Greystar ties rent to inflation in Houston

Greystar has launched a brand of apartment communities that target the “missing middle” housing market, and it’s testing the waters with a project in Houston.

Communities under the brand Ltd. by Greystar will have annual rent increases on track with the national consumer price index, or 3 percent, whichever is greater, the Houston Chronicle reported. Greystar says it is implementing this strategy to expand the supply of workforce housing.

The brand targets renters who typically can’t afford new, market-rate apartments but also don’t qualify for subsidized housing, Greystar Senior Managing Director Scott Berka said.

“We wanted to create a win-win outcome that delivers new, quality housing at affordable rents,” Burka told the outlet. “Ltd., importantly, provides rent cost predictability for existing residents. Through Ltd., we’re seeking to provide ‘certainty of housing’ for existing residents.”

The South Carolina-based developer is testing the concept on a 378-unit complex, called Ltd. Med Center, at 12806 Buffalo Speedway in Houston, about seven miles south of the Texas Medical Center. The complex opened in April and already has 61 percent occupancy. The firm is also experimenting with the brand in Davenport, Florida.

The rent increases within the Ltd. portfolio will be based on the CPI posted in January each year, if it’s more than three percent. That could benefit residents during times of rapid rental growth, but it could also work against them in markets where rents are flattening or even declining, like Houston. 

Greystar says Ltd. apartments offer a higher-quality experience compared to similarly priced, older communities typically associated with workforce housing. For instance, Ltd. Med Center advertises one-bedroom rents starting at around $1,100, while average rents across the greater Medical Center area are approximately $1,400.

—Quinn Donoghue

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