Demographic firm Population and Survey Analysts projects 1,003 build-to-rent units will join Katy ISD’s boundaries over the next decade, according to the demographic firm’s November 2023 report.
The build-to-rent trend is happening across the Houston area, said Bruce McClenny, industry principal for MRI ApartmentData at MRI Real Estate Software.
“It's something that all of a sudden has gained popularity and addresses the needs of people in search of housing to rent,” McClenny said. “It's great to go into some of these neighborhoods that [residents] feel like, ‘I'm in a single-family home. I'm living the single-family life in suburbia, and I can afford it because I'm renting.’”The details
Some build-to-rent communities coming to Katy are joining master-planned communities. Starwood Land's Sunterra development in northwest Katy, for example, has three of these neighborhoods that are under construction or recently opened, according to MRI ApartmentData.
Located off Aruba Bend Drive, Eden at Sunterra opened the first of its 266 homes in April, Community Manager Kristin Coffey said. Single-family rental homes are still under construction and are about 7% preleased, but Houston-based homebuilder Colina Homes aims to have all homes completed by early spring 2025, Coffey said.
“I think it’s a great area for people to be able to rent here who can’t necessarily own a home right now or don’t want the responsibilities of owning a home,” she said.
Coffey said home features include:
- Three- to five-bedroom floor plans
- Monthly rents ranging from $2,450-$3,250
- Maintenance-free living, which includes pest control, 24-hour emergency maintenance and landscaping
- Two-car garages
- Backyards
- Full-size washers and dryers
- Retreat Amenity Village, which has a pool, tennis courts and soccer fields, dog parks, a game area, an event lawn, and a kids zone
- Sol Club Lagoon Amenity Village, opening in early spring 2025, which is a 2.7-acre lagoon with beaches, cabanas, paddleboards and kayaks, a boardwalk, pickleball courts, and event and yoga lawns
Rental demand is on the rise in the Houston area, leading to leased single-family home rentals—which includes build-to-rent as well as existing single-family rentals—growing 6.7% year over year in the region and average rent prices nearing their peak, according to the Houston Association of Realtors' most recent report on May's rental market.
The average rent price for single-family homes rose to $2,345 in May, tying with the price last August—the second-highest average rent price recorded, per the report.
Eden at Sunterra requires tenants to make three times the monthly rent; have a verified proof of income; and pass credit, criminal and rental background checks, Coffey said. This means a household must make at least $88,200 annually to qualify, based on The Eden at Sunterra’s base rent.
“[The community] was a great opportunity to build in the No. 1-selling master-planned community in Texas right now,” she said. “Katy’s booming. There’s a lot of demand for rental, and I’m seeing a lot of build-to-rents going up.”
Looking ahead
Despite the growth of the build-to-rent housing sector, single-family homebuying still reigns for its popularity, said Charles Nash, head of the Houston multifamily investment team at Colliers. This is also supported in PASA’s projections, which show build-to-rent accounting for 2.2% of all new housing units over the next decade.
“There's always going to be a segment of the population that would like to have the flexibility of renting ... versus people that know they're going to continue to work in the same career or same location or whatever, and want to settle down and build equity in the ownership of a single-family residence,” Nash said.
Cassandra Jenkins and Jessica Shorten contributed to this report.
