A shift has occurred in the rental market, where renters are now choosing to live in the suburbs. In 19 out of the 20 largest American metro areas, there is a shift of renters choosing to live in the suburbs rather than the city. Between 2011 and 2015 the number of suburban renters increased faster than the number of urban renters. The study completed by Rent Café, shows how the suburbs of St. Louis, Atlanta, Riverside, and Boston gained 3 times more renters than urban areas.
The highest percentage increase is shown in Atlanta, with the suburban areas gaining 26% more renter households, while its main urban areas gained only 10% more. However, it is not only the percentage increase of renter households, but in the 20 metro areas studied, about 700,000 new suburban renter households were added, but only 600,000 new rental households were added in the urban areas.
So, the question is, what is driving new renters to the suburbs? Well, price is a big factor. In 18 out of the 10 metro areas studied, renting in suburban areas is cheaper than renting in urban areas. In fact, renters save about a month’s worth of rent in one year if they rent in the suburbs. However, rent is not the only reason people are moving to the suburbs, there is an added appeal of nicer communities that are family-friendly, nicely landscaped, and quieter. The father an apartment is from the city center, the more likely it is to have more square footage, outdoor space, and available parking.
When most think of the suburbs they revert back to the “white picket fence American dream” of raising a family and living in a small quaint community. Nevertheless, people are not moving to the suburbs to necessarily start a family. Millennials are attracted to the suburbs for a well-managed apartment that is in a community close enough to the city to visit and is equipped with convenient access to everything they need such as entertainment, shopping, and work opportunities.
A major appeal of renting in the suburbs, is that they offer a wider range of rental options. Aside from low and mid-level apartments, the suburbs offer higher-end garden style apartment communities, with luxury features. The only problem with these new apartment complexes, is that unlike urban areas, the suburbs cannot build as fast. In the 20 metro areas studied, a total of about 300,000 new apartments were built in the urban areas versus 180,000 in the suburban areas. However, many experts are sayingthat suburban apartment markets are poised to become the next hot thing in multifamily and thus, we can expect to see a boost in suburban apartment construction in the upcoming years.