Built-to-rent communities are sprouting up all over the Houston area as residents crave a suburban lifestyle without bearing the burden of home ownership.
Developers such as Clay Residential and McLain Homes are capitalizing on this trend in various parts of the metro, the Houston Chronicle reported.
Clay Residential, an affiliate of Clay Development & Construction, has started construction on a rental community with 368 homes in Cypress as part of the Marvida master planned community. The project marks the firm’s second built-to-rent development in Houston, as it launched Willow at Sierra Vista in Iowa Colony last year. The first homes in that development will be available in July.
Lafayette-based McLain Homes has opened the Cottages at Buckshot Landing, a gated community with 129 rental homes, spanning 18 acres, in Magnolia. The firm is now planning to build duplexes on a 15-acre tract near FM 149 and FM 1488.
In addition to the lifestyle aspect, the surge of built-to-rent communities has stemmed from increased home prices, compared to relatively slow wage growth. Houston’s median single-family home price has gone up 42 percent over the past five years, reaching $334,000 in the first quarter of 2023.
The median household income only grew by 14 percent over the same five-year period.
Higher mortgage rates, which doubled since last year to around 6.5 percent, have created another challenge for prospective home buyers.
“The headwinds for the single-family purchase market are the tailwinds of the single-family rental market,” Ermengarde Jabir, senior economist at Moody’s Analytics, told the outlet. “If they’re facing affordability issues purchasing their own home, the alternative for that portion of the population becomes a single-family rental.”
Built-to-rent homes have mostly attracted young people looking to move to the suburbs. But now older people are seeking rental homes, said Michelle Cigler, property manager at the Cottages at Buckshot Landing.
“They want to free up their time with less house to maintain,” she told the outlet. “That’s very new for us. It wasn’t necessarily a demographic we’ve seen before.”
—Quinn Donoghue
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