The Renting Revolution

by Ben Spradling | Jan 15, 2020 12:57:27 PM

The renting revolution is upon us. As the demand for rental
units reaches record highs and residents skew increasingly younger, Seattle’s
marketplace is facing a new, younger, lease on life.

For the first time in more than half a century, the number
of Seattle residents living in rental units equaled the number of homeowners. Citing
recent census data, The Seattle Times stated in a recent  article the number of renters
increased by 16% over a five-year span
, eventually reaching a record
360,000 people in 2018.

The trend is expected to continue through this year and
beyond, pushing the city’s rental population past its number of homeowners. To
give you an idea of how striking this is, we haven’t seen a stat like that since
the years of the Great Depression when a struggling economy blocked many from home
ownership.

At the heart of this current shift is a grand immigration of
younger residents. The Times noted that three quarters of Seattle’s new
inhabitants over the past decade have been adults under 40 years old – a
demographic typically unable or unready to make the financial commitment of
home ownership. So, it makes sense that as that group grows, the demand for rental
units rises.

Seattle’s dynamic landscape is already paving the way for growing
opportunities in commerce. Look no further than the construction industry to
see the first impacts. By the end of 2018, Seattle
was building the fifth-most apartments
of any metro area in the country.
The building boom continued into 2019 when, as of June, nearly
20,000 new rental units were under construction
.

For almost every other industry, opportunity arrives along
with the new residents. According to a recent study focused on the economic
impact of the apartment sectors, resident spending in
Seattle, Tacoma and Bellevue
contributes a combined $27.5B to the local
economy. In addition to paying for necessities related to housing, utilities
and transportation, apartment renters have been found
to spend roughly 70% of their disposable income
locally on things like
apparel, entertainment and restaurants.

Emerging industries may already be benefitting from the higher
population of young renters (and their income). The use of electric-assist
bicycles in Seattle, for example, seems to parallel the demand for rental
units. Some e-bike companies have seen sales double over the past two years as bike
ridership hit record highs
along some of the city’s most popular routes.
Renters rolling their way into work may be looking for ways to bypass traffic
congestion and cut down on costs by going
“car-light.”

Seattle is in the midst of a population pivot. It’s
strengthening existing industries and inviting newer ones to grow. As more
younger renters make their way into the city, a growing amount of economic
opportunity seems to be moving in along with them.

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