Decoding Build-to-Rent: A Trendy Fix for America’s Housing Hassles?

The housing market has always been a bit of a rollercoaster ride for many Americans. While some are eagerly waiting for a glimmer of hope in the form of potential relief, others are taking a different route altogether. Real estate developers, in particular, are seizing the opportunity presented by the high demand within the market by delving into the realm of “Build-to-rent” neighborhoods. These neighborhoods are a new trend in the market, offering full-size homes that are available for rent.

According to RentCafe’s analysis of Yardi Matrix data, build-to-rent homes have reached an all-time high. The numbers speak volumes – in 2021, 9,978 homes were built, and that figure skyrocketed to 15,691 in 2022. Last year alone, over 27,000 new build-to-rent homes sprung up, with Phoenix, Dallas, and Atlanta leading the charge in construction. The National Association of Home Builders has touted build-to-rent homes as a viable option for individuals who may not have the financial means to purchase a home or for those who find themselves frequently on the move due to work commitments.

Robert Dietz, the chief economist for the National Association of Home Builders, emphasized the significance of homeownership as a primary avenue for wealth accumulation for families. However, he also acknowledged that renting can be a practical choice for certain households. Muqaddam-Grayer, a property manager overseeing two build-to-rent communities, highlighted the appeal of these communities for individuals who may not have the capability or desire to maintain a home of their own. The rental prices in these communities can range from $2,700 to $4,200 a month, reflecting the premium nature of the offerings.

Ian Peterson, president and owner of Integrate Properties, LLC, shared his vision for developing these rental communities in areas with reputable school districts, underlining the emphasis on providing a wholesome living environment for residents. Dietz echoed the sentiment, noting that these communities offer a practical solution for individuals who are diligently saving for a down payment to purchase a home or for those who prioritize flexibility due to their transient lifestyles.

In essence, the rise of build-to-rent neighborhoods signals a shift in the traditional mindset of homeownership being the ultimate goal. These communities cater to a diverse range of individuals, offering them a compelling alternative that aligns with their current circumstances and preferences. As the housing market continues to evolve, the build-to-rent trend presents an intriguing avenue for both developers and prospective tenants alike.