The SpareFoot List: America’s Top 15 Apartment Boom Towns

By    March 9, 2014

apartment building

If you live in an apartment, you could have the luxury of living across the hall from your friends or the misery of living down the hall from your nemesis (bonus points if he’s named Newman). Perhaps you enjoy the simple comfort of knowing someone else is responsible for fixing a leaky sink. Or maybe you constantly feel as though you’re trapped in a mystery novel titled “WTF Are My Upstairs Neighbors Always Doing at 2 in the Morning?”

Apartment Popularity
No matter how good or bad your apartment experience is, you’re likely to find more people these days who are in the same boat. More than 100 million Americans are renters, and up to half of all new U.S. households formed this decade could wind up in rental housing, according to the National Apartment Association.

The conditions are right for rental housing in general and apartments in particular to remain popular for a while, said housing expert John McIlwain, senior resident fellow at the Urban Land Institute, a nonprofit land-use research and education group.

“Housing prices are going to go up, and credit remains tight,” he said.

At the same time, unemployment remains relatively high for people in their 20s and 30s, and many of them are burdened with student debt, McIlwain added. So, many people are delaying buying homes. Meanwhile, construction costs are rising.

apartment for rent

“The big challenge to industry is to provide rental housing at prices that middle-income people can afford,” he said.

That’s why, when we wanted to determine America’s Top 15 Apartment Boom Towns, we included a measure of affordability. We also looked at indicators of apartment availability, economic growth and population growth for the 100 most populated metro areas in the U.S.; the data covered 2009 to 2013, depending on the category.

Bear in mind that data on the relative awesomeness or noisiness of neighbors is hard to come by, though, so we can’t vouch for our winners being free of Mr. Heckles types. Remember him from “Friends”?

The Way to San Jose
Here is SpareFoot’s ranking of America’s Top 15 Apartment Boom Towns, in descending order.

  1. San Jose, CA
  2. Austin, TX
  3. Houston, TX
  4. Grand Rapids, MI
  5. Nashville, TN
  6. Dayton, OH
  7. Portland, OR
  8. San Francisco, CA
  9. Dallas-Fort Worth, TX
  10. Oklahoma City, OK
  11. Seattle, WA
  12. Minneapolis-St. Paul, MN
  13. San Antonio, TX
  14. Des Moines, IA
  15. Detroit, MI

San Jose’s continued job growth, along with its shortage of affordable entry-level homes, encourages younger workers to look for apartments, said Matthew Mahood, president and CEO of the San Jose Silicon Valley Chamber of Commerce.

“The apartment housing market has responded to this increased demand and has built and will continue to build new projects. In fact, there are two high-rise projects being built simultaneously in downtown San Jose that will provide for nearly 700 for-rent units in the next two years,” Mahood said.

Matthew Mahood

Matthew Mahood is head of the San Jose Silicon Valley Chamber of Commerce.

Although tech hubs top our list, the ranking also revealed a few surprises, especially Detroit. (We’ll get to that shortly.) First, though, an explanation of our analysis. Our ranking relies on this data:

  • Total apartments per person
  • Population growth
  • The percentage of people spending more than 35 percent of their income on rent—lower numbers are better, as they indicate housing affordability
  • Per-capita personal income growth
  • Per-capita gross domestic product (GDP) growth
  • Growth in per-capita construction permits for new apartments

We used the most recent data available from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, and averaged growth rates over a few years to ensure one-year spikes wouldn’t skew the rankings. Personal income and GDP data were adjusted for inflation.

San Jose, CA

San Jose

Apartments per person: 0.09
Average population growth: 1.4 percent
Percentage of people spending more than 35 percent of their income on rent: 38.1 percent
Average per-capita personal income growth: 4.6 percent
Average per-capita GDP growth: 3.8 percent
Average growth in per-capita construction permits for new apartments: 67 percent

Austin, TX

Austin, TX

Apartments per person: 0.1
Average population growth: 3 percent
Percentage of people spending more than 35 percent of their income on rent: 41.7 percent
Average per-capita personal income growth: 1.5 percent
Average per-capita GDP growth: 2 percent
Average growth in per-capita construction permits for new apartments: 86 percent

Houston, TX

Houston, TX

Apartments per person: 0.08
Average population growth: 1.9 percent
Percentage of people spending more than 35 percent of their income on rent: 40.1 percent
Average per-capita personal income growth: 2.9 percent
Average per-capita GDP growth: 2.8 percent
Average growth in per-capita construction permits for new apartments: 42 percent

Grand Rapids, MI

Grand Rapids, MI

Apartments per person: 0.05
Average population growth: 0.8 percent
Percentage of people spending more than 35 percent of their income on rent: 43.1 percent
Average per-capita personal income growth: 3.1 percent
Average per-capita GDP growth: 3.5 percent
Average growth in per-capita construction permits for new apartments: 175 percent

