by Andrea West
Posted on 2016-02-22 22:31:35
According to a Zumper National Rent Report for July 2015, here they are -
City 1-Bedroom Median Rent
San Francisco, CA $3,500
New York City, NY $3,100
Boston, MA $2,230
San Jose, CA $2,180
Washington, DC $2,170
Chicago, IL $1,880
Miami, FL $1,880
Oakland, CA $1,850
Los Angeles, CA $1,750
Seattle, WA $1,550
What do these cities have in common?
Aside from high rent, quite a bit. Eight of these cities are in the top twenty-five largest cities in the US and most of them have been seeing healthy growth rates. All but Chicago have grown by 3.3% or more. These cities house an educated population. About 29% of the US has a bachelor’s degree and only one of these cities isn’t above that average. These cities also make a lot of money. Seven are at or above the US median income of $53,000 yearly.
More in keeping with the title of this article, these cities all have lower percentages of home-ownership. Owning a home is still a large part of the American dream and about 64% of us have been able to realize that dream. But in these cities, this percentage is flipped. Most of these cities are 60-70% made up of renters. And these renters don’t all have room to pick and choose apartments as they please. San Jose has the lowest vacancy rate at only 4.3%
What is it about these cities that makes the rent so high?
Low vacancy rate is one factor to consider. When there are a lot of apartments available, this gives renters the upper hand. Landlords have to offer better rates in order to compete with everyone else trying to fill up space. So it makes sense that when vacancy rates are low the reverse would happen. This is especially true when rates fall below 5%. Renters no longer have as many options so may be stuck paying a higher rent than they would prefer.
Also mentioned earlier, these cities are growing. However, new housing for these incomers is not keeping up. Plus, younger Americans are renting longer than previous generations. This contributes to the low vacancy rates and continues to keep them low.
Another factor to consider is rent control. Six of these cities employ some use of this. The intent of rent control is to keep rent from getting too high, but this has a tendency to backfire, as demonstrated by these cities.
What are the stats?
City Growth Degree Income Home Vacant Size *
San Francisco, CA 5.9% 52% $76K 36% 6.9% #14 Y
New York, NY 3.9% 34% $52K 32% 5.8% #1 Y
Boston, MA 6.2% 44% $72K 34% 5.2% #21
San Jose, CA 6.6% 37% $82K 58% 6.6% #10 Y
Washington, DC 9.5% 52% $90K 42% 8% #24 Y
Chicago, IL 1% 34% $47K 47% 13.2% #3
Miami, FL 7.7% 23% $30K 33% 8.9% #44
Oakland, CA 5.9% 38% $53K 40% Y
Los Angeles, CA 3.6% 31% $49K 37% 4.3% #2 Y
Seattle, WA 9.8% 57% $65K 47% 8.1% #22
United States 3.3% 29% $53K 64% 7.3%
Info from US Census & ballotpedia.org
*Cities with a ‘Y’ use rent control