Apartment List study of high income renters

Best Addresses by James Goode, published by the Smithsonian Institution Press, discusses the architecture of DC's apartment houses.

The rental search firm Apartment List has released its annual study of high income renters, "Rich and Renting: Understanding the Surge of High-Earning Renters."  It reports, no surprise, that rents are trending higher and that more higher income households are renting rather than buying.

It confirms a point that I've made in the past ("Applying the super-gentrification thesis to San Francisco, Santa Monica, and other cities experiencing hyper-demand," 2014), that the real estate market is driven by high income households not average income households, and as more neighborhoods (what real estate people call "submarkets") become attractive at the metropolitan scale, they get priced upward, as higher income households seek to live there.

In turn, as people, still with comparatively high incomes, get pushed out of the most attractive neighborhoods, they move to similar neighborhoods and in turn push those prices up higher.


CityVista at 5th and K Streets NW is a mix of condominiums and rental apartments, with ground floor retail including a Safeway Supermarket.  It opened around 2009.

The rampant construction of new and therefore higher priced apartment buildings in cities like DC--and by definition new construction is always the highest priced because it is built at today's cost of land, labor, and materials--has extended the price range of housing upward.

Sure you've always had clusters of higher cost apartment housing in cities--in DC, think of the buildings out Connecticut, Massachusetts, and Wisconsin Avenues.

Something I hadn't thought about in detail is how this construction is one of the contributors to the repositioning of urban markets as more attractive vis-a-vis the real estate development paradigm which previously favored the suburbs.

It's an argument extendable from Christopher Leinberger's The Option of Urbanism.

In that book he made the point that about 30% of the residential real estate market wants to live in cities, 40% wants to live in suburbs, and 30% is willing to live in either, but until recently most new housing was built in suburbs, so the people willing to live in either setting didn't have much choice and they ended up/stayed in the suburbs.

Now they do have choice and more willingly choose to live in the center city or more dense suburban town centers , not just in single family housing either attached or detached, but also in apartment buildings that aren't only new but also amenity rich, for which the supply previously had been relatively small, especially against the expansion of higher income segments of the population.

The options have grown.