Tomball - Magnolia Edition | July 2022

2022 REAL ESTATE EDITION

Local government oversight Stoll cited Sydney’s Park as an example of how city governments do not have the authority to oversee institutional investment or develop- ment buying. The plat was approved by Tomball City Council in 2019 for the construction of the 40-home Tomball Heights by MHW Develop- ment, Community Impact Newspa- per previously reported. “Once a plat has been assigned, we don’t have any control over what gets built there as long as it’s single family; it can be rental or for ownership,” Stoll said. “We don’t review plats either— all the oversight is during the platting process by the planning and zoning commission.” RoseRock and MHW did not respond to requests for comments as of press time. Stephen Sherman, a researcher with the Kinder Institute for Urban Research at Rice University, said local governments could establish rent controls, which would address a root cause of institutional invest- ment by limiting the protability of rentals. However, he said the pres- ence of real estate in local governing coalitions and the potential for those measures to aect smaller landlords make them unlikely to be successful. “The ways that you regulate this involve making owning rental prop- erties for prot less protable,” Sher- man said. “Cities such as Houston, Austin and Dallas may try something, but the real estate industry is part of the local governing coalition, and the state government can preempt any rent control law.”

“When a parcel of land is platted or replatted for single-family housing, rental homes fall under that category,” Stoll said. “We don’t control that.” Invitation Homes and American Homes 4 Rent did not respond to a

they have built; they face challenges saving for down payments.” Changing renter options HAR data released June 15 showed new single-family rental listings in the Houston area

Built to rent

New houses constructed in six ZIP codes for Tomball, Magnolia, Pinehurst and Hockley are increasingly being rented out in the same year of their construction.

request for com- ment, and FirstKey Homes referred Community Impact Newspaper to the NRHC for comment. Targeting aordable homes HCAD data shows the ve investment rms Community Impact Newspaper tracked concen- trated their buying

increased 28.6% from May 2021 to May 2022. Evan- gelou said she believes insti- tutional buy- ers focusing on rental properties are contribut- ing to surging rentals. “They cre- ate more rental housing, so even

NUMBER OF NEWLY BUILT HOMES FOR RENT LOCALLY

“Institutional investors seem to be taking a significant amount of homes that would otherwise go to first-time , low- income buyers.” NADIA EVANGELOU, DIRECTOR OF FORECASTING AT THE NATIONAL ASSOCIATION OF REALTORS

Magnolia, Pinehurst and Hockley area

Tomball area 0 25

50 75 100

in the Tomball area south of the city with 86 combined homes concentrat- ing in subdivisions within 10 miles of the intersection of the Grand Parkway and Hwy. 249. Common subdivisions for the rms included Westbourne, Northpointe and Pinecrest Forest. Meanwhile, MCAD data showed investment in the Magnolia area was more spread out with clusters of inves- tor-owned homes appearing north of FM 1488 at FM 2978, south of Pinehurst along Hwy. 249 and along FM 1774. Appraisal districts showed out of the 413 investor-owned properties, ve were appraised above $400,000. Evangelou said investment rms directly compete with rst-time buy- ers, and nationally, counties with higher percentages of investor-owned homes saw higher home prices. “Institutional investors seem to be taking a signicant amount of homes that would otherwise go to rst-time, low-income buyers,” she said. “First- time buyers don’t have equity that

if rents rise, there is more supply,” Evangelou said. “With rising mortgage rates, it gives more options for people.” Single-family homes constructed from 2018-2022 in the area are increasingly being sold as rentals. In Tomball ZIP codes 77375 and 77377, 85 single-family homes were con- structed and then leased the same year—up from 22 in 2020, according to Multiple Listing Service data provided by Hardcastle. Stoll said he was hopeful trends in both individual properties converting to rentals and build-to-rent develop- ments could contribute to Tomball becoming a more aordable city. “One of the issues I’ve had with Tomball is that land prices are expen- sive,” Stoll said. ”With [large employ- ers] bringing jobs to Tomball, people need places to live. I wish people the best in the American dream of buying your own home, … but we need aord- able places for people to live, and until recently Tomball did not have that.”

NOTE: DATA FOR TOMBALL IS COMPOSED OF ZIP CODES 77375 AND 77377. DATA FOR MAGNOLIA, PINEHURST AND HOCKLEY IS COMPOSED OF ZIP CODES 77354, 77355, 77362, AND 77447 RESPECTIVELY. *DATA FOR 2022 INCLUDES LEASED, ACTIVE AND PENDING LISTINGS AS OF JULY 12.

For more information, visit communityimpact.com .

SOURCES: MULTIPLE LISTING SERVICE, JANE HARDCASTLE REALTY COMMUNITY IMPACT NEWSPAPER

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TOMBALL MAGNOLIA EDITION • JULY 2022