Jul 24, 2023 - Real Estate

Built-to-rent house trend skips Oregon so far

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

Building houses for rent, not for sale, is a growing national trend, Axios' Felix Salmon reports. But Oregon is one of 10 states where it's not happening, despite efforts to create more much-needed housing here.

Why it matters: Built-to-rent single-family houses offer property management perks without the need for a down payment or long-term commitment.

Driving the news: Nationwide, there are 345 built-to-rent homes planned or under construction per million residents, per the National Rental Home Council.

  • In Oregon, NRHC research turned up zero built-to-rent houses in development.

Context: National construction of new built-to-rent homes hit a record high last year, with more than 14,500 houses completed and three times as many under construction, per RentCafe.

What's happening: These houses are in growing demand among would-be buyers who can't afford — or find — a single-family home, and those opting not to buy for lifestyle reasons.

What they're saying: "Portland and, more broadly, the state of Oregon have many of the kind of drivers that housing developers are looking for when they enter a market," NRHC CEO David Howard tells Axios, such as population growth and a need for all kinds of housing.

  • The Oregon Home Builders Association didn't respond to requests for an interview in time for publication.

Yes, but: Oregon's limits on annual rent increases worry built-to-rent developers, Howard said.

  • "Say what you will about the legitimacy of various rent control and rent cap regimes … it's something that causes developers to pause in their consideration of whether they want to enter a market," he said.
  • "I think developers have just gravitated toward other markets where there perhaps is more certainty."

The other side: "This type of housing does increase supply somewhat, but not necessarily the type of supply that would help a lot of people who are really in desperate need of housing," Marie Claire Tran-Leung, senior staff attorney with the National Housing Law Project, tells Axios.

  • "It does seem to be geared more towards middle-class families and that is not necessarily where the lack of housing is felt most urgently," she said.

Meanwhile, Zillow data says the U.S. needs 4.3 million more homes.

  • Oregon lawmakers passed a slew of bills this past legislative session aimed at building tens of thousands of new homes per year.

Of note: Arizona has the most robust built-to-rent homes industry, with 2,011 units planned or under construction per million residents.

  • North Carolina is a distant second, with 1,071; Texas is third, with 856.

The bottom line: Building more single-family rentals isn't going to solve the housing crisis, but it could ease the supply crunch — if it comes here.

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