Posted by: Richie Bernardo

Homeownership isn’t for everyone. Roughly 43 million American households have opted to rent rather than buy their homes because of convenience, cost or both. But renting isn’t always a cheaper or better alternative to owning a property. The right road to take depends on a variety of factors, including an individual’s or family’s financial means and how well the local real-estate market is doing.

One reason this is such an important decision financially is that rental prices have soared over the years, jumping 2.8% in 2017 alone. And with demand for affordable housing exceeding supply, more than one-quarter of all renters – 11.1 million people in total – spend more than 50 percent of their income on housing. They are classified as “severely cost-burdened” by federal housing agencies as a result.

Like home prices, however, rental rates can vary significantly by region, state or city. And in some places, renting will prove to be more cost-effective and a better overall value than owning.

To determine where renters can get the most bang for their buck, WalletHub compared more than 180 rental markets based on 22 key measures of attractiveness. Our data set ranges from the difference between rental rates and mortgage payments to historical price changes, the cost of living and jobs availability. Read on for our findings, expert insight from a panel of researchers and a full description of our methodology.

1. Main Findings
2. Ask the Experts
3. Methodology

Main Findings

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/23010/geochart-renters.html" width="556" height="347" frameBorder="0" scrolling="no"></iframe> <div style="width:556px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2LR0BAE>  

