apartment buildings

© slavun - AdobeStock

Renters Begin to Reemerge in Urban Centers

April 7, 2021

Could the exodus from dense city centers soon end? A new report indicates that renters’ search activity is increasing in higher density areas, beyond its pre-pandemic level.

As some renters fled to the suburbs during the COVID-19 outbreak, lower rental costs and vacancies started to emerge for downtown apartments. Now vaccine rollouts may be prompting more renters to consider city life again, particularly newcomers, according to a new report from Apartment List.

“2020 was less a story about urban exodus and more of an urban shuffle, whereby the people who left cities will be quickly replaced by the next generation of newcomers,” according to the Apartment List Renter Migration Report: 2021 Q1. “As cities lost residents, they gained the attention of new prospective renters that will sustain them going forward.”

What’s more, renters appear to not be deterred by density. That counters what some housing experts predicted as a lasting post-pandemic trend—a flight to the suburbs in search of more space to spread out.

But even in the suburbs, renters were looking for more dense areas to live. In the first quarter of 2020, 41% of out-of-city searches were for places that are at least 25% denser than the renter’s home city. A year later, that percentage has grown to 44%. On the other hand, the share of searches for lower-density cities (at least 25% less dense) has dipped from 32% in the first quarter of 2020 to 30% a year later, according to the Apartment List report.

While density doesn’t appear to be a concern for renters, they are showing greater demand for short-term leases, spanning six or fewer months. Before the pandemic, about 9% of all Apartment List users requested short-term leases. From April 2020 to the end of the year, demand for short-term leases started to rise.

“Those who sign short-term leases are signaling a lower level of commitment to staying in their next home,” Apartment List said in its study. “There are a number of ways in which the uncertainty of the pandemic may have driven increased demand for short-term leases. While it has always been higher for those looking to move to a new city or metro compared to those searching within their existing city, that gap has widened as the pandemic persisted.”

The uptick in short-term leases may be from renters who are cautious about making a long-term commitment to a new city or it could be due to the growth in remote work flexibility. Some renters may be experimenting as a “digital nomad,” hopping from place to place for short stints of time, the report said.

“As the pandemic continues, renters looking to move someplace new have grown increasingly likely to be searching in a location that is more dense than where they currently live,” the report concluded. “Those living in the core cities of major metro areas have become slightly more likely to want to stay put, while at the same time, renters living in the suburbs have grown more likely to be searching downtown. If the pandemic is pushing people out of cities, it is also opening doors for new ones to enter.”

Source: 
Apartment List Renter Migration Report: 2021 Q1,” ApartmentList (April 6, 2021)