Florida is experiencing a significant boom in its build-to-rent (BTR) housing sector, with thousands of new single-family homes for rent under construction. This trend is driven by rising home prices, high interest rates, and a growing demand for flexible, spacious living options, making Florida a leader in the national BTR movement.
Key Takeaways
- Florida is set to add over 13,500 new single-family rental homes, ranking it third nationally in BTR development.
- The state’s BTR inventory is projected to increase by 83% upon completion of these new units.
- Orlando, Tampa, and Jacksonville are leading metros for BTR construction, with thousands of units in the pipeline.
- The BTR sector offers renters the privacy and space of a single-family home without the responsibilities of ownership.
Florida’s Leading Role in Build-to-Rent
Florida is emerging as a powerhouse in the build-to-rent market, with an estimated 13,591 new single-family homes for rent currently under construction. This places the Sunshine State third in the nation, behind Texas and Arizona, in terms of BTR development. The influx of these new units is expected to increase Florida’s existing BTR inventory by a substantial 83%.
This surge is largely attributed to a confluence of factors, including escalating home prices, discouraging down payment requirements, and high mortgage rates, which are keeping many potential homebuyers on the sidelines. The BTR model offers an attractive alternative, providing the flexibility of renting with the comfort and privacy of a standalone home, often featuring amenities like attached garages and well-planned neighborhoods.
Metro Areas Driving BTR Growth
Several Florida metropolitan areas are at the forefront of this BTR expansion. Orlando is particularly prominent, ranking seventh nationally with over 3,000 single-family rental homes in development. This robust construction activity is fueled by the region’s strong job market and its status as a growing hub for technology and research.
Tampa and Jacksonville, while not in the top 10 nationally, are also seeing significant BTR development, with nearly 2,000 new units planned for each metropolitan area. Other cities like Kissimmee, St. Cloud, Wesley Chapel, Port St. Lucie, St. Augustine, and North Port are also contributing to the state’s BTR growth, with hundreds of units under construction in each.
Factors Fueling the BTR Trend
The build-to-rent sector’s growth is not solely a response to current market conditions. The pandemic also played a role, as remote work trends encouraged people to seek larger homes in more affordable areas. This shift, combined with the ongoing affordability challenges in traditional homeownership, has created sustained demand for spacious rental properties.
Developers are capitalizing on these trends by focusing on suburban areas where land costs are lower and zoning regulations can be more accommodating, allowing for more efficient and faster development of larger rental homes. This strategic approach is helping to meet the increasing demand for tenant-focused rental options across the state.
A Look at Specific Developments
Examples of this growth include communities like Magnolia at Powell in Wildwood, a 132-unit BTR development featuring amenities such as a resort-style swimming pool and fitness center. Such projects highlight the diverse range of BTR offerings, from townhomes to single-family detached homes, catering to a broad spectrum of renters.
While the BTR market is booming, some reports suggest a potential slowdown in new construction in the coming years due to rising costs for land, labor, and materials, as well as increased construction debt. However, the current pipeline indicates a significant expansion of rental housing options in Florida for the foreseeable future.
Sources
- Florida Among Build-to-Rent Leaders | Florida Realtors, | Florida Realtors.
- Report: Build-to-rent homes in Florida up more than 300%, Business Observer.
- Florida to add more than 13,000 rental homes this year, Florida Politics.
- Report: Florida ranks No. 3 in nation for build-to-rent housing market, Business Observer.
- JLL Arranges $26M Construction Loan for 132-Unit Build-to-Rent Community in Wildwood, Florida –
REBusinessOnline, REBusinessOnline.