July 24, 2024

KJ Home

The Best Home for Creating Lasting Memories

New communities offer renters the feel of single-family housing

6 min read

As renting season gears up in Illinois, a new trend is on the rise: the emergence of build-to-rent communities.

These residential developments are built for long-term renters and offer the traditional advantages of apartment living — including no mortgage payments or maintenance responsibilities — along with the space and feel of single-family housing. Some build-to-rent communities even offer yards, garages and a choice of floor plans.

When June Nilles came across a build-to-rent housing community in Oswego, she wasn’t looking to move.

“I said to my husband, let’s just go take a look,” she said. “And that’s really the attitude we walked in with that day. Let’s just go take a look. But we walked out having said yes, we want to live here.”

In December, June and her husband, Steve Nilles, moved into Home at Ashcroft, a housing community with build-to-rent attached luxury townhomes in Oswego. They were one of Ashcroft’s first residents, and moved in while many of the units were still under construction.

June and Steve Nilles are both in their early 70s and frequent travelers. Before moving into Ashcroft, they lived in an apartment in Oswego, which they transitioned to after retiring and selling their house in Sugar Grove. Despite the convenience of apartment living, June and her husband found they were not entirely satisfied with their new lifestyle.

“We chose apartment living originally, but over time we just felt like we needed more,” she said.

Because the couple frequently travels to and from Florida during the winter months, June Nilles said they were drawn to Ashcroft because they were looking for the feel of a home, without the responsibility that comes with homeownership.

The rise of build-to-rent properties

Home at Ashcroft is one of several Illinois build-to-rent communities, which are primarily located in suburban neighborhoods close to an hour outside of Chicago. RMK Management Corp., a Chicago-based property management company, is currently managing four new build-to-rent properties in Antioch, Yorkville, Gilberts and Crystal Lake completed in 2023.

A crew works on one of the townhomes in the Home of Ashcroft, a new Build-to-Rent community in Oswego. H. Rick Bamman / For the Chicago Tribune
A crew works on one of the townhomes in the Home at Ashcroft, a new build-to-rent community in Oswego. H. Rick Bamman / For the Chicago Tribune

Anthony Tiritilli, president of development for Lynd Living, a real estate firm based in San Antonio that manages Home at Ashcroft, said build-to-rent properties primarily appeal to young couples looking for their starter home, empty nesters trying to downsize, divorced individuals and older adults over the age of 55 who frequently travel or own a second home in a warmer climate.

“This provides them the luxury and convenience, again, of living in an apartment-style community with all the amenities, but having a home and it’s brand-new,” Tiritilli said. “There’s not a lot of that.”

In Illinois, there are 1,203 build-to-rent units planned or under construction, according to the National Rental Home Council.

First built in the 1980s, build-to-rent neighborhoods have gained popularity in recent years, partly due to the changing housing market and evolving renter preferences.

Real estate experts say the build-to-rent model originated from the single-family rental market, which grew during the financial crisis of 2007-08 when many homes were lost to foreclosure.

“During the financial crisis of 2007-2008, a lot of single-family homes were lost in foreclosure,” said Joseph Pagliari, a John Mazarakis and Chicago Atlantic clinical professor of real estate at the University of Chicago. “And a lot of the larger private equity funds started to buy these homes out of foreclosure at distressed prices.”

Since the recession, Pagliari said rising mortgage rates and fewer homes for sale have pushed prices to unaffordable levels for many prospective buyers. As a result, Pagliari said there is a growing demand for reasonably priced rental homes.

While the pandemic exacerbated housing supply shortages, Pagliari said it also led to movement away from cities, which greatly influenced the demand for build-to-rent housing in suburban areas.

Rent prices have also increased dramatically since the pandemic. In 2021, rent prices in the U.S. rose 16.3%, according to Apartment List. Pagliari attributed this shift to a combination of factors, including the limited availability of housing, restrictive zoning regulation and societal changes such as the widespread adoption of remote work.

Navigating affordability and renter stigmas

Build-to-rent communities gained significant popularity after the pandemic, targeting renters who may not want the financial burden of a home, Tiritilli said.

