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Detroit Metro Area Nearly Doubles Its Number of Build-to-Rent Houses in Just 5 Years
Build-to-rent houses increased by 81% in the Detroit metro area in the last 5 years, according to a new analysis by RentCafe.
SOUTHFIELD, Mich. (FOX 2) - Across the country, build-to-rent homes are having their most successful season on record.
A new analysis from RentCafe shows the number of build-to-rent houses grew by 81% in metro Detroit from 2019 to 2023, when 2,114 units were added to the market.
In fact, in the Detroit metro area alone, the number of build-to-rent (BTR) homes almost doubled in just five years, reaching a total of 4,717 BTR units in 2023.
Data shows Detroit is the nation's 5th top metro for new build-to-rent houses. It's growth that's currently surpassing other major Midwest hubs like Columbus and Chicago.
"There isn't a neighborhood unaffected by this," Sami Abdallah said, a broker and owner at RE/MAX City Centre. "It really puts into perspective that our recovery is in full swing. You could almost say we've arrived due to the demand for housing."
For investors and renters alike, the future is bright with hundreds of houses for rent under construction. But this new trend, for some, isn't always sunny.
Build-to-rent homes are described as detached units that are built specifically for the purpose of long-term rental. Typically, they are maintained by large companies, rather than individuals.
"I'd say the average Joe is now starting to feel the impact," Abdallah said. "We've got this huge influx of money coming from all over the world. You could call it Wall Street vs Main Street to an extent. It used to be just you and i bidding against each other for this piece of property. Now it's you and me, this hedge fund, that investment group, this local investor, so it's really created a new set of challenges we haven't encountered."
Though the Detroit area remains an affordable place to live, compared to most other metropolitan cities, housing prices continue to rise. New homes built for the purpose of renting are having a moment, with millennials who are reaching their prime nesting years, but who are also finding homebuying challenging.
However, this new trend is making the home buying process even harder, with more competition, less inventory and, in turn, higher home prices.
When it comes to apartment units, Abdallah says Detroit's rental market is thriving, with almost 6,000 apartment units in the pipeline.
"I think if we look at the new apartments being built, I think it tells a very interesting story about where we are as a city right now. The fact that there's demand, even in the face of, let's say, increased interest rates, these projects are still moving forward, so i think we should all take some solace in knowing that it's a great place to be and there's a ton of people who want to be here."
According to RentCafe, around 370 homes are currently under construction in the metro area and will be completed in the next couple of years.
Track the expansion of build-to-rent homes across the U.S. using their interactive map, which highlights the 100 metro areas with the highest increases in stock over the last five years.