Over the next two years or so, the rental housing market in Williamson County will grow significantly, thanks in large part to abundant growth in one area: the single-family rental community.
Separate from rental units owned by individuals who act as landlords, single-family rental communities are essentially subdivisions of homes typically owned by an entity or corporation. Also, all or most of the homes in the community are for rent, not for sale.
In the Round Rock, Pflugerville, and Hutto area, there is only one active single-family rental community called Legacy, which contains 83 homes available for rent.
However, there are more than a dozen single-family rental communities at some stage of development in Williamson County, including Leander and Georgetown.
“Overall, it provides another housing option for people,” said Brad Wiseman, director of planning and development at Round Rock.
Wiseman and other local real estate professionals and experts agree that a diverse range of housing options is good for economically diverse populations. Given the strong demand for this type of housing coupled with soaring mortgage rates in the area, many experts agree that the trend of the single-family rental community is likely to continue.
“You get a lot of the qualities of a single-family type neighborhood without the…expenses, the mortgage — everything that goes with owning a home,” Wiseman said. “You get a lot of benefits without a lot of inhibitors to get into that single family home.”
The single-family rental boom
Anna Postelle, a resident of the Legacy single-family rental community off Pfennig Lane in Pflugerville, said her location has several advantages.
For Postelle, one of the main benefits of living in Legacy is the flexibility it gives her. She said she also likes not having to worry about paying a mortgage and all the responsibilities that come with home ownership, including home maintenance and repairs.
“I’ve lived in multi-family apartments, and they’re great,” Postelle said. “But when I was given the option of having more square footage and a grassy area, I have a dog, I love my dog and I want my dog to be able to go outside in the garden. I enjoy that aspect of my lifestyle, so that’s also a plus.
Since mid-2020, city officials in Williamson County have approved several new single-family rental communities, the majority of which will have rental-ready units by late 2023 or early 2024.
Together they will bring over 2,000 new rental units to the area.
Two of these communities, called Oasis Round Rock and Oasis Georgetown, will bring up to 540 units combined with a large percentage of detached single-family homes representing inventory.
Matt Shafiezadeh, director of Urban Genesis, a real estate company that produces Oasis, said his company’s single-family rental housing community is geared towards solving the problem he says many people are facing right now, including aging millennials and downsized baby boomers.
“They want to live in a [single-family] home, but they can’t afford it or they don’t have bail,” Shafiezadeh said. “In particular, with what’s happening in our economy with mortgage rates, [this] That’s why we design this product in the first place.
Shafiezadeh said when the Oasis units in Round Rock and Georgetown become available, which is expected to be in early 2024, rents will go according to the market rate at that time. He couldn’t provide specific numbers, but said as an example that if units became available in early June 2022, the average rent would be around $2,200 per month.
Another upcoming single-family rental community in East Pflugerville is called Cameron Yardhomes, which will be part of a larger mixed-use development called Cameron 96. When completed, Cameron Yardhomes will have approximately 260 single-family detached homes as well as duplexes. . Rental units should be ready for rent by the end of 2024, according to Jessica King, development manager for Urban Moment, the company bringing the Cameron 96 community to Pflugerville.
In addition to Cameron 96, Urban Moment brings several other single-family rental communities to the area, including Urbana at Cottonwood Creek in Hutto, Urbana at Hero Way in Leander, and Urbana at Meadow Lake in Round Rock.
All four communities are expected to be completed by mid to late 2024 and will bring nearly 1,000 detached single-family and duplex units to the area.
Advantages and disadvantages
For local municipal government officials and staff, having a wide range of housing options in the area makes sense for several reasons.
“While single-family home rentals are nothing new to us in Pflugerville, a neighborhood built on the framework [of] a multi-family project but with single-family structures instead of apartments is a new concept for us,” Jeremy Frazzell, director of planning and development services for Pflugerville, said in an email.
Frazzell added that single-family rental communities provide an opportunity for residents looking for an alternative to traditional homeownership without the typical feel of an apartment.
However, with most developers in these communities in Williamson County and northern Travis County confirming that once completed, rental rates will go to market price for a single family rental home, many people could be left out. of this option.
Sarah Wooster, who lives in the Emory Apartment complex in Hutto, said a single-family rental home was not feasible for her. She splits the total rent of $1,100 at The Emory and said that even if she wanted to, with the average cost of renting a single-family home in Hutto being around $2,200 in June 2022, she rules that option out.
“It’s hard enough to pay rent, gas and everything else,” Wooster said. “And I couldn’t imagine renting a [single-family] residence.”
Mark Sprague, state director of information capital for Independence Title, said he’s been something of an economist and real estate analyst in central Texas for several years.
Like other industry professionals, Sprague agrees that single-family rental communities can bring many benefits to residents, but they must be well maintained by property management.
“You have to have property management in perpetuity so the community doesn’t look [bad] in the future,” he said. ••Sprague said he has seen several examples of companies mismanaging single-family rental communities, and those communities eventually went bankrupt. However, Sprague added that he could see communities growing as a trend.
One reason is that in Texas, property appreciation is up 158% over the past 12 years, compared to 40% to 50% appreciation on either coast of the states. United, he said. ••In addition, he said rents in Central Texas are rising faster than in most countries and demand for rental housing in the area remains high.
“I can return my capital more quickly [in Texas]there’s high appreciation, and there’s higher rents per square foot than I can get on a single family home [homes] against apartments,” he said.