Here is some good news for brokers and developers working in the multifamily business: In 21 U.S. cities with a population of 100,000 or more, more than 50 percent of the households are made up of renters, And according to research from ABODO, the number of cities that can claim this is only going to grow.
ABODO earlier this week released a report identifying those major urban areas in which more households rented than owned. Relying on numbers from the U.S. Census Bureau, ABODO researchers found that of more than 400 urban areas with populations of more than 100,000, 21 are composed of at least 50 percent renters.
Now, that number might not seem that great. But ABODO is predicting that the number of renter-majority cities will only continue to grow. The company points to a report from the Pew Research Center saying that 3 million former homeowners moved from owning to renting in 2011. That’s up from 2.5 million who made the same switch in 2001.
There are several cities in the Midwest in which 50 percent or more of the households rent rather than own, according to Abodo. In Columbia, Missouri, for instance, 53.3 percent of households rent, while in LaFayette, Indiana, 52.9 percent rent. In Champaign, Illinois, 52.5 percent of households rent, and in Clarksville in Kentucky and Tennessee, 51.9 percent of households are renters.
What might be most surprising is some of the big cities in which more households don’t rent. In Chicago, for instance, only 36.1 percent of households rent instead of own.
Age, of course, has a lot to do with this trend. According to ABODO, the majority of renters in the company’s list of renter-dominated cities are under 44, with the highest percentage — 24.29 percent — falling between the ages of 25 and 34. Owners are older, with ABODO reporting that 77.16 percent of owners are older than 45.
It matters, too, if a city is a college town. ABODO found that many of the cities on the list are college towns, including, of course, Champaign, Columbia and LaFayette. In these cities, more than 50 percent of renter households were occupied by non-families — many of them, of course, being college students.
What do all these numbers mean? Only that there remains plenty of opportunity in the multifamily sector for both developers and brokers. Renting is becoming the top choice of a growing number of households across the country. And while the majority of cities and communities across the United States remain populated by more owners than renters, you can bet that the number of renters will only continue to increase.
Just look at the centers of such cities as Chicago, Minneapolis, Kansas City, Cleveland and Detroit. In these urban areas — and many others across the Midwest — renting is becoming an ever more popular option. And as the ABODO report shows, this is a trend that isn’t slowing any time soon.