Space and Privacy Drive More Renter Households to Suburbs
Chances are, when the average person thinks of a renter, they envision someone who lives in an apartment complex in a large district with just about everything they need within walking distance. But that vision may be outdated as more suburbs appeal to renters, as lifestyle has shifted since the pandemic, according to a new analysis by Point2Homes. In fact, the growth of renter households in suburbs is outpacing their rate of growth in five of the 20 largest U.S. metros.
The term “renters” refers to both apartment and single-family homes, a spokesperson for Point2Homes said.
Nationwide, Census data shows 203 suburbs in metropolitan areas now majority feature renters, with more people leasing than owning homes. Even though that number is lower than the 233 such suburbs identified in 2018, the trend is clear. “Today, approximately 6.08 million households rent a suburban home in these areas, an increase of around 231,000 since 2018,” the report said.
Between 2018 and 2023, 15 suburbs switched from owner-majority to renter-majority. In 15 suburbs, the number of renter households more than doubled in the period. Some may switch to ownership if economic and financial conditions allow.
“The suburb wins when the need for more space and privacy wins,” the report commented. In many cases, especially in the South and Midwest, renters feel the suburb comes with more and better options.
“Developers are shifting their attention away from downtowns, urban cores and main cities. Instead, they are focusing on expanding outwards, toward the towns and suburbs surrounding cities proper, to be able to provide renters with more space and better amenities,” the report noted.
The trend is especially notable on the East Coast, visible in some suburbs of New York City, Miami, Boston, Philadelphia and Baltimore, as well as two suburbs of Chicago.
Outside military bases, the suburbs with the highest renter shares are Cudahy, CA, the University in Hillsborough County, FL, Clarkston, GA (which has a high refugee population), Addison, TX and Webster, TX. In each of them, over 80% of the population is made up of renters.
Renter households are growing at a faster pace (18%) in the suburbs of Dallas than in the city itself (8%). More rapid growth is also seen in the suburbs of Minneapolis and Boston, while renter households in those areas of Tampa and Baltimore are growing at about the same rate as each city.
Between 2018-2023, the influx of renters in some suburbs has been remarkable, especially in Texas, where Frisco added 10,213 new renter households. Other Lone Star cities with rapid suburban growth were McKinney, Grand Prairie, and Lewisville. Woodbridge, VA was the only city in the top five located outside the state. Another state with rapid growth in several suburban areas was New Jersey (Elizabeth, Patterson, Harrison and East Orange). In all, 104 suburbs nationwide each added more than 1,000 rental households in the period.
“The rise of the renter suburb is not a blip. It’s a fundamental shift in how Americans live and think about housing. This trend is maintained by factors like remote work and market conditions that don’t quite favor homeownership,” Point2Homes stated.
Source: GlobeSt/ALM