Build to rent is a housing model where purpose-built homes are constructed specifically for rental purposes, offering an alternative for those who cannot afford to buy a home or prefer to rent. The popularity of rental housing grew during the COVID-19 pandemic as people sought more space and flexibility in where they lived. Currently, there is a housing shortage in the United States, with a shortage of approximately 6.5 million housing units.
The build-to-rent trend has gained significant momentum in recent years, as more individuals and families are choosing to rent rather than buy homes. This shift in housing preferences can be attributed to various factors, including changing lifestyles, financial considerations, and the desire for flexibility. By focusing on purpose-built rental properties, the build-to-rent model offers numerous benefits to both tenants and investors.
Benefits of Build to Rent
Sustainable Solution for Urban Living
Build to rent offers energy-efficient homes that help reduce energy consumption and carbon emissions. By incorporating sustainable building practices and materials, these homes are designed to maximize energy efficiency and minimize environmental impact. For example, they may include features such as solar panels, energy-efficient appliances, and efficient insulation.
In addition to individual unit features, build-to-rent communities also prioritize shared amenities that promote sustainable living. These amenities, such as community gardens, bike-sharing programs, and recycling facilities, encourage resource-sharing and reduce individual consumption. Furthermore, build to rent developments are often designed to be walkable and transit-friendly, reducing the reliance on private vehicles and promoting a more sustainable urban lifestyle.
Attainable Housing Options
Build to rent provides attainable housing options for renters-by-choice, downsizing retirees, and those who cannot afford to buy a home in expensive urban areas. It offers a flexible and cost-effective alternative to homeownership. Renters benefit from the flexibility of renting without the financial burden and responsibilities of owning a home.
Furthermore, build to rent communities often offer a sense of community and a range of amenities, providing a high-quality living experience for renters. These amenities can include fitness centers, swimming pools, communal spaces, and organized social activities. They contribute to a sense of belonging and create a supportive community environment.
The Emergence of the Build-to-Rent Industry
The build-to-rent industry emerged after the 2008 financial crisis as a way for investors to purchase foreclosed homes and rent them out at higher prices. This new model allowed investors to capitalize on the growing demand for rental properties while providing a solution for individuals who were unable or unwilling to purchase homes.
One prominent player in the build-to-rent industry is Quinn Residences, based in Atlanta, with a focus on the Southeast region. Quinn Residences specializes in developing and managing purpose-built rental communities that offer high-quality amenities and a sense of community for its residents. Their success and growth reflect the increasing demand for build-to-rent properties.
Investors are attracted to the build-to-rent model due to its stable cash flow and potential for long-term growth. The rental market has proven to be resilient, even during economic downturns, making it an appealing investment option. Additionally, the build-to-rent model provides investors with the opportunity to diversify their portfolios and access a steady stream of rental income.
Challenges and Misconceptions
The build-to-rent industry faces misconceptions and criticism from those who view rental housing negatively. Some common misconceptions include concerns about maintenance and care of build to rent properties, as well as the perception that rental housing negatively impacts neighborhoods. However, build-to-rent companies ensure the maintenance and care of their properties. They often have dedicated property management teams that handle repairs and upkeep.
Educating the public and fostering collaboration between stakeholders are essential to combat negativity and address the housing shortage. By highlighting the benefits of build to rent, such as the increased housing stock and the positive impact on local economies, misconceptions can be dispelled.
It is also important to address the challenges associated with build to rent, such as affordability for low-income individuals and families. While build-to-rent communities offer attainable housing options, there is still a need for affordable housing initiatives to ensure that everyone has access to safe and affordable homes.
Contributing to Housing Shortage Solutions
Build to rent provides an alternative solution to the housing shortage by adding to the housing stock. Institutions currently own less than 2 percent of single-family rental homes in the US, indicating that build to rent can help bridge the gap in affordable housing. Build to rent developments do not significantly impact density or congestion in communities due to their purpose-built nature.
To address the housing shortage effectively, it is crucial to foster collaboration between the public and private sectors. Local governments can incentivize build-to-rent developments through tax incentives or streamlined permitting processes. In turn, developers can work closely with local communities to ensure that their projects align with the needs and values of the area.
Furthermore, it is important to consider the long-term sustainability and affordability of build-to-rent communities. Ensuring that rent increases are reasonable and in line with income growth can help prevent the displacement of long-term renters. Additionally, incorporating affordable housing units within build-to-rent developments can provide opportunities for low-income individuals and families to access quality housing.
Energy Efficiency in Build to Rent
Energy efficiency is a key aspect of sustainable buildings and plays a crucial role in reducing carbon emissions. Build to rent homes are designed with energy efficiency in mind. They incorporate green building practices and utilize energy-efficient technologies and materials to minimize energy consumption.
A systematic review conducted on energy efficiency in sustainable buildings identified challenges, motivations, recommendations, and pathways for future research. The review explored various aspects of energy efficiency, including green building rating systems, policies, technology utilization, and strategies. The findings of this review can inform decision-makers and stakeholders in the build-to-rent industry to enhance energy efficiency practices.
Some energy-efficient features commonly found in build-to-rent homes include:
Solar panels to generate renewable energy and reduce reliance on grid electricity
Energy-efficient appliances, such as refrigerators, dishwashers, and washing machines, that consume less electricity.
Smart thermostats that regulate heating and cooling systems for optimal energy usage
High-quality insulation materials to minimize heat loss and improve overall energy efficiency.
By incorporating these energy-efficient features, build-to-rent properties not only benefit the environment but also help tenants save on energy costs.
Conclusion
Build to rent offers a sustainable solution for urban living by providing energy-efficient homes, shared amenities, and a reduced carbon footprint. It addresses the housing shortage by adding to the housing stock and provides attainable housing options for a wide range of individuals. Collaboration and further research in the field of build to rent are vital to address the housing shortage and promote sustainable urban development.
