The Atlanta Journal-Constitution
Dream of home ownership now for rent
Some metro Atlanta developers jumping on board new trend.
Ruddy and Yesenia Cordero left their pricey New York City apartment for a spacious townhome in Gwinnett County.
The couple moved to Georgia over the summer to raise their two young daughters outside of the city. The New York natives held off on purchasing a home, despite having the means, and instead rented a townhome in the Sweetwater Springs community off Duluth Highway.
In fact, all of their neighbors rent their homes.
The 58-unit development by Parkland Communities is part of a growing trend by metro Atlanta developers to bring “build-torent” homes to suburban areas.
Build-to-rent communities can be constructed in various ways, everything from townhouses to detached single-family homes found in ordinary subdivisions. But they all have one thing in common — the developers intend to lease them rather than sell them.
And renters are eager to move in.
Renters leased every Sweetwater Springs home in only 90 days, said Jim Jacobi, president of the company. More than 200 interested renters are on a waiting list, he said, just in case someone drops out while construction finishes on the last two of four attached townhome sections.
“The demand really is shocking,” Jacobi said. “I never thought it could go this well.”
The relatively new concept of building homes from the ground up with the intention of renting them is a small but fast-growing trend, said John Hunt, a market analyst and founder of Marketnsight.
It’s hard to track an increase, Hunt said, since permits issued by local planning departments often do not differentiate between rentals and for-sale housing. It’s estimated that anywhere from 5-10% of transactions now involve build-to-rent housing, compared to about 2-3% a few years ago, he said.
“We’ve got far more people that need a place to live than we have places to live,” Hunt said. “... As long as general inventory is at almost zero, you’ll continue to see anything and everything filling that space.”
It’s about $388 cheaper on average to pay monthly rent than to pay a monthly mortgage in metro Atlanta, according to Lending Tree. It has become even more expensive to buy a home in the popular areas in which people want to live, Jacobi said, furthered by low housing inventory as a result of the pandemic.
“Maybe they’re not building equity in the house, but they probably have more money in their checking account,” Jacobi said.
Residential developers and home builders don’t have to worry about last-minute client meetings and changes as they do with custom-built homes, said Jim Chapman, president of Atlanta-based Chapman Communities and Ranch Cottages for Rent.
“I can put the same color granite countertops in every single home, and no one complains,” said Chapman, whose company has brought build-to-rent cottage homes in Athens and Dawsonville. “There’s no individualization. Frankly, it’s fantastic.”
But local officials in some cities are not sold on rental homes coming to their communities, especially when they come as a surprise.
Stockbridge officials pushed pause on allowing construction of single-family home rental subdivisions in January and have since
extended a moratorium through the end of the year. Large companies buying up homes and renting them for exorbitant prices became a concern, said Mayor Anthony Ford.
The city, located in Henry County with about 29,000 residents, wants to encourage homeownership and worry pricey rentals will hurt affordability, Ford said. City Council will lift the ban after updating its unified development ordinance with clearer restrictions on rentable homes, he said.
“The ultimate goal is to allow folks to afford their own property and the build generational-type wealth and have pride in what they own,” Ford said.
Not everyone wants to own a home, though. Most of the renters in Champan’s cottages are older, single women who could afford to purchase a home if they desired, the developer and home builder said.
Instead, some of his renters use their cottages as a second residence to visit grandchildren. Or they simply don’t want to deal with the hassles of ownership, like mowing their own lawns, calling a plumber or paying homeowners association fees.