Newsfeed: Renting Out the Neighborhood: 101 Zip Codes Switch From Homeowner to Renter Majority

  • Renting is at the highest level in half a century, with 43.7 million households currently living in rentals.
  • As many as 101 zip codes switched to renter majority in the past decade. 
  • Renters surpass homeowners in 41% of zip codes in the 50 largest US cities. 
  • Downtown areas became more popular for renters in 2020 compared to 10 years prior. 
  • Of the new renter majority zip codes, 43240 in Columbus, OH saw the fastest increase in the number of renters. 
  • San Antonio’s 78215 is the top trending zip code for renters in the nation, tripling its renter population in ten years.

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.

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.

Deemed one of the best neighborhoods for young professionals in Chicago, the West Loop has had a spectacular transformation in the last two decades. In a true Cinderella story fashion, it blossomed from a commercial area into one of the best neighborhoods to live in Chicago.

At the same time, Philadelphia, PA leads the pack with the most neighborhoods that transitioned to renter-majority, with a total of seven zip codes, followed by Memphis, TN and Houston, TX with six zip codes each.

Zooming out, at a state level, Texas leads with the highest number of neighborhoods that switched. The Lone Star State recorded 17 in total, taking third place with zip code 78256 (also known as the northwest San Antonio neighborhood), which saw a 132% increase in renters in 10 years. As of the most current Census data, 56% of northwest San Antonio’s population is renting. A part of Bexar County, this neighborhood has been deemed one of the best to live in Texas, offering its residents a suburban feel with urban amenities.

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.

Zip Codes with Highest Shares of Renters: 5 Neighborhoods Exclusively Occupied by Renters 

As of 2020, renters are the majority in 632 zip codes around the U.S. In fact, in five U.S. zip codes located in New York City; Nashville, San Francisco; Dallas; and Fort Worth, the population is exclusively made up of renters.

First up, New York City zip code 10162 is one of the five zip codes where the entire population is renting. A tiny zip code of less than 2,000 residents in Manhattan on the Upper West Side, 10162 is home to upscale buildings dating back to as early as the 19th century.

Likewise, Nashville’s 37228 is another example of a renter-dominated zip code, encompassing a small area on the north side of Nashville. As of the 2020 Census data, the zip code had roughly 1,300 residents.

Similarly, zip code 94130 in San Francisco, also known as Treasure Island, is home to 2,100 residents, all renters.

Additionally, zip code 75251 (located in north Dallas) boasts a 100% renter share in 2020, with a 44% rise in number of residents since 2011. A small and densely populated area, Preston Hollow is mostly inhabited by young Millennials, with a total population of just under 4,000. Here, the rental homes built primarily in the 1990s are mostly one-bedroom apartments, and the median household income is around $80,000.

Just 52 miles from north Dallas, we found the largest community in the U.S. made up solely of renters: Zip code 76155. Renters here doubled in numbers in the last decade, growing from a total of 2,600 to more than 6,300.

Methodology 

  • RentCafe is a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the United States.
  • For this study, we looked at the number of renters and owners in 1,553 zip codes with a minimum population of 1,000 in 2011 and 2020 across the 50 largest U.S cities.
  • To identify the zip codes that switched to renter-majority, we took into consideration those zip codes where the renter share surpassed 50% in 2020, compared to 10 years prior. We then ranked them based on the increase in renter population in 2020 compared to 2011.
  • Fastest-growing zip codes are defined as those zip codes with a minimum population of 1,000 in 2011 and 2020; a renter majority of at least 50%; and a renter percentage increase of at least 1% above the city average and above the homeowners increase.
  • The list of zip codes with the highest share of renters is comprised of a total of 632 zip codes with a renter a renter-majority of at least 50.1%
  • The zip code boundaries are defined according to the U.S. Census Bureau 2011 & 2020.
  • The corresponding neighborhoods of the aforementioned zip codes were mapped based on neighborhood boundaries on RentCafe.com.
  • Data source for population and household tenure: 2020 U.S. Census Bureau ACS 5-year Estimates - Table ID - B25008.
  • Data source for city/zip code matching: Simplemaps.com.

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