16 votes

The rise of build-to-rent housing

24 comments

  1. [23]
    JXM
    Link
    I am one of two people in my friend group who owns a house. Everyone else rents. Not because they want to, but because unless you have a partner to help pay for it, you can’t afford to own a house...

    I am one of two people in my friend group who owns a house. Everyone else rents. Not because they want to, but because unless you have a partner to help pay for it, you can’t afford to own a house here (US).

    My neighborhood is about 45 years old and the only undeveloped lot just had two small single family homes built with the explicit intention of renting them out (they had signs up advertising them as rentals during construction). No one here is happy about it - not because it’s two small single family houses (almost everyone in the neighborhood wants more density) but because they’re owned and rented by a national company. They have no local connection and don’t give a shit about anyone else in the neighborhood. They won’t be a part of our community. They’re just extracting profit without giving anything back.

    17 votes
    1. [15]
      stu2b50
      Link Parent
      Does the landlord need to be part of the community? Presumably the people renting the house would be the ones who would be in the community. That’s what property taxes are for.

      They have no local connection and don’t give a shit about anyone else in the neighborhood.

      Does the landlord need to be part of the community? Presumably the people renting the house would be the ones who would be in the community.

      They’re just extracting profit without giving anything back.

      That’s what property taxes are for.

      10 votes
      1. [9]
        TMarkos
        Link Parent
        Citing property tax is a bit disingenuous when property taxes are almost always an order of magnitude lower than rents. A typical single family home in the US will pay something like $1-3k yearly...

        Citing property tax is a bit disingenuous when property taxes are almost always an order of magnitude lower than rents. A typical single family home in the US will pay something like $1-3k yearly depending on value and location, but that same house will likely rent for close to that value monthly. Far more money leaves the community than is returned via taxes.

        And the money leaving the community is precisely what is concerning. If the landlord was local, even a local company, then the money would remain and continue to bolster local business and trade. Local landlords would tend to spend it locally. Renting to a national corporation instead siphons the money off who-knows-where and provides little benefit to the local economy.

        18 votes
        1. [8]
          DynamoSunshirt
          Link Parent
          Maybe across the USA. Here in the Northeast, a modest house pays more like 4-5k, more like 7-10k if you bought in the last couple of years when anything habitable started to hit 400+. I suspect...

          Maybe across the USA. Here in the Northeast, a modest house pays more like 4-5k, more like 7-10k if you bought in the last couple of years when anything habitable started to hit 400+.

          I suspect properties that haven't been sold in a while (and thus have awfully low assessments relative to actual value) distort that figure significantly.

          2 votes
          1. [7]
            TMarkos
            Link Parent
            I did do my research - the median property tax in the US peaks at about 10k for some wealthier areas but it's far below that almost everywhere. Those wealthier areas have higher rents and lower...

            I did do my research - the median property tax in the US peaks at about 10k for some wealthier areas but it's far below that almost everywhere. Those wealthier areas have higher rents and lower proportions of renters. Very few people are renting houses that are in established, high wealth communities, and nobody is doing btr there. These btr developments are largely new, modest houses in low-CoL areas.

            3 votes
            1. [6]
              updawg
              Link Parent
              What do you mean that it peaks around $10K? There are towns in Illinois where the median is $25K and an area like Bel-Air would have a median property tax around maybe $50K.

              What do you mean that it peaks around $10K? There are towns in Illinois where the median is $25K and an area like Bel-Air would have a median property tax around maybe $50K.

              2 votes
              1. [5]
                DefinitelyNotAFae
                Link Parent
                What are you using for Illinois? Illinois Property Tax Rates 2026 I'm not sure what towns (or cities) have a median tax rate over 25k here?

                What are you using for Illinois?

                Illinois Property Tax Rates 2026

                I'm not sure what towns (or cities) have a median tax rate over 25k here?

                1. [4]
                  updawg
                  (edited )
                  Link Parent
                  That's just county-level. Winnetka is ~$25K, whereas a more achievable town like Naperville[1] [2] is ~$10K.

