- Described by some as “horizontal apartments,” communities of houses built for the sole purpose of renting are becoming the hottest topic in residential living.
- 6,740 new rental homes in built-to-rent communities were completed — the highest yearly total to date.
- There are an estimated 14,000 built-to-rent homes under construction in the United States right now. That will more than double the 2021 total.
- Currently, there are about 90,000 existing single-family homes in the United States in nearly 720 such communities designed specifically for renting.
- The occupancy rate is 97%.
What's Going On?
- According to Shannon Hersker with Walker & Dunlop: “There is a misconception that the majority of renters are Millennials when, in reality, you have everyone — including college students, empty nesters, families with kids, pet owners, and those wanting to downsize,” she said.
- “Undoubtedly, coronavirus has also impacted upon this increased popularity,” said Christopher Michael, architect and founder of archisoup. “Many are now moving out of the cities and apartment living to seek out more space in rural and suburban locations.”
Top 20 Metro Areas
Texas Leads the Way
Texas and Arizona have five of the top twenty built-to-rent areas.
The Phoenix area has 6,420 units. Phoenix is also a leading metro in new apartment construction, making it one of the top coveted areas for renters overall.
Texas and Arizona accounts for 17,020 of the existing 90,000 units.
Top 20 Cities
Las Vegas is the top city but once again Texas and Arizona leads the way with nine cities in the top 20.
Trend Makes Sense
These trends make sense for many reasons.
- Boomers fleeing high-tax states like Illinois.
- People downsizing in general seeking warmer climates.
- Homeowners of all sorts no longer want to deal with maintenance on yards, etc., but wanting community services and pools.
- Newly married couples and others have had enough of big city crime, congestion, and small apartments.
- Millennials want to remain mobile and/or cannot afford a down payment on a home.
- Work-at-home is not going away. Those who lived in cities for ease of commute now have other options.
Compared to the overall housing market this is a very tiny subset yet one clearly in increasing demand.
This article originally appeared on MishTalk.
Correction. I did not properly separate Texas and Arizona, now fixed.
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