“Not everybody can afford to buy today because of what home prices have done or now interest rates, which is very prohibitive for anybody to get in,” Tiritilli said.

In Illinois, the median monthly home payment is $1,804, just slightly more than the national average, according to Business Insider calculations.

At Ashcroft, rent prices for single-family homes range from $2,800 to $4,000 a month. On the lower end, this number is not significantly higher than the median rent for 3-bedroom properties in Illinois, which falls at $2,200 a month, according to Zillow Rental Manager.

Tiritilli said another benefit of choosing a build-to-rent community is that there is a perceived stigma associated with renting in a neighborhood dominated by homeowners.

“You’re gonna be a renter on a block that is surrounded by people that own homes,” Tiritilli said. “Everybody that owns a home on that street knows who the renter is … and people worry about the tenancy that comes with renting.”

Pagliari said this perception comes from “not in my backyard” attitudes, which he says are more prevalent in suburban areas than in big cities.

“There’s some reluctance in certain suburban municipalities that if you have a bunch of renters, particularly in kind of conventional multistory apartment complexes, that that’s going to be a drain on the school system and the park district and maybe even the police force,” Pagliari said.

Choosing community and flexibility

Like June and Steve Nilles, other residents said location and flexibility played a significant role in their decision to move to Home at Ashcroft.

LaTanya McMahan waited months to move into Home at Ashcroft after touring the rental community in 2023 while she was still tied up in a lease. While she waited, McMahon had her unit customized to include a finished basement.

New resident LaTanya McMahan retrieves her favorite art as she moves into Home of Ashcroft, a new Build-to-Rent community in Oswego, March 16, 2024. (H. Rick Bamman / For the Chicago Tribune)
New resident LaTanya McMahan retrieves her favorite art as she moves into Home at Ashcroft, a new build-to-rent community in Oswego, on March 16, 2024. (H. Rick Bamman / For the Chicago Tribune)

“I definitely did not want to be tied down into homeownership at the time. I wanted something new and I wanted something that I felt like I helped design,” she said. “This (Ashcroft) gave me everything, honestly, that I needed without buying it myself.”

McMahan, who lives with her 28-year-old daughter and 5-year-old granddaughter, said her decision to move into Home at Ashcroft was largely influenced by the property’s close proximity to reputable elementary and junior high schools, which she hopes her granddaughter will eventually attend. With a young child at home, McMahan said space was also a determining factor.

At Home at Ashcroft, there are three floor plans renters can choose from including Birch, Douglass and Cypress. The floor plans vary in square footage and layout, but each has three bedrooms, at least two bathrooms and a two-car garage.

McMahan chose the Cypress model, which has a private master bedroom on the upper level, situated away from the other two rooms on the main floor.

Build-to-rent communities come with amenities Tiritilli says resemble those in an apartment building, but include more specialized offerings like wine tastings or even cooking classes.

Some of the most common amenities include fitness centers, co-working spaces, game rooms, clubhouses and outdoor pools, which Tiritilli said are designed to foster a sense of community among renters.

McMahan said she is looking forward to using the clubhouse, where she hopes her daughter and granddaughter can build relationships with other renters in the neighborhood.

“Having the clubhouse where you can meet people, where my daughter can meet friends or my granddaughter can meet little friends over there and hang out, having just that individual home feel with that community feel,” she said.

In light of the increasingly competitive housing market, some Illinois residents are opting to be renters for life, favoring build-to-rent communities over traditional homeownership.

“I think we are renters to stay. We love this community,” June Nilles said.

For developers like Tiritilli, the build-to-rent model represents a crucial element of the evolving housing market, addressing the changing demands of today’s renters.

“Five years ago I didn’t walk around saying oh my god, we’ve got to build BTRs,” Tiritilli said. “I didn’t even know what BTR stood for because it just wasn’t what we did. Now, we see that the BTR is something that’s here to stay.”

Samantha Moilanen is a freelance reporter.

link

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © All rights reserved. | Newsphere by AF themes.