As Millennials choose dogs over children and renting over buying, Texas developers hammer away to meet demand.
Dallas-Fort Worth and Houston rank third and fourth, respectively, in build-to-rent communities, according to Dallas Business Journal’s analysis of a new report from rental platform RentCafé. With a total of 4,290 houses in build-to-rent communities, Dallas-Fort Worth’s rental market ranks third behind the Phoenix area, with 6,420, and Columbus, Ohio, with 4,780.
The Houston area trails just behind Dallas-Fort Worth with 3,600 rental units, ranking fourth nationally. Houston proper tops its north Texas competitor in the number of single-family rentals within their respective city limits. Dallas proper has 1,270 single-family rentals while Houston boasts 1,620.
Central Texas has also seen a surge in this sector. San Antonio has 960 homes in build-to-rent communities and Austin has 760.
Build-to-rent communities, which are made up of single-family homes intended for renters instead of buyers, have become a hot trend in residential real estate as renters look for more space and privacy while waiting out the seller-dominated market.
The affordability of single-family rentals satisfies a niche for millennials and similar groups, said Larry Corson of Dallas-based Corson Cramer Development. Corson’s firm buys and develops land intended for single-family rentals and residential communities.
“It fills the gap between being in an apartment and being in a home,” he said. “It’s certainly very attractive to people with pets. It’s attractive to people who are looking for a little bit more privacy.”
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As a result, build-to-rent construction is exploding to meet demand. Searches for “homes for rent” on rentcafe.com tripled between 2020 and 2021.
A record number of single-family rental homes–6,740 nationally – were built in 2021, according to the RentCafé report. The momentum seems to be growing exponentially with plans for nearly 14,000 more this year.
The fast-growing demand is also driving up rental prices. Last year, Dallas-Fort Worth saw the sixth highest increase in rental prices in the nation– a whopping 14.1 percent, according to an analysis by CoreLogic cited by the Dallas Business Journal. As of September, the median rent for single-family homes in Dallas-Fort Worth was $1,909.
Leading this roaring rental market is Dallas-based Invitation Homes, which owns more than 80,000 single-family rentals across the country, making it the largest owner of rental homes nationally. The publicly-traded company has become a favorite of investors, but has also captured the attention of Sen. Elizabeth Warren (D-MA) who accused the firm of hiking rents and driving up sales prices at the expense of first-time homebuyers earlier this month.
[Dallas Business Journal] – Maddy Sperling