In Tomball and Magnolia—where the median home price is $388,750 and $353,390, respectively, according to the Houston Association of Realtors—there are over 1,100 build-to-rent units, and 400 units being built, according to data from HAR and developers.
In 2014, 60% of Harris County households were able to afford a median-priced home in Tomball at $166,685, but in 2024, 28% of residents could afford a median-priced home of $388,750, according to HAR.
If homebuying continues to be out of reach for prospective home buyers, the market for build-to-rent homes may continue to increase, according to an April report from RentCafe.
Kelly Violette, executive director of the Tomball Economic Development Corp., said build-to-rent housing gives people other options with home buying becoming increasingly more expensive.
Two-minute impact
Texas-based developer Caldwell Companies is developing 204 build-to-rent units in its community Mirella, located on the outskirts of west Tomball. Preleasing for the single-family rental homes began in August, with over 1,000 people on an interest list, Todd Johnson, president of residential rental, said.
Johnson said the decision to develop the company’s first build-to-rent development stemmed from the need for a cheaper alternative to home buying and building. At Mirella, leases start at $2,300 according to its website, while the average monthly payment for a home in Tomball in 2024 is $2,620, according to data from HAR.
“Our mission ... is really about enriching the lives of our residents ... and meeting them where our residents are at,” Johnson said.
Anna Broussard, senior regional manager at Wan Bridge, a development company building a build-to-rent community at the corner of FM 1486 and FM 1774 in Magnolia, said developers are able to build rental communities three times faster than for-sale homes. The faster product availability, she said, leads to a higher leasing velocity.
What they're saying
- “I think that the driver behind [build-to-rent] is the institutional investor looking for different ways to invest in the real estate market. ... This is ... like a new frontier.” —Kyle Jefferson, real estate agent, Living the Dream Realty Group
- “I think that the build-to-rent communities ... accommodate a lot of different lifestyles ... and I think that’s important as we continue to grow.” —Kelly Violette, executive director, Tomball Economic Development Corp.
- “[We want] to accommodate residents where they’re at in their life cycle, ... trying to find the products and the needs that the community needs.” —Todd Johnson, president of residential rental, Caldwell Companies
Harris County residents had to make a minimum annual household income of $41,600 to afford a Tomball home in 2014, but that number has since increased by nearly 177% to a minimum annual household income of $115,600 in 2024.
Build-to-rent means people who want homes but can’t afford them can still enjoy the benefits of living in a single-family home without having to be tied down to long and expensive mortgages, said Kyle Jefferson, a real estate agent for Living the Dream Realty Group.
“Obviously, I’m a Realtor. I want to sell [houses],” Jefferson said. “But [build-to-rent] does meet a need.”
Per HAR’s Q2 2024 Housing and Rental Affordability Report, mortgages are higher than leases.
Although build-to-rent housing growth is prominent in Houston, the rise can be seen more drastically across other U.S. metro areas. From 2018 to 2023, the Houston metro saw a 73% increase in build-to-rent units, whereas Dallas, Atlanta and Phoenix all saw more than a 160% increase, according to the RentCafe report.
Nationally, 75% more houses for rent were completed in 2023 than in 2022, with Texas being the leading state for these developments with 4,800 houses for rent completed in 2023, according to the report.
Additionally, 41% of the total number of build-to-rent homes nationwide were built within the last five years, equating to around 68,000 rental homes, according to the report.
Looking ahead, Houston will add around 4,800 new single-family homes for rent by 2026, surpassed only by Dallas and Phoenix, according to the report.
According to the TEDC, the population in Tomball is expected to grow from 12,000 to over 20,000 by 2030.
Violette said the city is one of the fastest growing in the Greater Houston area, and build-to-rent communities help accommodate the quickly expanding population.
“[Build-to-rent housing] opened up a lot of opportunity for people to look at Tomball in a way that maybe they hadn’t been able to before as an option,” Violette said.
Johnson said there’s a fit for build-to-rent in Tomball, and with a high demand for Caldwell Companies’ Mirella, he doesn’t think it’s a product that will go away soon.
“We are actively pursuing more opportunities in this [build-to-rent] space,” Johnson said.
Haley Velasco contributed to this report.
