A Wave of Change: Rental Market Today and Beyond · Denver, CO Detroit, MI Las Vegas, NV...

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A Wave of Change: Rental Market Today and Beyond Skylar Olsen, PhD Director of Economic Research and Outreach

Transcript of A Wave of Change: Rental Market Today and Beyond · Denver, CO Detroit, MI Las Vegas, NV...

Page 1: A Wave of Change: Rental Market Today and Beyond · Denver, CO Detroit, MI Las Vegas, NV Minneapolis, NY New York, NY Philadelphia, PA Phoenix, AZ San Diego, CA San Francisco, CA

A Wave of Change: Rental Market Today and Beyond Skylar Olsen, PhD Director of Economic Research and Outreach

Page 2: A Wave of Change: Rental Market Today and Beyond · Denver, CO Detroit, MI Las Vegas, NV Minneapolis, NY New York, NY Philadelphia, PA Phoenix, AZ San Diego, CA San Francisco, CA

Argument for the long term health of rent

Too much building in certain segments

Rent pressures happening across the U.S.

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Annual growth is getting volatile, remains far below 2015 highs, but is on another uptick

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Rent pressure varies significantly across the country

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Metros have taken different paths, but with some exceptions the story is similar

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2% 3% 4% 5% 6% 7% 8% 9% 10%

Rental vacancy change, 2015 to 2017

Phoenix, AZ 5.8%

St. Louis, MO 6.4%

Philadelphia, PA 5.7%

Riverside, CA 3.7%

New York, NY 3.8%

Minneapolis, MN 3.4%

San Francisco, CA 3.2%

Seattle, WA 3.6%

Los Angeles, CA 3.2%

San Diego, CA 3.5%

Boston, MA 3.4%

Washington, DC 5.4%

Detroit, MI 4.9%

Chicago, IL 6.3%

United States 6.2%

Atlanta, GA 6.1%

Miami, FL 7.9%

Dallas, TX 7.2%

Houston, TX 9.7%

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Multifamily construction is contributing to the volatility, slower overall pace of rents

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Permits for single-family homes remain well below the historical norm Permits per 1,000 residents in previous 12 months

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Most Metros Have Many Fewer Permits Than They Would Have Number of additional permits these metros would have had in the past decade if the rate of permits matched historic norms

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Without new supply, suburban rent growth outpaces urban

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Before building boom, 1-bedroom units rent growth dominated. Post apartment boom, 2 and 3 bedroom units set the pace, current convergence.

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The Missing Middle: Where are the small rental buildings?

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Rent affordability in the US: Still not great, but down from recent extremes or stabilizing

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Rent Affordability, Largest 20 Metros

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Homelessness climbs faster when rent affordability reaches 22% and 32% thresholds

22% 32%

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Renters save by having a roommate

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Doubled up households are not just a young people phenomenon

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Populist backlash to rising rents Rent control is on the ballot in California rent control headlines

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Rent control is popular regardless of party affiliation Share of adults who support rent control

50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%

Washington, DC United States

Tampa, FL St. Louis, MO

Seattle, WA San Jose, CA

San Francisco, CA

Phoenix, AZ Philadelphia, PA

New York, NY Minneapolis, MN

Miami, FL Las Angeles, CA

Las Vegas, NV Detroit, MI Denver, CO

Dallas, TX Chicago, IL Boston, MA Atlanta, GA

All Conservative Liberal

San Diego, CA

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50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%

Owner Renter

Owners and renters support rent control

Atlanta, GA Boston, MA Chicago, IL

Denver, CO Detroit, MI

Las Vegas, NV

Minneapolis, NY New York, NY

Philadelphia, PA Phoenix, AZ

San Diego, CA San Francisco, CA

San Jose, CA Seattle, WA

Las Angeles, CA Miami, FL

St. Louis, MO Tampa, FL

Washington, DC

Dallas, TX

Share of adults who support rent control

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Age distribution of the U.S says we’ve got strong long term demand

First time home buyer median age: 34

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Those get married and having kids timeseries

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The two panel homeownership by single & married

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Good reasons why renting will be a bigger part of our housing lifecycle – student debt

Share of Listings Affordable

Share of listings affordable, with

student debt

Share of listings affordable, without student debt

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Job opportunities drive list of hottest US markets for 2019

San Jose Orlando Denver Atlanta Minneapolis

San Francisco Dallas Nashville Jacksonville San Diego

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