It was a lunch stop for burgers that changed Bonita and Bernie Styers’ idea of the American dream.
The couple, both in their 60s, felt that their 3,000-square-foot, Dallas-area house was too big for two empty nesters. They had considered buying a smaller house, but it was tough to find one for the right price in such an expensive market. That’s when Bonita spied a gated community of compact, cottage-style homes behind the parking lot of a fast-food restaurant.
She had found a single-family rental community—a neighborhood of one- to three-bedroom, single-family, detached homes. The neighborhood of 122 rentals ranges from $1,275 a month for a one-bedroom house to $2,900 for a three-bedroom model.
“We feel like it’s our home, but we have a little bit of help taking care of it,” says Bonita, 62, a medical receptionist.
These master-planned communities are aimed at those who don’t want to deal with the maintenance of owning a home—but aren’t keen on living in an apartment either. And they’re gaining in popularity. That’s because more baby boomers are retiring and seeking a simpler life, as sky-high home prices are pushing many out of the market.
The Urban Institute reported in 2017 that single-family rentals—whether detached homes or townhouses—were the fastest-growing segment of the housing market.
Builders have taken note. The number of newly built, single-family rentals was up from 37,000 in 2017 to 43,000 in 2018, according to the National Association of Home Builders. They make up only about 4% of all single-family construction nationwide, but they’re expected to jump to 6% over the next few quarters, according to Robert Dietz, chief economist of the NAHB.
They’re going up predominantly in the suburbs of Southern states stretching from Arizona through Texas and into Florida and the Carolinas, says Rick Palacios Jr., director of research for John Burns Real Estate Consulting. There is more affordably priced land available in this part of the country, and the cheaper property means rents don’t have to be sky-high for builders to make ends meet.
“The stigma of renting has … gone away,” says Palacios, whose firm advises builders and developers nationally. “Fewer and fewer people think you need to own a home to make it.”
The perks of single-family rental communities
Audrey Kowalczyk, 58, and her sister, Sharon Kowalczyk, 68, are moving from Virginia to Christopher Todd Communities at Marley Park in Surprise, AZ. The security of the gated location and the lack of neighbors upstairs helped shape their decision. The sisters, who are both retired and share their rental home, also liked the idea of on-site maintenance.
“We are not too knowledgeable when it comes to anything needing repair,” Audrey says. “Maintenance is only one phone call away.”
Knowledgeable or not, many aging boomers are simply growing tired of the upkeep of their large houses. That’s certainly the case with Bonita Styers, whose husband travels frequently for his job as a vice president in charge of franchise sales for a hotel chain.
“We didn’t want to have to take care of a yard and a pool and all those things,” she says.