Priced out of buying, some younger renters eye build-to-rent homes

Could a new way of purchasing houses alleviate homebuying stress while helping solve the housing crunch? We take a look at a 'Build-to-rent' community in Mesa.
Published: May. 31, 2022 at 12:47 PM MST
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MESA, AZ (3TV/CBS 5) -- Many would-be home buyers are getting priced out of the competitive Arizona housing market, and it’s pushing some to a different type of rental with no shared walls. “It’s something between a single family home and an apartment,” said Josh Hartmann, the CEO of NexMetro. The company has 17 rental communities in Arizona, including the Avilla Enclave in Mesa, a build-to-rent community full of one, two, and three-bedroom homes.

“You’ve got your own backyard. You’re separated and your own entry, but then we have on-site maintenance, on-site property management where everything is taken care of,” Hartmann said. “Your lightbulb goes out, you call the maintenance team. They change your lightbulb for you, and there’s a certain demographic that wants that lifestyle. According to Hartmann, empty nesters and retirees are often drawn to this type of property, but he noted a shift to younger renters.

“Housing prices are getting substantially higher,” Hartmann said. “So what we’re seeing is a lot of younger people. Our demographic is shifting younger, probably people who were trying to buy a home, probably realized that they kept getting priced out and they’re going, ‘Listen, I’m going to step out for a bit.’”

According to a RentCafe analysis, the build-to-rent trend is growing quickly. This year, nearly 14,000 single-family build-to-rent homes are being built, more than doubling the 6,470 constructed in 2021.

“In Arizona, it feels like everyone is building this type of product. There’s so much talk about it, so much hype,” Hartmann said. “We’re actually building less here and we’re building more across the country, but what we see in Atlanta, for example, when we go out there, no one has ever heard of it. They’ve never seen this type of product.” The average cost for a rental home in the Avilla Enclave is about $2,000.