Best Places to Rent

Overall Rank (1 = Best)	City	Total Score	‘Rental Market & Affordability’ Rank	‘Quality of Life’ Rank
1	Scottsdale, AZ	69.26	14	1
2	Peoria, AZ	66.72	12	2
3	Chandler, AZ	66.41	22	3
4	Gilbert, AZ	66.16	7	9
5	Fargo, ND	63.16	2	49
6	Bismarck, ND	63.00	3	50
7	Overland Park, KS	61.76	17	16
8	Lincoln, NE	61.41	19	29
9	Mesa, AZ	59.56	38	23
10	Tempe, AZ	59.50	28	28
11	Irvine, CA	59.49	111	4
12	Nashua, NH	59.48	57	13
13	Sioux Falls, SD	59.15	4	86
14	Boise, ID	59.03	68	15
15	Phoenix, AZ	58.63	44	30
16	Omaha, NE	58.31	27	44
17	Lewiston, ME	57.84	23	46
18	Glendale, AZ	57.52	37	40
19	El Paso, TX	57.24	50	37
20	Cedar Rapids, IA	57.06	5	81
21	Tampa, FL	56.59	130	7
22	Charleston, SC	56.43	59	26
23	Huntsville, AL	56.30	1	121
24	Plano, TX	55.97	66	35
25	Casper, WY	55.75	6	97
26	Henderson, NV	55.59	29	59
27	Portland, ME	55.47	58	36
28	South Burlington, VT	55.37	81	25
29	San Diego, CA	55.33	157	6
30	Rapid City, SD	55.05	8	100
31	Madison, WI	54.84	53	52
32	Fremont, CA	54.54	121	18
33	Reno, NV	54.44	34	66
34	Manchester, NH	54.21	72	38
35	Orlando, FL	53.87	139	17
36	Fort Smith, AR	53.80	9	108
37	Grand Prairie, TX	53.77	97	22
38	Tucson, AZ	53.75	56	58
39	Las Cruces, NM	53.70	13	102
40	Austin, TX	53.53	76	47
41	Amarillo, TX	53.37	42	65
42	Cape Coral, FL	53.22	145	11
43	Des Moines, IA	53.01	45	68
44	Huntington Beach, CA	52.80	161	5
45	San Francisco, CA	52.55	107	41
46	Chesapeake, VA	52.43	10	118
47	Raleigh, NC	52.43	15	113
48	Las Vegas, NV	52.38	40	77
49	Newport News, VA	52.19	11	120
50	Virginia Beach, VA	52.01	24	98
51	Colorado Springs, CO	51.93	62	64
52	Honolulu, HI	51.61	160	27
53	Jacksonville, FL	51.51	91	55
54	Santa Rosa, CA	51.49	165	10
55	Cheyenne, WY	51.45	33	104
56	Chula Vista, CA	51.26	146	32
57	Sacramento, CA	50.76	149	34
58	St. Petersburg, FL	50.71	141	42
59	Grand Rapids, MI	50.69	96	56
60	Fort Worth, TX	50.67	71	70
61	Charlotte, NC	50.61	31	107
62	Nampa, ID	50.58	106	53
63	Winston-Salem, NC	50.48	26	125
64	Santa Clarita, CA	50.43	171	8
65	Salem, OR	50.35	73	69
66	Glendale, CA	50.17	169	12
67	Irving, TX	50.05	74	74
68	Rancho Cucamonga, CA	50.04	151	21
69	Columbia, MD	50.03	36	126
70	San Antonio, TX	49.89	70	79
71	Pittsburgh, PA	49.76	82	72
72	Kansas City, MO	49.62	46	103
73	Durham, NC	49.43	16	144
74	Dallas, TX	49.43	104	67
75	Fontana, CA	49.30	114	57
76	Juneau, AK	49.24	18	148
77	Garland, TX	49.21	138	54
78	Bakersfield, CA	49.18	52	99
79	Birmingham, AL	49.12	30	134
80	Port St. Lucie, FL	48.96	166	24
81	Greensboro, NC	48.87	35	135
82	Long Beach, CA	48.71	163	39
83	Oklahoma City, OK	48.69	43	116
84	San Jose, CA	48.53	156	45
85	Arlington, TX	48.46	89	78
86	Denver, CO	48.42	127	61
87	Nashville, TN	48.36	77	92
88	Los Angeles, CA	48.33	172	33
89	Lexington-Fayette, KY	48.21	61	101
90	Atlanta, GA	47.95	118	71
91	Billings, MT	47.92	51	124
92	Anaheim, CA	47.87	167	43
93	North Las Vegas, NV	47.78	47	122
94	Oceanside, CA	47.64	178	14
95	Chattanooga, TN	47.63	85	91
96	Little Rock, AR	47.33	25	160
97	Washington, DC	47.21	64	110
98	Albuquerque, NM	47.18	20	147
99	Oxnard, CA	47.13	152	51
100	Cincinnati, OH	47.00	103	89
101	Minneapolis, MN	46.97	110	87
102	Portland, OR	46.93	124	76
103	West Valley City, UT	46.91	100	90
104	Columbus, OH	46.83	87	95
105	Missoula, MT	46.75	65	123
106	Pembroke Pines, FL	46.70	175	20
107	Garden Grove, CA	46.66	176	19
108	Fayetteville, NC	46.65	21	168
109	Riverside, CA	46.53	129	75
110	St. Paul, MN	46.39	120	85
111	Laredo, TX	46.18	123	82
112	Ontario, CA	46.07	164	48
113	Yonkers, NY	45.68	95	106
114	Fresno, CA	45.63	83	111
115	Aurora, IL	45.55	98	105
116	Wichita, KS	45.55	32	155
117	Modesto, CA	45.50	88	109
118	Brownsville, TX	45.49	117	94
119	Salt Lake City, UT	45.48	69	132
120	Mobile, AL	45.28	49	152
121	Dover, DE	45.13	54	154
122	Columbia, SC	44.95	67	139
123	New York, NY	44.81	142	84
124	Moreno Valley, CA	44.73	148	73
125	Corpus Christi, TX	44.72	102	112
126	Norfolk, VA	44.55	41	161
127	Louisville, KY	44.45	75	136
128	Richmond, VA	43.87	60	173
129	Houston, TX	43.82	86	131
130	St. Louis, MO	43.66	55	158
131	Seattle, WA	43.56	158	83
132	Jersey City, NJ	43.55	80	138
133	Warwick, RI	43.37	122	115
134	Chicago, IL	43.19	78	140
135	Knoxville, TN	43.14	125	117
136	Stockton, CA	43.11	109	127
137	Montgomery, AL	43.02	63	164
138	Augusta, GA	42.82	90	143
139	Aurora, CO	42.82	150	96
140	Miami, FL	42.71	177	63
141	Gulfport, MS	42.60	113	133
142	Anchorage, AK	42.56	39	172
143	Lubbock, TX	42.49	115	130
144	Springfield, MO	42.44	48	176
145	Fort Lauderdale, FL	42.42	174	62
146	Philadelphia, PA	42.35	140	114
147	Vancouver, WA	42.22	159	93
148	Boston, MA	42.19	168	88
149	Spokane, WA	42.07	101	142
150	Tulsa, OK	42.02	92	141
151	Tallahassee, FL	41.39	135	129
152	Santa Ana, CA	41.35	179	60
153	San Bernardino, CA	41.33	144	119
154	Fort Wayne, IN	41.01	99	151
155	Milwaukee, WI	40.92	94	156
156	Rochester, NY	40.78	105	157
157	Burlington, VT	40.46	128	146
158	Pearl City, HI	40.26	181	31
159	Indianapolis, IN	40.20	84	167
160	Columbus, GA	39.97	116	162
161	Wilmington, DE	39.80	93	169
162	Newark, NJ	39.48	79	170
163	Tacoma, WA	39.48	137	149
164	Worcester, MA	39.41	133	150
165	Buffalo, NY	39.18	119	163
166	Oakland, CA	39.17	154	137
167	Baton Rouge, LA	38.93	126	159
168	New Orleans, LA	38.40	143	145
169	Charleston, WV	37.62	112	179
170	Akron, OH	37.58	155	153
171	Toledo, OH	37.35	131	166
172	Shreveport, LA	36.93	135	171
173	Jackson, MS	36.79	147	165
174	Hialeah, FL	36.58	182	80
175	Providence, RI	36.18	132	178
176	Baltimore, MD	34.91	108	181
177	Bridgeport, CT	34.24	180	128
178	Huntington, WV	33.95	153	180
179	New Haven, CT	32.39	173	174
180	Cleveland, OH	32.28	170	175
181	Memphis, TN	32.18	134	182
182	Detroit, MI	32.09	162	177

