The housing market is becoming increasingly unaffordable, leaving many people unable to achieve the American dream of homeownership. In response to this growing crisis, a new solution is gaining traction across the United States – built-to-rent communities. These developments feature single-family homes exclusively designed for renters, offering an appealing option for those seeking the comforts of a house without the burden of ownership.
Richard Belote, a Texas resident, exemplifies this growing trend. While he currently rents a home 90 minutes outside Houston, he sees it as a temporary, albeit necessary, compromise. “It’s a good steppingstone,” he says, acknowledging that soaring interest rates have made buying a home impossible for him at this time. His hope is that interest rates will decline, allowing him and his fiancée to eventually enter the homebuying market.
Belote’s perspective is shared by many. A recent CNN poll revealed that a staggering 86% of renters nationwide believe they can’t afford to buy a home, and a disheartening 54% believe they may never own one. Yet, despite these challenges, a separate poll found that 81% of renters still aspire to own their own home someday. This dichotomy highlights the persistent desire for homeownership amidst the stark reality of affordability issues.
Jill Schlesinger, a CBS News business analyst, explains the situation succinctly: “House prices have increased by over 40% in just four years. There are a lot of people out there who really, really want to be in homes, and they just can’t afford to get there.”
This growing problem has paved the way for the rise of built-to-rent communities. These communities, which first emerged in Phoenix during the Great Recession, feature smaller, cottage-sized homes designed with higher density. They’re now spreading rapidly across cities in the Sunbelt, from Phoenix to Atlanta to Dallas, as more people seek alternatives to the traditional housing market.
Brent Long, who spearheads the build-to-rent expansion for Christopher Todd Communities in Arizona, explains that their tenants come from a diverse range of demographics, from Gen Z to Baby Boomers. “It’s really renters by choice and renters by need,” he says. Long emphasizes that he doesn’t believe this concept undermines the American dream of homeownership. “I think it solves some issues that are out there in terms of affordability and availability.”
Cassie Wilson, a renter in Phoenix, exemplifies the appeal of this model. She enjoys living in a fully maintained house while maintaining the flexibility to pursue her travel aspirations. “I can live here in a house that is fully kept up by someone else,” she says. While she hopes to buy a house eventually, she acknowledges that renting allows her to maintain a desired lifestyle.
Despite the rapid growth of built-to-rent communities, they currently account for only 7.9% of new housing construction, according to Arbor Realty Trust. While housing advocates in Arizona recognize the positive contribution of these communities, some warn that they won’t be sufficient to significantly lower home prices. Nevertheless, many welcome any solution that helps address the ongoing housing crisis.
The rise of built-to-rent communities represents a new chapter in the housing landscape. Whether they will be a panacea for the affordability crisis remains to be seen, but they are undoubtedly providing a much-needed alternative for those seeking a comfortable and sustainable housing solution in an increasingly challenging market.
