Developers have added plenty of amenity-rich apartment buildings across the Midwest in the last decade. Turns out, that approach has paid off, attracting a surge of wealthy renters who might not otherwise have considered renting over owning.
Apartment List recently published a study of high-income renters and uncovered an interesting fact: High-income renter households, those earning at least $100,000 a year, represent the fastest-growing segment of the U.S. housing market. Apartment List reported that this group grew 48 percent from 2008 through 2017.
During this time nearly 2 million high-income households became renters. Apartment List pointed to four factors that have spurred this growth: The boom in multifamily construction, much of which has been at the high end; the number of single-family homes that were turned into rentals following the Great Recession; rising demand for urban living; and the tougher task of qualifying for mortgage loans.
And while the growth of wealthy renters has been dramatic, renting in general has become more popular. During the last decade, the country’s population of renters has grown by 15 percent. Apartment List said that the population of renters earning from $50,000 to $100,000 a year has grown by 18 percent, while the population of renters earning less than $50,000 has grown by 8 percent.
The number of high-income renters in the United States has grown from 3.8 million in 2008 to 5.7 million in 2017, according to Apartment List.
Denver has seen the greatest growth in high-income renters during this time, with Apartment List reporting that this population grew by 146 percent from 2008 through 2017.
But some Midwest cities have also seen significant growth in high-income renter households. In Oklahoma City, this population has grown by 121 percent, the third-highest growth rate in the country. The number of high-income renters in Memphis has grown by 110 percent, while it has risen by 103 percent in Minneapolis. And in Nashville, this number has grown by 96 percent.
Apartment List said that the growth in wealthy renters has been slower in big cities such as Chicago. That’s because these cities already had plenty of high-income renters.
Of course, while the growth of high-end apartment projects has attracted wealthier renters, there is plenty of concern from developers and municipal officials that the Midwest needs more new multifamily projects designed for renters of more modest incomes. That’s the balance that has been so difficult to achieve.