Charlotte’s Growing Build-to-Rent Housing Market

News Summary

The Charlotte area is experiencing a significant increase in build-to-rent housing, with over 5,300 homes under construction. This trend reflects shifting housing preferences as residents seek affordable rental options amidst rising homeownership costs and a surging local population. Corporate landlords are becoming prominent players in the market, raising questions about the future of homeownership. As the build-to-rent trend continues, it reshapes the landscape for both renters and buyers in the vibrant city of Charlotte.

Charlotte’s Booming Build-to-Rent Housing Market Takes Center Stage

The Charlotte area is witnessing a significant surge in the construction of single-family rental homes, positioning itself as a national leader in the build-to-rent housing market. A staggering total of 2,300 build-to-rent homes are currently under construction within the city, while the larger Charlotte-Concord-Gastonia metropolitan region reports an impressive 5,300 homes in progress. This trend underscores a shift in housing preferences amidst rising homeownership costs, reshaping the local real estate landscape.

Understanding Build-to-Rent Homes

Unlike traditional homes, build-to-rent properties are specifically designed for renters and will never be available for sale to buyers. This is becoming increasingly relevant as the median home price in Mecklenburg County soared to $445,000 last year—a notable 4.7% increase from previous years. Moreover, the average mortgage payment has skyrocketed by an alarming 75% since 2019, making homeownership seem like an elusive dream for many.

Demand Fueled by Local Growth

The Charlotte area is welcoming a remarkable 117 new residents daily, further intensifying the demand for rental housing. As young professionals and families flock to the region, the need for affordable living options has prompted a pronounced shift toward single-family rentals. This demand is not limited to Charlotte; surrounding areas like Raleigh and Wilmington are also reporting increased construction activity, with approximately 2,900 and 1,800 homes under construction, respectively.

North Carolina’s National Standings

North Carolina is stepping into the spotlight with over 12,398 new single-family rentals in development, placing it fourth nationally behind states like Texas, Arizona, and Florida. This emerging landscape not only underscores a growing preference for renting but also reflects the evolving needs of a changing population seeking flexibility without the permanence of homeownership.

Benefits of Renting

For many residents, renting these newly constructed single-family homes presents enticing advantages. The option grants them more space, enhanced privacy, and significantly reduced maintenance responsibilities—all at a comparatively lower cost than owning a home. This shift is exemplified by new developments that cater to the modern renter who seeks the coziness of a family home without the weight of property ownership.

The Role of Corporate Landlords

Corporate landlords are increasingly making their mark in the rental market, with entities such as Blackstone and Invitation Homes dominating the field. As of 2022, these corporate giants owned approximately one-quarter of all rental homes in Mecklenburg County. However, their growing presence is not without controversy, facing scrutiny over alleged malpractices in property management and tenant relations.

The Future of Homeownership

The spurt in build-to-rent housing is raising concerns about the potential long-term implications for homeownership rates. As builders are redirected from developing properties for sale to rental-focused communities, traditional home buyers may find themselves further marginalized in a competitive market. Even as inventory has increased by 24%, there continues to be a prevailing sentiment that it remains a seller’s market.

Shifting Spaces: From Retail to Rentals

Many former retail spaces are being transformed into rental properties to accommodate the ever-growing demand for rental living. This adaptation not only offers consumers exciting new options but also revitalizes areas that may have suffered from changes in shopping trends.

Taking the First Steps towards Homeownership

For many residents, such as Sheryl De Sa, renting provides a temporary solution while laying the groundwork for future homeownership. The allure of space and reduced maintenance costs in build-to-rent properties presents a practical alternative as they prepare for a more permanent housing arrangement.

As the Charlotte area rides the wave of this transformative housing trend, the mix of increased demand, corporate influence, and demographic changes promises to redefine what it means to live in this vibrant city.

Deeper Dive: News & Info About This Topic

HERE Resources

Charlotte Leads North Carolina’s Build-to-Rent Housing Boom
North Carolina Leads in Built-to-Rent Housing Development

Additional Resources

• Charlotte Observer
• Wikipedia: Housing in the United States
• WSOC TV
• Google Search: Charlotte rental housing
• Spectrum Local News
• Google Scholar: Build-to-rent real estate
• Axios Charlotte
• Encyclopedia Britannica: Townhomes in Charlotte
• WBTV
• Google News: Charlotte corporate landlords