As millennials drive rental demand, Dallas and Houston rank 3rd and 4th nationally in build-to-rent construction

A total of 6,740 single-family rentals were built nationwide in 2021 alone; this year, cities are in race to meet demand for single-family rentals

Larry Corson of Corson Cramer Development (Corson Cramer Development, iStock)
Larry Corson of Corson Cramer Development (Corson Cramer Development, iStock)

As Millennials choose dogs over children and renting over buying, Texas developers hammer away to meet demand.

Dallas-Fort Worth and Houston rank third and fourth, respectively, in build-to-rent communities, according to Dallas Business Journal’s analysis of a new report from rental platform RentCafé. With a total of 4,290 houses in build-to-rent communities, Dallas-Fort Worth’s rental market ranks third behind the Phoenix area, with 6,420, and Columbus, Ohio, with 4,780.

The Houston area trails just behind Dallas-Fort Worth with 3,600 rental units, ranking fourth nationally. Houston proper tops its north Texas competitor in the number of single-family rentals within their respective city limits. Dallas proper has 1,270 single-family rentals while Houston boasts 1,620.

Central Texas has also seen a surge in this sector. San Antonio has 960 homes in build-to-rent communities and Austin has 760.

Build-to-rent communities, which are made up of single-family homes intended for renters instead of buyers, have become a hot trend in residential real estate as renters look for more space and privacy while waiting out the seller-dominated market.

The affordability of single-family rentals satisfies a niche for millennials and similar groups, said Larry Corson of Dallas-based Corson Cramer Development. Corson’s firm buys and develops land intended for single-family rentals and residential communities.

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“It fills the gap between being in an apartment and being in a home,” he said. “It’s certainly very attractive to people with pets. It’s attractive to people who are looking for a little bit more privacy.”

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As a result, build-to-rent construction is exploding to meet demand. Searches for “homes for rent” on tripled between 2020 and 2021.

A record number of single-family rental homes–6,740 nationally – were built in 2021, according to the RentCafé report. The momentum seems to be growing exponentially with plans for nearly 14,000 more this year.

The fast-growing demand is also driving up rental prices. Last year, Dallas-Fort Worth saw the sixth highest increase in rental prices in the nation– a whopping 14.1 percent, according to an analysis by CoreLogic cited by the Dallas Business Journal. As of September, the median rent for single-family homes in Dallas-Fort Worth was $1,909.

Leading this roaring rental market is Dallas-based Invitation Homes, which owns more than 80,000 single-family rentals across the country, making it the largest owner of rental homes nationally. The publicly-traded company has become a favorite of investors, but has also captured the attention of Sen. Elizabeth Warren (D-MA) who accused the firm of hiking rents and driving up sales prices at the expense of first-time homebuyers earlier this month.

[Dallas Business Journal] – Maddy Sperling