Renting the Dream: The Rise of Single-Family Rentership in the Sunbelt Metropolis

Abstract

In the aftermath of the foreclosure crisis, there has been a marked shift toward renting in the United States, with a large increase in households renting single-family homes. In the 50 largest metropolitan areas, the number of detached, single-family rental homes (SFRs) increased from 3.8 million to 5.8 million from 2006 to 2015. Single-family rentership rates increased in all 50 large metro areas, with the percentage of single-family units that are rented increasing from 11.3% to 16%. Notably, the nine metropolitan areas with the largest increases were all located in the Sunbelt. Given expected neighborhood sorting, it is important to consider neighborhood increases in SFRs. In one large Sunbelt metro area, Atlanta, increases in SFRs from 2010 to 2015 were particularly large in older, inner-county diverse suburbs. Regression results show that, controlling for other neighborhood characteristics, neighborhoods with larger Asian, Latino, and black populations saw larger increases in SFRs. The effects were particularly high in neighborhoods with larger Latino and, especially, Asian populations. Another key finding is that, in neighborhoods with lower property values, more foreclosures during the crisis were associated with sizeable increases in SFRs. However, more foreclosures in neighborhoods with high property values were not associated with increases in SFRs. This is possibly due to the exclusionary nature of high property-value suburbs and the strong demand in such neighborhoods for owner-occupied housing. Implications for policy and research are considered.

Keywords:

• Renting
• housing
• single-family rentals
• single-family
• suburban
• rentership
• homeownership
• rent
• suburbs
• housing tenure

Acknowledgments

The author would like to thank the editor and the referees for their comments on an earlier version of this article.

Notes

1. There is a slight discrepancy between the total SFR and increase in SFR in Table 3 versus Table 2 because a few tracts do not have a defined poverty rate or percentage black because of measurement-suppression issues in the ACS tract data.

2. Foreclosures take some time to work through the system and it may be well over a year between when a foreclosure is initiated and when a home ends up owned by a new owner (and either renter-occupied or owner-occupied).