April 6, 2026

This piece is sponsored by Ernst Capital Group.

Take the best elements of owner-occupied housing, blend them with the perks of renting, and the result explains a fast-growing housing approach finding early success in Sioux Falls.

Build-to-rent housing involves developing professionally managed neighborhoods that mimic the look and feel of owner-occupied housing while being designed for tenants.

“It’s really built like a single-family development, but the full plan and intent from the start is an entire rental community,” said Chris Daugaard, a partner in Ernst Capital Group. “It’s really filling a pretty unique niche in the housing market right now.”

Ernst Capital Group provided capital for the first full build-to-rent neighborhood in Sioux Falls: Willowbrook Village from developer Signature Cos., which opened in 2024 at 6544 E. Pine Grove Place, northeast of Veterans and Arrowhead parkways.

The 57 detached two- and three-bedroom homes are 100 percent leased.

“These are brand-new units with an attached two-stall garage and small yard. They have privacy, but they also have next-door neighbors, and they enjoy lawn care, trash service and snow removal included in their rent,” Daugaard said. “There’s definitely a sense of community that’s been formed here.”

Not only that, but also the units rent for nearly $1,000 less per month than a mortgage with insurance and property taxes on a comparable single-family home, he said.

“We essentially build the whole neighborhood at once, and the land is sold in one parcel, so it’s bought wholesale instead of retail,” he explained, “and they can be financed more affordably at scale, so the cost drivers are cheaper.”

Many current Willowbrook renters are retirees, “and they want the easy living with no maintenance,” he added.

“Someone else takes care of the details, and they get a nice rental home that’s cheaper than buying one. It’s still early at Willowbrook, but we anticipate turnover of tenants will be significantly below other multifamily properties.”

Ernst Capital is waiting to invest in additional build-to-rent communities until there is greater clarity around federal policy related to the housing category, he said.

“There are efforts by the federal government to limit large institutions buying up existing homes and competing with homebuyers, but since this is a very different concept from that, we’re hopeful the value of building brand-new neighborhoods like these is taken into account,” Daugaard said. “The conversation at the federal level doesn’t affect existing properties.”

“We’re creating new housing supply in a way that’s very popular with renters. We’re able to build with scale and achieve pricing that’s incredibly positive for residents and a solid value for investors.”

In anticipation of being able to move forward with additional projects, Ernst Capital is actively considering opportunities in Sioux Falls and other markets it views as a good fit, he said.

“We have one site that’s ready to go,” Daugaard said. “There’s definitely potential in other markets where we do business. People are surprised when they hear the numbers because it really brings value to a renter you can’t get anywhere else.”