Crescent Communities, among Charlotte’s best-known developers, and the investment firm Pretium are spending $1 billion building more than 3,000 homes for rent in 14 markets across the Sunbelt, including Charlotte.
Details: The properties will include three- and four-bedroom townhomes (from 1,500-2,200 square feet), plus detached single-family houses, Crescent said in a statement last week. They will operate under an umbrella brand called Harmon.
- Each community will have features such as outdoor space, walking trails and pocket parks.
In Charlotte, Crescent is planning about 300 rental townhomes. The developer is eyeing four areas: Ballantyne, north Charlotte and two in Gastonia. Construction will start sometime next year, says Tony Chen, managing director of single-family build-to-rent at Crescent Communities.
- Rents will be comparable to what you’d pay at a typical new apartment building in Charlotte, Chen says. But the Harmon communities offer alternative perks, like fenced-in backyards and garages.
Crescent’s goal is to “professionalize” the single-family rental experience and eliminate pain points of homeownership, Chen says.
- Tenants can put in a work order online for plumbing issues, for instance, instead of calling a plumber themselves.
The first of the Harmon communities Crescent is developing will include 109 townhomes in Moncks Corner, about 25 miles from Charleston. Construction begins this fall and the homes will be ready to rent in October 2022, per Crescent.
Why it matters: The supply of available housing is already tight in fast-growing markets like Charlotte. Real estate firms such as Crescent see built-to-rent homes as a way to alleviate the problem — plus give renters an option that’s different from a typical apartment community.
In a recent Forbes article, housing market economist Brad Hunter called built-for-rent (or “BRF”) communities “the hottest thing in residential development.”
- The trend is driven by a number of key factors, Hunter wrote, including the fact that millennials are having kids and want more space to raise them. And the soaring price of homes, he adds, makes homeownership out of reach for many young people.
What’s more, Chen adds, this is an alternative for renters who are transient.
“You don’t have the down payment and you don’t need to commit to living there forever,” Chen says.
Background: Crescent Communities is one of the most prominent apartment developers in Charlotte. The company is behind the Novel multifamily brand — which has properties in hotspots like NoDa and Atherton — plus a handful of office developments, including Elizabeth on Seventh.
Crescent also built the 26-story Ally Charlotte Center in Uptown and sold the building to Ally over the summer for $390 million. Crescent is occupying one floor of the tower for its headquarters, per CBJ.
Harmon marks Crescent’s foray into single-family rental developments, Chen says.
- Crescent and Pretium will work with Tokyo-based Sumitomo Forestry on building the Harmon homes.
Zoom out: For years, mom-and-pop landlords operated single-family rentals in the Charlotte market, as the Observer recently reported. After the recession, Wall Street investors like Invitation Homes and American Homes 4 Rent started buying up single-family homes and renting them out.
- Wall Street-backed landlords now own more than 11,000 moderately priced single-family houses in Charlotte, according to June reporting from UNC Charlotte’s Urban Institute.
Crescent and Pretium, on the other hand, are building the Harmon homes from the ground up, so they’re not eating into the city’s supply of existing single-family properties.
- Still, new rental townhomes aren’t that common in Charlotte. One other recent addition is Anker Haus, a 49-townhome community by MyNiche Apartments near Plaza Midwood. Units start at $1,225/month and the community has a pool, gym, outdoor dining area and shared green spaces.
“This is a product that consumers should know exists. When you move to a new city you don’t really realize that single-family rentals are an option,” Chen says.