                  That's just county-level. Winnetka is ~$25K, whereas a more achievable town like Naperville[1] [2] is ~$10K.

                  1 vote
                  1. [3]
                    DefinitelyNotAFae
                    Link Parent
                    Got it, it's very much an incredibly wealthy outlier, from what I can see. And I'm not sure whether its township taxes them, or if it's just getting county taxes and nothing separate. It's just...

                    Got it, it's very much an incredibly wealthy outlier, from what I can see. And I'm not sure whether its township taxes them, or if it's just getting county taxes and nothing separate.

                    It's just about how you slice the numbers then, the rich 12k resident village is counter balanced by the poorer ones. I think county as the category makes the most sense personally, not because the numbers line up in a particular way just because it seems like that's the most relevant to rates. Even my village has different rates depending on which county you end up in. (School districts play in too).

                    Neither of you would be wrong, it just depends on how you use the data.

                    Fwiw Naperville is the 4th largest city in the state (for folks unaware), calling it a town compared to a village like Winnetka made me giggle.

                    2 votes
                    1. [2]
                      updawg
                      Link Parent
                      I find the way Illinoisans label municipalities funny. To me, almost everything is a town. Winnetka, Naperville, Chicago. It's just a colloquial term for a municipality. I thought village was just...

                      I find the way Illinoisans label municipalities funny. To me, almost everything is a town. Winnetka, Naperville, Chicago. It's just a colloquial term for a municipality. I thought village was just a quaint name that smaller cities used until I saw people on /r/ChicagoSuburbs talk about their villages. To me, a village is a place where peasants live, not a place that actually exists in the modern developed world. But I guess I'm from a city so my perception of city vs village vs town is different from others'.

                      1. DefinitelyNotAFae
                        Link Parent
                        Yeah it's all about what form of government they have, not necessarily size iirc. And some colloquial cities are actually towns - Town of Normal vs City of Bloomington - and some rich ass suburbs...

                        Yeah it's all about what form of government they have, not necessarily size iirc. And some colloquial cities are actually towns - Town of Normal vs City of Bloomington - and some rich ass suburbs are Villages. Plus then there's the Townships which exist to handle shit mostly between municipalities but not always and they're different from counties for some reason.

                        But I live in a little semi-rural village, and have a township with a different name that runs the fire dept, and a third name for a county (which is different from some of my fellow residents' county) and things are weird.

                        But maybe a bit like learning the gender of french objects hearing the "wrong" label is noticeable

                        2 votes
      2. JXM
        Link Parent
        Yes, the landlord should ideally be part of the community. It being controlled by an out of town conglomerate that doesn’t make decisions based on what’s good for the local community but based on...

        Yes, the landlord should ideally be part of the community. It being controlled by an out of town conglomerate that doesn’t make decisions based on what’s good for the local community but based on what will extract the most money from the property for said corporation. At least if they are local, it gives them a human connection to the people in the community. Interacting face to face with your neighbors every day makes a big difference.

        And property taxes are great, if you have them. Look at what Florida is trying to do.

        6 votes
      3. [3]
        CannibalisticApple
        Link Parent
        National companies don't have any interest in making sure their tenants aren't nuisances to the surrounding community. I've seen multiple horror stories on reddit where posters struggled to get...

        National companies don't have any interest in making sure their tenants aren't nuisances to the surrounding community. I've seen multiple horror stories on reddit where posters struggled to get those sorts of companies to respond to renters who had bad behavior. Things like clearly having way too many people living there, engaging in shady behavior, harassing neighbors, getting constant noise complaints, etc.

        Basically the companies don't seem to care too much so long as tenants pay rent and aren't outright destroying the house—and even then, they can just have their lawyers go after the tenants after they're evicted to recoup costs. They have so many rental properties that one house being trashed and off the market for a bit isn't a big deal.

        Meanwhile more local landlords... Well, at bare minimum they're easier to find and goad into taking action if tenants cause problems. And they also usually have only a few properties, so they have stronger incentive to ensure their tenants aren't damaging the property.

