In an interview, Chelsey and Spencer Marks, a young couple, shared their journey from homeownership to renting in La Quinta, California. They previously owned a single-family home in Cathedral City, but faced persistent issues that made living there increasingly difficult.

One major challenge was the air conditioning system. They recently spent $15,000 to repair it, as summer temperatures consistently exceed 100 degrees Fahrenheit in this desert vacation haven. With thoughts of needing to replace windows in their three-bedroom home and new costs for repairing the pool’s pump, living there felt more burdensome by the day. Chelsey, 41, reflected, “One day, I came home and realized I just couldn’t go on living like this. I suggested to my husband that we sell the house.”

However, their plan was not to sell one house and buy another. Instead, they chose to embrace a growing trend across the U.S.: renting a brand new single-family home in an entire community designed exclusively for renters.

In January of this year, they became one of the first residents of the SolTerra community, located just 15 miles from their previous home. This development boasts 131 houses, and although they lost their low-rate mortgage, selling their house erased credit card debt and left them with enough cash to look forward to a trip to Italy this fall.

The benefits of this new living situation are myriad. If any issues arise in their home, they simply inform the landlord, and repair workers come at no cost to them. “Come check out my kitchen,” Chelsey said to a reporter. “I don’t need to own this house to live the way I want to!” The open-concept kitchen is bright and spacious, outfitted with stainless steel appliances.

Nationwide, the landscape of homeownership is shifting. With soaring home prices and interest rates that have doubled since three years ago, the traditional American dream of owning a home has transformed. Developers are now building entire communities of single-family homes intended solely for rent. These homes offer residents private backyards and garages, once considered symbols of middle-class success, without the requirement of ownership.

According to the National Association of Realtors, around 90,000 new single-family homes began construction last year for rental purposes, comprising about 10% of all new builds—a notable increase from 5% just two years prior. This marks the highest percentage recorded since the U.S. Census Bureau started tracking this data in the mid-1970s.

For renters moving into these “build-for-rent” communities, the appeal lies in accessing spacious, modern homes without hefty financial burdens. While some hope one day to own a home, the presence of corporate investors—especially those from Wall Street—has raised concerns among local and state lawmakers. There is a fear that corporate ownership could outcompete individual buyers, exacerbating housing shortages and driving prices further beyond reach.

Deonte Palm, a 30-year-old roofing contractor, shared his experience of renting a new four-bedroom home in Menifee, California. He hopes to stay here temporarily until mortgage rates drop, as he initially shared an apartment with his fiancée and their newborn, which felt cramped. His arrangement with his brother and brother’s girlfriend allows them to rent this spacious home for $3,400 a month, which is cheaper than renting two separate apartments.

The trend of building homes solely for rent can be traced back to the Great Recession of 2008, when the housing market collapsed, allowing corporate investors to snap up properties to rent out. Doug Ressler, a corporate research manager at Yardi Matrix, explained that as millennials start families, the demand for spacious homes has surged, prompting investors to enhance their rental strategies.

Currently, the most robust build-for-rent communities are found in areas like Texas and Arizona, where land is more affordable. In Southern California, interest is shifting toward the Inland Empire rather than coastal regions, as residents seek newer, larger, and less expensive homes.

Bill Shopoff, founder and CEO of Shopoff Realty Investments in Irvine, noted that after conducting market research, he realized there were about 60,000 renters in Southern California able to afford three-bedroom homes, yet very few had been developed in the past two decades. This prompted him to create SolTerra, initially intended for sale but later converted to rental-only.

The SolTerra community offers three and four-bedroom homes with Spanish-style red tile roofs and colorful mosaic tiles at the entrance. Each home features a garage and a balcony, with quartz countertops in the kitchen and soaking tubs in the master bathrooms, alongside a large swimming pool and community center.

The rent starts at $3,299 for a 1,520-square-foot home, with some units reaching $4,460 and offering 2,400 square feet of space. Since opening last summer, 50% of these homes have already been rented, indicating strong demand.

Blackstone, the world’s largest private equity firm, recently completed a $3.5 billion acquisition of Tricon Residential, a company that develops apartments and single-family homes in Canada and the U.S. Tricon aims to fulfill 3,000 build-for-rent projects in the coming years, emphasizing the increasing availability of such rental options.

Amid rising housing costs, many renters are opting for the flexibility of renting over the financial burdens associated with homeownership. In California, for instance, purchasing a mid-priced home—when factoring in mortgage, taxes, and insurance—costs an average of $5,500 per month, which has surged by 80% since January 2020. Renting a two-bedroom home costs significantly less.

For Erick Carlelen, 47, this financial math is straightforward. After moving with his wife and three daughters into a Tricon community in Menifee, he realized that even a modest down payment put homeownership out of reach, with monthly costs around $6,000. “I’d rather pay $3,800 in rent and enjoy life,” he stated.

However, for Marcia DeMello, who has lived in coastal Orange County for decades, the shift to renting is an experiment. Now 59 and nearing retirement, she’s trying out life in the desert by renting a three-bedroom home in SolTerra, contemplating the long-term viability of this lifestyle.

DeMello, a massage therapist, expressed her concerns about being at the mercy of landlords, as rents can fluctuate due to market conditions. Lawmakers share this concern, seeking to legislate against corporate domination in the housing market. Research indicates that about one-third of rented units in the U.S. are single-family homes, with corporate investors owning just over 3%.

Legislators have proposed limits on corporate ownership in the rental sector, citing a case involving Invitation Homes—a major player in the single-family rental industry—who settled for nearly $4 million over alleged violations of California’s anti-rent gouging laws. Critics argue that corporate buyers are increasingly squeezing individual buyers out of the market, particularly in newly developed neighborhoods.

Chris Ward, a Democratic state assemblyman representing San Diego, highlighted the imbalance, asserting that corporate investors have a distinct advantage over individuals. He has proposed legislation aimed at restricting build-for-rent projects amidst concerns over facilitating unequal transactions.

Conversely, corporate investors argue that they are helping to fulfill housing needs, bringing stalled development projects back to life. Shopoff rebutted claims against capital investment, asserting that it merely responds to consumer demands.

Industry experts like Ressler agree that the underlying reasons for the build-for-rent trend remain consistent. Post-World War II initiatives provided significant support to veterans for homeownership, normalizing the notion of suburban living as a pathway to wealth accumulation.

With no similar public investment initiatives currently in place, the burden of homeownership remains heavy for many aspiring buyers. Analysts anticipate that the trend of increasing costs for both renting and buying homes will continue for the foreseeable future.