Build-to-Rent Communities Offer Affordability Amid Rising Interest Rates

More Americans are looking for homes even as available housing shrinks. This dynamic is rapidly accelerating the demand for build-to-rent (BTR) communities.

The United States has failed to build as many homes as needed to keep up with population expansion, especially in markets in and around growing cities. Over the past 10 years, the U.S. developers have delivered 19 percent less housing than in the previous decade — all while the population and overall demand for housing dramatically increased.

The challenges to adding housing inventory aren’t new. In many areas, it’s become very difficult and expensive to navigate environmental and zoning regulations, putting many otherwise available sites out of reach. Additionally, costs of materials and labor continue to rise. While these constraints existed before the pandemic, COVID-19 pulled these limitations forward.

Emerging in response to the agitated real estate market are single-family homes that are developed specifically as rentals, a relatively new housing product type that combines elements of homeownership and multifamily renting. Unlike institutional investors purchasing existing single-family homes off the market to rent, Landmark Properties is purpose-building homes to combat the nation’s housing shortage, ultimately alleviating pricing pressure in the housing market.

Therein lies the fundamental difference between building to rent and single-family renting.

BTR communities appeal to many pools of potential renters, from young professionals who are starting families to empty nesters who are looking to escape the upkeep that comes with owning a home.