Flexible work policies have given Americans permission to move, driving up apartment rents in suburbs and lower-cost cities and pushing landlords to slash prices in New York and San Francisco.
With concessions factored in, rents on new U.S. apartments leases were down just 0.3% last month compared with the all-time highs a year earlier, according to RealPage Inc. But the pandemic has opened up a geographical divide like never before.
Rents fell almost 22% in San Francisco, 16% in New York and 9% in Boston. But of the 150 large metropolitan areas studied by RealPage, 119 showed an increase. Rents jumped 8% in Riverside, a suburban area outside Los Angeles, and Sacramento, about 90 minutes east of San Francisco. And they climbed 6% in Memphis, Tennessee, and about 5% in Phoenix, Detroit and Cleveland.
“I’m old enough to have done this for three decades,” said Greg Willett, chief economist at RealPage. “And I’ve never seen a range of results that is this wide.”
New York and San Francisco have been hit hard by Covid-19, which has closed restaurants and cultural attractions and emptied out office towers. With companies allowing employees to work remotely, Americans have been moving to more affordable cities.