        6 votes
        1. [2]
          xethos
          Link Parent
          First one sounds like a... lack of parking complaint? I'm honestly not sure how else this would affect you or your neighbours, let alone be something you have grounds to complain about. I'm open...

          clearly having way too many people living there, engaging in shady behavior, harassing neighbors, getting constant noise complaints

          First one sounds like a... lack of parking complaint? I'm honestly not sure how else this would affect you or your neighbours, let alone be something you have grounds to complain about. I'm open to being wrong though, is there something I missed about too many people per house / unit?

          The latter three though are, IMO, what bylaw and law enforcement are for. That's who a local landlord would escalate to as well, isnt' it? I can recognize Americans have a... complicated... relationship with the cops, but one very common complaint is how frequently they side with capital. I.E., the home-owning class.

          Local landlords are better, sure, but I have a much easier time with TMarkos' comment regarding capital leaving the community than complaints that, personally, I'd be talking to tenants directly with first, then calling non-emergency police numbers or bylaw enforcement over.

          2 votes
          1. CannibalisticApple
            Link Parent
            The too many people is usually more of a "symptom" than a direct issue (though parking would become a problem). Basically, most reasonable people wouldn't rent or buy a two-bedroom house and then...

            The too many people is usually more of a "symptom" than a direct issue (though parking would become a problem). Basically, most reasonable people wouldn't rent or buy a two-bedroom house and then cram in fifteen people of varying ages. And that many people in one small house are just naturally loud and messy. Some of the tales I recall hearing involve people coming and going at all hours, or young children being left largely unsupervised and screaming at all hours.

            As for the other issues, while they should be subject to law or bylaw enforcement, the challenge is actually getting it enforced. It's not even an issue of not wanting to call the cops, but that they just can't or won't do anything. There are countless tales of how useless police can be when dealing with bad neighbors (including some where the police are sympathetic and NOT being lazy or dismissive) unless the neighbor is very obviously doing something highly illegal. Similar story with bylaw violations: it's dependent on the relevant agencies actually enforcing them.

            Sometimes it's laziness or apathy on the part of the relevant agencies... and sometimes it's just that a neighbor being crazy or an asshole doesn't break any laws or bylaws. There are all sorts of examples I want to cite but keep cutting for being too tangential; tales of bad neighbors can be fascinating rabbit holes.

            I want to emphasize this is a problem with all bad neighbors, not just renters. When they're homeowners, sometimes the only feasible solution is to just move away. But with renters, it can genuinely be more productive to alert the landlord to the issues. Local landlords have a lot more financial and social incentives to evict problematic tenants, or at least try to get them to tone down the worst of their behaviors.

            National rental companies meanwhile... Really don't have a reason to care too much. They just want rent, and really don't care what people do in the houses so long as they're paying and the house is still standing. They can absorb the financial blow of a bad tenant much more easily.

            4 votes
      4. c-w-s
        Link Parent
        Who exactly do you think pays those property taxes? I might have a bridge or two to sell you.

        Who exactly do you think pays those property taxes? I might have a bridge or two to sell you.

        3 votes
    2. [7]
      skybrian
      Link Parent
      Maybe the people who move in will be part of the community though?

      Maybe the people who move in will be part of the community though?

      3 votes
      1. [6]
        MimicSquid
        Link Parent
        Perhaps, but homeowners are broadly more invested in the community in part because their economic existence is tied to the surroundings. A person who lives in a home they own in a community they...

        Perhaps, but homeowners are broadly more invested in the community in part because their economic existence is tied to the surroundings. A person who lives in a home they own in a community they live in will make different choices regarding the property than will a corporation making a choice about a single unit of their real estate portfolio that's spread all over the world.

        8 votes
        1. [5]
          skybrian
          (edited )
          Link Parent
          I don't like the idea of assuming renters are second-class members of the community. Whether you rent or own shouldn't matter.

          I don't like the idea of assuming renters are second-class members of the community. Whether you rent or own shouldn't matter.

