With rental rates going up across the US where many Americans still cannot afford to buy homes, distressed consumers forced out of homeownership by foreclosure are finding refuge in the apartment sector. According to sources, this trend of owners becoming renters is actually supporting the fragile recovery seen so far in the housing sector. And a boom in the rental market is creating opportunity for private equity investment. Neighborhood stabilization depends on a balance between ownership and rental. The rental market is becoming critical to keeping homes occupied, according to Stockton Williams, senior advisor and director of green economy initiatives for Living Cities. "As homeowners become renters and prospective new buyers cannot or will not enter the homeownership market, rental becomes a critical means of keeping homes occupied," Williams said in an exclusive Q&A in a upcoming HousingWire issue. "This is in the immediate best interest of homeowners in low-income communities, many of whom are far underwater. Right now, in communities destabilized by foreclosures, occupancy comes first." He added that properties do not have to remain in rental forever, as renters purchase and multifamily properties can be converted to condos and sold over time. Williams said, "To do this, we have to remove barriers to acquiring rental properties; strengthen mechanisms to influence management and maintenance of existing rental properties; incentivize developers and owners to convert excess supply of homeownership units (assuming they don’t need to be demolished); strengthen and sharpen enforcement; and keep stable tenants in foreclosed rental units." Among rental properties that remain in performing status, the market for investing is strong. Grubb & Ellis Apartment REIT -- a real estate investment trust -- recently acquired a 216-unit luxury multifamily community in the Dallas suburb of Duncanville. The property, Bella Ruscello Luxury Apartment Homes, was built in 2007 and is currently 97% occupied. "Bella Ruscello Luxury Apartment Homes is a well-occupied and well-equipped luxury apartment community that adds immediate value to Grubb & Ellis Apartment REIT," said chairman and CEO Stanley Olander Jr. "Bella Ruscello is concrete evidence of the favorable acquisition environment we currently enjoy; this exceptional property was acquired at a significant discount compared to what it likely would have traded for just a couple of years ago." Grubb & Ellis acquired the property with financing provided by Fannie Mae (FNM) and arranged by Berkadia Commercial Mortgage. The acquisition closed March 24th for $17.4m plus closing costs, according to a regulatory filing. Write to Diana Golobay. Disclosure: The author holds no relevant investment positions.