Suburbs Continue To Attract Renters Despite "Urban Core" Narrative
A few years ago, within multifamily circles, the Urban Core was the place to be spurring stepped up construction of Class-A urban rental properties catering to the work-live-play lifestyles of well-off urban professionals. To most casual observers, suburban and garden multifamily seemed doomed to high vacancies, poor-quality tenancy, and declining market-share.
However, serious practitioners always believed this migration to be over-hyped as high-density urban core product could never offer amenities most renters valued such as low-density, backyards, low crime, school quality, or large open spaces for kids and pets. In addition, suburban properties cater to more cost-conscious renters and families. Multifamily investors understood that with their high student loan burdens, stalling wage gains, and unpredictable employment, most lower-middle and middle-class renters, including millennials, lack the financial resources to rent hip urban-core apartments.
Well, a recent study by Rentcafe confirms that demand for suburban multifamily remains strong especially in sprawling suburbs of Atlanta, Phoenix, Riverside, and Dallas. Atlanta saw a 26% net gain in suburban renters versus 10% in Urban renters while Phoenix saw a net increase of 23% and 14% respectively.
While the urban core remains attractive with younger professionals especially in cities such as New York, and San Francisco; good quality suburban assets will continue to be competitive and sought after among large sections of the renting population.
The Rentcafe analysis can be read here.
