The Merced area ranks toward the top of a list of cities with more renters than owners, according to a recent report from a rental website.
The trend is a growing one and is expected to continue to rise, according to experts from Madison, Wis.-based Abodo.
About 53.3 percent of Merced’s residents are renters, ranking the city seventh out of 21 “urbanized” cities with more renters than owners, according to the report, “Where Renting Trumps Owning.”
Abodo used data on Merced, Atwater and Winton from the U.S. Census’ 2015 American Community Survey to study cities of more than 100,000 people.
“It will raise no eyebrows” that cities such as San Francisco and New York make the list, the report says. But it includes a number of college towns, such as Texas’ College Station, Santa Barbara and Tallahassee, Fla.
Those latter cities are home to Texas A&M University, UC Santa Barbara and Florida State University and respectively rank first, ninth and 13th on the majority-renter list.
Land is getting scarce and expensive all across the country, so, as cities with a renter majority start to fill up, more developments could be on the way.
Sam Radbil, senior communications manager for Abodo
UC Merced students likely make up a good portion of the area’s renters, but average incomes in Merced also keep home ownership out of reach for many, according to Sam Radbil, senior communications manager for the company.
The median home value in Merced is $194,400, which is in line with the national median figure of $194,500, Radbil noted. But Merced’s median income of $37,497 is significantly less than the national median income of $55,775.
On top of that, 31.1 percent of Merced’s population lives below the poverty line, which is more than twice the national average, he said. In Merced, families make up 71 percent of those renting, the report shows.
“The downside of being a renter-majority city is that renters are much more likely to leave a city than homeowners,” Radbil said in an email.
City leaders often talk about Merced’s “brain drain,” in which the best and brightest leave the community for career opportunities elsewhere.
53.3Percentage of Merced’s residents who are renters
Majority-renter cities also give landlords more leverage and control over rental price increases, according to Abodo. Area real estate agents have said Merced has a 1 percent vacancy rate in its rentals.
Having so many renters isn’t all bad news. High-renter populations can attract more new developments, a potential economic boon to the city’s coffers, Radbil said. “Land is getting scarce and expensive all across the country, so, as cities with a renter majority start to fill up, more developments could be on the way,” he said.
Renters tend to be younger than 44, the report says.
Nationwide, renters are on the rise, the report says. In 2015, there were 1.4 million new renter households, and the country is seeing its largest percentage of renter households – 36.4 percent – since the 1960s, the report says. Renters became the majority in 21 cities in 2015, up from 14 three years earlier.
This report has been corrected from an earlier version.