 

Ask the Experts

Finding a suitable rental unit is a similar process to buying a home. Your search may be based purely on cost or also on needs, such as the number of bedrooms or close proximity to work. For guidance, we asked a panel of experts to share their thoughts on the following key questions:

1. What tips do you have for a person looking to get the best value in an apartment?
2. What are the most common mistakes that renters make when searching for a new apartment?
3. In evaluating the best and worst cities for renters, what are the top five indicators?
4. Are the fastest growing cities a good place for renters? Why?
5. How can local policymakers make housing more affordable for renters without upsetting homeowners?

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• David Fiorenza Instructor, Villanova University
• John Winters Associate Professor of Economics, Iowa State University
• Andrea J. Boyack Professor of Law, Co-Director of Business & Transactional Law Center, Washburn University School of Law
• Stuart Norton Research Coordinator, Alabama Center for Real Estate (ACRE), The University of Alabama
• Chester S. Spatt Professor at Tepper School of Business Carnegie Mellon University and a Visiting Professor, the Sloan School of Management at MIT
• Christopher D. Johnston Assistant Director, Everitt Real Estate Center, Colorado State University
• S. Hesam Ghodsi Research Associate at the Center for Research on International Economics (CRIE) at the University of Wisconsin-Milwaukee

David Fiorenza Instructor, Villanova University

What tips do you have for a person looking to get the best value in an apartment?

Look for an apartment that is close to your lifestyle, that is, location to work, shopping, even public transportation. Ask yourself are you really going to use the gym and pool membership if you company already provides that at work?

What are the most common mistakes that renters makes when searching for a new apartment?

Common mistakes include not reading the contract related to the security deposit, pets, and any fees additional monthly fees.

Are the fastest growing cities a good place for renters? Why?

Not necessarily as demand may not equal supply which could drive the rent higher.

How can local policymakers make housing more affordable for renters without upsetting homeowners?

I would rather local policymakers not be involved in this portion of the regulation and let the market forces of supply and demand dictate prices and other amenities.

In evaluating the best and worst cities for renters, what are the top 5 indicators?

The top 5 indicators would be:

1. Location to public transit,
2. Highways,
3. Infrastructure,
4. Code or other violations,
5. Property management relationship to the business community.

John Winters Associate Professor of Economics, Iowa State University

What tips do you have for a person looking to get the best value in an apartment?

An apartment provides a bundle of housing services and amenities, much like a cable company provides a bundle of channels that you can watch. However, the great thing about apartments vs. cable is that there are many options for different bundles of things people want in an apartment, as opposed to cable where there are relatively few options in most places. Some people want a great location but do not need a lot of space. Others need more space but are more flexible on location. In most markets, there are options that can satisfy both of these and many other types. The keys to getting good value in an apartment are to know what you want, do your research to find where you can get what you want at a reasonable price, and try to avoid bundles that require you to pay for things you don’t want.

Are the fastest growing cities a good place for renters? Why?

We should start by asking why certain cities are growing. The answer is usually because people want to be there, maybe because of a strong job market or a great quality of life in the city. When a city is growing because more people want to live there, rent will tend to go up. Growing cities with expensive rents can still be great places to live for young people with the flexibility to live in small apartments or share a place with many roommates because they still get to enjoy all of the other great things about the city if they are willing to give up some housing space. Of course, some people need more space for family and other responsibilities, and expensive cities can be bad places or even unattainable for them.

