Small Outdoor-Friendly Metros Attracted the Most Renters during the Pandemic. Will the Trend Continue? [Expert Interview]

The pandemic has changed not just our way of living, but also the locations where we prefer to live. The most recent RentCafe Year-End Report, which captured the trends in the rental market in the last year, showed a strong interest from renters for small- and mid-sized metros, prevalently with access to outdoor amenities.

Curious about what driving factors might explain this tendency and whether the trend is here to stay, we asked urban planning experts to provide some insights on this subject and what we can expect in the future. Their opinions touched upon practical considerations every renter can relate to, such as the cost of living, natural beauty, remote work, commute, and generational preferences as the top drivers for these latest trends.

Do you see the trend of small/mid-sized metro living remaining popular, or even increasing in popularity?

• Edward Murray, AICP, Associate Director Jorge M. Perez Metropolitan Center, Florida International University

“Given the cost and paucity of rental housing, renters will search out available units in communities within a reasonable driving distance from their jobs. This has less to do with popularity and more to with a lack of geographic choices in the rental market.”

• Robert G. Shibley, FAIA, FAICP, SUNY Distinguished Professor and Dean, School of Architecture and Planning, University at Buffalo

“We are seeing increasing interest in the City of Buffalo as an example of one small to the mid-sized metro. We have experienced a revitalization of the downtown rooted in residential and mixed-use developments coupled with successful economic development work. By contrast to New York City, the relatively low cost of living upstate New York will continue to be popular. That said, there is little data to support the idea that there is a large migration toward small to mid-sized metro areas. In general, the size of the population that moves each year has reduced every year for the last three decades. There was a modest (about one percent) uptick in move behavior the first two years of the pandemic.”

• Mark Stapp, Fred E. Taylor Professor in Real Estate at the W. P. Carey School of Business and the director of the Master of Real Estate Development program at Arizona State University

“Typically housing demand results from population growth and that is a result of employment growth. I see the trend of small/mid-sized metro living continuing but in concert with a return to larger city centers – I do not see these as either/or. There will be “taste-based selection” by a portion of the population that can choose small communities – those with a choice resulting from either employment flexibility or retirement. But, residency location relates to employment location so the extent of the trend will depend on how employers deal with WFA/flex schedules and choices of employers to locate in small communities.”

• Jake Wegmann, Associate Professor, School of Architecture, The University of Texas at Austin

“For the most part, I don’t think that many small-to-mid sized metros that were struggling to attract in-migrants and jobs before the pandemic will dramatically change their trajectory. One possible partial exception may be formerly small, struggling metros that are relatively close to large metros. Although I don’t foresee remote work remaining the norm for very large numbers of office workers in the coming years, I do think that hybrid work changes the commute-versus-housing affordability tradeoff for some workers.”

“If you live in Bethlehem, PA, the commute to Manhattan five days a week would have been absolutely punishing in the past (which is not to say that a small number of people weren’t doing it). But if you only have to physically show up to the office two days out of five, then you might be more tempted to move there to take advantage of the relatively affordable housing costs–the brutal commute is perhaps something you’re willing to put up with if you don’t have to do it every weekday.”

“The other category of small metros that I imagine continuing to experience an uptick in interest will be those that offer extraordinary natural beauty. For the most part, places like Bozeman, MT and Bend, OR were already struggling with very high housing costs before the pandemic. But the increase in fully remote work means that they will likely see a continued influx of remote workers in the coming years. It doesn’t take that many such workers entering the housing markets in such locations for them to experience a major shock.”

After the pandemic, do you think that large metros will regain popularity with renters?

• Robert G. Shibley:

“Large metro areas will eventually have to deliver sustainable home environments that allow for a wide range of income levels. For the foreseeable future, the attractiveness of small to mid-sized metros may continue to benefit from the choices made by early-career workforces seeking lower costs of living and high-quality places.”

• Mark Stapp:

“I think movement back to larger cities will occur but its growth rate will likely be less than pre-pandemic. I also think it depends on employer decisions. Large cities still offer certain desirable benefits sought by a significant segment of the population. There are also economic benefits such as more choice, larger employment pools, greater scale, etc.”

“Many times, large cities support higher order goods and services that can’t be supported by smaller populations. Not everyone can choose to move. My fear is that all those who have a choice will chose to move out leaving larger cities with only those who can’t and are the least resilient and most vulnerable rather than a mix of income levels, cultures, backgrounds and opportunities – all of which make cities desirable and important.”

• Jake Wegmann:

“I do–I believe that the fundamental forces (the economic benefits of density and agglomeration, concentrations of major institutions like universities and hospitals, cultural amenities, etc.) that have driven job and income growth to medium-to-large metros in the US in the last half century remain unchanged by the pandemic. I would expect, however, for the trend that we saw in the pandemic, where growth pressures within large metros shifted from the urban core and the inner suburbs to the outer suburbs and exurbs, to continue. There were already demographic forces pushing in this direction pre-COVID (the aging of the oldest Millennials into prime years of marriage, child-rearing, and homebuying), and then the desire for more living space during the pandemic just accelerated it.”

What are other trends you see emerging in terms of urban living in the US?

• Mark Stapp:

“There is a convergence of several factors: some lifecycle related – the Baby Boomer/Gen X/Millennials/Gen Z populations and their own life positions and lifestyles which impact behavior, values and preferences; some are technological coupled; and some are economic conditions. How society responds is not yet fully known. Some trends were underway pre-pandemic, some are new resulting from the pandemic and some from simple aging process. We don’t fully know which are “sticky” and will continue and which are temporary resulting from reaction to the pandemic and will go away. I think we need at least another year to better understand.”

• Jake Wegmann:

“I believe that the Millennial generation genuinely has a much greater interest in urban living and walkability than the Boomers and Gen Xers did before them at the same age. As a lot of Millennials move from urban cores to suburbs within large metros, or move from large metros to smaller metros, I believe that they are going to take their preferences with them. There are many people in their 30s and early 40s who may be having children and who would like to live in a single-family house or a townhouse, but they still would enjoy having somewhere to walk to that’s interesting, or at least they would like to have the option to drive to a suburban town center nearby that has a walkable feel.”

“To give one example, the completely-automobile dependent affluent suburb of Lakeway (outside of Austin, where I live) is likely to get a new walkable, mixed-use lifestyle center–the downtown it never had to begin with–in the coming years. I believe that the urbanization of the suburbs that Christopher Leinberger has predicted will be a major trend in the rest of the 2020s, even as some of the demand pressures on urban cores ease somewhat.”