Rentonomics
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Research

Making Moves: Why Some Renters Chase Jobs & Others Chase Locations

By: Sydney Bennet
May 11, 2018
  • When making a long-distance move, some renters search for jobs in multiple cities before moving (job-first movers), while others pick the city in which to live and then find a job (location-first movers).
  • The majority of college-educated renters are job-first movers, while the majority of those without a college degree are location-first movers.
  • The metros with the most location-first movers tend to be more affordable, fast-growing Sunbelt metros, while those with the largest share of job-first movers have a higher share of college-educated workers and high housing costs.
  • Location-first movers are more likely to plan on settling down in their new metro: 42.8 percent of location-first movers plan on settling down where they currently live, compared to 27.3 percent of job-first movers.
  • Renters without a college degree are often unable to take advantage of job opportunities in expensive metros due to high housing costs. Even college-educated workers who can afford to move to these expensive tech hubs to pursue better job opportunities still don’t plan to settle down in these areas long-term.

Economic opportunities vary with geography. Thus, residential mobility that allows workers to move to areas with better job opportunities can promote economic mobility. Residential mobility has been a defining feature of the American Dream, from westward expansion to the Great Migration, but long-distance moves are at a historical low. While overall mobility remains low, renters are significantly more mobile than homeowners, and new data show a recent uptick in inter-state moves for millennials to pre-Recession levels.

Previous Apartment List research has shown that job opportunities are the most common reason renters relocate, a trend that supports the relationship between residential and economic mobility. In order to better understand the motivation behind long-distance moves, we surveyed over 20,000 Apartment List users about their decision-making process on selecting where they live.

We then divided respondents into two categories, based on their moving process:

  • Job-first movers refer to renters who applied for jobs in multiple cities, then picked a city based on job offers.
  • Location-first movers refer to renters who chose a city to live in before applying for jobs in that city.

In order to focus on renters who made big moves, we limited our sample to non-student renters who are currently living in a metro other than where they grew up. Nationwide, 46.5 percent of new-metro movers were job-first movers, but this share varies significantly by education level and location.

College-Educated Renters are More Likely to Look For Jobs in Multiple Cities

Of renters who move away from their hometowns, those with a college degree are more likely to search for jobs in multiple cities. An estimated 57.2 percent of renters with a bachelor’s degree were job-first movers, compared to 35.5 percent of those without a bachelor’s degree. Renters with STEM degrees, often working in the technology sector, are even more likely to have relocated for a job. To better understand the way the moving process can be shaped by education and occupation, we’ll use the example of a tech worker with a bachelor’s degree and hospitality worker without a bachelor’s degree.

The tech worker may explore jobs in a few different tech hubs, comparing not only pay and cost-of-living but also job responsibilities and differences in company size or culture. The tech worker will find that many companies are willing to fly her out for an interview and provide the time and financial support necessary to make a big move.

The hospitality employee, on the other hand, will find similar jobs in many cities, perhaps even with the same chain of stores, hotels or restaurants. Even if the hospitality worker wants to search for jobs in multiple cities, she is less likely to be able to secure a job before moving, as she will likely need to be in the area to search for jobs and will be expected to start work within a few days. The hospitality worker is more likely to be a location-first mover, choosing a city to move to, perhaps based on cost-of-living, before searching for a job.

Lower residential mobility suggests that workers are unable to move to regions with better job opportunities, a trend that’s particularly stark for less-educated workers. From 2015 to 2016, college-educated workers were more than twice as likely to move to a new state compared to someone with a high-school degree. The ability to make job-first moves means college-educated workers can more easily move to areas with better economic opportunities.

Location-First Movers Drawn to Sunbelt Cities

Fast-growing Sunbelt metros with comparably affordable housing see a higher share of location-first movers who are generally relocating to job markets where they can find a job upon arrival. Expensive cities with strong job markets, such as San Jose, D.C. and Boston tend to attract job-first movers. These cities have high proportions of college-educated workers, including in STEM fields, who are more likely to be job-first movers.

Some notable takeaways on the metros with a large share of job-first versus location-first movers:

  • Las Vegas has the largest share of location-first movers, with 82 percent of movers selecting the metro before searching for a job. The large share of location-first movers is driven by both the sizeable hospitality industry and an influx of Californians in search of more affordable housing options.
  • The prevalence of location-first movers in other Sunbelt metros is part of a broader movement to “growing regions where employment is plentiful.” These metros, including Phoenix, Charlotte, N.C., and San Antonio, offer more affordable housing options, with core city median two-bedroom apartments renting for $1,030, $1,110 and $1,050, respectively.
  • Movement to tech and business hubs, such as Denver, Seattle, Boston, Washington, D.C., and the Silicon Valley is driven primarily by job-first movers. Many of these job-first movers are college-educated millennials in search of career opportunities and an urban lifestyle.
  • Expensive metros, such as San Jose and Boston, where the citywide median two-bedroom rent is $2,580 and $2,080, respectively, price out many location-first movers, who are less likely to have a college degree. In these technology hubs, the wage gains from moving from a cheaper location are unlikely to cover the high rent prices.
  • The combination of large technology companies, start-ups and job opportunities in science and academia attract many job-first movers to the Research Triangle surrounding Raleigh, N.C.
  • New York, San Francisco and Los Angeles appeal to both location-first and job-first movers. These cities attract many college graduates who are drawn to the lifestyle and industries these cities offer, as well as workers moving after securing a job.

