A relatively new trend in housing clients are showing interest in is single-family homes for rent (SFR). Multifamily developers are looking to capitalize on an emerging market by building rental communities made up of small homes, perfect for apartment dwellers who aren’t quite ready to buy a house but want the benefits a house provides, or empty-nesters looking to downsize from a large house in transition to senior living. Sometimes the single-family for rent is developed within a traditional multi-family community – a hybrid rental development.

Whatever called — single family for rent, build to rent, horizontal multifamily — they are typically communities of up to 200 units, the units are sized like traditional multifamily units but with a mix tilting to two and three bedrooms. Most developments are in the suburbs and exurbs because the density of these projects is, understandably, much lower than mid- or high-rise multifamily. This is because the developer has to strike the right balance between the consumer benefits and service of living in multifamily housing with the advantages and feel of single-family homes. Inner-city SFR developments tend to necessitate more of a townhouse and rowhouse approach to achieve required densities relative to the land cost.

Challenges Developers Face

Perch Denton | Denton, TX

1. Planning Priority

In order for single-family for rent projects to be successful, developers need to focus on creating a brand and creating a sense of community, therefore enticing residents to live there long term. Resultingly, an emphasis on human-centric master planning is critical. We favor unique opportunities, like clustering homes around common open spaces and facilitating passive connections between neighbors to create a compelling place. This connection also lends a shared sense of safety, camaraderie, and neighborly relationships.

Once the master plan is in place and ideas like the common open space are employed, the homes (and spaces between) must be designed to support and enhance this framework.

Panhandle Townhomes | Arlington, TX

2. Home Design

A critical opportunity in distinguishing this product from apartments is making sure that each unit is designed more in line with a single-family home. The basic programming of the unit should consider resident and guest entry, the flow of semi-public spaces, and relationship to the private yard. However, unlike common single-family for sale product, there is a shift in the renter mindset from individuality to community, as expressed in the master plan.

3. Construction Cost

Single-family housing is more expensive per unit than most market-rate multifamily developments, so accommodation needs to be made to keep construction costs in line with the proforma. There is a balance to be struck between efficiency, delivering amenities, and creating a desirable community at a workable cost.

Fredericksburg MF/MU | Fredericksburg, TX

Because of the nuances and constraints, it can be challenging for a traditional multifamily developer to construct these communities with the same construction practices and contractor relationships. However, not all single-family builders are readily equipped to handle the unique aspects of the SFR development, and few cities understand the typology yet. At JHP, we are currently working on several such projects. In part, our role is to help our clients navigate through entitlement, permitting, and design in the most effective way.

Much of the story is yet to be written, but our experience in community building — Whole Community — across all developments translates really well to this project type. If you are interested in discussing a new single-family for rent community, contact us.



The information presented is based on JHP’s experience.