Plenty of factors cause apartment rents to rise and fall. But how about crime rates? Do high crime rates automatically result in lower apartment rents?
Usually, according to a new study from RentHop. But the type of crime plays an important role.
RentHop found that certain crimes tend to have a bigger impact on rental rates. Burglary and robbery are the most likely to drag down rents in an area.
The RentHop study confirmed the initial assumption of researchers here that high crime rates tended to result in lower rents. However, RentHop found that the relationship between crime and apartment rents was more nuanced than that simple reading.
In short, certain crimes matter more than others. RentHop found that the crime that had the biggest impact on rents was burglary, followed by robbery. Next came motor vehicle theft, larceny theft (this generally means the non-violet theft of possessions other than a vehicle), murder, arson, aggravated assult and rape.
To demonstrate the power that some crimes have on rents, RentHop compiled a chart listing the correlation of these crimes with rental prices. The closer the numerical correlation a crime has to -1, the stronger its relationship to lower rents. Burglary, topping the list, had a correlation of -0.84. Robbery had one of -0.79, while motor vehicle theft had one of -0.76. Aggravated assualt, near the bottom of RentHop’s list, had a correlation of just -0.49.
RentHop looked at the crime rates in several major cities across the United States, cities that are important markets for the company. It found that Atlanta ranked first among these cities in crimes per capita, with Houston coming in second, Miami third, Dallas-Fort Worth fourth and Chicago — the only Midwest city on the list — fifth. Philadelphia came in sixth, with Los Angeles seventh and New York City eighth.
How did these cities rank when it came to apartment rents? New York City, not surprisingly, topped the list as the city boasting the highest monthly multifamily rents. Los Angeles came in second, while Atlanta and Houston, with their higher crimes per capita, brought up the bottom in rental ratees. Chicago came in fourth on RentHop’s list of rental rates, behind New York City, Los Angeles and Miami, and ahead of Dallas-Fort Worth, Philadelphia, Atlanta and Houston.
It’s little surprise that, in general, neighborhoods with more crime do tend to have lower rents. It’s important to note, though, that some neighborhoods with higher crime rates might still have higher apartment rents. That happens when an area’s amenities — its restaurants, parks, public transportation options, shops and night life — outweigh the higher crime rates.