After the recession, renters—particularly millennials—were flocking to urban areas, and as such, urban apartment construction surged to record-high levels. But now, a new study shows that's changing. Renters are now targeting the suburbs in greater numbers.
From 2011 to 2015, suburban areas outpaced urban areas in renter household gains in 19 of the 20 largest U.S. metros. The suburbs of St. Louis, Atlanta, Boston, and Riverside, Calif., all gained three times more renters than their urban areas, a new analysis by Rent Café notes.
In the 20 metros that Rent Café analyzed, about 700,000 new suburban renter households were added during the five-year period from 2011 to 2015. On the other hand, the total number of new renter households was 600,000—or 100,000 less.
Metros like Phoenix saw an increase of 23 percent in renter households in 2015 than in 2011, while renter households in its urban areas grew by 14 percent. The Atlanta region saw a 26 percent increase in renter households to its suburban areas in that time, while its main urban areas only saw a 10 percent increase. In Riverside, Calif., rental households bloomed by 23 percent in 2015 over 2011, but urban renter households grew by only 13 percent.
Rent Café researchers speculate that cheaper rents may be one major factor driving new renters to the suburbs. On average, renters can save about a month’s worth of rent in one year by opting to rent in the suburbs over an urban area, Rent Café found in an analysis of the Yardi Matrix database in the 20 largest U.S. metros. In some locales, the savings may be even greater. For example, in New York, renters may save $1,600 per month on average—or $19,200 per year—by living in the suburbs rather than downtown, the analysis showed.
Source: “Suburb vs. City: Suburban Areas Are Gaining Renters Faster Than Urban Areas in 19 Out of 20 Largest Metros,” Rent Café Blog (May 3, 2017)
