May 20, 2023 - Economy

Built-to-rent housing is on the rise — and could help solve America’s home shortage

Single family built-to-rent units planned or under construction, per million residents
Data: National Rental Home Council, U.S. Census Bureau; Chart: Thomas Oide/Axios

America has declared: Now is a terrible time to buy a house. That implies stronger-than-ever demand for rental property, especially single-family homes.

Why it matters: Housing is still segregated across much of America, with the most expensive neighborhoods almost entirely owner-occupied and less desirable locales containing most of the rental properties. In some parts of the country, however, that's changing.

The big picture: Built-to-rent housing can provide the opportunity to move into a brand-new house — often with professional property management and other amenities attached — without the need to raise a huge down payment or a long-term commitment to stay in place.

Between the lines: Such houses aren't available everywhere. In 10 states, including Oregon, Massachusetts and West Virginia, there is no built-to-rent construction of single-family homes ongoing or planned at all, per the National Rental Home Council (NRHC).

  • On a per-capita basis, the state with by far the most built-to-rent housing is Arizona, with 2,011 units planned or under construction per million inhabitants. North Carolina is a distant second, with 1,071; Texas is third, with 856.
  • Nationwide, the average is 345.

What they're saying: “Built-to-rent housing is quickly emerging as an essential, and highly desirable, sector of America’s housing market,” says NRHC CEO David Howard.

  • "America is facing a housing shortage of somewhere between 3 and 6 million homes. Anything that brings more housing into the mix is a positive."

The bottom line: Built-to-rent single-family new construction isn't going to singlehandedly solve the housing crisis, with only 115,091 units in the pipeline nationwide.

  • A new dataset from NRHC and Yardi Matrix will allow economists to gauge, on a quarterly and state-by-state basis, whether that new supply is growing or shrinking.
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