Many of the strong economies and tech hubs that attract job-first movers are too expensive for less-educated workers to move to. High housing costs may dissuade less-educated renters from searching for jobs in these metros entirely, despite opportunities for better jobs or higher wages. Recent research has shown having more college graduates in a metro means higher incomes for all workers, although the gains are higher for college graduates. Unfortunately, for less-educated workers, the accompanying increase in housing costs from the increase in college graduates negates the wage increase.

Job-First Movers are Less Likely to Settle Down in their Current Metro

Renters who deliberately select a city to move to are more likely to plan on settling down in that city longer term. Of these location-first movers, 42.8 percent plan to stay in their current metro, compared to just 27.3 percent of job-first movers. This trend holds true within each of the metros studied. For example, in the Atlanta metro, 51.1 percent of location-first movers plan on staying in the Atlanta area, compared to 27 percent of job-first movers.

While job opportunities attract workers to new metros, cost-of-living is a major factor for renters determining where to settle down. Renters in more affordable metros were more likely to report plans to settle down in their current metros. Of renters surveyed living in lower rent metros, 42.4 percent plan on settling down in their current metro, compared to 34.3 percent of renters in more expensive metros.1

Many of the cities with the largest share of renters planning to settle down are the same Sunbelt metros that appeal to location-first movers. These Sunbelt metros, including San Antonio, Las Vegas and Charlotte, offer both job opportunities and relatively affordable housing options. For example, the median condo in Las Vegas, where 63 percent of renters plan on settling down long-term, costs less than a fifth of the price of the median condo in San Francisco, where only 23.9 percent of renters plan on settling down long-term.

Expensive metros, often with a high proportion of job-first movers, such as Boston and San Francisco, should expect higher turnover, as fewer of these workers plan to settle down long-term. Cities, such as New York and San Francisco, have long been destinations for young workers launching their careers, but the high home prices make it difficult for many workers to settle in these cities long-term. It’s interesting to note that despite rapidly increasing housing costs, newer tech hubs, such as Austin and Denver, have a higher share of renters planning to settle down, compared to established tech centers, perhaps indicating that these are long-term destinations for tech workers leaving places, such as the San Francisco Bay Area.

Conclusion

The ability to move to a new location is an important way workers can take advantage of better job opportunities in different cities. Historically, residential mobility allowed for workers from poorer states to migrate to wealthier states, mitigating differences in income across states. Now, despite the fact that high-paying jobs are clustering in a small subset of cities, moves to a new county remain less common than in prior decades due to high housing costs in these job hubs.

As strict land use regulations increased housing costs in technology hubs, migration to these cities was no longer a reasonable option for less-educated workers. These lower-wage movers tend to be location-first movers, in part due to the difficulty of searching for lower-skill jobs before a move. These location-first movers are clustering in expansive, fast-growing Sunbelt metros, such as Las Vegas, Phoenix and Charlotte, with affordable housing and plentiful job opportunities for less-educated workers.

Migration to expensive cities such as San Jose, Washington, D.C., and Boston remains an attractive option for educated workers who tend to be job-first movers with high enough wages to take advantage of the job opportunities is expensive metros. In these metros, in-migrants tend to be higher-income than out-migrants, as educated workers continue to move to the job opportunities in technology hubs, while lower-income households are pushed out by rent increases that outpace wage gains.

Even though high-income, educated workers are still drawn to the job opportunities in these expensive metros, such as San Francisco and New York, a relatively small share plan on settling down permanently in tech hubs, likely due to the high cost-of-living. More affordable Sunbelt metros such as Houston and Charlotte have a higher share of renters planning to settle down long-term, while relatively few renters plan to stay in expensive cities, such as New York and San Francisco.

See the table below for metro-level findings:

Metro
Share of Job-First Movers
Share of Location-First Movers
Overall Share Planning to Settle
Job-First Share Planning to Settle
Location-First Share Planning to Settle
National46.5%53.5%35.6%27.3%42.8%
Atlanta, GA44.7%55.3%40.5%27.0%51.1%
Austin, TX41.2%58.8%41.2%----
Baltimore, MD43.9%56.1%27.5%----
Boston, MA55.1%44.9%15.6%7.1%25.7%
Charlotte, NC36.1%63.9%57.6%----
Chicago, IL42.5%57.5%29.1%19.4%36.0%
Columbus, OH48.6%51.4%30.3%----
Dallas, TX46.6%53.4%47.4%34.5%59.0%
Denver, CO49.3%50.7%45.3%36.7%52.9%

  1. Median rents determined using 2016 Census metro median rents. Higher rent metros have a median rent of over $1,100. Lower rent metros have a median rent under $1,100.  When looking solely at location-first renters, those in lower rent metros are 25 percent more likely to plan on staying in their current metro than their peers in higher rent metros.
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