VERIFY – YOU’VE GOT QUESTIONS, WE’LL FIND ANSWERS
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A hot topic among Denverites is the growth of our city, but a recent study found 67 percent of Denver metro renters are looking to move out of town.
9NEWS decided to verify if most renters are looking to move out of the metro area.
WHAT THE STUDY CLAIMS
The fact that people from all around the country are looking to relocate to the Denver metro is not a surprise. But a recent Apartment List study states the majority of renters currently in the city are looking to settle down somewhere else.
The study examined an annual survey of about 24,000 renters, including around 400 people from the Denver area. Nationwide about two-thirds of respondents were millennials.
Of the 67 percent of Denver metro renters the study cited as planning on settling down in a different city, affordability was the primary reason listed for moving at 48 percent, followed by better job opportunities at 22 percent and commute at 6 percent.
Affordability concerns were highest in costly coastal cities. However, Denver was among the smaller list of inland metros that have also seen rapidly rising rents.
Nationwide, the study found 64 percent of renters plan to settle down in a different metro. The primary reasons listed were job opportunities at 34 percent, affordability at 30 percent and safety and crime at 8 percent of renters surveyed. Commute and weather were the main reason for moving at 7 percent each.
The study also looked at where the Apartment List users currently in the Denver area were searching for apartments. Most people were looking to stay in Colorado, specifically Fort Collins, followed by Boulder, Greeley and Colorado Springs. A smaller number of people were looking to move outside the state mainly to Chicago, Dallas and Phoenix.
Sydney Bennet, an Apartment List Research Associate, said Dallas and Phoenix have a more appealing affordability, whereas Chicago offers excitement and job opportunities. However, she added the number of people looking to move from the Denver metro for jobs is lower than the national average found in the study.
“If Denver stays on the track it is now, I think you’ll keep attracting young renters because of the job market and the entertainment scene,” Bennet said. “I do think you will see people maybe in their 30s and 40s moving to be able to buy a home somewhere else, but new people in their 20s coming to Denver.”
She said having more affordable starter homes on the market is key for people looking to stay for the long-run in order to ease the transition from being a renter to a homeowner.
However, Bennet does not think people’s relocation to the Denver metro is going away.
“It definitely seems like these renters are being replaced,” Bennet said. “I would expect as the job market stays strong you should kind of see that happening.”
The study cited Denver as the top pick for renters coming from Austin, Dallas and Houston. The city is also popular with renters in the Southwest, Mountain and West Coast regions of the United States.
WHAT WE FOUND
The 9NEWS Verify team reached out to the Denver Regional Council of Governments, an organization that fosters collaboration between local governments, to compare the study findings to other research and analysis.
Daniel Jerrett, DRCOG’s chief economist, looked into the study and called into question its sampling method, which exclusively utilized renters who had used Apartment List. He said this could potentially overstate the amount of people looking to move.
“You have 24,000 people who have kind of implicitly admitted that they are already looking to move,” Jerrett said. “So if you were then to abstract that back out to the overall renting population of the Denver region, I guess the question we have to ask: is this really a fair representation, or is this sample somewhat biased to a group of people?”
He said if the people surveyed were random and did not have a relationship to Apartment List, it would be closer to a representative sample of the region, which would be more accurate to generalize to the broader group.
The fact that the renter survey data does not specify the timeframe in which people are looking to move was another concern. Jerrett said that information would provide more clarity in terms of people’s actual situation and how current the responses were.
However, he did find certain aspects of the study valid.
“48 percent identifying affordability as a concern, I think that’s legitimate,” Jerrett said. “We’ve all experienced the growth in population and employment in Denver in the past five to six years, and we continue to have a lot of migration.”
Jerrett cited research that the Denver MSA is the 8th greatest in terms of job growth and 2nd in terms of earnings growth in the last five years, which he said does not contradict the study. It is also important to note between 2010 and 2016, for people in lower income groups seeking affordable rentals, rents increased almost 32 percent while wages increased only 5.6 percent.
He also pointed out many recently added units are high-end luxury rentals that low-wage earners cannot afford. Vacancy rates for low-end units are at an almost record low.
Jerrett noted recent movers in the Denver area are more likely to be millennials than in the rest of the country. Since most respondents were millennials, they are likely more mobile than families or more established professionals. But he does not think the data is conclusive yet on whether there is a real trend of millennials only coming for a few years.
He said if the city is losing people because of affordability or jobs, they are being replaced.
“It’s not a one-to-one ratio. We still have positive net migration, which means we are bringing in more people.”
When it comes to the other cities where renters are looking to move, Jerrett said there is no data to support people merely searching a website necessarily translating into renters moving to a new location.
Although it is true some renters are leaving the Denver metro due to affordability, the methodology behind this particular study might have generated bias due to the makeup of the sample population.
Additionally, while some renters are leaving the Denver area, most are looking to relocate to other Colorado cities.