Homeownership may be a key part of the American Dream, but rentership (yes, that’s a word) has become the norm in more of our cities since the financial crisis. In 2016 renters outnumbered homeowners in 47 percent of major cities, up from 21 percent in 2006, according to a new analysis from APM Research Lab.
Using data from the U.S. Census Bureau’s American Community Survey, researchers looked at cities with populations of 150,000 or more. Not a single city saw a statistically significant decline in the percentage of households that rent, and many saw substantial increases. Nationally, the number of households that rent increased 4.2 percentage points from 2006-2016, representing an increase of 7.3 million renting households.
Lancaster, California, saw the biggest jump in renters, rising by 15.3 percentage points to 51.9 percent, while cities like Brownsville, Texas, and Anchorage, Alaska, saw no significant change. Newark, New Jersey, had the highest proportion of renters, at 79.1 percent, while Frisco, Texas, had the lowest, at 25.1 percent.
|Explore the rise of renters in your own city|
Our senior housing correspondent Amy Scott set out to talk to renters in one of the country's hottest housing markets, Denver, Colorado. Half of city residents are now renters, up from about 44 percent in 2006. That’s partly because of an influx of young people, who tend to be less ready to buy homes. A focus on apartment construction and a shortage of single-family homes has also pushed prices beyond the reach of many people who want to buy. The average price of a single-family home is more than $500,000. And then there’s the hangover from the housing crisis.
We asked members of our Public Insight Network to share their experiences of renting in one of the country’s more expensive markets. Here are some of their stories, lightly edited for brevity:
Lonnie Allen and Heidi Laursen
Ages: Both 42.
Occupations: Lonnie is a freelance artist and graphic designer. Heidi was recently laid off from her job in hotel sales.
Family size: Five kids between them; three still at home.
Rent: $2,600 for a 3-bedroom house in Denver’s Cheesman Park neighborhood.
Lonnie: A decade ago or something, (my then-wife and I) looked into purchasing a house. We went to a (first-time) homeowners seminar and everything. This was before the big crash, but I remember we were trying to do it right because it's the most important investment that most people will make in their life. And we did the math and we just couldn't afford it.
And then the housing crash happened. There was no way that we would qualify for a loan because I had bad credit. But I feel like the pendulum has swung so far the other way. (Lenders) should take in mitigating factors, like a good payment of rent history. But even with all those things, the price of houses right now is just so prohibitive, at least in Denver. To realistically look at a home ownership, we'd have to look in a different city.
Heidi: I would say 95 percent of the time I want to be a homeowner. But there is that 5 percent where, I remember when I lived in my house (that she previously owned), the garage door broke, the furnace went out, and we needed to put new carpeting and flooring in the whole house, and those things are really expensive. There were some negatives to home ownership, too. But when it comes right down to it I'd still rather be a homeowner. I'd rather have the kids have a home that they have memories in and could come back to.
Occupation: Call center employee.
Family Size: Lives with a partner and three roommates.
Rent: $2,800, split five ways, for a 4-bedroom townhouse in Mayfair.
Student Loan Debt: $16,000
While I wouldn't say that I'd prefer to own a house, I would like to own one someday. Unfortunately, between my student debt, low pay, and high cost of living, I don't think I will be able to any time soon. It feels like a big commitment. I don't know where I'm going to be in five years. I don't know if I want to even be in Denver in five years. Who knows? My friends are moving all the time and maybe I would, too. It's hard to say. I'm doing the things that I'm told I'm supposed to do. Like I have a 401(k) and I've even started investing a little bit — like a little, little bit. But other than that, I guess maybe it's still hard to think about the future. It feels so far away.
James Crapes and Matthew Davis
Ages: 32 (James) and 34 (Matthew).
Occupations: James is a product manager for a company that manufactures metal panels for commercial buildings. Matthew is a paraprofessional with Denver Public Schools and runs a small theater company.
Family Size: Two adults, no kids.
Rent: $1,550 for a 2-bedroom apartment in Englewood, a suburb of Denver.
James: I lived in a very nice apartment for about 11 years. When I moved in I believe it was around $725 (a month) and when I moved out it was $1,100. And that's where I was like, “Ooh, we're reaching the breaking point here now.”
Matthew: This last summer the owner decided to terminate my lease so that he could redo the basement apartment and basically charge more money for it. But I was about at the point where I was about to be priced out of there as well, just for my income bracket.
James: Since his lease was being terminated, that's when we made the decision to go ahead and move in together, and we had been talking about it anyways. So it was kind of just the catalyst that pushed us.
As somebody who works in architecture, in the construction business, it's always been my goal to own my own home and do whatever I want with it. That was my thinking before I met Matt, but now I want to build a home that's ours.
Matthew: Which is funny because, honestly, I never really cared about owning a home. I just assumed, you know, I'm poor. My degree is in art and theater, so I was just planning on renting. But it would be nice to own a home, to have a place that I could call my own and do things that I wanted to do.
James: I think he's come around now that it is something that maybe, with our combined income, is something that could be one day a possibility for us.
Emily and Alfredo Cervantes
Ages: Both 37.
Occupations: Emily is a health policy analyst. Alfredo teaches science at a public middle school.
Family size: Two adults and two kids, ages 9 and 14.
Rent: $1,425 for a two-bedroom bungalow in Denver’s Montclair neighborhood.
Student Loan Debt: $626,700
Emily: We purchased a home in Lakewood (a Denver suburb), back in around 2002. We were really excited because we were really young and it was under $200,000, which was amazing. The mortgage lender told us that the best for us would be a five-year adjustable-rate mortgage, and us being young and not knowing very much said, "OK.” Five years happened and the ARM came due and our rate jumped. Gosh it doubled. And at that time house prices were also dropping. So when we went to refinance they told us that they couldn't do it because our equity was actually not there, because the house value actually decreased. So we were left with either trying to sell the home or just foreclosing and walking away, which is what we had to do.
To save up that amount of money that you need to purchase a home and to purchase one comfortably is going to take us, I can't even think about how many years that's going to take at this point.
Alfredo: If something were to happen to one of us, where one of us can't work, it would be the same thing all over again.
Sean Baker and Beth Higgins
Ages: He’s 39; she’s 33.
Occupations: Sean is manager of corporate partnerships with the Colorado Symphony. Beth does marketing finance for Sling TV.
Family Size: Two adults, two cats.
Rent: $2,200 for a 2-bedroom apartment in Capitol Hill.
Student Loan Debt: $228,000
Sean: We moved here in December of 2016. Living in New York City for so long, homeownership was not even something that I ever considered when I was there, because it was just — between student loans and the amount of money that it would cost to buy a place — never going to be an option for me, working in a nonprofit, in the arts. But I'd like to believe that it's a reality out here. It was actually one of the reasons that we decided to leave the city in the first place.
Beth: We've got a gym and a pool and everything, and that was one of my stipulations when we moved from New York. I was like, “I'm not leaving the city unless I can live like a king.” And so we came out here and, whether it was wise or not and probably wasn't, we got the fancy new building and it has been really wonderful. I also like the freedom that being a renter provides, at least right now. I personally don't feel like I've found my city yet, and so I know if we bought something right now I might feel quite trapped by that.
More to Come
Homeownership has fallen across the board since before the housing crisis, but people of color — and particularly African-Americans — have seen greater declines. According to a report from the Urban Institute, black homeownership fell by 5.6 percent between 2006 and 2016, compared to a 2.6 percent decline for white households. Share your experience below or email us at email@example.com and we might include it in a forthcoming story.
“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VABEFORE YOU GO