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.