When the COVID-19 pandemic hit the United States, the question of what might become of densely populated cities was thrown to the center of public discussion. Questions remain around if people will continue to live in large cities with their high costs and close proximity to others — a tough sell during a global pandemic. COVID-19 may accelerate pre-existing trends of renters moving away from metropolitan centers to less dense cities; cities such as Austin, Charlotte, and Richmond. These up-and-coming urban centers have become top choices for those looking for affordable places to live and build within these growing economies. There are a few major factors shaping the future of cities as we know them.
Jobs and Housing Affordability
Renters are attracted to cities that are able to preserve low cost of living even as their economies grow. In 2020, industries of all kinds can and do exist everywhere. Charlotte is home to several Fortune 500 companies including Bank of America and the Coca-Cola Bottling Company. Richmond’s job growth has increased steadily every year in part due to the presence of companies like Capital One Financial Corporation — the biggest employer in the region — who employs over 12,000 of the city’s residents. Austin, Texas has also been on the rise as a new cultural center in Texas’ longstanding cultural and economic history. In recent years Austin has seen a population boom that works hand-in-hand with a city whose industry is based heavily in cultural and social event creation. Popular festivals such as SXSW boost the local economy and brought $355 million into the city in 2019 alone.
People seek housing in new places that are more affordable than the home they’re leaving. This is a no-brainer. Cost of living is one of the largest factors in renters’ decisions no matter where they’re moving to (or where they’re moving from). Austin has a cost of living that’s 3% below ($1,524/average rent) the national average, and was named as the fastest growing major metropolitan center in the country between 2010 to 2019. Charlotte’s cost of living is 9% lower ($1,380/average rent) than the national average. Similarly, Richmond’s cost of living is 6% below ($1,266/average rent) the national average. Richmond Mayor Levar Stoney continuously emphasizes the prioritization of policies around housing affordability that will preserve Richmond’s ability to keep cost of living lower than the national average. As a founding member of Rhino’s Housing Innovation Council, Mayor Stoney works closely with industry leaders and other Mayors to understand what it takes to keep cities affordable and attract residents who will contribute to an overall ecosystem of economic growth. The ability to move in easily and affordably plays a large part in these cost of living calculations.
Being forced indoors is making us all re-evaluate how we think about green spaces. Properties with private outdoor spaces are coming off the market much faster, and cities across the country are reallocating public space to be more foot-traffic friendly. Charlotte has set an example by setting aside 150 miles of green space to be developed into walking and biking paths in addition to the 40 miles of public paths the city currently operates. Richmond has taken steps to fortify public space, with Mayor Stoney making urban park expansion and an overall increase in green space a top priority. To keep up with their rapid population growth, Austin has taken steps towards becoming a green and sustainable city and was named by Architectural Digest as one of the Top 10 Greenest Cities in America for a Cleaner Future. Cities that prioritize sustainability are attracting more residents. Properties that provide options and access around open space are doing categorically better than those who do not provide these things. Thinking green and going green is a strong opportunity for owners to get ahead.
A robust public transportation system is an important indicator of a sustainable and livable city. Renters are moving to and staying in cities that allow them to go to the places they need to without having to own a car. As a part of Charlotte’s Strategic Energy Action Plan, the city aims to become a low-carbon city by transitioning 100% of their public transportation and facilities to zero-carbon fuel sources by 2030. An up and comer in public transportation development in its own right, Richmond debuted their rapid autobus transit system GRTC Pulse in 2018, leading to a 17% increase in ridership citywide. Robust public transportation allows for a lower individual carbon footprint and more economic opportunity for those who may not live in the specific economic hot zone of a city. As environmental situations become more dire, these new opportunities around public transportation will result in important considerations that owners must take when developing strategy to attract prospective renters.
Richmond, Charlotte, and Austin are just examples of the many new cities that have caught the eye of renters. Times are changing and renters have new needs, especially in the context of large global changes. We’re here to help owners seize new opportunities and capitalize on signs of economic promise in new areas, including the ones highlighted above. The goalposts may be changing, but Rhino will remain ready to support owners through it all.
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