Jul 1, 2023 - Real Estate

D.C. is short 134,000 homes for sale

Illustration of a hand fitting a house in a gap.

Illustration: Aïda Amer/Axios

Single-family rental homes are on the rise nationally, but don't expect the trend — aka built-to-rent housing — to take off in D.C.

Why it matters: The D.C. metro is short almost 134,000 homes for sale or rent, one of the widest housing gaps in the country, a new Zillow analysis shows.

How it works: 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.

Yes, but: The growth of D.C.'s supply of those homes lags other major metros, per a recent report from listing service RentCafe.

  • The area has added only 143 new single-family rentals in the last five years. Of the five U.S. metros bigger than D.C., only New York saw a smaller increase.

What's happening: Built-to-rent housing is held up as a way to ease the housing shortage. But the density of D.C. and its surrounding cities isn't ideal for such housing, since builders need lots of available and usable land, Doug Ressler of real estate research firm Yardi Matrix tells Axios.

  • "You have to go out to places like Frederick to see single-family rentals — that far out of the D.C. area."

The big picture: Built-to-rent houses have found a growing niche among would-be buyers who can't afford — or find — a single-family home, and those opting not to buy for lifestyle reasons, says Ressler, Yardi's manager of business intelligence.

What they're saying: "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.

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

In Virginia, there are 127 built-to-rent units planned or under construction per million inhabitants, according to the National Rental Home Council.

  • In Maryland, that ratio is just 42 per million people.

State of play: These houses aren't available everywhere. In 10 states, there is no single-family, built-to-rent construction ongoing or even planned, the group found.

  • The state with the most built-to-rent housing is Arizona, with 2,011 units planned or under construction per million inhabitants.
  • Nationwide, the average is 345.
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