In Philly, the renters keep on coming
Philadelphia is now nearly 48 percent renters, 52 percent homeowners.
Philadelphia's renter base grew faster over the last 10 years than those of most other big cities, bringing the city closer to an even split between homeowners (now 52 percent) and renters (48 percent).
The number of renters in Philadelphia increased by 6.1 percentage points between 2006 and 2016, according to a study published Wednesday by the real estate website Zillow.
The bump, higher than those in New York, Chicago, Los Angeles, and Houston, follows a national trend of families, especially young adults, opting to rent. The number of renters in 50 big cities studied increased over the last decade, Zillow researchers found. In 29 of 50 cities, renters outnumber homeowners.
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"It's no secret why," said Kevin Gillen, senior economic adviser to Houwzer LLC, a Philadelphia real estate agency. "The housing bubble burst, millennials started graduating from college during a recession, they didn't have a lot of money, it was crash on Mom and Dad's couch or rent."
The renter numbers could be growing faster in Philadelphia because of the city's young-adult population. A 2014 Pew study found millennial growth here outpaced that of other cities, though a subsequent study found a smaller increase.
Philadelphia also had a relatively low number of renters compared with most other big cities, giving it more room to grow.
Although home sales in Philadelphia have been strong, Gillen said, prices are flat. He attributes that to first-time home-buyers looking to buy cheap. Buyers who don't find what they're looking for often turn to renting, Gillen said.
Home ownership rates are rising slowly nationwide, the Zillow study found. Recent data show a surge in young adult home ownership over the last two years, though to nowhere near pre-recession numbers.
Lifestyle choices also could be contributing to the rise in renters. The study found more young adults are delaying marriage and starting families, while also looking to live in urban areas, where rental options are more abundant.
Deborah Solo, who owns Solo Realty, which sells and rents properties in Philadelphia, said that in the last two years, developers have favored rental properties, creating a glut in the rental market. Nearly 4,000 new apartments are expected to hit the market by 2019. The median rent in Philadelphia is $1,214, up 0.7 percent from last year.
"There's a lot for rent," she said. "It's been, I'd say, harder each year for the last couple of years to either raise rents or make sure we have all our units filled by the end of rental season, the end of August."
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Phil Lord, executive director of the Tenant Union Representative Network (TURN), which helps low-income renters, said the study illustrated the need to drive down the city's high eviction rate and amp up support for renters, especially long-term renters.
"I think we have to look at how to keep renters where they are, especially in the context of gentrification," Lord said. "The idea of renters as transients becomes a self-fulfilling prophecy, because if you create situations where tenants can't be stable, you create instability."
Lord said his organization had seen more "over-income" people — people paying $2,000 or $3,000 a month for rent — coming to TURN for counseling or renter advice.
"I think there's more people who are renters who are in a higher income bracket," he said. "People say the housing crisis and foreclosure crisis made more renters out of necessity, but it also made people feel that renting isn't necessarily a step on the way to being a homeowner; it's a legitimate alternative to being a homeowner."