Nashville, TN

Nashville, TN

Apartments per person: 0.07
Average population growth: 1.5 percent
Percentage of people spending more than 35 percent of their income on rent: 41 percent
Average per-capita personal income growth: 2.4 percent
Average per-capita GDP growth: 2.9 percent
Average growth in per-capita construction permits for new apartments: 77 percent

Dayton, OH

Dayton, OH

Apartments per person: 0.09 percent
Average population growth: Zero percent
Percentage of people spending more than 35 percent of their income on rent: 43.4 percent
Average per-capita personal income growth: 1.7 percent
Average per-capita GDP growth: 1 percent
Average growth in per-capita construction permits for new apartments: 688 percent

Portland, OR

Portland, OR

Apartments per person: 0.1
Average population growth: 1.3 percent
Percentage of people spending more than 35 percent of their income on rent: 42.6 percent
Average per-capita personal income growth: 1.3 percent
Average per-capita GDP growth: 3.6 percent
Average growth in per-capita construction permits for new apartments: 66 percent

San Francisco, CA

San Francisco

Apartments per person: 0.12
Average population growth: 1.3 percent
Percentage of people spending more than 35 percent of their income on rent: 41.6 percent
Average per-capita personal income growth: 1.8 percent
Average per-capita GDP growth: 2.5 percent
Average growth in per-capita construction permits for new apartments: 37 percent

Dallas-Fort Worth, TX

dallas-fort worth

Apartments per person: 0.09
Average population growth: 1.9 percent
Percentage of people spending more than 35 percent of their income on rent: 39.1 percent
Average per-capita personal income growth: 2 percent
Average per-capita GDP growth: 1.8 percent
Average growth in per-capita construction permits for new apartments: 26 percent

Oklahoma City, OK

Oklahoma City

Apartments per person: 0.06
Average population growth: 1.5 percent
Percentage of people spending more than 35 percent of their income on rent: 41.1 percent
Average per-capita personal income growth: 2.2 percent
Average per-capita GDP growth: 0.9 percent
Average growth in per-capita construction permits for new apartments: 238 percent

Seattle, WA

seattle

Apartments per person: 0.1
Average population growth: 1.5 percent
Percentage of people spending more than 35 percent of their income on rent: 39.4 percent
Average per-capita personal income growth: 1 percent
Average per-capita GDP growth: 2.5 percent
Average growth in per-capita construction permits for new apartments: 46 percent

Minneapolis-St. Paul, MN

minneapolis

Apartments per person: 0.08
Average population growth: 1 percent
Percentage of people spending more than 35 percent of their income on rent: 40.4 percent
Average per-capita personal income growth: 1.8 percent
Average per-capita GDP growth: 2.2 percent
Average growth in per-capita construction permits for new apartments: 141 percent

San Antonio, TX

San Antonio

Apartments per person: 0.07
Average population growth: 1.9 percent
Percentage of people spending more than 35 percent of their income on rent: 39.8 percent
Average per-capita personal income growth: 2.1 percent
Average per-capita GDP growth: 1.9 percent
Average growth in per-capita construction permits for new apartments: -6 percent

Des Moines, IA

Des Moines

Apartments per person: 0.07
Average population growth: 1.5 percent
Percentage of people spending more than 35 percent of their income on rent: 36.2 percent
Average per-capita personal income growth: 2 percent
Average per-capita GDP growth: 1.4 percent
Average growth in per-capita construction permits for new apartments: 127 percent

Detroit, MI

detroit

Apartments per person: 0.06
Average population growth: Zero percent
Percentage of people spending more than 35 percent of their income on rent: 46.4 percent
Average per-capita personal income growth: 2.6 percent
Average per-capita GDP growth: 3.8 percent
Average growth in per-capita construction permits for new apartments: 44 percent

What’s Up With Detroit?
You might be wondering how Detroit made the list. It beat out the likes of Charlotte, NC; Boston, MA; and even New York City, NY, for a couple of reasons.

First, we focused our growth analysis on 2009 to 2012, so the starting point for measurement of growth in Detroit was when the Motor City essentially hit economic rock bottom.

Second, while GDP and personal income in Detroit have grown, the population hasn’t. We focused on per-capita numbers to adjust for cities of different sizes, meaning that no population growth plus economic growth helped a city’s ranking.

Now, this doesn’t mean Detroit fails to qualify as an apartment boom town. It simply means Detroit’s economic gains are spread among the same number of people, while other cities’ gains are spread among a larger number of people. That aided Detroit’s ranking.

  • Jim McNamara

    Congratulations on a great article. Innovation will drive our economic growth in the future. The people who will make up that sector all want a livable lifestyle with nearby shopping, restaurants, open space and other ecosystem support.

    I would love to see an expanded list of cities that also used walkability, healthcare and public transportation.

  • EditorJohnEgan

    Thanks so much for your nice comment, Jim. We’re always open to ideas for other “city lists” like this one.

  • MAK Austin

    Super informative article. Thank you!

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