Photo: Robert Clark
Renters became the majority in nearly a quarter of the largest US cities in the decade between 2006 and 2016.
Over those 10 years, rentership growth outpaced homeownership in nearly all of the most populous US cities, according to a report released last week by the listing site RentCafe.
Some 22 of the 100 largest cities became renter-majority between 2006 and 2016, bringing the total of renter-dominated cities to 42. The increase was so pronounced that it was only slightly below the total national population growth recorded during that decade.
The US population grew by nearly 24 million people between 2006 and 2016. During that period, the number of renters increased by 23 million while the country-wide homeowner total grew by less than 700,000.
During the 10-year period, the overall population only decreased in 8 of the 22 cities that shifted to renter-majority.
Chicago, IL, Austin, TX and San Diego, CA, were among the cities that shifted from homeowners to renters between 2006 and 2016.
“The sudden surge in the renter population is a response to the decline in the late 2000s. Economic instability generally has a negative impact on homebuying decisions and when the short-term risks of buying outweigh the long-term benefits, it tips the balance toward renting,” Balazs Szekely, real estate writer and data analyst, tells BuzzBuzzNews.
During the Great Recession many people lost their homes and were forced into renting. Others were either discouraged by “cashing out large sums on a down payment” — or simply couldn’t afford one, Szekely says.
And while lack of inventory is certainly a factor in the shift towards renting, it is not the main cause.
“The wave of foreclosures was still the main driver of the sudden expansion of the renter population. The inventory crisis and the income growth caused an increase in rents, though,” Szekely adds.
At the same time, the population of renters grew faster than homeowners in 97 of the 100 most populous cities studied by RentCafe. The renter population in Gilbert, AZ increased by more than 50 percent during the decade studied — the largest growth recorded nationwide. Significantly, Gilbert’s population also doubled during that 10-year period.
“This translates into an average annual growth rate of close to 13 percent during these three decades — meaning that the city’s overall population has also more than doubled in a decade, and the vast majority of the new population chose the renter lifestyle,” RentCafe writes in the digital release.
Plano, TX, St. Petersburg, FL, North Las Vegas, NV and Toledo, OH, were among the markets that had the largest increases in renter population during the 10-year period.
Meantime, Jersey City, NJ and Newark, NJ and New York City are among the top 10 markets with the highest proportion of renters. Newark ranks the highest, with renters accounting for 74 percent of its population. Ranking second, just over 70 percent of Jersey City’s residents are renters.
Surprisingly, NYC — the most populous city in the country — ranked fourth overall, with renters accounting for 65 percent of its population.
“When a city already has five million renters, a decade is barely enough to produce a remarkable proportional growth — this is how NYC had no chance to make it to the top 10 with a sorry 4.5 percent growth rate, in spite of adding close to 440K renters,” says RentCafe.
Other cities with high proportions of renters include Miami, FL (68 percent), Boston, MA (63 percent), Los Angeles, CA (60.8 percent) and Oakland, CA (58.9 percent).