Urban Locations Maintain Their Attraction
- Apr 14, 2021
There’s no question that renters were on the move last year. Spurred by the COVID-19 worldwide pandemic, 18 percent more apartment dwellers changed residences in 2020 than in 2019, according to new research.
But based on an analysis of 1.7 million rental applications between January and November of last year, StorageCafe found that the anticipated exodus to the suburbs and small towns never really materialized, at least not to the extent suspected.
Indeed, just a third of those applying elsewhere were looking at the suburbs, which is “much in line” with renter movement patterns prior to the health crisis, the self-storage industry tracker found. As recently as 2016, 40 percent of city dwellers were hunting around in the suburbs.
Over the previous five years, the report says, “it was urban locations that popped out as preferred destinations.”
The study also found that renters moving from cities with populations of a million or more tended to search in other urban areas. Only 21 percent applied to properties in the suburbs, a percentage similar to that in 2019. At the same time though, 35 percent of those in somewhat smaller cities with populations of 500,000 to one million seemed headed to the ‘burbs.
City-dwelling high-income earners were the least likely to abandon their urban settings for the hinterlands. Only 25 percent of renters earning between $100,000 and $2 million searched for a new place outside city limits. On the flip-side, 40 percent of renters with annual incomes of under $30,000 preferred a suburban location.
“Despite discussions of the rising cost of living and overcrowding, mega-cities continue to attract renters even if that means spending more on lifestyle needs,” the StorageCafe report said. “For a significant proportion of today’s renter cohort, the opportunities that can be found in big, active urban hot spots often hold greater appeal than the slower-paced suburban environments, as charming as they may be.”
The company asked sociology and urban studies experts to weigh in on its findings. Ron Cheung, a professor of economics at Oberlin College replied that part of the reason some people eschew suburbia is cost. People are heading back to cities is because “suburban rents are approaching those in urban centers.”
Cheung also pointed out that commutes are growing longer because of increased congestion, making urban areas “more attractive compared to suburban ones in terms of access to public transportation, nightlife, cultural and retail amenities.”
While location, amenities, cost and employment opportunities are always part of the mix when renters consider moving, these key factors were joined last year by the desire for more space. More than half the renters looking to migrate elsewhere applied for larger places, the study found.
It also found that renters are tending to remain in the same state. Two thirds stayed put, while the remaining one third eyed a different state altogether for their new residences.
The study took a deep dive into the top renter hot spots, naming Los Angeles as No. 1. “Los Angeles proved to be the most sought-after renter destination in the U.S., as it attracted the most people coming from a different city,” it says.
Interestingly, L.A. was the top draw for renters leaving the Big Apple. Nearly 4 percent of those leaving New York City applied for apartments in Las Angeles. At the same time, 77 percent of those heading to NYC were from another state, making it the second most popular relocation destination.
Renters moving to “the city” were almost evenly split between suburban and other urban locations—48 percent and 52 percent, respectively. But when they came from within New York state, 83 percent came from the suburbs. Out of state, the most likely originating cities were Jersey City, Chicago, San Francisco, Philadelphia, Boston and Miami.
Other popular destination cities include Chicago, Phoenix, Houston, San Diego, Dallas, Denver, Charlotte, Austin, San Antonio, Texas; Columbus, Ohio; Oklahoma City, Ok.; Atlanta, Seattle and Mesa, Ariz. Each is covered in some depth in the report, as are moving patterns among the various age cohorts.
But not everyone is convinced is urban locations still own the hearts and minds of renters, especially when it comes to the growth of the work-from-home movement.
“I believe that fewer workers will be traveling to their workplaces each day after the pandemic ends because the pandemic has shown us what can be done from home,” Janice Madden, a professor of regional science, sociology, urban studies and real estate at the University of Pennsylvania is quoted as saying. “People living in cities rather than suburbs who want to decrease their commutes will be motivated to suburbanize.”
Robert Silverman, a professor of urban and regional planning at the University of Buffalo, suggested that renters tend to stay in the places with which they are familiar.
“If renters are finding the housing, in terms of size and amenities, close to where they already live, then they will tend to relocate closer to where they already live and work,” Silverman told researchers. “That may be part of what you are seeing. Longer distance relocations are typically tied to changes in life cycle, employment, and other factors that motivate moves.”