Andrea J. Boyack Professor of Law, Co-Director of Business & Transactional Law Center, Washburn University School of Law

What tips do you have for a person looking to get the best value in an apartment? (I assume you mean rental apartment - not an apartment to purchase as a condominium)

Many people believe that there is a set "market rent" in a given area, but rental rates can vary widely, even in the same neighborhood. In fact, in many metropolitan areas, rental rates can vary by a factor of 5 or more in a one-mile radius! In looking for a good rental value, information is your friend, and, luckily, internet resources make information available even without a broker. Use zillow.com or a plethora of other resources to look at comparative prices, and consider several neighborhoods you would like to live in. Best value means more than monthly rental rate, though, because much of the price variance is determined based on location/neighborhood or quality of the rental. I would suggest not renting a home sight-unseen unless a trusted advisor can tour the apartment on your behalf and report back. It is also sometimes helpful to compare rental rates to purchase prices. For apartment rentals, this means comparing monthly rent to monthly ownership costs of a similar condominium unit (mortgage payment plus condominium assessment). The "price-to-rent ratio" can tell you whether renting or buying is a more financially sound choice in a given area. When home purchase prices are on a rapid upswing, rents may be vastly more affordable than purchase prices. In 2006, for example, rental prices in certain markets were 10% of what homeowners had to pay in monthly mortgage payments. Once again, online tools can help you gather this information. Realtor.com has a rent vs. buy calculator that can be useful. Just as there is no set "market rent," there is also no set "fair market value" for a home purchase price. One of the biggest mistakes people make (in both buying and renting) is thinking that prices are somehow standardized or established. In reality, the price of a home (rental rate or purchase price) is whatever parties agree it will be. Also note that the terms of your lease are critical when you assess the value of your rental. You aren't just renting the physical space, you are agreeing to the terms of a contract - and you should read the contract and negotiate for terms that you require (pet clauses, termination clauses, etc.)

What are the most common mistakes that renters makes when searching for a new apartment?

People often rely too much on realtors or landlords to tell them what rental rates are fair. Nowadays, information is out there for people to access themselves, and many people do not take advantage of it. Also, sometimes people do not carefully inspect the apartment they are considering renting, relying instead on viewing a model apartment or on photos. There are things that you can only tell "on the ground," like smells and light exposure and noise from neighbors. Speaking of neighbors, this is an oft-neglected but very important factor in deciding where to live. There are, once again, helpful online tools where people can "report" on lousy neighbors - sort of like a yelp review for housing locales. The other mistake I see is people considering only one neighborhood when renting. I'd recommend researching locations and deciding a few different neighborhood options so that there are more choices and a greater possibility of finding a good value and fit. There are also twin mistakes that renters make in moving too often and not moving when they need to move. There is a cost to move, so the more frequently a renter relocates, the more costly renting is (all else being equal). But sometimes people stay in a bad situation (bad landlord, bad premises, etc.) when their quality of life and cost of housing would be vastly better if they moved. Finally, most people do not negotiate or even read their lease agreements. You should read your lease because this governs what you can and can't do with your home and what your financial risks are (security deposit refund ability, termination provisions, etc.). Landlords may say that the lease form is non-negotiable, but you can often get changes or additions made to an attached addendum if you ask.

Are the fastest growing cities a good place for renters? Why?

It is difficult to generalize regarding which cities are the best for renters, but often fast-growing cities are good for renters because they are good for employees and offer good job opportunities. Usually, developers will construct housing to reflect increased demand, so you may get a newer, nicer apartment in a fast-growing city than in a more stagnant economy. Construction usually lags demand, however, so rents may skyrocket in fast-growing cities. People often talk about how expensive "housing" is in a given city, but once again, there is a different expense calculation for renting and for buying. For example, it is extremely expensive to purchase a home in San Francisco and in New York, but relatively, renting is cheaper in those two areas (even though in real terms, renting is quite pricey in both markets as well... just less pricey than buying is). On the other hand, if you move to Detroit or Cleveland, it is relatively more expensive to rent (although in real terms vastly cheaper) because buying is relatively so much less expensive. One way to see whether rents have gotten out of control is to track them temporally: have rents recently increased, or have they been high for a while? For example, rents in Denver have been skyrocketing recently, but rents in Dallas - one of the fastest-growing markets - have remained very affordable. Incomes in Nashville are among the fastest-growing in the country, and rents there are starting to increase as well. Sometimes rental rates reflect reputation of a city rather than real opportunity. Columbus, Ohio, for example, seems to offer a lot of opportunity for a decent cost of living. Some of the cheapest rents are still in the cities that overbuilt during the 2002-2006 housing boom - for example in Las Vegas and Phoenix.

How can local policymakers make housing more affordable for renters without upsetting homeowners?

