purchased by American Homes 4 Rent within Lebanon. He said the company, along with a handful of other similar businesses, occupy several areas in the city, mainly in newer areas such as Spence Creek, Kensington, Plantation South, and in northern portions of Lebanon and near State Route 109.

In 2016, the Lebanon City Council approved a rezoning request on Leeville Pike for Fleming Homes for a 55-home subdivision called Rowland Farms. Residents and some city councilors, including Crowell, protested the rezoning. The council approved the request after Fleming Homes officials met with nearby residents, reportedly saying that it would be an elderly community where residents own their homes.

Last month, city officials learned the property had been sold to American Homes 4 Rent, a California-based real estate investment trust. American Homes 4 Rent specializes in buying property around the country and developing subdivisions that feature homes for rent instead of ownership.

The group has kept the working name Rowland Farms for the development.

American Homes 4 Rent would not need to appear before the Lebanon Planning Commission nor Lebanon City Council due to the allowances of the zone that came with the rezoning in 2016. However, the development would still be subject to site plan and other routine reviews.

Corder said there are about 140 properties within the city currently owned by “build to rent” entities, including Rowland Farms, which is a relatively small number, according to Corder.

“This is a relatively small percentage of what’s in the county. We are not being affected as much as some other parts of the county,” Corder said. “Which means it’s possible that it could grow.”

Bell said a property owner with an approved plat that’s not been built told the mayor that he was approached by American Homes 4 Rent and was offered $200,000 above his asking price for his property.

“They have money and they’re very aggressive. He said he didn’t sell to them, but they did make a good offer,” Bell said. “It’s here.”

Bell said this type of purchasing and development is new to the city.

“We kind of know how to deal with apartments and townhouses. This is a new thing that we just don’t know how to deal with,” Bell said. “We have people here in town who own houses to rent. I own duplexes. I do. How do you tell people they can’t rent their houses?”

The group discussed putting a cap on the number of allowed rentals within a subdivision, but Corder said the regulation could be hard to enforce.

Bell said the market in Lebanon is inviting to the national renters and the city must figure out a way to curb the issue with more options for residents.

“They wouldn’t go to a place where there wasn’t a market, because they’re in the business of making money. There must be a rental market here. I think part of this is out of our control. Housing prices have gone so high now. People can’t afford to buy a house and they have to live somewhere,” Bell said. “I don’t know what the answer to that is.”

Corder said the city and local developers must provide housing options that people in the city want.

“What we have right now is a lot of single-family homes – three-bedroom homes — and if there’s a single person, young couple or older couple who want maybe a one- or two-bedroom house, they can’t find it,” said Corder. “Our problem is not that we have too small of units. Our problem is that we don’t have any small units. We don’t have any at all.”

Corder added that too many regulations and restrictive zoning also allows for more rental properties.

“It’s the opposite of what we think it is. If you put too much restrictions on, this is the only option. You have to make the stuff that people want legal in order to avoid this,” Corder said. “That’s really counterintuitive.”

Burdine questioned Corder on what actions he suggested the city take.

“We really need to tap in and figure out what the people need in the city and how do we provide it? We have to figure out what is the market and where we are lacking. Where are people suffering? How can we fix that? Where are people wanting something that we can’t get? And I think we need to do that in a quality way,” Corder said.