Atlanta's build-to-rent boom grows with U.S. housing shortage near 'historic proportions'

By Chris Fuhrmeister – Digital Editor, Atlanta Business Chronicle

Metro Atlanta's build-to-rent market was the third-biggest in the United States last year.

The metro area saw 1,872 build-to-rent homes constructed in 2023, according to a Jan. 25 report from the National Rental Home Council (NRHC) trade association.

Atlanta trailed only Phoenix (3,806) and Dallas-Ft. Worth (2,694) in total build-to-rent homes constructed.

Georgia ranked fourth with 2,349 build-to-rent homes constructed last year. Georgia was behind Texas (4,701), Arizona (3,806) and Florida (2,365).

Build-to-rent has become a major storyline in the post-pandemic housing market, particularly in Sunbelt states.

The region was a magnet for new residents as pandemic-era migration trends took hold in America. Millions of moved from expensive cities such as New York, Los Angeles and San Francisco to metro areas including Atlanta because of their lower cost of living. The surge in population contributed to sharp decrease in for-sale housing supply.

With housing inventory at a historically low level, home prices at record highs and — more recently — rising mortgage rates making homeownership unattainable for buyers on a budget, real estate investors and builders cranked up production on rentals.

In build-to-rent communities, developers mix single-family housing like detached homes, cottages or townhomes in one contiguous lot. They manage and lease the residences to tenants as they would apartments.

Critics of build-to-rent say the model is contributing to a shortage of attainable homeownership. But, increasingly, build-to-rent is viewed as a modern version of entry-level single-family housing.

“Build-to-rent housing is quickly emerging as an essential, and highly desirable, sector of America’s housing market,” said David Howard, CEO of NRHC, in the report.

Howard added that renting a house is "appeals to an increasing number of families" because the U.S. for-sale housing market faces a supply shortage of "near historic proportions."

Some of the largest housing developers headquartered in Atlanta are getting into the build-to-rent sector. Landmark Properties, which both builds and manages student housing complexes, aims to shift part of its portfolio to the sector in the next coming years, Atlanta Business Chronicle reported in January. The firm broke ground on its first two build-to-rent projects last year. One is in Houston and the other is near Huntsville, Alabama.

Full article: https://www.bizjournals.com/atlanta/news/2024/01/30/build-to-rent-construction-biggest-markets.html