The popularity of apartment living is growing with a wide variety of renters at all income levels, ages and stages of life.
Negative perceptions about renters and landlords have been around for ages. According to a survey conducted by Apartment List, some of these perceptions include renters are poorer and can’t afford to purchase a home, they are transient and not invested in their community, and renting is a short-term solution which points to a lack of commitment and responsibility.
Throughout our own development process and experience, we consistently run into locals who feel adding an apartment development within their community will have a negative impact on the neighborhood.
The popularity of apartment living and for rent single family homes continues to grow across the United States, and for many it’s by choice. According to Pew Research Center, the percentage of renters in the United States rose from 34.6% to 43.3% from 2006 to 2016 and it appears to have remained at these levels since. So why the negative perceptions? And why are so many choosing to rent as opposed to purchasing a home?
Who’s Renting and Length of Residency
We’re seeing a wide variety of renters in all stages of life, economic standing, and age applying to live in an apartment and for rent communities.
Some are snowbirds looking for a second home in a warmer climate to spend their winters, some are traveling professionals, some are building a home or waiting to purchase a home, many want to live in a specific location, some are retiring and looking to simplify and downsize, and some simply do not want the stress that comes with owning and maintaining a home. For these reasons and many more, renting has been a lifestyle choice for years and is increasing in popularity.
One of the stigmas related to apartment living is the fear an apartment community will draw transients and higher crime rates. As of May 2022, the average residency of a P.B. Bell apartment resident is 29.3 months or 2.4 years. On the high end, two communities within our portfolio have an average residency of 3.7 years. The properties within our portfolio range in class type, age, and location and offer a varied sampling. Maintaining a beautiful, clean, and safe community is a top priority at all our properties and residents enjoy the benefit and convenience of having a professional group manage and care for their community and home.
Many community members worry, and may publicly voice concern when a new multifamily community is proposed or planned for development in their neighborhood because of the idea or assumption that apartment renters generate lower than average income and are not willing to invest in their immediate and surrounding community.
According to CoStar, as of May 17, 2022, the average asking rent for an apartment home in the Phoenix Metropolitan Area is $1,597. Typically, the minimum income requirement to qualify for a rental home is at least three times the asking rent, which would total nearly $60,000 in annual income. Newer apartment communities are asking much more. The average market rent per unit in an apartment community built in 2020 to 2022 in Phoenix is $2,060 (source: CoStar). This brings the minimum annual income requirement to $74,160.
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While some are applying for an apartment home with roommates to combine income and meet these qualifications, we’re also seeing many applicants surpass the minimum income requirement by quite a bit, falling into the upper middle and upper class.
Regardless of single or multiple applicant status, occupancy standards are enforced at all professionally managed communities which is typically two persons per bedroom. When we review our residents’ qualifications, it’s clear many can afford to purchase a home but are choosing to rent because they like the location, the flexibility, availability, and convenience an apartment home may offer. Multifamily residents also support nearby shops and restaurants boosting local businesses.
Master-planned community members may fear that apartment renters moving into the community will cause congestion with the use of their amenities, such as parks, community centers, pools, etc.
However, it’s quite the opposite. One of the appealing factors to many apartment renters are the incredible amenities available exclusively to them within their apartment community. In Arizona, some of these basic amenities include resort style pools, fitness centers, 24-hour on call maintenance, controlled community access, and playgrounds. Newer developments are offering so much more, from dog parks and dog spas to indoor and outdoor lounges, complimentary common area WiFi, coffee bars, business centers, electric vehicle charging stations, smart apartment home thermostats and so much more. Apartment residents have the ability to access all these amenities within walking distance from their apartment home, offering a unique lifestyle of luxury, exclusivity, and convenience.
We’d like to challenge skeptics to seek out a new apartment or rental community in your area and take a tour. See for yourself why people are making this lifestyle choice and making the decision to rent.
Source: Rental Housing Journal