High-income renters are a growing share of all rental households, particularly in the nation’s most expensive metropolitan areas, according to analyses in our most recent America’s Rental Housing report and an online interactive tool released in conjunction with the report.
The shift comes amid tremendous growth in the national rental housing market, which added nearly 10 million new rental households between 2006 and 2016. These include 2.9 million “high-income” renters (those with real annual incomes exceeding $100,000). This is a 29 percent increase in a group that represented 9 percent of all renters in 2006 but accounted for 13 percent of renters in 2016 (Figure 1).
Figure 1: Higher-Income Households Represent a Growing Share of Renters
While the growth in high-income households occurred in virtually all of the nation’s major metropolitan areas, there was significant local variation in both the magnitude of that growth and in high-income households’ share of rental household growth (Figure 2). Three aspects of those changes are particularly notable.
Figure 2: Change in Renter Households by Real Household Income, 2006-2016 (Interactive)
1. Growth in high-income renter households was especially pronounced in more expensive metropolitan areas. Five metropolitan areas with particularly high rents—San Francisco, New York, Boston, Washington, DC, and Los Angeles—accounted for 30 percent of the national growth in high-income renters. In those areas, high-income renters also represented an unusually high share of new renter households. In the San Francisco metro area, where median rents in 2016 were $1,750, the number of high-income renters nearly doubled from 144,000 households in 2006 to 276,000 in 2016, an increase that accounted for 93 percent of the net change in renters in that region (Figure 3). In the New York metropolitan area, where the median rent was $1,350, high-income households accounted for nearly two-thirds (65 percent) of renter growth between 2006 and 2016. High-income households also were a particularly high share of net growth in renters in Boston (61 percent), Washington, DC (48 percent), and Lost Angeles (42 percent) metros.
Figure 3: Higher-Income Households Represent a Growing Share of Renters, Particularly in High-Cost Metros Like New York, San Francisco, and Washington, DC
2. However, the number of high-income renters also grew in lower-cost markets. The rate of growth in high-income renter households outpaced overall renter growth in 92 of the nation’s 100 largest metro areas. In the Houston metro area, where median rents were $1,000 and the median renter income was $40,000, the number of high-income renters increased from 58,000 to 133,000 households, a 130 percent increase that far outpaced the 39 percent growth for all renter households in the region. As a result, high-income household growth in the Houston metro accounted for 28 percent of the growth in renter households. High-income renters also comprised high shares of renter growth in a host of other metros including Toledo (31 percent), Milwaukee (36 percent), Pittsburgh (40 percent), Ogden (41 percent), and Baton Rouge (51 percent). Median rents reported in these metros in 2016 ranged from $678 in Toledo to $898 in Ogden. In contrast, the reported number of high-income renters declined in just two markets, Lakeland (FL) and Omaha (NE), where small sample sizes could have played a role.
3. Nevertheless, low- and modest-income renters still outnumber high-income renters in nearly every metro. In 2016, over one-third (35 percent) of the nation’s renter households had incomes below $25,000, and nearly two-thirds (62 percent) had incomes below $50,000. Even in the nation’s ten most expensive markets, households making less than $25,000 a year still made up to 27 percent of all renter households in 2016, while those making more than $100,000 were 22 percent of the rental households (Figure 4). In fact, renters earning over $100,000 outnumbered those earning under $25,000 only in San Jose, San Francisco, Washington, DC, and Honolulu metropolitan areas. And even in San Francisco and San Jose, which have the largest share of high-income renters (at 35 and 42 percent respectively), roughly 1-in-5 renter households still had incomes below $25,000. Such figures underscore the fact that regardless of local market conditions, low-and moderate-income renters across the country struggle to find affordable rental housing, in part due to the increased demand created by the growing number of high-income renters.
Figure 4: Even With High-Income Renter Growth, Low-Income Renters Still Outnumber High-Income Renters in High-Cost Metros
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