In recent years, a noticeable shift has occurred across the United States as an increasing number of Americans opt for long-term renting over homeownership. As this trend gains momentum, the housing industry is poised to witness continued evolution and innovation, transforming not only the market but also influencing saving patterns, driving new developments, and inspiring businesses.
One striking example of this trend is the transformation of a once-abandoned textile factory located in Scranton, Pennsylvania. Closed in 2002, the Scranton Lace factory was vacant for nearly two decades until it was redeveloped into a luxurious mixed-use apartment building called ‘Lace Village’. Now, tenants can choose from a range of apartments priced between $950 and $3,600 per month. Renters have exclusive access to high-end amenities such as a personal yoga studio, a spa, a dog park, and pickleball courts.
Traditionally, Americans who could afford to become homeowners now embrace long-term renting, with some abandoning plans to purchase a home altogether. According to the U.S. Census Bureau, the U.S. homeownership rate reached 65.9% in 2022.
GID, a real estate giant managing 50,000 apartment units across 30 U.S. markets, revealed that almost a quarter of its residents earn $200,000 annually, challenging the idea that renters are predominantly lower income. This surge in higher-income renters has led to a scarcity of affordable rentals. In 2022, IPUMS census data reported a record 4,453 renter households with incomes surpassing $1 million, many of whom exhibit traits that align with the profile of potential first-time homebuyers.
A real-world example is Alicia Couch and her husband, whose combined income is $122,000. While they could comfortably afford a mortgage and down payment for a house in Dawsonville, Ga., they have chosen to remain in a four-bedroom townhome in a BTR community by ARK Homes for Rent. Their rent is $2,085 a month. This decision highlights the changing preferences of individuals who value the flexibility and convenience of renting over homeownership. Build-to-Rent (BTR) developments are emerging residential communities, contributing to the growth of the U.S. housing market and playing a vital role in alleviating the nation’s housing shortage.
Not only are homeowners attracted to build-to-rent communities, but developers and builders who specialize in multi-family, active adult, senior housing, and student housing are beginning to dip their toes into BTR communities to diversify their portfolios. “The stigma associated with renting is nearly non-existent, thanks to the evolving quality, variety, and locations of these developments,” states Darin Rowe, the national President for the Yardly BTR brand by Taylor Morrison, one of the country’s prominent home builders. According to the National Association of Home Builders, in the second quarter of 2022, there was a 91% surge in the start of over 21,000 new single-family BTR communities. These communities are trending across California, Arizona, Colorado, and Texas. Within these markets, developers are seeking suburbs over dense urban areas due to the availability of larger parcels and the hope for a smoother approval process within the cities.
The evolving landscape of America’s housing preferences reflects a profound shift away from traditional notions of homeownership. The redevelopment of the Scranton Lace factory into a luxurious mixed-use apartment complex, along with the real-world example of Alicia Couch and her family in the BTR community, highlights the increasing preference for rental options and the unique benefits they offer. Beyond homeowners, builders and developers are embracing this trend, actively exploring the potential that comes with these innovative developments.
At California Builder Services, we play a pivotal role in this transformation for builders and developers throughout California. Annually, we complete dozens of public reports for various developments, including built-to-rent projects. As the demand for these developments rises, our commitment is to bring your project to life and contribute to a thriving and well-regulated housing market.
DRE Public Report processing involves acquiring a great deal of information. We understand the needs of our clients and work to seamlessly expedite the process. If you are looking to obtain a public report, we’re more than happy to guide you through the process. Get in touch with us today!