Socio-Economic Shift

01 January 2023

Socio-Economic Shift

The American dream of homeownership has been rehashed throughout the past decade, with more households renting than at any point in the last 55 years. Although renting was previously considered an alternative brought on solely by circumstances, one-third of this decade’s renters now say that it’s a matter of choice. In fact, according to our previous study, a diverse set of 23 large and mid-sized cities transitioned from owner- to renter-majority between 2010 and 2020. And five Metro Phoenix zip codes have switched from homeowner to renter majority during that time.

This time, we wondered how these changes might look at the local level. So, we put each of the 50 largest U.S. cities under the magnifying glass and analyzed the renter and owner mix of each zip code. In a first-of-its-kind analysis that uses the most recent data from the U.S. Census Bureau, we wanted to see which zip codes radically changed their structure. In other words, what zip codes do renters prefer? In doing so, we found that 101 zip codes switched to renter-majority in the last 10 years.

With the addition of these communities, renters represent the majority population in 41% or 632 of the 1,553 zip codes analyzed in the 50 largest U.S. cities.

101 Zip Codes Made the Switch From Homeownership Dream to Renter Haven

The number of renters in the U.S. rose by 12% between 2011 and 2020 — three times faster than the 4% increase in homeowners, according to the most recent U.S. Census estimates. Thus, it comes as no surprise that, during this time period, as many as 101 zip codes switched from owner- to renter-majority.

For this report, we compiled the 101 zip codes into a list and ordered them from highest to lowest percentage change in order to get a better view of where the biggest changes in the owner versus renter mix took place.

The first zip code on the list is 43240 in Columbus, OH. About 68% of the people living in Columbus’ 43420 are renters — as a result of a whopping 157% increase in the last 10 years. A densely populated area, the zip code largely overlaps with the Polaris neighborhood, which is home to a community of young renters with a median age of 31. Here, residents earn a per capita income of $43,000 — 25% higher than that of the Columbus metro area, per Census data.

Next up is Chicago’s 60606, which coincides with the West Loop neighborhood. In this area, the number of renters grew by two and a half times in a decade (151%). A thriving community that flaunts a 63% renter population, its residents are mostly Millennials and Gen Zers with high academic achievements.

Zip Codes with Fastest-Growing Renter Populations: Downtown Areas Are the Trendiest for Renters

Many of the zip codes with the fastest-growing renter populations are located in city cores. Specifically, eight of the 20 neighborhoods that grew their renter populations by more than 80% in the past decade are in or near downtowns. Similarly, our latest report on the top neighborhoods for apartment construction showed a historic boom in centrally located areas in the last five years — a timely response to the increased demand for rentals in these locations.

In this respect, San Antonio, TX is home to the top-trending neighborhood for renters nationwide: zip code 78215 in downtown San Antonio boasting an incredible growth rate of 238% in renter population. Here, the proportion of renters more than tripled, going from a mere 735 in 2011 to 2,482 in 2020.

Downtown Miami follows closely, registering a record 173% increase in zip code 33123. Almost 10,000 renters live in downtown Miami as of the latest Census data. Meanwhile, 3,820 new apartments were built here between 2017 and 2021 in an attempt to accommodate the growing renter community, which is mostly comprised of Millennials and Gen Zers.

Zip code 55415 — located in central Minneapolis, MN, — rounded out the top three with an impressive 162% leap in its number of renters. The Twin City downtown area is more than twice as renter-friendly as it was in 2011. And Minneapolis as a whole is a clear reflection of the same trend, with renter households taking over the city.

Despite the growth that central areas registered in the last 10 years, the pandemic created a temporary downturn for downtowns, with many of them left vacant and desolate as workers moved from the office to home. As such, it remains to be seen if a post-COVID world will bring about a second bounceback — especially if rising numbers of renters continue to pump life into city centers.

Meanwhile, three of the five cities that are home to the largest numbers of trending renter zip codes are in the South, with Houston, TX leading the way with a total of 16 zips. Dallas, TX and Miami, FL follow closely behind with 12 zip codes each. Breaking the Southern sway are Los Angeles, CA and Chicago, IL with 14 and 12 zip codes, respectively.

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01 January 2023