          5 votes
          1. [4]
            MimicSquid
            Link Parent
            It's not that renters are second-class members of the community. What I'm saying is that when you own a piece of property and it's a significant portion of your total assets, you care more about...

            It's not that renters are second-class members of the community. What I'm saying is that when you own a piece of property and it's a significant portion of your total assets, you care more about that house than a corporation that owns a thousand and then rents them out. If I'm a renter and I can see the property badly needs a paint job, I have very little I can do about that if the landlord decides that it's not in their interests to paint the place. After all, it's not like they have to look at it. And that sort of purely economic extractive outlook is corrosive to a community even beyond the fact that the money paid to rent is leaving the area.

            12 votes
            1. [3]
              skybrian
              (edited )
              Link Parent
              Maybe that's true, but I think renters having a place to live is a good thing. The previous owner sold it to a corporation that built two small houses, so now two renters can live there. That...

              Maybe that's true, but I think renters having a place to live is a good thing. The previous owner sold it to a corporation that built two small houses, so now two renters can live there. That seems good for them.

              If the property had been developed as a single, more expensive home, and sold to someone who could afford the mortgage, it seems like that would be increasing inequality and shutting out the renters?

              (Also, when a home owner pays their mortgage, isn't that money leaving the area too?)

              2 votes
              1. [2]
                MimicSquid
                Link Parent
                I also think renters having a place to live is a good thing, so I'm glad we're on the same page. You may note that in each of my statements in this thread I've been talking about proximity to the...

                I also think renters having a place to live is a good thing, so I'm glad we're on the same page. You may note that in each of my statements in this thread I've been talking about proximity to the property and significance of the property to the owner as the key issues. If the owner was living in one of the two units and renting the other, it would be a significant asset for them, and so they'd likely care about it quite a bit. The problem of indifference towards the community in which the property exists is exacerbated at every step of physical and emotional remove between the owner and the property.

                5 votes
                1. kingofsnake
                  Link Parent
                  Your contributions here are totally on point. Let's assume for a minute that discussions about owners vs renters are not a front for renter or hating on the less fortunate and instead, look at the...

                  Your contributions here are totally on point. Let's assume for a minute that discussions about owners vs renters are not a front for renter or hating on the less fortunate and instead, look at the clear incentives that owners have to maintain and improve the property, know their neighbors and plan for the future of the community.

                  It's not to say that renters don't have an interest in or ability to do this, but with ownership incentive comes action, and that bears out along multiple lines of inquiry.

                  2 votes
  2. skybrian
    Link
    From the article: [...] [...] [...] [...] [...] [...]

    From the article:

    A major shift in the housing market in the last several years is the rapidly increasing popularity of “build-to-rent” homes — single-family homes that are built specifically for the purpose of being rented out. According to the National Association of Homebuilders, build-to-rent homes have risen from less than 2% of new housing starts in the 1990s to more than 7% of housing starts today. In 2025, at least 68,000 new single-family housing starts were built to rent (and due to data limitations, the true number may be much higher, 100,000 homes or more).

    [...]

    The modern BTR industry, where developers build entire communities consisting of dozens or hundreds of single-family homes for rent, is a product of the 2008 Global Financial Crisis. Prior to the financial crisis, single-family home rental wasn’t uncommon — in 2005, there were over 8 million detached single-family homes being rented — but the business was mostly the purview of small “mom and pop” operators that owned a relatively small number of scattered rental properties. As late as 2011, no single company owned more than 1,000 rental homes in the US.

    But the financial crisis shifted the housing landscape. Huge numbers of people lost their homes to foreclosure: foreclosure rates in 2009 and 2010 were four times rates from 2005, and between 2007 and 2010, there were four million foreclosures. The homeownership rate in the US fell from a high of 69% in 2005 to 63% in 2016. At the same time, to rein in the subprime lending that had precipitated the crisis, banks tightened their lending standards, and average mortgage credit scores rose by more than 50 points. In 2003 buyers with a credit score of less than 620 made up 7% of all mortgages. By 2011 that had fallen to essentially zero.

