The build-to-rent housing concept is gaining traction in North Texas, with a growing percentage of residential construction in the metroplex accounting for single-family rental homes.
The build-to-rent (BTR) or single-family rental (SFR) model consists of constructing between 250 to 300 rental homes around a central community with each unit averaging around 850 square feet, according to the National Apartment Association.
BTR communities typically include shared amenities such as resort-style pools and spas, fitness centers, clubrooms, dog parks, and more.
The BTR business model, which stretches back to the 1980s and saw a boost in popularity proceeding the 2008 housing crisis, is now gaining traction again here in North Texas. The area is expected to build roughly 5,000 rental units this year alone, according to the Dallas-based housing analytics and consulting firm Residential Strategies Inc.
Newly built rental homes account for nearly 10% of residential construction in Dallas-Fort Worth, according to The Dallas Business Journal. Much of the recent demand was driven by the changing work dynamic and the push away from the city and into the suburbs caused by the COVID-19 pandemic, said Bryan Moore, president and CEO of McKinney-based DBA Architects.
With BTR single-family homes making up slightly under 10% of all new residential construction in Dallas-Fort Worth, it is hardly a surprise that DFW ranked third in the nation for BTR projects, The Dallas Business Journal reported.
Most Millennials and Gen Xers have been priced out of the housing market due to skyrocketing home prices, sharply higher interest rates, and red-hot inflation sweeping the nation, according to Moore.
In addition, he explained that the mix of high home costs, growing frustration with apartment life, and the absence of a backyard for their pets make BTR communities an ideal fit for younger generations looking toward single-family rental homes in professionally managed communities as an alternative to apartments.
Moore believes that the driving demand for SFR homes is coming from young people who cannot own a house because interest rates and cap rates are soaring.
“Most of these are young, just-married couples or young singles. They can’t come up with the down payment, they’re tired of living in an apartment, and the biggest driver is they want a backyard for their dog,” said Moore.
The two places in North Texas that have BTR communities constructed by Moore’s architecture firm are Arlington and Greenville. JLM Living in Austin is DBA’s biggest client. The firm has also done or is currently doing business with Third Lake Development in Florida, Campus + Main in Los Angeles, and 360 Real out of Euless.