Developing Build-to-Rent Communities

19 September, 2022

The commercial real estate market has seen significant growth in the build-to-rent (BTR) building type due to increased demand from tenants, investors, and developers.

Before 2020, BTR was considered an interim solution for potential buyers who couldn’t commit to a mortgage but were ready to move out of an apartment. Then the pandemic fueled demand for privacy and space, driving further industry expansion. Today, with rising interest rates and single-family housing prices, BTR attracts a variety of homeowners priced out of the market.

Despite addressing a significant housing need, not all stakeholders immediately support BTR development. Local communities have concerns about the zoning and management of these hybrid communities that blend single-family concepts with multifamily operations. In some regions, the concept is still relatively new.

However, developers who understand the importance of educating jurisdictions about the BTR concept are finding success. Here’s how to ease their concerns and streamline your development process.

Applying Current Zoning to a New Concept

At Bohler, we work with land use attorneys to educate jurisdictions on the single-family BTR concept, including unit design and community benefits. Our design and legal teams work to apply existing zoning codes, usually adapting them for this new product type. On rare occasions, the team must completely rewrite a new zoning section to advance the project.

These efforts are tailored to each local community and address specific concerns point by point. We also work closely with developers and legal teams to determine project specifics such as density, expected setbacks, and other parameters aligning the project to local standards and the municipality’s vision.

We’ve had great success processing these types of projects through entitlements.

Daniel Hines, Principal

Addressing Community Concerns

BTR projects are typically designated as multifamily, which piques the interest of local governments in terms of operational and maintenance details. They want to know who will be responsible for tasks like lawn maintenance, preserving curb appeal and overseeing the interior of the homes. Additionally, zoning boards and local citizens are frequently concerned about the density of these projects and the impact on property values for nearby homeowners.

There are some negative connotations that can come from multifamily because the lack of individual ownership. There’s a fear that tenants might not keep up their lots because they don’t own them.

Daniel Hines, Principal

To manage these concerns, we work closely with property management organizations to clarify the roles and responsibilities of both management groups and renters. Often, the property management group maintains everything within the building’s perimeter, just as they would in a traditional multifamily community.

Adapting to Local Trends

Successfully overcoming zoning challenges requires a deep understanding of local trends and community concerns. Developers must take into account the surrounding community and its needs when deciding on factors like number of stories, appearance, and cost.

In Texas, for example, BTR zoning allows us to build eight to twelve units per acre for planned development and single-family rental spaces. It was critical for us to be explicit in the proposal, specifying that only 12 units per acre will be built. This approach ensured that communities were not alarmed by a shift to multifamily zoning, where the developer could legally change the plans to build more densely.

In another example, my team contributed to the creation of design criteria and standards for a BTR developer that will be implemented across all future markets. By standardizing community designs, we streamlined their design, development, and permitting processes.

SEE RELATED: 6 Ways to Improve Your Due Diligence Checklist

Across our footprint, Bohler’s ongoing efforts involve conducting thorough due diligence, identifying suitable sites, and collaborating with local agencies to simplify the entire development and approval process for BTR communities.

About Daniel Hines, PE
Daniel Hines, Associate Bohler Engineering Charlotte NC

As Principal of Bohler’s Charlotte, NC office, Daniel leads a team of civil engineering, land surveying, and landscape architecture professionals focused on helping developers across the Carolinas tackle site challenges to accomplish their land development goals. As the residential market continues to boom, Daniel helps develop unique residential solutions for desirable communities that attract homebuyers and tenants while contributing to community growth.

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