SEATTLE -- For decades, Seattle has been primarily a city of homeowners, but those days may be coming to an end. It's one of the many ways that the city's current population boom has been transformative.
According to census data, a record 360,000 Seattle residents lived in rental units in 2018 -- a 16% jump from just five years earlier. And with their surging numbers, renters pulled just about even with homeowners, whose numbers increased at half the rate for the same period.
Assuming the trend continues, renters will soon be in the majority, something we haven't seen since before 1950.
The trend isn't unique to Seattle. Renters are on the rise in nearly every big U.S. city since the Great Recession, when homeownership rates took a big hit.
In Seattle, the majority of people flooding into the city this decade have been younger -- three out of four new arrivals are adults younger than 40, according to census data. Needless to say, most of these folks are not in a financial position to buy a home in the overheated Seattle market -- or even if they are, they may not be at a point in their lives where homeownership makes sense.
So Seattle's population boom has also been a renter boom, and it has set off an unprecedented explosion in apartment-building construction.
Ryan Moyes lives in one of those new buildings. The 24-year-old Las Vegas native shares a tiny studio apartment on Capitol Hill with his girlfriend.
Moyes says higher salaries and better career opportunities drew him to Seattle: "I didn't envision living here post-college," he said. "If it were just a choice, I would definitely want to live in Las Vegas, but there's a huge disparity in wages."
Of course, it's also a lot more expensive to live in Seattle than Las Vegas. But in addition to his full-time job as a business-development associate, Moyes and his girlfriend serve as property managers for their apartment building, for which they receive a rent credit. That's made Seattle much more affordable for them.
Moyes says he's enjoying life in a dense, urban neighborhood, but he thinks it's likely that the city's real-estate costs could eventually propel him back to Nevada. Back home, he says, his mom pays almost the same amount for her mortgage on a brand-new three-bedroom house as the studio apartment rents for in his Capitol Hill building.
"Definitely at some point I would like to be a homeowner and not rent forever," he said. "I think Las Vegas would be more ideal for owning a home, at least right now, given how expensive things are in Seattle."
If renters do move into the majority in the next few years, it wouldn't be the first time.
In Seattle's Gold Rush period, most city residents, like most people in the United States, were renters. Seattle's rental-housing stock included a mix of apartment buildings, boardinghouses and residence hotels.
In the 1920s, homeownership rates jumped. Land around Seattle was abundant, and a network of streetcar lines connected outlying neighborhoods to downtown. But in the 1930s, as the Great Depression ground on, many people lost their homes, and ownership rates dropped. By 1940, census data shows, rentals far outnumbered owner-occupied homes in Seattle.
As the economy revived in the 1940s, particularly after World War II (and with the creation of the GI Bill's low-interest home loans for veterans), homeownership rates shot through the roof. The 1950 census shows that homeowners were once again the solid majority in the city.
Seattle hit peak homeownership in 1960, when the number of people living in owner-occupied homes was double the number living in rental units.
Since then, Seattle has gradually become more of a renter city. By 1990, the city's housing stock actually included slightly more rental units than owner-occupied homes. Even so, the homeowner population was still in the majority. That's because homeowners have a larger average household size -- for example, married couples and families are more likely to own, while single people are more likely to rent.
Nearly 30 years later, Seattle renters have reached parity. As of 2018, among the 50 most-populous U.S. cities, Seattle is one of 21 where renters represent at least half the total population living in households.
The city with the highest percentage of renters last year was Miami, at 67%, followed by New York City with 64% and Boston at 63%. The lowest rate was in Virginia Beach, where just one-third of household residents are renters.
According to Census Bureau terminology, every household either rents or owns its home. However, some people don't live in households, and are considered neither owners nor renters. Instead, they live in "group quarters," such as nursing homes, shelters, college dorms, military barracks, correctional facilities, and so on. In Seattle, about 3% of residents live in some type of group quarters.
While Seattle as a whole is evenly split between owners and renters, individual neighborhoods tend to be skewed toward one or the other. That's not surprising, since much of the city is zoned exclusively for single-family homes, which are typically owner-occupied.
As it turns out, the top renter neighborhood and the top homeowner neighborhood are both located in North Seattle.
The University District is Seattle's No. 1 renter neighborhood -- 98% of the residents in the section around University Way are tenants. West and north of the University of Washington campus, the area has a high percentage of students.
Broadview, also in North Seattle, is on the other end of the spectrum. Renters make up just 5% of the population in the quiet neighborhood of mostly single-family homes that looks out over Puget Sound.
A few neighborhoods have a population split 50/50 just like the city itself: North Beacon Hill, Judkins Park and the northeast corner of Queen Anne.
With more demand for apartments in Seattle than ever before, it certainly hasn't gotten any cheaper to be a renter. The median amount paid in rent and utilities (across all rental types and sizes) hit $1,699 in 2018, according to census survey data. Among the 50 biggest U.S. cities, only two others have a higher median rent -- and like Seattle, they're both tech hubs: San Jose and San Francisco.
Information for this article was contributed by Katherine Khashimova of the Seattle Times.
SundayMonday Business on 01/12/2020
Print Headline: Renters on rise in big-city U.S.