National Housing Market OutlookBuild-to-Rent

Answering build-to-rent supply questions

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Danielle Nguyen

June 9, 2023

Co-authored by James Mc Keever

Did you know that 81% of completed build-to-rent (BTR) homes are attached? Or that BTR is set to almost double?

BTR is experiencing a 16% increase in homes currently under construction, and another 74% of the current supply is in some stage of planning that makes timing uncertain.

We define build-to-rent communities as:

  • 25 or more contiguous and professionally managed homes built in the last 26 years
  • Detached or attached single-story or two-story homes with no unit above them (unless the community includes both stacked and non-stacked units)
  • Homes with either a direct-access garage or dedicated surface parking in some “horizontal apartment” and mixed communities
 

 Find more insights and definitions of standard nomenclature here.

Attached homes comprise a majority of BTR communities.

We know of 1,177 completed and actively leasing BTR communities with ~146,000 units whose mix is as follows:

  • Single-family detached homes:
    • 251 communities totaling ~28,000 units (~112 homes per community)
    • 19% of units are single-family detached. 
  • Attached homes: 
    • 926 communities totaling 118,000 units (~127 homes per community)
    • 81% of units are attached.
     

Supply is planned to almost double.

We spend a lot of time understanding future supply in submarkets thanks to our consulting team advising our clients with rent, absorption, and lease-up recommendations—along with competitive analysis. We have identified 708 coming-soon BTR communities totaling more than 131,000 homes, which would be a 90% increase in supply. This supply includes 24,000 homes under construction and 107,000 in many different planning stages, so the timing of these projects remains uncertain.

Here is a deeper dive into the ~24,000 homes currently under construction:

  • Single-family detached homes:
    • 41 communities totaling ~6,000 units, or 25% of under construction supply
  • Single-family detached homes:
    • 106 communities totaling ~18,000 units, or 75% of under-construction supply
    • Of the attached units under construction, below is the product design breakout:
      • 9K horizontal apartments
      • 5K townhomes
      • 3K rowhomes
      • 1K mixed communities

While a doubling of supply sounds significant—and in a few submarkets, we believe it is too much—remember that more than 12 million people rent single-family detached homes today. Another 11 million rent individually owned attached homes or rentals with four or fewer attached homes. As a percentage of total rental home demand in America, BTR is a small fraction that we believe will grow steadily over the coming decades. 

We have mapped all the existing and proposed BTR communities across the country for our clients, which has helped them identify both areas of opportunity and risk. Please fill out this form to learn more about our research and consulting services.

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About The Author

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Danielle Nguyen
Vice President of Research
Danielle manages, implements, and analyzes the housing market with a specific focus on for-sale and for-rent research. She is a research content creator who produces high-quality, insightful, and forward-looking housing research and a trusted resource (connector) for clients and those interested in JBREC’s research.

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