As federal interest rates continue to climb nationwide, at least 10 projects specializing in single-family homes for rent are under development at McKinney.
Sometimes referred to as build-to-rent or single-family rentals, homes built for rental purposes are already found in McKinney, primarily in Avilla Northside, at the northeast corner of Community and White Avenues, and Elevate at Skyline at US 380 and Skyline Drive.
But more single-family rentals are on the way. In recent months, several projects have received the necessary zoning from McKinney City Council to develop, and a few others with zoning already in place are laying the foundation for more of these single-family rental communities. Upcoming developments include single family homes, townhouses and duplexes.
“We’ve certainly seen a big increase in this type of development over the past two years,” said McKinney’s director of planning, Jennifer Arnold.
The city estimates it will add about 500 to 1,000 of these units over the next three to five years, she said.
Phil Crone, general manager of the Dallas Builders Association, said there are about 4,200 of these types of homes in the area, which represents about 5 to 7 percent of the market, he said.
“It has gone up, especially in light of the challenges that housing has had overall,” Crone said.
How it works
Although these communities are often referred to by their developers as single-family homes, McKinney city planning staff note that these are multi-family developments, Arnold said. The city calls them “multi-family cottage” projects.
Among the projects is Legacy at McKinney, developed by Hanson Capital Group on the southeast corner of Rockhill Road and North Brook Drive. Additionally, two more projects are coming as part of the planned Painted Tree development at US 380 and Lake Forest Drive. These are Avendale and Cyrene at Painted Tree.
San Antonio-based AHV Communities also announced a 157-unit community rental project in July that will come to Custer Road and US 380.
Hanson Capital Group director Chris Hanson said these types of projects offer better amenities than most apartment complexes. Any repairs or improvements that need to be made are taken care of by the management company, including lawn maintenance, as with the apartments, he said. Additionally, these developments offer on-site amenities, such as community centers, swimming pools, fitness centers and trails.
“If you’re renting an apartment, you can also consider renting one of our units,” he said. “But that has a price. These units are going to be more expensive than a conventional higher density apartment community, but not as much as you might think.
Hanson Capital Group’s Avilla Northside community had floor plans available as of July 8 ranging from $1,721 to $2,951, according to its website.
Tom Woliver, co-chairman and founder of Oxland Group, the company behind Painted Tree, said these developments will attract a variety of residents as more people choose to rent.
“It is difficult to find accommodation and [rentals are] just a great way to get into a community like McKinney and figure out if this is the right fit,” he said.
With its two projects in McKinney, Hanson said the city offered a prime location close to the Dallas area that still had land to develop.
“We wanted something that had conventional apartments on the market, which we think will attract a lot of renters, as well as predominantly single-family communities,” he said. “And we wanted it to be in an area that was continuing to develop.”
Woliver added that these types of communities provide a more accessible housing option than buying a traditional single-family home.
“Renting is more affordable than owning because of interest rates and the cost of housing,” Woliver said.
The City of McKinney has made affordable housing options a priority in the city as home values and rents rise. The median selling price of a home in McKinney has increased nearly 77% over the past five years, according to data from the Collin County Association of Realtors. Rents for McKinney apartments have risen more than 20% over the past year, according to Apartment List.
Although single-family rentals cost more in monthly rents than traditional affordable housing, it adds an option to help fill the “missing middle,” Arnold said. The missing intermediate dwellings offer between two and eight units, usually in the form of duplexes, triplexes, quadruplexes or townhouses. This is a type of housing McKinney Council is focusing on because it prioritizes housing accessibility and affordability, Arnold said.
City Council member Patrick Cloutier has voted to approve two single-family rental community projects since his election in January. Both projects were unanimously approved by board members.
One project he voted for was in April, which was a Craig International rental duplex development on Stacy and Custer roads. These duplexes could eventually become products for sale rather than rent, he said. The second project he voted for was Avanterra Lake Forest in late June, consisting of 123 duplex units in the future extension of Collin McKinney Parkway and Lake Forest Drive.
Cloutier said if more of these projects come to the board, he would like to see an option for people to buy them and build equity, like the Craig International project.
McKinney resident Lisa Turner said rental communities like Avanterra Lake Forest create problems precisely because they don’t allow the resident to build equity.
“All that [money] going out of state, and the rent will be so high that [the renter] will never be able to save and own their own home,” she said.
However, Jennifer Glaze, another McKinney resident, said a rental home community might be a good option for her. With two HOA charges on her senior home, she said she wanted to be able to get more bang for her buck.
“I’m in my 50s and I don’t want to have to do landscaping,” she says. “Looks like they had really good equipment.”
Developers have predicted that more multi-family cottage projects will be built, not just in McKinney, but across the region.
“The reality is that I think it’s a long-term thing that’s probably going to exist for the foreseeable future,” Woliver said.