In some high-rent areas, lawmakers pass rental controls such as rent freezes and other forms of rent control. I think this distorts the market and imposes broad societal costs on a small handful of landlords, which is not fair. Rent control measures can be both inequitable and inefficient. The better way for policymakers to make housing more affordable is to encourage the development of more housing. Zoning regulations and development exactions basically increase the cost of renting (and buying) for people in a city and should be kept to a minimum. These sorts of governmental cost impositions not only raise rents but skew rental development to the high end of the market. When set development costs apply to all rental units, it makes more sense for luxury units to be developed rather than affordable units. This is a big contributor to a problem that nearly all markets face: there is sufficient supply of high-end rental units but a vast undersupply of affordable apartments. Policymakers can combat this by lowering the cost of development and by encouraging the development of affordable units. Housing costs are more reasonable and housing quality more equitable when apartments can be constructed in all residential areas in a metropolitan area. "Single family only" neighborhoods raise housing costs for everyone. Of course, there is an inherent resistance to this from people who own their homes, because once you buy a home, you're made richer when home prices increase. Homebuyers and renters want costs to stay reasonable, but homeowners want prices to soar.

In evaluating the best and worst cities for renters, what are the top 5 indicators?

1. Job Opportunities
2. Less exclusive zoning policies
3. Protective landlord-tenant laws
4. Public transportation
5. Grocery access/affordability

People rarely decide to move to a city based only on rental rates and availability - they usually look for jobs. But all things being equal, rental options can make a given city much more (or less) attractive to someone looking to relocate. Looking for a city with pro-renter policies regarding encouraging apartment development and locating rentals in good neighborhoods is one good indicator of a good place for renters to live. It is also a good idea to get a general sense of landlord-tenant law in a given market. This varies widely, not only from state to state but even from city to city. Look for a place with good protection for renters, such as guaranties of habitable apartments and the ability to withhold rent if the apartment becomes uninhabitable. Another good indicator for a city is a robust transportation network. Not only is this important for renters who do not want to rely on private automobile transport, but it indicates that the city is willing to invest in infrastructure. Finally, another indicator of a city that is good for renters turns on another neighborhood factor, namely the number and location of grocery stores. Many people end up living in "food deserts" in our country, and access to quality, affordable food is key to ensuring a higher quality of life.

Stuart Norton Research Coordinator, Alabama Center for Real Estate (ACRE), The University of Alabama

What tips do you have for a person looking to get the best value in an apartment?

Begin your search as soon as possible to avoid making a rushed decision. Also, the renter needs to complete some due diligence by getting rental price quotes from various neighborhoods around town. This is as easy as looking online or making a few phone calls. It’s common sense, but a person in the rental market should follow up by physically visiting at least 5 properties in person before making a decision. This will help the renter get a feel for the local rental market, and ultimately lead to a more informed decision. Also, don’t be afraid to negotiate, especially if you are looking at rental houses and are in direct contact with the owner.

What are the most common mistakes that renters makes when searching for a new apartment?

The worst thing a renter can do is to sign a lease on the first apartment or house that they visit. I doubt a renter will get great value if they skip the research phase. It’s also important to ask the right questions...What are my upfront costs (first month’s rent, last month’s rent? deposit?) Also ask about average utility bills to get a better estimate of total housing costs. What is the average electric bill? Is water included in my rent? Is the central heating gas or electric because if it’s gas that means another utility payment. Asking the right questions will help the renter estimate their total housing costs, rent and utilities.

Also, carefully read the lease before signing. Know your duties as a tenant but also know the owner’s duties when it comes to repairs, maintenance, etc. You want to get your deposit back at the end of the lease so know exactly what you need to do to make that happen.

Are the fastest growing cities a good place for renters? Why?

This is a good question, but it depends on many factors. Let’s start by looking at the Zillow Rent Index (ZRI) for some of the fastest growing cities in America…

• Myrtle Beach, SC $1,254
• Austin, TX $1,680
• Greely, CO $1,643
• St. George, UT $1,421
• Bend, OR $1,673
• Raleigh, NC $1,437
• Orlando, FL $1,445
• Daphne-Fairhope, AL $1,362
• Houston, TX $1,550

A quick look at the list reveals that these fastest growing cities are quite competitive with one another when it comes to average rent. The ZRI, however, is the view from 30,000 feet. It lets you compare one city to another, but it does not shed any light on how rent will vary from one neighborhood to another.

Fast growing cities have the advantage of better job opportunities, better amenities, and a higher percentage of new construction on the market versus your slow growing cities or cities seeing population declines. But be prepared to face a higher cost of living. Also, renters should expect a more competitive rental market if they decide to live in a fast growing city. There is going to be more competition, among renters, for the limited number of properties available for rent. So do your due diligence, but be prepared to make a quick decision.

