San Francisco has experienced a major uptick in “millionaire renters” and rich tenants in general, according to data compiled by Yardi subsidiary RentCafe.
The city had the biggest percentage increase in millionaire tenants in the country, going from less than 20 renter households that earn more than $1 million annually to nearly 300 in five years, a 15-times increase.
The listing site used U.S. Census and Integrated Public Use Microdata Series numbers comparing 2015 figures to 2020, the most recent five-year data available from IPUMS, according to a RentCafe spokesperson.
“The number of renter households with incomes of more than $1 million reached a record high of 3,381 in 2020 — three times as many as there were in 2015, when 1,068 millionaires were renting their homes in the U.S.,” according to the report.
Millionaire renters in D.C. get more for their money than in other markets: an average of five bedrooms, compared to three bedrooms in New York, L.A. and San Francisco.
Looking at the most recent Census data from 2021, the spokesperson said via email that the richer tenant trend was still holding strong nationwide, even in San Francisco, where those with lower incomes have been coming to the city to take advantage of the down market and grab a rent-controlled apartment.
San Francisco had the highest percentage of renters who make more than $150,000 a year, a salary earned by more than a third of its renters, compared with 17 percent in 2015. Though the numbers of high-income tenants grew in many markets, no other city was close to that percentage aside from San Jose, where a quarter of all renters made the $150,000 threshold in 2020.
New York City had the most high-income tenants at nearly 300,000 in 2020, but that is only 14 percent of the renters in the city, according to the report. That’s a lower percentage than Seattle, Boston and Washington, D.C.
The Bay Area’s high-paying jobs and high cost for homes, which require an income upwards of $400,000 a year to be “affordable,” were cited as reasons behind the richer tenant trend. But because the area was already difficult to afford in 2015, San Francisco was nowhere near the top of the list in the percentage increase in new high-income renters. In 14 cities across the U.S., high-income tenants more than doubled in numbers in the last five years, according to the report. Those markets include Portland, Nashville, Austin and top-market Seattle, which just narrowly beat out Miami for the biggest increase in high-income renter households.
Many of these areas saw housing prices rise by 50 percent or more between 2015 and 2020. Plus, even those who could afford to buy may be choosing not to, according to the survey, especially millennials who make up the biggest demographic chunk of the rising “millionaire renter” trend.
“For many millennials of homebuying age and with above-average incomes, lifestyle renting is a better choice than owning,” according to the report. “This mindset is mirrored among millionaire millennials, too, who, unlike their baby boomer parents, decide to rent despite having the financial resources to own.”
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