A new Apartment List report reveals that 64 percent of renters indicate plans to settle down in a city other than where they currently reside, with Sunbelt renters more likely to settle in their current location. In pricey East Coast and West Coast metros, renters cite affordability as the largest driver of relocation, while in inland metros -- primarily located in the Midwest and South Atlantic -- better job opportunities are the main factor driving renters to new locations.
As America’s cities continue to grow and add jobs, it’s crucial that sufficient new housing is built to meet the demand created by that growth. Analyzing data on building permits and employment, Apartment List found that only 10 of the nation’s 50 largest metros have produced enough new housing to keep pace with job growth in recent years. We also find a strong correlation between the number of jobs per permit and rent growth from 2005 to 2015, showing that a failure to meet the demand for new housing drives rent increases.
There is growing concern about poverty in the suburbs, known as the “suburbanization of poverty.” Apartment List found that, while poverty has grown in both suburban and urban areas, it is increasing faster in the suburbs. While a larger share of the country’s poor population lives in dense urban areas than any other neighborhood type, poverty is becoming increasingly suburban, as the share of the poor population in low-density and medium-density urban areas, considered “suburban,” grows.
Although many metros have experienced overall wage growth over the past decade, very few have achieved something called “inclusive growth” that benefits all workers. Over the past decade, “post-rent wages,” or wages left after deducting median rent costs, decreased for service workers (-7 percent) and blue-collar workers (-5 percent), while only knowledge workers saw an increase (6 percent). The combination of unequal wage growth and rising rents has led to an increase in inequality between blue-collar, knowledge and service workers in most metros.
Data from private listing sites, such as Apartment List and our competitors, tend to include a greater share of high-end luxury units, and therefore, overrepresent the upscale neighborhoods in a city. This results in median rent estimates that are too high, a phenomenon we call “luxury bias.” In order to make our rent estimates the best and most accurate available, we've revamped our methodology to control for this issue.