How can local policymakers make housing more affordable for renters without upsetting homeowners?

This is a tough one. Let’s look towards one of America’s most expensive cities for an example.

New York City has used two approaches for this issue in the past: rent control and rent-stabilization. Rent control is disappearing, and for good reason. There are only about 27,000 rent controlled apartments in NYC in 2014 compared to around 2 million in the 1950s. This represents about 1% of the modern NYC rental market and the median rent is approximately $1,020 per month! These luck individuals are basically paying 1970s rent! Imagine this from the landlord/owner’s perspective. Who wants to purchase an apartment building that is rent controlled? But we can infer that rent control is an ineffective solution by the decline of rent control over time.

Rent-stabilization is becoming more popular in NYC as approximately 50% of apartments in the area are rent stabilized. In these apartments, rent can be only be increased by a percentage determined yearly by the Rent Guidelines Board. In June, the board voted to increase rent by 1.5% on one-year leases and 2.5% on two-year leases. This is a modest increase that is in line with the Consumer Price Index, yet there were shouts of “shame, shame, shame.” Rent was increased in similar levels in 2017 after rent freezes in 2015 and 2016.

In evaluating the best and worst cities for renters, what are the top 5 indicators?

1. Job opportunities
2. Amenities and quality of life (somewhat intangible)
3. Cost of living
4. Average rent appreciation
5. Quality of local schools

Chester S. Spatt Professor at Tepper School of Business Carnegie Mellon University and a Visiting Professor, the Sloan School of Management at MIT

What tips do you have for a person looking to get the best value in an apartment?

Not all apartments are right for everyone. Some of the characteristics will be more valuable (or costly) to some renters than others. This should play an important role in apartment selection. For example, someone in ideal physical condition and who would not anticipate guests who have mobility issues might find the discount on a four-story walkup a great value, but others might not be interested in such an apartment. Someone who will use the subway a lot might be more willing to pay the premium for being especially convenient to the subway. A Harvard student might find paying the Harvard Square premium much more valuable than an MIT student (and vice versa for apartments near MIT’s Kendall Square), even though the two schools are just a few miles apart.

What are the most common mistakes that enters makes when searching for a new apartment?

It is important to assess one’s priorities and comparative advantage and disadvantages (likes and dislikes) and use that to focus one’s search. However, it can help to look at a few places to sort that out. Also, it can be a mistake to be too wedded to a particular apartment, just like in buying a house it can be costly to not be willing to “walk away”. It also may be important not to accept terms that are likely to be a mis-fit, such as needing to start your lease earlier than you need.

How can local policymakers make housing more affordable for renters without upsetting homeowners?

Housing will be more affordable when there are not artificial restrictions on supply (such as height restrictions on building that are too constraining for the city) or demand (such as barring unrelated people from renting together). Of course, the homeowners might also like restrictions on density.

Christopher D. Johnston Assistant Director, Everitt Real Estate Center, Colorado State University

What tips do you have for a person looking to get the best value in an apartment?

Any tips around finding the best value in an apartment or rental search would focus around flexibility, and having a wide-ranging search. It is important to remember that amenities can be a value-add, or can increase rent without substantially increasing the value to certain tenants. This will come down to personal preference & Cost/Benefit type analysis by the tenant.

Tenants should identify and select the amenities you are seeking in local goods and services – This may be the quality of local schools, park districts/natural areas/open spaces, etc.

As with any real estate decision, the tenant should be acutely aware of “location, location, location”. This will come with decisions and trade-offs around distances to areas/resources you want or desire -- work, shopping, nightlife, peace & quiet, natural areas etc. All of these factors impact the value each individual finds in a living space.

Another major factor in finding value in your rental search will often revolve around timing in the rental market you are located in.

What are the most common mistakes that renters makes when searching for a new apartment?

A couple mistakes that come to mind often develop from the individual lacking flexibility (Narrow Searches) – Some renters may get completely fixed on the idea of living near something (campus, work, friends, etc.). Keeping options open is key to finding high value in rentals.

