Built-to-rent housing is on the rise in the Twin Cities
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The Twin Cities area is among the top metros in the U.S. building the most single-family homes for rent.
Why it matters: Built-to-rent housing offers a new home with property management perks, and without the need for a down payment or long-term commitment, Axios' Felix Salmon reports.
What's happening: Those houses have found a growing demand among would-be buyers who can't afford — or find — a single-family home, as well as those opting not to buy for lifestyle reasons, Doug Ressler of real estate research firm Yardi Matrix tells Axios.
Driving the news: The metro area has 623 single-family rentals under construction, per a recent report from listing service RentCafe. That puts it among the top 20 nationwide for built-to-rent construction.
Zoom in: The Twin Cities' outer suburbs are a prime spot for those rentals, with more zoned land and big employers, says Ressler, a senior research officer at Yardi Matrix, which provides data for RentCafe.
- Eden Prairie-based Integrate Properties is developing 180 built-to-rent homes in Albertville and Victoria, offering a pool, dog park, clubhouse and homes that range from about 1,300 to 3,000 square feet, the firm's owner Ian Peterson tells Axios.
What they're saying: The properties have proved particularly appealing to three types of people, says Peterson: empty nesters (who are especially interested in snow removal and lawn care services), millennials and those who relocate to the area for work.
By the numbers: In Minnesota, there are 212 built-to-rent units planned or under construction per million residents, according to the National Rental Home Council.
- Nationwide, the average is 345.
Between the lines: Inventory levels of local homes for sale keep sliding. While Twin Cities homebuilding picked up in May, it still lagged this time last year, per Housing First Minnesota.
Zoom out: "Built-to-rent housing is quickly emerging as an essential, and highly desirable, sector of America’s housing market," says David Howard, CEO of the National Rental Home Council.
The bottom line: Building more single-family rentals isn't going to solve the housing crisis, but it could ease the supply crunch.