A solution for attainable housing—or housing within reach of people earning an area’s median income—has eluded our industry for the past several years. There are multiple causes—the cost of land, city requirements on zoning and home site footage, and NIMBYism (Not In My Back Yard)—but often it simply comes down to making a project pencil out … which is increasingly challenging and often not achievable.
In a recent meeting, a client questioned why so many industries can find ways to create more affordable solutions but the housing industry can’t. Most people can’t afford a Tesla, but there are attainable alternatives such as the Nissan Leaf or the Hyundai Kona. The new iPhone costs nearly $800, but a good quality smartphone is accessible for around $200. Why not housing? We don’t have the answer yet, but I believe it starts by rethinking the starter home.
The concept of the starter home originated in the United States after World War II, when young families wanted to buy a home as part of the American Dream. These homes differed in form over the years, from mill workers’ cottages, shotgun homes, bungalows, and split levels, and some buyers decided on brick rowhouses or duplexes for their first home.
As the starter home of old—likely detached, reasonably sized, and probably with a small yard—has become unattainable for most first-time homebuyers, new housing types have emerged to bridge the gap. Build-to-rent, modern multigenerational living, and density with dignity are three opportunities to deliver attainable starter homes today, even if they don’t exactly fit the old mold.
More people are choosing single-family build-to-rent homes—including attached—as an alternative to purchasing a home, simply because the down payment on a for-sale “starter” home is too big a financial hurdle to overcome.
Life circumstances also play a role. Consumer research we conducted in 2021 among 1,242 homeowners with a net worth of $100,000-plus (excluding those who never plan to move) shows that one in four respondents would prefer to rent if it allowed them to live in a home that met their exact needs.
Today’s BTR homes are durable, well-appointed, and easier to get into than their for-sale counterparts, which is a big reason why the following projects have performed so well.
The Villas at Nexton
With 282 attached and detached homes ranging from 576 to 1,440 square feet, The Villas at Nexton by Capstone Communities, in Summerville, S.C., experiences high demand from young recent college grads who are looking to rent their first place but don’t want an apartment.
Not only did the developer focus on designing great homes, but the Capstone team also wanted to build a sense of community so neighbors could connect with one another. Residents have access to amenities within the Villas neighborhood, and also enjoy the benefits of being part of the larger Nexton Master Plan.
Since their grand opening in November 2022, the Villas are currently 63% pre-leased.