• People choose where to live / how to live more based upon the “Why” than the “What” - Don’t get tied up in features (the what) of your living situation, focus on the benefits that certain places bring (the “why”) People may get tied too much into where they live and what they get with their rental instead of focusing on the value of why they want to live in a certain area. Once these “whys” are addressed, a more affordable location may be found that only adds minutes to a person’s commute, offers a park nearby (if this is someone’s why), and satisfies many other needs of the tenant without paying a high premium for items that aren’t important to them.
• • A big screen TV, group hangout room, foosball & pool tables, etc. as amenities of an apartment complex may not actually add any value to certain renters if they aren’t going to use them.
• Timing is Key – Time rental searches with natural periods of higher vacancy if possible -- some markets have natural turnover periods (college cities tend to have yearlong leases with the highest percentage of units being available in the July/August timeframe -- falling outside that period may limit selection but may also give you better negotiating power/lower prices.
• • College Communities when leases turn over.
  • Seasonality can also impact home prices and rental rates in certain areas – winter seasons may provide fewer vacancies, but off timed vacancies can often lead to lower rental rates to fill those units at that time.
• Losing Options is another common mistake that can often be found in rental searches.
• • Keep as many options in your lease as possible! See the lease as a negotiation with your landlord. E.g. option to sublet; cancel the lease early, pets, etc.

Are the fastest growing cities a good place for renters? Why?

This is a very complex question as fast growing cities can often come with high rates of population growth, employment growth (wage impacts), home value changes, and pipeline/delivery of multifamily projects. These factors can often play both positive and negative roles in rental and housing affordability equation.

The key question may end up being – “how long do you believe you will be in that fast growing city?” The new norm of people not working with one or just a few employers all their life (“Job-Hopping”), the job turnover in today's markets is much higher. On average you need 3-4 years to "break-even" if buying instead of renting. The more mobile one is, the more they should consider renting.

This answer will also be different depending on personal information/preferences of the renter (single/married, kids, age, lifestyle/hobbies).

How can local policymakers make housing more affordable for renters without upsetting homeowners?

This is another tough question as there are really just a couple sides to the equation that policymakers can play with: income, and cost of housing. This also brings complex discussions around building material cost, development hurdles/policies, and incentives for building affordable purchase options such as condominiums in that area into the conversation.

Often increasing housing density in certain areas is seen as a possible solution, but this often has to be done in ways that do not jeopardize your city/upset homeowners. NIMBY or “not in my back yard” thinking becomes a real trend. Everyone agrees affordable housing is needed and useful as long as it doesn't affect them. There is a long history of cities using public housing projects (both positive and negative).

In general there will always be something sacrificed -- located further distances to desired items (jobs, amenities, etc.), located closer to negative externalities such as expressways, commercial/industrial areas, etc.

In evaluating the best and worst cities for renters, what are the top 5 indicators?

Certainly a complicated scenario, this discussion starts with the cost tradeoff of owning vs renting. The keys to this discussion are cost of housing, mortgage rates, rental rates, appreciation rates in housing (inflation), and the total percentage of housing stock that is rental in an area determining how large one's choice set is to begin with. Generally inner cities will have a higher percentage whereas the suburbs will have a much lower percentage of its housing available for rental use.

Harvard joint center for housing has a nice summary of many govt statistics.

In any evaluation of living in a certain area/city, renters will become very aware of indicators such as:

1. Average Rent Figures.
2. Average Income/Wage Information - Job Growth & Areas of Job Growth.
3. Changes in Rent (Growth/Trends).
4. Average Vacancy Figures.
5. Multi-Family Development Pipeline.

S. Hesam Ghodsi Research Associate at the Center for Research on International Economics (CRIE) at the University of Wisconsin-Milwaukee

What tips do you have for a person looking to get the best value in an apartment?

Renters must have a clear view of what they are looking for by renting an apartment. In order to be able to get the best value in an apartment renters need to priorities the factors that affect their personal or family life such as amenities, crime rate, school system quality, public transportation, commute distance to work, etc. These factors affect total cost of renting an apartment (including rent, utility, parking fee and etc.). By considering these factors renters can then focus on finding an apartment that meets their saving target and maximizes their rent to income ratio. The closer renters are to their work the more money and commute time they can save. Getting direct information from current residents of apartments is the best and most reliable way of collecting information for their decision making process. Therefore, a temporary stay before signing a long-term lease might seem an additional cost at the beginning but would end up getting the best value in an apartment.

What are the most common mistakes that renters makes when searching for a new apartment?

Most common mistakes are underestimating the commute time and cost to work, not taking the right utility and parking fee costs into account, not having a true knowledge about the neighborhood, and not signing a lease that better fits their timing situation.

Are the fastest growing cities a good place for renters? Why?

Most renters are workers and their life depends on their job therefore fastest growing cities that offer more job opportunities are better choices for renters. Moreover, growth rate of cities is one of the indicators that home developers consider for new construction projects. This causes an increase in the supply of housing in the long-run in fast growing areas.