    The raft of foreclosures and the tightening of lending standards had two simultaneous effects on the housing market.

    First, they pushed millions of Americans into renting. Between 2010 and 2015 the number of renter households in the US rose by roughly six million, while the number of homeowner households declined by roughly 800,000.

    Second, this shift created a huge pool of homes available for purchase at very low prices. Between 2006 and 2010 the value of US homes dropped by 26%, greater than the average decline during the Great Depression. In some markets the declines were even worse: home prices declined by 60% in Las Vegas, and by roughly 50% in Phoenix, Miami, and Tampa.

    In response to these market conditions — millions of homes available to buy cheaply, and millions of Americans who couldn’t afford to buy them — various real estate ventures were formed to take advantage of the situation. In 2010, the Arizona-based housing investment company Treehouse Group began to buy distressed mortgages in Phoenix and turn them into rental housing. Within a year the company had purchased 11,000 homes. In 2012 Treehouse was acquired by the investment group Blackstone, which turned Treehouse into the single-family rental company Invitation Homes. Today, Invitation Homes is one of the largest home rental companies in the US, with more than 86,000 rental homes across 12 states.

    [...]

    This large-scale acquisition and transformation of single-family homes into rental properties was encouraged by the federal government, as part of broader efforts to keep the housing market from collapsing completely. In 2012 the Federal Housing Finance Agency launched the REO-to-Rental Initiative pilot program, which “allowed pre-qualified investors to bid on large portfolios of foreclosed properties owned by Fannie Mae.” Roughly 1,800 homes were sold to investors under this program. And in 2017, Fannie Mae backed a billion-dollar loan to Invitation Homes for the purposes of purchasing rental properties.

    [...]

    Building new rental homes had several advantages compared to acquiring existing homes. Being new construction, they typically had much lower maintenance costs than existing homes, and they could be designed by the developer with an eye towards minimizing maintenance and overheads. And because they were clustered together, they were somewhat easier to manage than purchased rental houses that might be spread across a wider area.

    As the housing market recovered and the pool of single-family homes available for purchase at favorable prices dwindled, many of the large home rental companies began to experiment with their own BTR strategies. American Homes 4 Rent began work on its first ground-up rental community in 2016; today it owns more than 14,000 BTR homes, with essentially all new home acquisition coming through BTR. Invitation Homes began purchasing BTR homes in 2021 in a partnership with homebuilder Pulte, and as with American Homes 4 Rent essentially all its home acquisition now comes from BTR. Pretium Partners, which owns over 80,000 single-family homes under its “Progress Residential” umbrella, formed a $1 billion BTR venture in 2021. Some companies, such as American Homes 4 Rent, opted to do all their BTR development work in-house, while others preferred to partner with existing homebuilders, buying new houses that developers constructed in bulk.

    [...]

    Today, BTR is still a small segment of the overall housing market: CBRE estimates that there are about 350,000 BTR units in the US, which is just 1.5% of the overall single-family home rental market. But it’s a rapidly growing segment of the US housing market — or was, until this recent Senate bill.

    [...]

    “Build-to-Rent” has become synonymous with single-family homes built specifically to be rented out, typically in communities of a few dozen to a few hundred rental homes, but within that category companies offer a broad range of different products. BTR generally gets broken down into several major subcategories (though some use slightly different ones): single-family detached, single-family attached, and horizontal multifamily. These categories exist on something of a spectrum of “very similar to conventional single-family homes” on one end and “very similar to conventional apartment buildings” on the other.

    [...]

    But while affordability issues seem to be the primary driver of BTR’s popularity, there also seems to be some fraction of residents that simply prefer renting over owning, due to a desire for less maintenance or simply because they don’t perceive owning a home as a major life goal. CBRE, NAHB, and NexMetro all mention various demographics of “renters by choice” (such as retirees), an analysis echoed by several BTR developers I talked to. As construction of BTR communities continues, this growth might create a sort of reinforcing cycle: more people move into rental housing, which makes it more accepted, which draws even more people in, and so on.

    6 votes