How can local policymakers make housing more affordable for renters without upsetting homeowners?

Policymakers can incentivize real estate investment capital companies to build new apartment communities outside of primarily owner occupied neighborhoods by providing tax cut and exemptions, by facilitating permit procedures for new constructions, providing long-term and low rate funds and subsidizing lots needed for new constructions.

In evaluating the best and worst cities for renters, what are the top 5 indicators?

There are some indicators have been used by researchers such as the ratio of rent to income, vacancy rate, percentage change in rent, percentage change in housing start and etc. However, if I were to pick one measure it would be ratio of house prices to total personal income as it is widely used in economic studies (higher house prices causes higher rents). The lower this ratio is for a region, the more affordable housing is either renters or buyers. That said, there are many other determinants that play key roles in one’s personal decision in choosing a city to move to benefit from its affordable housing.

Methodology

In order to determine the best local rental markets, WalletHub compared 182 cities — including the 150 most populated U.S. cities, plus at least two of the most populated cities in each state — across two key dimensions, including “Rental Market & Affordability” and “Quality of Life.”

We evaluated those dimensions using 22 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for renters.

Finally, we determined each city’s weighted average across all metrics to calculate its total score and used the resulting scores to rank-order our sample. Our sample considers only the city proper in each case and excludes cities in the surrounding metro area.

Rental Market & Affordability – Total Points: 60

• Share of Renters: Full Weight (~3.33 Points)Note: This metric specifically measures the share of renter occupied housing units among total occupied housing units.
• Rental Vacancy Rate: Full Weight (~3.33 Points)
• Sublet Laws-Friendliness: Full Weight (~3.33 Points)
• Average Home Square Footage: Full Weight (~3.33 Points)
• Share of Newer Homes: Full Weight (~3.33 Points)Note: “Newer Homes” include housing units built between 2010 and 2016.
• Rental Affordability: Triple Weight (~10.00 Points)Note: This metric was calculated as follows: Median Gross Rent / Median Annual Household Income.
• Historical Rental-Price Changes: Full Weight (~3.33 Points)Note: This metric specifically measures the year-over-year percentage change in rent prices (2016 vs. 2015 vs. 2014).
• Forecasted Change of Median Rent: Full Weight (~3.33 Points)Note: This metric is based on the Zillow Rent Forecast over the coming year.
• Share of Severely Cost-Burdened Renter Households: Full Weight (~3.33 Points)Note: “Severely Cost-Burdened Renter Households,” as defined by the U.S. Department of Housing and Urban Development, refers to consumers who spend at least 50 percent of their income on housing.
• Average Annual Renters-Insurance Premium: Full Weight (~3.33 Points)
• Rent-to-Price Ratio: Full Weight (~3.33 Points)
• Cost of Living: Triple Weight (~10.00 Points)
• Buy vs Rent Breakeven Horizon: Full Weight (~3.33 Points)Note: The “breakeven horizon” is defined by Zillow as the point, in years, at which buying a home becomes less expensive than renting the same home.
• Security-Deposit Limit: Full Weight (~3.33 Points)Note: This metric measures the maximum security-deposit amount that landlords are allowed to charge in the state. A lower amount is ideal for renters.

Quality of Life – Total Points: 40

• City Satisfaction Ranking: Full Weight (~5.71 Points)
• Job Market: Full Weight (~5.71 Points)Note: This metric is based on WalletHub’s “Best & Worst Cities for Jobs” ranking.
• Driver-Friendliness: Half Weight (~2.86 Points)Note: This metric is based on WalletHub’s “Best & Worst Cities to Drive in” ranking.
• Recreation-Friendliness: Full Weight (~5.71 Points)Note: This metric is based on WalletHub’s “Best & Worst Cities for Recreation” ranking.
• Weather: Half Weight (~2.86 Points)Note: This metric is based on WalletHub’s “Cities with the Best & Worst Weather” ranking.
• Quality of Public School System: Half Weight (~2.86 Points)Note: This metric is based on GreatSchools.org’s ratings of U.S. public school systems.
• Safety: Double Weight (~11.43 Points)Note: This metric measures the violent- and property-crime rates.
• Presence of State Bedbug Laws: Half Weight (~2.86 Points)Note: This binary metric measures the presence or absence of bedbug laws in the state. Bedbug laws address bedbug infestations in rental properties.

 

Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Council for Community and Economic Research, Zillow, Harvard Joint Center for Housing Studies, Insurance Information Institute, Flex Zone, Gallup, Federal Bureau of Investigation, Regents of the University of California, GreatSchools.org, NOLO and WalletHub research.

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